Supply Chain Technology II

BLCP 201
Supply Chain Technology
• A Framework for Managing Supply Chain
Information
• Master Model of Supply Chain Excellence
• Supply Chain Management Software
• Supply Chain Technology Implementation
• Supply Chain Technology Innovations
 A Framework for Managing Supply Chain
Information
• Supply Chain Information System (SCIS) –
information system that automate the flow of
information between a firm and its suppliers to
optimize the planning, sourcing, manufacturing,
and delivery of products and services.
• SCIS have the capacity to collect and synchronize
data, manage exceptions, and help streamline key
processes.
• SCIS links all functional areas of supply chain to
promote visibility of actionable information and
enhance decision making.
 Master Model of Supply Chain Excellence
Open Systems
Standards
Resource
Metrics and Dashboard

Web-Based
Agents-Automated Decision Making

Methods
Exception Management

Skills
Data Data
Collection Synchroni
e.g., RFID Visibility zation

Planning & Execution Infrastructure Technology

Process
Organization’s Skills & Functional Expertise
People
 A Framework for Managing Supply Chain
Information
• Foundation Elements- The ability to capture and
manage supply chain information depends upon a
strong well-integrated foundation of people,
processes, and technology
– People – users must be properly trained in the
appropriate, accurate use of the tools
– Process- SOP and goals must be established for
technology-enhancement to generate desired outcome
– Technology- software applications and internet platform
to be carried out in synchronized manner to maximum
performance; electronic data interchange (EDI)
 A Framework for Managing Supply Chain
Information
• Key Requirements
– Data collection- collect relevant information timely
in the supply chain
– Data synchronization- accurate updating of item
within and across enterprises to ensure consistent
information in the organization and business
partners
– Functional expertise- managers to leverage
information to support planning and decision making
across supply chain operations
– Metrics- help organization articulate their impact on
the supply chain
 A Framework for Managing Supply Chain
Information
• Differentiating Capabilities
– Visibility- focus on providing seamless flow of
timely, important information
– Exception management capabilities-detect of
performance problems and signal alerts to the
affected organizations. Immediate correcting action
can be taken
– Automated decision making- to recognize
exception alerts, assess the problem, evaluate
alternatives and recommend solution and take
corrective action without human intervention
Supply Chain Management Software
SCM Software
• Technology that address virtual function and task
that occurs in the supply chain.
• These tools attempt to harness the organizations
plan, execute, and control supply chain activities in
real time.
• Management are looking to establish the “sense and
respond” capabilities of agile, adaptive organization.
• The more integrated the tools are, the better the
support they will provide for effective management
of the supply chain.
 Supply Chain Management Software
Planning
• Help organizations evaluate demand for materials,
capacity and services so that effective fulfillment
plans and schedule can be develop.
• It encompasses a comprehensive set of software
tool design to help managers gain accurate detailed
view that affects their development and planning.
• It addresses longer-term planning and important
issues.
• Short-range planning tools helps to managers be
able to make better decisions.
 Supply Chain Management Software
Execution
• Execution tools and suites carry out key tasks from the time
an order is placed until it is fulfilled.
• Integrated supply chain capabilities shifted to a broader
scope including procurement and supplier relationship
management, manufacturing execution and shop floor
control, and customer relation management.
• Consist of a group of integrated tools that link well with
supply chain partners system to share relevant data.
• Successful implementation provide users with improved
inventory visibility, data accuracy, faster throughput and
higher inventory turns, better control of transportation costs
and improved customer service.
 Supply Chain Management Software
Event Management
• Tools collect data in real time from multiple sources across
the supply chain.
• It is able to define business rules that triggers alerts when
specified events occur or fail.
• Allows supply chain managers to focus on managing
exceptions rather than monitor every movement and
compare against its plan.
• Able to monitor activities exceeds manual capabilities to
help detect, evaluate and resolve issues.
• Optimization techniques is used to evaluate the severity of
situation and propose alternative solutions to decision
makers or initiate action based on established guidelines.
 Supply Chain Management Software
Business Intelligence
• Builds upon traditional reports and output systems that
provides historical data and the new system can analyze
and information sent to front line employees for effective
planning and decision making.
• It supports self-service reporting, performance scorecards
versus goals, development of dashboards and other
graphic report display in supporting event management
and provide better access of data to decision makers.
• Emerging capabilities make it easier to interpret data via
simple dashboard items, such as charts, graphs and maps
that are easier to understand than pages of data.
 Supply Chain Management Software
Enterprise Resource Planning (ERP)
• Multi-module system software platforms that
help organization manage the important parts
of their businesses
• Focus on integrating information and activities
across the organization
• Activities includes; accounting, finance,
planning, engineering, human resource,
purchasing, production, inventory management
etc.
….cont..
 Supply Chain Management Software
• Branch out to also include supplier
relationship management, customer relation
management and other supply chain that
connects between SCIS
• The system provides a mechanism for supply
chain members to efficiently share
information so that visibility is improved,
transaction are completed with speed and
accuracy
Supply Chain Management Software
ERP Integration of SC Capabilities
 Supply Chain Management Software
Related Tools
• ERP tools help improve the flow of usefulness of
the supply chain information, support
development and implementation of strategies
including;
– Supply chain collaboration tools: help users integrate
their information technology systems with those of
trading partners to streamline and automate supply
chain processes. It provides interoperability between
different SCIS to support collaboration initiatives
leveraging on Internet standards
Supply Chain Management Software
– Data synchronization applications:
Provide a platform for manufacturers, distributors and
retailers to aggregate and organize item related data
(number, prices, description, weight etc.,). Required
RFID technology and automated processes.
– Spreadsheet and database software (Excel):
Provides managers with handy portable tools to
gathering data, consolidating, and analyzing supply
chain data. It is vital that the planning and analytical
work done via these tools be linked to the SCIS so that
information is not lost.
 Supply Chain Management Software
Performance
Management

Event Distribution Order Management

Management Appointment Transportation Yard/Dock Warehouse
Scheduling Procurement Mgt. Mgt. Order Entry

Trading To
From Shipment RFID Stores/
Source
Partner
Management
Distribution
Customers
Consumption
Integration
Supplier Transportation Logistics Labor Mgt. Order
Enablement/ Planning & Hub Slotting
Execution Mgt. Optimization
Visibility Analysis &
Visibility
Reporting
Reverse Logistics Management

Enterprise
Integration Services
 Supply Chain Technology Implementation
Need Assessment
• Most important step in software selection and
implementation is to understand the supply chains that the
technology is intended to support.
• Start with diagnosis of situation on own supply chain and
access the capabilities and benchmark against the needs of
the supply chain partners.
• Technology also improves adequate processes but only after
deficiencies have been address.
• The needs assessment sequence highlights the link between
effective business processes, appropriate technology, and
supply chain performance which leads to realistic
expectations, and great returns on supply chain investment.
 Supply Chain Technology Implementation
• Software Options – managers must compare the
advantages of commercial software to in-house solutions,
choose between single vendor suites and applications from
multiple vendors, and consider licensing versus on-demand
purchases, among other issues.
• Development Alternatives
– software selection focuses on who will develop the solution. The
choice is to develop the tools in house for own use or to purchase
software from an external vendor.
– Large firms depend upon their own information technology
departments to build supply chain application which are tailored
to their specific industries.
– Most small and mid size firms are not able to build their own
supply chain software, thus they rely heavily on external vendors
to develop for them.
Supply Chain Technology Implementation
• Solutions Packages
– Buyers have the choice of purchasing supply chain software suites that
combine planning, execution, event management, and related
capabilities.
– Options are to work with a single vendor software or purchase individual
applications form leading providers in each category (best-of -breed).
– Single vendor supply chain suites should take les time to implement
than variety tools from different vendors as it requires less training time
and have a lower implementation cost
– Best-of-breed tools are more complex and typically take longer to
integrate into a SCIS to streamline the process. They are more powerful
and provide greater flexibility and can be better tailored to individual
firm’s issues.
– The challenge of choosing between these options is to understand the
implementation issues; firm’s need for tailored, advanced capabilities,
and changing vendor landscape.
Supply Chain Technology Implementation
• Purchase options
– Historically, when buyers purchased a software, they also have
to obtain a license and manage the implementation issues and
ongoing upgrades, and maintenance cost.
– The Internet with application service provider (ASP) now
offered a new way to buy software
– ASP owns and operates the software while user can access the
software via Internet capabilities and be bill as they uses the
service
– The advantage is that ASP will cost lower for user however the
disadvantage is the inefficiency of hosting one copy of the
software application for each client
– On-demand solutions provider offers software that is accessible
by multiple parties via Internet through shared application
Supply Chain Technology Implementation

• Technical Issues
– Prior to implementation, management must
address all technical issues before selecting the
software suite or best-of-breed application
– Useful software will become “shelfware” if it is
difficult to install, unable to link to other tools in
support of visibility
– Two areas to address are Data Standardization and
Application Integration
Supply Chain Technology Implementation
• Data Standardization
– Can be a challenge when the software comes in different
languages and that may be difficult to bring data together
– An option is to translate the data through a translator however it
may be too cumbersome
– The best option is to use a standard format across the business
which is the English language
– Electronic data interface (EDI) provides interorganizational,
computer to computer exchange of structured information in a
standard, machine processed format
– To implement EDI can be complex as their cost through link
charges can be significant for some businesses
– Extensible markup language (XML )is a flexible way to create a
common information formats that can be shared through
Internet
 Supply Chain Technology Implementation
• Application Integration
– The greater the variety of application, the more
challenging connectivity and information sharing issues
become (present data differently).
– Development of Application programming interface (API)
to allow companies to link SCIS.
– Focus has shift towards Service-oriented architecture
(SOA) with “plug and play” function. It defines how two
computing entities interact in such a way as to enable
one entity to perform on behalf of the other entity.
– SAP’s Netweaver and Oracle’s Fusion are examples of
SOA based applications.
– Buyer must monitor the development of SOA and its
impact on software applications landscape.
Supply Chain Technology Implementation
Asking The Right Question – to meet the
organization overall objective and improved its
performance and move forward with
technology investment and implementation
– Who will lead our implementation effort?
– How will technology support our business needs
and processes?
– What is the status of our existing data?
– How well does our existing system integrate with
suppliers and customers?
– What external issues must our system address?
 Supply Chain Technology Innovations
Radio-Frequency Identification (RFID)
• An automatic identification method similar to bar-
coding which consist of tags imbedded to items in a
form of universal electronic product code (EPC)
• When tags passes through a reader within proximity,
the data is captured and relay back to the SCIS
updating its location status
• It helps reduce out of stock and enhance customer
satisfaction while reducing theft
• It provides real time view of its inventory, item-level
traceability of products, and true event of
management capabilities.
Supply Chain Technology Innovations
Radio Frequency Identification (RFID)
 Supply Chain Technology Innovations
Adaptive Supply Chain Networks (ASCN)
• Integration of supply chain and other support system and
processes both within and across the business is needed to
allow true full supply chain visibility and flexibility.
• Help meet the growing need for supply chain connectivity
(visibility) and collaboration (enables joint response) to avoid
possible problems.
• Help shift from a perspective of “selling what I make” to
“making what I sell”.
• Support true collaboration to eliminate inefficiencies in the
supply chain by synchronizing information flows and
activities.
• Participants will achieve a valuable blend of low-cost, high
quality supply chain performance.
 Supply Chain Technology Innovations
Pervasive Automation
• As technology advances, the realization of product connectivity
provide digital intelligence for almost every products.
• Manufactures and service providers are able to communicate
with their products and equipment without direct human
involvement.
• Application are made to by pervasive automation to become
“smart” devises and capable of real-time assessment
information sharing.
• RFID, ASCN, other wireless communication tools do not require
human interaction, and supports supply chain innovation.
• Technology landscape is always changing and new tools may
render existing ones obsolete and supply plant emerging
innovations.