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Chapter 10

LOGISTICS INFORMATION SYSTEMS

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References
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1. Reza Zanjirani Farahani, Shabnam Rezapou, Laleh

Kardar (2011), Logistics Operations and Management:
Concepts and Models
2. Douglas M.Lambert, James R.Stock, Lisa M.Ellram
(1998), Fundamentals of Logistics Management
3. David B.Grant (2012), Logistics Management

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LOGO Contents

10.1 Overview of Logistics Information System (LIS)

10.2 Structure of Logistics Information System

10.3 LIS modules

10.4 Technologies in LIS

10.1. Overview of Logistics Information System (LIS)

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Definition of LIS
 Information system is a system created for sending,
receiving, saving, displaying or implementing other
processing with respect to data messages
 LIS is an interacting structure of people, equipment, and
procedures which together make relevant information
available to the logistics manager for the purposes of
planing, implementing and control.

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LOGO Logistics Information System

LIS combine hardware and software to manage, control,

and measure logistics activities.

hardware software

• Computers • System and application

• Servers programs
• Internet technologies
• Input and output devices
• Communication channels
• Barcode, RF, storage media

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LIS Characteristics

 Availability
 Accuracy
 Timeliness
 Flexibility
 Appropriate Format
 Interactive

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LISs’ Functionality Levels

 transaction system,
 management control
 tactical planning and control and decision analyses
 strategic planning

Pyramid of LIS functionality levels

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Role
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 logistical information has two major components:

(1) planning and coordination
(2)operations

 Planning and coordination

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 Strategic objectives: marketing and financial goals

 Capacity constraints : identify manufacturing and market-
distribution limitations, barriers, or bottlenecks.
 Logistic requirements :identify the specific work facilities,
equipment, and labor forces required to support the strategic plan.
 Manufacturing requirements determine planned schedule
 Procurement requirements represent a time-sequenced schedule of
material and components needed to support manufacturing
requirements
 Forecasting is the prediction of the future using historical data,
current information, and planning goals and assumptions

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 Operations
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 Order processing refers to the exchange of requirements information between

supply-chain members involved in product distribution.
 Order assignment identifies inventory and organizational responsibility to satisfy
customer requirements.
 Distribution operations involve information that facilitates and coordinates work
within logistics facilities
 Inventory management is related to information that is necessary for implementing
the logistic plan. The main function of inventory management is managing and
deploying inventory according to planned requirements.
 Transportation and shipping information directs inventory movement. The
activities in transportation and shipping include shipment planning and scheduling,
shipment consolidation, shipment notification, transport documentation generation,
and carrier management
 Procurement is concerned with the information necessary to complete purchase
order preparation, modification, and release while ensuring overall supplier
compliance.
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10.2. Structure of Logistics Information System
 LISs have three main components : input, database, and output.

Basic structures of the LIS

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Input
The LIS data can be obtained from the following sources :
 Customers:
 Customer data are captured during their sales activities, order
entries, and deliveries.
 Typical data from the customers are customer locations, their
demands, weight and value of demanded items, date of order
and date of shipping, shipment size, packaging, transportation
mode, and so on
 Company records: Accounting reports, status reports, internal and
external study reports, and various operating reports
 Published data: Professional journals, trade magazine, and government
reports
 Management predictions: Predictions of future sales level, action of
competition, availability of purchased materials

Database Management
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Key sources of information for the logistics Database
Order processing system
Industry/external data
• Customer location Operating data • Market share
• Order history • Freight payment • Product offering
• Salesperson • Transportation history • Demographic trends
• Revenues • Inventory • Economic trends
• Order status • Credit files
• Product movement Company records
Management • Cost of capital
• Competitive reactions • Cost of logistics
• Sales forecasts activities
• Future trends • Standart costs
• New markets

Logistics Database

Report generation • Product traking and

• Order performance forecasting
• Shipment performance • Performace and cost
• Damages and returns reports

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
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Database Management (Contd)
Database management contains three main functions:
 data selection,
 analysis method selection
 basic data-processing procedure to implement

Output
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 Reports: Summary reports of financial and performance indicators,

Status reports of current activities, Exception reports that compare
actual performance with goals, Reports that initiate actions

 prepared documents: shipment documents and freight bills.

 results of data analysis from mathematical and statistical models

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10.3.LIS
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Internal External
• Finance/Accounting • Customers
• Marketing • Vendors
• Logistics LIS • Carriers
• Manufacturing • Supply chain partners
• Purchasing

Order Management Warehouse Management Transportation

System System Management System
• Contact with customer Stock level management Shipment consolidation
• Stock availability Order picking Routing and scheduling
• Crediting checking Picker routing Claims
• Invoicing Picker assignments and Tracking
• Product allocation to work loading Bill payment
customer Product availability Freight bill auditing
• Fulfillment location estimating

LIS modules
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 The Order Management System (OMS): The OMS is the first point of
logistics system contact with customers by managing order receiving
and placement.
 The Warehouse Management System (WMS): The key elements can
be identified as follows:
● Receiving
● Put away
● Inventory management
● Order processing and retrieving
● Shipment preparation
 The Transportation Management System (TMS): shares information
with other LIS components such as order content, quantity, weight and
cube, delivery date, and vendor shipping schedules.

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10.4.Technologies in LIS
 Data collection: optical scanning, electronic-pen
notepads, voice recognition, and robotics
 Identification: bar codes, radio frequency(RF) tags and
antennas, smart cards and magnetic strips, and vision
systems
 Positional systems (GPS-MPSGIS-Navigator)
 Communication networks and data exchange (EDI-XML-
Internet-Satellite-LANWAN-EPOS)
 Data storage: data marts and data warehouses
 Software: DSSs, artificial intelligence, general software,
and LIS modules

Data-Handling Hardware (Data Collection and Data

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Identification)
 Bar Codes
 Bar-Code Readers
 Optical character recognition (OCR)
 Radio Frequency Identification (RFID)
 Magnetic Stripes and Optical Cards
 Vision Systems
 Error Rates

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LOGO Optical character recognition (OCR)

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Positioning
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 The geographical information system (GIS): used to

capture, store, analyze, manage, and present data that are
spatially referenced (linked to location).
 The global positioning system (GPS): a satellite-based
navigation system

Communication, Networks, and Data Exchange

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 Electronic Data Interchange (EDI)

 Electronic Point of Sale
 Radio Frequency Data Communications
 Synthesized Voice
 Satellite Communications
 Networks
 E-Commerce

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LOGO Case study

Adobe Systems Inc. is a major producer of software for graphics and electronic publishing applications. It
ships up- ward of 400,000 boxes a year—valued at more than $100 million—into the Pacific Rim,
including Japan, Southeast Asia, India, Australia, and Latin America.
Like many software makers, Adobe does most of its over- seas business through distributors, according to
Larry C.Clopp, manager of international sales for the Pacific Rim. And it introduces regular updates of its
most popular titles, rendering all previous versions obsolete. But Adobe’s method for taking back old
software left much to be desired. It was getting requests from distributors to take back between 10,000 and
20,000 boxes a year, which were then shipped to California for destruction.
To discourage piracy, the company had to confirm the se- rial number of each returned title, then give it
to a software recycler for erasure. However, Adobe was taking up to two months to credit distributors’
accounts, so its distributors were hamstrung by severe reductions in their already thin credit lines.
Even worse, distributors were paying the cost—more than $2,500 per shipment—of sending
the product by air back to the United States. Some became fed up by the process and sold the old
software locally.
How can Adobe cut its processing time on returns in half, while sharply reducing administrative costs
and ensuring product security?
“What Is Your Solution?

Source: Douglas M.Lambert, James R.Stock, Lisa M.Ellram (1998), Fundamentals of Logistics Management, p.110

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