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Management of
Transportation
Seventh Edition
Coyle, Novack, Gibson &
Bardi
© 2011 Cengage Learning
Chapter 12
Information
Management and
Technology
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
2
Introduction
• IT use in supply chain explodes in ’90s
– IT use enables reduction of assets
– IT use enables better management of
• Information flows
• Product flows
• Cash flows
– Cost of IT declines significantly
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
3
Information Systems
• Purpose
– Collect, organize, and portray meaningful data
to decision makers
• Challenge: vast volumes of information
– Serve multiple organizational levels
– Facilitate integrated decision making within
firms and across supply chain
• Core components
– Common databases, hardware, software
– Enterprise resource planning (ERP) systems
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
4© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-
1
5
Information Systems, cont’d
• Ex: info needed to manage transport transaction
– Pre-transaction phase: info needed to plan carrier
movement
• Shipper needs purchase order, forecasts, POS data,
equipment availability, possible pick-up times
– Input to carrier selection decisions
• Carrier needs bill of lading info., preferred pick-up and
delivery times
• Receiver needs advance shipment notice, scheduled
delivery times
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
6
Information Systems, cont’d
• Info needs for transport transaction, cont’d
– Transaction phase
• All parties need shipment status info
– Carriers typically provide on exception basis
– Post-transaction phase
• Shipper and receiver needs depend upon terms of sale
– Proof of delivery and carrier performance
– Freight bill
– Claims, if necessary
• Carrier needs payment info, claims info
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
7© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-1
8
Information Sources
• Prime sources were paper documents
– Many transactions are now paperless
• Bill of Lading (BOL)
– The single most important document.
– Initiates shipment, typically generated by shipper
– Provide all the information the carrier needs to accomplish
the move
– Stipulates the transportation contract terms including the
scope of the carrier’s liability for loss and damage
– Acts as a receipt for the goods the shipper tenders to the
carrier
– Shows certificate of title to the goods
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
9
Information Sources
• Bill of Lading (BOL)
– Serves five legal purposes
• Receipt for goods
• Description of shipment
• May be evidence of title to goods
• Operating document
• Defines terms of contract between carrier and shipper
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
10
Information Sources, cont’d
Bill of Lading, cont’d
– Minimum information required:
1. Origin/destination of shipment
2. Carrier designation
3. Special operating instructions
4. Shipment description
5. Billing instructions
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
11
Information Sources, cont’d
Bill of Lading, cont’d
– Minimum information required:
1. Origin/destination of shipment
– Carrier to identify freight lane that will be used for
shipment, availability of equipment and personnel to
provide transportation, to determine pick-up and
delivery times
1. Carrier designation
– Determine carrier-routing process
– Helps identify the initial contact with the pickup carrier
1. Special operating instructions
– Temperature control, loading/unloading requirements,
blocking/bracing, pickup or delivery requirements
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Information Sources, cont’d
Bill of Lading, cont’d
– Minimum information required:
4. Shipment description
– About the commodity, quantity, weight
– Hazardous material
4. Billing instructions
– Information on the identity of the party responsible for
paying the transportation services
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
13
Information Sources, cont’d
Bill of Lading, cont’d
– Two types of bills of lading
• Straight or non-negotiable
– The carrier must deliver the goods only to specific
receiving organization and destination in return for freight
charge payment
• Order or negotiable
– The owner of the goods has the right to transfer title to the
goods to another party and reroute the shipment to a
location other than the one listed on BOL
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
14© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-4
15
Figure 12-5
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
16
Information Sources, cont’d
• Waybill
– Operating document for railcar movement
• Assigns car to train, contains billing info
– Describes car’s contents
– Most are now electronic
• Manifest
– Trucking equivalent to waybill
– Documents weight loaded in each trailer quartile
– To address axle weight restrictions on the highway
system
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
17
Figure 12-6
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
18
Information Sources, cont’d
• Freight bill
– Purpose/function
• Carrier’s invoice for transport services and related
charges
• Notifies buyer of charges and means of assessment
• Can serve as proof of delivery
– Efforts to shorten freight bill payment cycle
• Many buyers require proof of delivery (signed freight
bill) before initiating payment process
– Delivery proof matched with BOL and packing list
– Carriers supply electronic delivery proof to speed process
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
19© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-7
20
Information Technology
• A leading and constant concern of logistics
and transport managers
• Areas of application
– Top application: connecting to supply chain
– Drivers
• Information can substitute for assets, services
– Ex: Satellites, inventory visibility, safety stocks
• Cost of IT continues to fall and capabilities rise
– Hardware, software, networking communication and data
exchange capabilities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
21
Information Technology
• A leading and constant concern of logistics
and transport managers
• Areas of application
– Top application: connecting to supply chain
– Drivers
• Information can substitute for assets, services
– Ex: Satellites, inventory visibility, safety stocks
• Cost of IT continues to fall and capabilities rise
– Hardware, software, networking communication and data
exchange capabilities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
22
Information Technology
• A leading and constant concern of logistics
and transport managers
• Areas of application
– Top application: connecting to supply chain
– Drivers
• Information can substitute for assets, services
– Ex: Satellites, inventory visibility, safety stocks
• Cost of IT continues to fall and capabilities rise
– Hardware, software, networking communication and data
exchange capabilities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
23
Table 12-2
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
24
Table 12-3
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
25
Information Technology, cont’d
• Areas of application, cont’d
– Drivers, cont’d
• Supply chain partners demand more info
– Ex: Collaborative planning, forecasting and replenishment
(CPFR) requires sharing/collaborating on demand forecasts
• Managing information flows well is critical to
meeting customer demands and to efficient operations
and profitability
– Info flow necessary for managing relationships and product
and cash flows
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
26
Information Technology, cont’d
• Types of information technology
– The basics: comprehensive, quality electronic
data interchange (EDI)
• Definition: the application-to-application exchange
of standard format business transactions
– One of oldest IT forms, now nearly a standard
requirement
• Advantages
– Eliminates human intervention and errors
– Reduces transaction costs by reducing labor costs
– Improves customer service – auto. exception alerts
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
27© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-4
28
Information Technology, cont’d
– EDI, cont’d
• Requires protocols and standards to define data, its
order, field lengths, etc.
– Universal standards set by ANSI
– Industry-specific standards
– Proprietary standards
• Most popular uses – sending/receiving orders, ASN,
invoicing, and electronic funds transfer
• Institutional and technical barriers
– Capital investment, hardware/software compatibility
– Consistent formats, security, top mgmt. support
– Internal ownership
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
29© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-8
30© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-9
31
Information Technology, cont’d
– EDI, cont’d
• Role of third-party value added networks (VANS)
– Translates proprietary and industry-specific EDI standards
– Enables EDI user to develop a single EDI transmission network
rather than multiple networks direct to customers
» User to VAN to customers
– Saves on capital and operating costs compared to multiple
networks
• Internet: possible substitute for VANS and dedicated EDI
networks
– Extensible mark-up language (XML) mitigates standards
requirements
– Capacity can be a concern
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
32
Information Technology, cont’d
• Types of technology, cont’d
– The basics: automatic ID - bar coding
• Patterns of dark bars and spaces that when coupled
with other IT provides info on product movement
throughout supply chain
• Requires standard formats of bar/space patterns
– Code 39 and Code 128 are most popular formats
• Developments
– 2-D bar codes
– Matrix bar codes
– “License plates” for pallets
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
33
Figure 12-10
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
34
Figure 12-11
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
35
Figure 12-12
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
36
Figure 12-13
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
37
Figure 12-14
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
38
Figure 12-15
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
39
Figure 12-16
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
40
Information Technology, cont’d
• Types of technology, cont’d
– The basics: track and trace
• Provides in-transit shipment visibility
• Greatly enhanced by satellite technologies coupled
with EDI and radio frequency (RF) technology
– Carriers can monitor vehicle positions, better manage
vehicle utilization, and be more customer responsive
• Classification of shippers by track/trace capability
– Lagging edge
– Mainstream
– Leading edge
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
41© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-6
42
Information Technology, cont’d
• Types of technology, cont’d
– Emerging: electronic product code (EPC) tags
• Bar code info: static and requires readers to capture
• EPC or “smart” tags
– Info can be updated, carrying more info than bar codes, and
can transmit info via RF technology
• Wal-Mart requirements for RFID
• Issues in universal adoption
– Cost
– Standards
– Compatibility with current software systems
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
43
Information Technology, cont’d
• Types of technology, cont’d
– Emerging: the Internet
• Principal current uses
– Information resource: ex: track and trace
– Communications purposes
» Share demand, production forecasts
» CPFR, collaborative transportation mgmt. (CTM)
– To accomplish transactions
• Challenges
– Capacity
– Security
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
44© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
45© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
46© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
47© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
48© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
49© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
50
Information Technology, cont’d
• Types of technology, cont’d
– Emerging: the Internet, cont’d
• Many future applications
– Sales interface
– Customer service utility
– Load-matching services – shipper/carrier without broker
• Trends in e-business capabilities to support
transport
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
51
Information Technology, cont’d
• Types of technology, cont’d
– Emerging:Transportation Requirements Planning
• Sharing of info regarding movements
– Improves flow efficiency/effectiveness
– Using data inputs from shippers and carriers, develops optimal
shipment plans/schedules given shipper requirements and carrier
constraints
– Includes “what if” planning analysis capabilities
– Given shipment plan, provides status/performance reporting
• Penske LMS system as example
• TRP may be stand-alone or linked to ERP system
• Transportation management software development and
implementation
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
52© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-17
53© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-18
54© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-19
55© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-9
56
Information Technology, cont’d
• Types of technology, cont’d
– The future: Internet-intelligent applications
• Heuristics designed to reduce degree of manual
interaction
– Ex: event management
– The future: Transparent EDI
– Reducing EDI cost via more flexible standards
– The future: Data warehousing
– Aggregation of a firm’s functional databases into
relational databases
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

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Transport Management & Theory Practices (12)

  • 1. Management of Transportation Seventh Edition Coyle, Novack, Gibson & Bardi © 2011 Cengage Learning Chapter 12 Information Management and Technology © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 2. 2 Introduction • IT use in supply chain explodes in ’90s – IT use enables reduction of assets – IT use enables better management of • Information flows • Product flows • Cash flows – Cost of IT declines significantly © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 3. 3 Information Systems • Purpose – Collect, organize, and portray meaningful data to decision makers • Challenge: vast volumes of information – Serve multiple organizational levels – Facilitate integrated decision making within firms and across supply chain • Core components – Common databases, hardware, software – Enterprise resource planning (ERP) systems © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 4. 4© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12- 1
  • 5. 5 Information Systems, cont’d • Ex: info needed to manage transport transaction – Pre-transaction phase: info needed to plan carrier movement • Shipper needs purchase order, forecasts, POS data, equipment availability, possible pick-up times – Input to carrier selection decisions • Carrier needs bill of lading info., preferred pick-up and delivery times • Receiver needs advance shipment notice, scheduled delivery times © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 6. 6 Information Systems, cont’d • Info needs for transport transaction, cont’d – Transaction phase • All parties need shipment status info – Carriers typically provide on exception basis – Post-transaction phase • Shipper and receiver needs depend upon terms of sale – Proof of delivery and carrier performance – Freight bill – Claims, if necessary • Carrier needs payment info, claims info © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 7. 7© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Table 12-1
  • 8. 8 Information Sources • Prime sources were paper documents – Many transactions are now paperless • Bill of Lading (BOL) – The single most important document. – Initiates shipment, typically generated by shipper – Provide all the information the carrier needs to accomplish the move – Stipulates the transportation contract terms including the scope of the carrier’s liability for loss and damage – Acts as a receipt for the goods the shipper tenders to the carrier – Shows certificate of title to the goods © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 9. 9 Information Sources • Bill of Lading (BOL) – Serves five legal purposes • Receipt for goods • Description of shipment • May be evidence of title to goods • Operating document • Defines terms of contract between carrier and shipper © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 10. 10 Information Sources, cont’d Bill of Lading, cont’d – Minimum information required: 1. Origin/destination of shipment 2. Carrier designation 3. Special operating instructions 4. Shipment description 5. Billing instructions © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 11. 11 Information Sources, cont’d Bill of Lading, cont’d – Minimum information required: 1. Origin/destination of shipment – Carrier to identify freight lane that will be used for shipment, availability of equipment and personnel to provide transportation, to determine pick-up and delivery times 1. Carrier designation – Determine carrier-routing process – Helps identify the initial contact with the pickup carrier 1. Special operating instructions – Temperature control, loading/unloading requirements, blocking/bracing, pickup or delivery requirements © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 12. 12 Information Sources, cont’d Bill of Lading, cont’d – Minimum information required: 4. Shipment description – About the commodity, quantity, weight – Hazardous material 4. Billing instructions – Information on the identity of the party responsible for paying the transportation services © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 13. 13 Information Sources, cont’d Bill of Lading, cont’d – Two types of bills of lading • Straight or non-negotiable – The carrier must deliver the goods only to specific receiving organization and destination in return for freight charge payment • Order or negotiable – The owner of the goods has the right to transfer title to the goods to another party and reroute the shipment to a location other than the one listed on BOL © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 14. 14© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-4
  • 15. 15 Figure 12-5 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 16. 16 Information Sources, cont’d • Waybill – Operating document for railcar movement • Assigns car to train, contains billing info – Describes car’s contents – Most are now electronic • Manifest – Trucking equivalent to waybill – Documents weight loaded in each trailer quartile – To address axle weight restrictions on the highway system © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 17. 17 Figure 12-6 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 18. 18 Information Sources, cont’d • Freight bill – Purpose/function • Carrier’s invoice for transport services and related charges • Notifies buyer of charges and means of assessment • Can serve as proof of delivery – Efforts to shorten freight bill payment cycle • Many buyers require proof of delivery (signed freight bill) before initiating payment process – Delivery proof matched with BOL and packing list – Carriers supply electronic delivery proof to speed process © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 19. 19© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-7
  • 20. 20 Information Technology • A leading and constant concern of logistics and transport managers • Areas of application – Top application: connecting to supply chain – Drivers • Information can substitute for assets, services – Ex: Satellites, inventory visibility, safety stocks • Cost of IT continues to fall and capabilities rise – Hardware, software, networking communication and data exchange capabilities © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 21. 21 Information Technology • A leading and constant concern of logistics and transport managers • Areas of application – Top application: connecting to supply chain – Drivers • Information can substitute for assets, services – Ex: Satellites, inventory visibility, safety stocks • Cost of IT continues to fall and capabilities rise – Hardware, software, networking communication and data exchange capabilities © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 22. 22 Information Technology • A leading and constant concern of logistics and transport managers • Areas of application – Top application: connecting to supply chain – Drivers • Information can substitute for assets, services – Ex: Satellites, inventory visibility, safety stocks • Cost of IT continues to fall and capabilities rise – Hardware, software, networking communication and data exchange capabilities © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 23. 23 Table 12-2 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 24. 24 Table 12-3 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 25. 25 Information Technology, cont’d • Areas of application, cont’d – Drivers, cont’d • Supply chain partners demand more info – Ex: Collaborative planning, forecasting and replenishment (CPFR) requires sharing/collaborating on demand forecasts • Managing information flows well is critical to meeting customer demands and to efficient operations and profitability – Info flow necessary for managing relationships and product and cash flows © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 26. 26 Information Technology, cont’d • Types of information technology – The basics: comprehensive, quality electronic data interchange (EDI) • Definition: the application-to-application exchange of standard format business transactions – One of oldest IT forms, now nearly a standard requirement • Advantages – Eliminates human intervention and errors – Reduces transaction costs by reducing labor costs – Improves customer service – auto. exception alerts © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 27. 27© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Table 12-4
  • 28. 28 Information Technology, cont’d – EDI, cont’d • Requires protocols and standards to define data, its order, field lengths, etc. – Universal standards set by ANSI – Industry-specific standards – Proprietary standards • Most popular uses – sending/receiving orders, ASN, invoicing, and electronic funds transfer • Institutional and technical barriers – Capital investment, hardware/software compatibility – Consistent formats, security, top mgmt. support – Internal ownership © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 29. 29© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-8
  • 30. 30© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-9
  • 31. 31 Information Technology, cont’d – EDI, cont’d • Role of third-party value added networks (VANS) – Translates proprietary and industry-specific EDI standards – Enables EDI user to develop a single EDI transmission network rather than multiple networks direct to customers » User to VAN to customers – Saves on capital and operating costs compared to multiple networks • Internet: possible substitute for VANS and dedicated EDI networks – Extensible mark-up language (XML) mitigates standards requirements – Capacity can be a concern © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 32. 32 Information Technology, cont’d • Types of technology, cont’d – The basics: automatic ID - bar coding • Patterns of dark bars and spaces that when coupled with other IT provides info on product movement throughout supply chain • Requires standard formats of bar/space patterns – Code 39 and Code 128 are most popular formats • Developments – 2-D bar codes – Matrix bar codes – “License plates” for pallets © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 33. 33 Figure 12-10 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 34. 34 Figure 12-11 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 35. 35 Figure 12-12 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 36. 36 Figure 12-13 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 37. 37 Figure 12-14 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 38. 38 Figure 12-15 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 39. 39 Figure 12-16 © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 40. 40 Information Technology, cont’d • Types of technology, cont’d – The basics: track and trace • Provides in-transit shipment visibility • Greatly enhanced by satellite technologies coupled with EDI and radio frequency (RF) technology – Carriers can monitor vehicle positions, better manage vehicle utilization, and be more customer responsive • Classification of shippers by track/trace capability – Lagging edge – Mainstream – Leading edge © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 41. 41© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Table 12-6
  • 42. 42 Information Technology, cont’d • Types of technology, cont’d – Emerging: electronic product code (EPC) tags • Bar code info: static and requires readers to capture • EPC or “smart” tags – Info can be updated, carrying more info than bar codes, and can transmit info via RF technology • Wal-Mart requirements for RFID • Issues in universal adoption – Cost – Standards – Compatibility with current software systems © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 43. 43 Information Technology, cont’d • Types of technology, cont’d – Emerging: the Internet • Principal current uses – Information resource: ex: track and trace – Communications purposes » Share demand, production forecasts » CPFR, collaborative transportation mgmt. (CTM) – To accomplish transactions • Challenges – Capacity – Security © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 44. 44© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 45. 45© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 46. 46© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 47. 47© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 48. 48© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 49. 49© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 50. 50 Information Technology, cont’d • Types of technology, cont’d – Emerging: the Internet, cont’d • Many future applications – Sales interface – Customer service utility – Load-matching services – shipper/carrier without broker • Trends in e-business capabilities to support transport © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 51. 51 Information Technology, cont’d • Types of technology, cont’d – Emerging:Transportation Requirements Planning • Sharing of info regarding movements – Improves flow efficiency/effectiveness – Using data inputs from shippers and carriers, develops optimal shipment plans/schedules given shipper requirements and carrier constraints – Includes “what if” planning analysis capabilities – Given shipment plan, provides status/performance reporting • Penske LMS system as example • TRP may be stand-alone or linked to ERP system • Transportation management software development and implementation © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
  • 52. 52© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-17
  • 53. 53© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-18
  • 54. 54© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Figure 12-19
  • 55. 55© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Table 12-9
  • 56. 56 Information Technology, cont’d • Types of technology, cont’d – The future: Internet-intelligent applications • Heuristics designed to reduce degree of manual interaction – Ex: event management – The future: Transparent EDI – Reducing EDI cost via more flexible standards – The future: Data warehousing – Aggregation of a firm’s functional databases into relational databases © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.