Darshan Hiranandani (Son of Niranjan Hiranandani).pdf
Role of Information technology in supply chain management
1. Role of Information Technology
in
Supply Chain Management
Presented by
Deepak Gupta
Onkar Surve
Shubham Lahupachang
October 7,2020
2. Contents
1. Introduction to SCM
2. Importance and benefits of IT in SCM
3. Areas in which IT is used for optimizing SCM
4. Types of IT used in SCM
5. MRP, e-SCM, Barcode, GPS, RFID,ERP,CPFR
6. Future of IT in SCM
3. Introduction to SCM
SCM is the design, planning, execution, control,
and monitoring of supply-chain activities.
Objective
Creating net value
Building a competitive infrastructure
Leveraging worldwide logistics
Synchronizing supply with demand
Measuring performance globally.
1
4. Traditional View of SCM
• Focus on competition
• Products are handled too many times
• Physical carriers struggle to maintain costly
equipment on slim margin
• Limited information to each player
Traditional view
• Lack of knowledge of end to end demand
function.
• Unstable variations in demand (Bull whip
effect)
• Lack of process integration with partners
• Fragmented processes and operations
Consequences of traditional view
2
5. Importance and Benefits of IT in SCM
Competitive advantage
Gathering and evaluating
information
Report generation and
decision making
Coordinating processes of
SC
Quick Response
Importance Benefits
Information availability and
visibility
Single point of contact for
data
Allows decision making
based on SC
Enables collaboration with
partners
3
6. Areas in which IT is used for Optimizing SCM
4
Warehousing
Logistics
e-Commerce
Sales
Transaction Processing & Management
Supply chain planning and collaboration
7. Areas in which IT is used for Optimizing SCM
5
II. Logistics
• Smart Inventory Management
• Damage Detection
• Real time visibility
• Accurate inventory control
I. Warehousing
• Load Optimization
• Space Utilization
• Shipment Tracking
• Reverse Logistics
• Yard and dock management
III. e-Commerce
• Electronic data interchange
• e-mail
• Electronic fund transfers
• Electronic publishing
• Image processing
IV. Transaction Processing & Management
• Exchange information
• Order processing
• Billing
• Delivery verification
• Generating and sending dispatch
advices
• Producing order codes
8. Areas in which IT is used for Optimizing SCM
6
V. Sales
• Business to business
• Business to customer
VI. Supply chain Planning and
collaboration
• Unpredictable and logistically
demanding environment
• Ensuring final shipments
9. Macro- processes of SCM in which IT is used
7
Supplier Relationship Management (SRM)
• Supply chain procurement management:
• Order and accounts payable management
Internal Supply chain Management (ISCM)
• Supplier management
• Supplier on boarding and contract management
• B2B integrations with supplier
Customer Relationship Management (CRM)
• Operational CRM
• Collaborative CRM
• Analytical CRM
SUPPLIER
FIRM
CUSTOMER
10. Types of IT system used in SCM
8
Barcoding GPS RFID Tags QR codes Sensors
Tracking and
Tracing
EDI CRM MRP e-SCM
Extranet
ERP
11. An identification technology with computer-readable
codes
Codes on items, cartons and containers in the form
of grouping of parallel bars (usually blocks)
Bars of different widths separated by light spaces
(usually white), again, of different widths
Used widely in healthcare and hospital settings
Barcode System [BCS]
9
12. • Speeds up data entry process
• Verifies orders at receiving and
shipping
• Improves customer service
• Enhances data accuracy
• Minimizes on-hand inventory
Benefits Of Barcode System
10
13. RFID Tags
• Wireless non-contact use of radio frequency waves to transfer data.
• Tagging items with RFID tags allows users to automatically and uniquely identify and track inventory and
assets.
Increased speed and
agility in locating the
products
Product
Forecasting and
Management
Asset Tracking
and
Management
Automatic records
the input and
output of the
materials
Improved
Inventory and
Order
Management
Shipping and
Receiving
Increase
efficiency and
cut-down
reworks
Benefits of RFID tags
11
14. e-Commerce
Definition: e-Commerce, also known as electronic commerce or internet commerce, refers to the buying
and selling of goods or services using the internet, and the transfer of money and data to execute these
transactions.
Comprises
• Electronic data interchange
• e-mail
• Electronic fund transfers
• Electronic publishing
• Image processing
• Electronic bulletin boards
• Shared databases
Magnetic/optical data capture.
Benefits
• Reach and attract new customers
• Accessibility and easiness
• Faster customer response
• Sell across globe
• Cost efficient
• Eye’s on buyer
12
15. GPS for Vehicle Tracking
13
To keep track of where your vehicles are on the map
Monitoring vehicle speed, routes, engine start up and
shut down, idling and routes.
Advantages of GPS Tracking
1. Fleet management
2. Resource optimization
3. Driver safety & performance
4. Reduce administrative resources
5. Cost analysis/assessment
6. Minimal theft risks
16. Forecasting
Functions of MRP
Waste Reduction
Scheduling
Advantages Disadvantages
• Reduced lead time
• Reduced Inventory costs
• Increased efficiency
• Effective Inventory
Management
• Increased Inventory costs
• Lack of flexibility
• Data Integrity requirements
Computer based Inventory control and Production planning System
Materials Requirement Planning
14
17. INPUT
• Bill of material
• Inventory record
• Master production schedule
PROCESS
• Transformation process
• Procurement process
OUTPUT
• Primary reports
• Secondary reports
Materials Requirement Planning
15
18. 4th
It is the use of web-based technology
to support the key procurement
processes, including requisitioning,
sourcing, contracting, ordering, and
payment
e-procurement
3rd
Combines business knowledge and
forecasts of multiple players along a
supply chain to improve the planning
and fulfillment of customer demand
Collaborative Planning
2nd
It is the use of web-based
technologies to support the
material acquisition, warehousing,
and transportation processes
e-logistics
1st
Supply chain replenishment
encompasses the integrated
production and distribution
processes..
Supply Chain Replenishment
e-SCM
16
19. Advantages of e-SCM
Helps in reducing excess inventory to reduce
inventory cost.
Reduces Inventory
Improves efficiency of the Supply Chain.
Improves Efficiency
Increase ON-Time delivery increasing customer
satisfaction.
Just In-time Delivery
Reducing cycle time to increase revenue and
improve order fulfillment
Reduce Cycle Time
Helps in reducing costs.
Reduces Cost
e-SCM
17
20. CPFR
Definition: Collaborative Planning, Forecasting and Replenishment (CPFR) is an approach which aims to
enhance supply chain integration by supporting and assisting joint practices. CPFR seeks cooperative
management of inventory through joint visibility and replenishment of products throughout the supply chain.
Benefits
• Improving customer service levels
• Reducing or eliminating stock outs
• Reducing over-buying of inventory
• Delivering right time, right place inventory
• Optimizing forecast accuracy
Four phases of CPFR18
21. Definition: Enterprise resource planning (ERP) is cross suite functional enterprise system driven
by an integrated suite of software modules that support the basic internal business processes of
a company.
ERP
Need
• Problems in daily communication and
exchange of data
• High inventory and material cost
• Inconsistencies and duplication of data
• Individual information systems integration
• Decentralized system
Benefits
• Reduce stock to a minimum
• Enlarge product assortment
• Improve product quality
• Reliable delivery dates
• Coordination of global demand, supply
and production
19
22. There are certain limitations to the use of Information Technology in SCM which are stated below
Limitations
Lack of Manager awareness with the system
Lack of management’s full commitments
Development of electronic data interchange is a costly affair
Problems related to data security and privacy
Lack of face to face contact may bring lack of trust
Customers also need awareness for effective utilization of internet in
the business
20
23. Future of IT in SCM
21
Percentage increase in
adoption rate of IT in SCM in
the next 6 years
Source: MHI Annual Industry Report