The Kaizen

Forum

Supply Chain Management

Enabling & Supporting Technologies

A pervasive Factor in SCM Fulfillment

15th Batch – 2012 – 2013

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Today’s Scenario
• With today's emphasis on cutting costs and streamlining
expenses, many companies are looking to improve their
bottom lines with more effective supply chains.
• Lack of understanding about what a supply chain is or how
it fits into the companies overall strategy.

Supply chains include a company’s entire manufacturing

and distribution process. They involve every step of the
production from planning to manufacturing to
handling defective goods. The overall goal of these
chains is to keep the process running smoothly at all
times and to keep all of the components connected.
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Technology Challenges
• Resistance from vendors/suppliers:
Suppliers of goods are often hesitant to jump
onboard because of the initial costs involved
in setting up their own end of supply chain
management system and because most
vendors do not have a trusting relationship
with their buyers. To overcome this obstacle,
the strong relationship must be present and
the supplier needs to be able to see the profit
potential on their end of the arrangement.
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Technology Challenges
• Resistance from employees:
Some employees have learned to develop a
hate-hate relationship with new technology. It
costs them their jobs and often makes them feel
that their work is more tedious & complicated.
Plus, software mistakes, which are inevitable at
the beginning, may cause other employees to
lose faith in the system altogether. Employees
need to trust the system, the company, and their
ability to use the program if they are going to
adopt the supply chain management software.
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IT Advantage - Example
• One of the biggest benefits technology has given to the
supply chain concept is the ability for companies to
Collaborate
• For example, a supplier of consumer goods may be linked up
via the Internet to one of its distributors so that when the
supply gets too low an order for more of those goods can be
placed automatically. In this way, the distributor never has to
worry about running out of a product and disappointing
customers and the supplier doesn't have to worry about
maintaining a large inventory in expectation of demand.
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Collaboration

• Proprietary Networks vs The Internet

• Proprietary Networks – Costly, difficult to
implement & maintain, lack of
compatibility with partners’ networks,
frequent technology updates.
• Internet can be unsecure, solution are
firewalls, VPN, encryption etc.
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Supply Chain & The Internet
• Even though the supply chain concept pre-dates the
Internet, only through the use of web-based software and
communication can it truly reach its full potential.
• Before the Internet, companies were not able to receive or
to send updates, feedback, or other important information
in a timely fashion.
• Also, companies were unable to work with global partners
because of language barriers and time differences. Using
the Internet to handle most of the elements involved in
supply change management, including procurement and
communication, makes the exchange of data and the
running of the supply chain faster.
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Sales Force Automation

• Automates business tasks such as inventory

control, sales processing, and tracking of customer
interactions, as well as analyzing sales forecasts
and performance.

Businesses may have a custom version

developed specifically for their needs, or
choose from among the increasing number
of sales automation software products
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ERP & Supply Chain
• Even for business individuals who do understand the essence
of the supply chain, they may not understand how it fits in or
how it is different from another popular technology: ERP
(Enterprise Resource
• Planning).
Supply chains often work best in conjunction with an ERP
system but they are not meant to replace or to be used instead
of such a system
• ERP systems involve a multitude of business activities,
including customer service that is not a part of supply chains.
•
• ERP system organize a lot of the information supply chains
use to run efficiently. Without ERP most companies run into
problems effectively setting up their supply chains.
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ERP History in Depth

• The evolution of the systems dates back to the year

1960 as per ERP history. The systems in the
yesteryears were designed to assist the manufacturing
process.

• The first software that was developed in this process

happens to be MRP – Material Resource Planning in
the year 1975.This was followed by another advanced
version namely MRP2 - Manufacturing Resource
planning. None of them yielded the benefit of ERP.
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Drawback of MRP Systems
• These software were helpful in manufacturing
process.
• Their benefits did not extend to other Sectors.
• ERP was developed as multifaceted software that
gradually stretched its limits into other areas like
human resource, finance, marketing and so on.
• ERP offered operational convenience and large
reduction in costs coupled with other benefits when
compared with earlier software.
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Advent of ERP

ERP came into being with effect from 1990

though the fact remained that many people are of
the opinion that ERP existed from the year 1960 in
the form of MRP1 and MRP 2.

In Fact MRP II was more or less an ERP except

for its inability to coordinate departments other
than marketing. The whole period from the year
1960 is denoted as the age of ERP.
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How ERP facilitates?
When a customer places an order the company officials get
all details that are needed.

• They don't have to get the level of stock by contacting the

department in charge of inventory.
• Neither do they have to get in touch with the finance
department to know the monetary transactions between the
customer and the company till date.
• Nor do they have to get to know the transportation issues
from the logistics department.

All that they need is available with the click of a mouse.

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Pre-ERP Era

• In past each department often used different systems

and techniques to manage that information.

• Information might also be duplicated many times

within an organization without necessarily being
identical or similarly up-to-date.

• Some of this information might only have been on

paper, making it difficult to access it across the
organization.
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ERP – Consolidates

• ERP software integrates the information used by

an organization's many different functions and
departments into a unified computing system.

• Therefore instead of using isolated departmental

databases to manage information, such as
employee records, customer data, purchase orders,
and inventory, everyone in the enterprise relies on
the same database.
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Are ERP Benefits for Real ?

• The unified nature of an ERP system can lead to

significant benefits, including fewer errors, improved
speed and efficiency, and more complete access to
information.

Saying
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Are ERP Benefits for Real ?

• An ERP system could let buyers in the purchasing

department quickly adjust material orders when they
see an increase or decrease in customer orders.

• Sense-and-Respond Organizations
• The result? They'll either ensure that orders are met on
a timely basis or save on inventory expenses.
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ERP Platform Timeline

• ERP systems, which first ran on mainframes

before migrating to client/server systems, are
now migrating to the Web and include
numerous applications.
1960s 1970s 1980s 1990s 2000+

MRP MRP-II ERP ERP ERP

Mainframe Client-Server Web-based
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ERP is Modular

• The "core" ERP applications or "modules," mean the

back-office capabilities to manage human resources,
accounting and finance, manufacturing, and project-
management functions.

• Major ERP suites from Oracle, PeopleSoft, and SAP

now provide much more -- including modules for
sales force automation, business intelligence,
customer relationship management, and Supply Chain
Management.
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ERP's Hidden Costs
• ERP systems can be difficult to deploy and maintain.
• ERP packages are complex by nature and IT departments must
invariably tailor the software to fit the company's specific
requirements and business processes.
• Installing an ERP system is usually a massive undertaking
measured not in months, but in years.
• Even after the initial deployment, an ERP system must be
continually adapted to reflect changes in the business and
software upgrades and extensions.
• Due to their complexity, ERP projects are expensive.
• Before embarking on an ERP project, it's important to
understand the project's total cost of ownership (TCO), which
extends far beyond the price of the ERP software.
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The Final Word on ERP

• Although ERP projects are complex and expensive,

properly implemented, they are nonetheless worthwhile.
Once fully deployed, the median annual savings from a
new ERP system was $1.6 million per year (2008).
• Every ERP system must be continually maintained and
upgraded to take advantage of new applications,
technologies, and features. ERP software is hardly static.
• It is the software and the business process it describes --
not the computing hardware -- that lies at the real center
corporate information technology.
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Automatic Identification
Through

Bar Codes
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What are Bar Codes

A Barcode (also bar code) is a machine-

readable representation of information
(usually dark ink on a light background to
create high and low reflectance which is
converted to 1s and 0s). Originally, barcodes
stored data in the widths and spacings of
printed parallel lines, but today they also
come in patterns of dots, concentric circles,
and text codes hidden within images called
matrix codes.
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Advantages

• Reduce paperwork & processing time

• Eliminate human errors
• Increase productivity
• Facilitates systems automation
• Enables systems integration
• …….. Leads to cost reduction
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3 Broad Categories
• Linear
Consists of single row of vertical lines. Read by single line
scanner. (Distribution, pharma, grocery & small items)
• Stacked
Several rows of bars and spaces. Read by a multiple ID
scanner with moving laser. (Passports & IDs)
• Matrix
Polygonal arrays of data cells. Read by a 2D image scanner.
(industrial parcels)
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3 Broad Categories

• Linear

• Stacked

• Matrix
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Code 39 Symbology

Clips 1,2, 3 VLC

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Bar Code Printers & Readers
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RFID
Radio Frequency Identification
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What is RFID ?
In RFID, data can be transmitted via radio waves
without physical or line of sight contact. An
RFID system infrastructure consists of a
transponder, a reader, and an IT system running
in the background.
The heart of the technology is the transponder – a tiny
computer chip outfitted with an antenna. It is integrated
into a carrier object – such as an adhesive label or a
plastic card. A code is stored on the chip. The code
encrypts information stored in a database. This process
gives every object containing an RFID transponder an
unmistakable identity. Clip 4
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RFID Photo Gallery
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Linking of Codes and Information
Special readers are needed to receive the stored information.
This send-receive-unit produces an electro-magnetic field that
is picked up by the antenna on the RFID transponder. The
transponder then transmits the number code to the reader.
Depending on the frequency, transmitting power and local
environmental conditions, the read range of the data can be a
few centimeters to several meters.
The reader transmits the code to the database. The IT system
decrypts the code and links it to information stored in the database.

The system’s knowledge, or intelligence, is located in the database,

not in the transponder.
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RFID System

Clip 5, 14
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Active & Passive Transponders
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Categories of RFID

RFID systems use radio waves to transmit information and

power. Similar to radio, RFID applications also employ
various ranges of radio frequencies. Generally, RFID
systems use low frequencies (around 125 kilohertz), high
frequencies (13.56 megahertz) or ultra-high frequencies (860 to
960 megahertz).

The chosen frequency depends on the type of application,

because the various frequencies have their own individual
characteristics – particularly in terms of read range and
speed. Both increase as the frequency rises – raising cost.
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RFID Frequency & Applications

Clip 6
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Research Fields
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Research Fields
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Glossary
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Glossary
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Glossary
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RFID Photo Gallery
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RFID Common Applications

Clip 7, 8, 9
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RFID Industrial Applications
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GPS
Global Positioning System
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GPS / Tracking

• A vehicle tracking system is an electronic device

installed in a vehicle to enable the owner or a third
party to track the vehicle's location. Most modern
vehicle tracking systems use Global Positioning
System (GPS) modules for accurate location of the
vehicle.
• Vehicle information can be viewed on electronic
maps via the Internet or specialized software.
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What is GPS

The Global Positioning System (GPS) is a

satellite-based navigation system made up of a
network of 24 satellites placed into orbit by the
U.S. Department of Defense. GPS was originally
intended for military applications, but in the
1980s, the government made the system available
for civilian use. GPS works in any weather
conditions, anywhere in the world, 24 hours a day.
There are no subscription fees or setup charges to
use GPS.
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The GPS Satellite System
• The 24 satellites that make up the GPS space
segment are orbiting the earth about 12,000 miles
above us. They are constantly moving, making
two complete orbits in less than 24 hours. These
satellites are travelling at speeds of roughly 7,000
miles an hour.
• GPS satellites are powered by solar energy. They
have backup batteries onboard to keep them
running in the event of a solar eclipse, when
there's no solar power. Small rocket boosters on
each satellite keep them flying in the correct path.
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The GPS Satellite System

Clip 10
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How Accurate is GPS?

Today's GPS receivers are extremely accurate,

thanks to their parallel multi-channel design. GPS
receivers are quick to lock onto satellites when
first turned on and they maintain strong locks,
even in dense plants or urban settings with tall
buildings. However, certain atmospheric factors
and other sources of error can affect the accuracy
of GPS receivers. GPS receivers are accurate to
within 15 meters on average.
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How GPS Works

GPS satellites circle the earth twice a day in a very

precise orbit and transmit signal information to
earth. GPS receivers take this information and
calculate the user's exact location. Essentially, the
GPS receiver compares the time a signal was
transmitted by a satellite with the time it was
received. The time difference tells the GPS
receiver how far away the satellite is. Now, with
distance measurements from a few more satellites,
the receiver can determine the user's position and
display it on the unit's electronic map.
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How GPS Works
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GPS – Interesting Facts
• Defense name for GPS): NAVSTAR
• The first GPS satellite was launched in 1978.
• A full group of 24 satellites was achieved in 1994.
• Each satellite is built to last about 10 years.
Replacements are constantly being built and
launched into orbit.
• A GPS satellite weighs approximately 2,000 pounds
and is about 17 feet across with the solar panels
extended.
• Transmitter power is only 50 watts or less.
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Major Areas of Use
• Stolen Vehicle Recovery: Both consumer and commercial vehicles can be
outfitted with GPS units to allow police to do tracking and recovery.
• Fleet Fleet Management: When managing a fleet of vehicles, knowing
the real-time location of all drivers allows management to meet customer needs
more efficiently. Whether it is delivery, service or other multi-vehicle enterprises,
drivers now only need a mobile phone with telephony or Internet connection to be
inexpensively tracked by and dispatched efficiently.
• Asset Tracking: Companies needing to track valuable assets for insurance or
other monitoring purposes can now plot the real-time asset location on a map and
closely monitor movement and operating status.
• Field Service Management: Companies with a field service workforce
for services such as repair or maintenance, must be able to plan field workers’ time,
schedule subsequent customer visits and be able to operate these departments
efficiently.
• Trailer Tracking: Logistics companies often operate lorries with detachable
load carrying units. The part of the vehicle that drives the load is know as the cab
and the load carrying unit is known as the trailer. There are different types of trailer
used for different applications, e.g., flat bed, refrigerated, curtain sider, box
container.
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Tracking Benefits
GPS Features Owner Benefits
Real Time Reporting Timely and accurate information
to manage your business
Eliminate discrepancies between
hours worked and hours claimed
by drivers
Pre-Set Alerts Reduce down-time
Increase productivity
Minimise liability
Driver/Asset accountability
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Driver/Vehicle Benefits Dispatcher Benefits
No customer discrepancies Timely and accurate
or false accusations information to route and
manage employees
Precise job time-
performance verification Eliminate unauthorised
vehicle use
Time sheets are accurate
to the minute Vehicle/driver
accountability
Reduce mobile phone calls
to drivers
Precise job performance Instant reporting of service
tracking orders or deliveries
Better Communications
Reduce employee
overtime pay
Eliminate unapproved or
extended journeys

Tracking Benefits
Route Information Increase efficiency
Increase profits
Lower fuel costs
Reduce mobile phone calls to
drivers
Real-time vehicle tracking
that provides accurate start
and stop times
Unauthorised Zone Alerts Reduce liability
Increase efficiency
Reduce labor costs
Increased profitability
Validates hours worked
Verify if service call was made
or attempted
Verifies whereabouts
Eliminate false accusations
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Deploy vehicles with greater
speed and efficiency
Accurately predict arrival
times or delays
Faster customer response
time
Decrease overtime
Improve driver accountability
Increase efficiency
Reduce labor costs
Increase employee
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It Just Keeps Getting Better -- WAAS

• Wide Area Augmentation System

• WAAS is a system of satellites and ground
stations that provide GPS signal
corrections, giving even better position
accuracy – up to five times better. A
WAAS-capable receiver can give a position
accuracy of better than three meters 95
percent of the time.
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WASS Accuracy

• 100 meters: Accuracy of the original GPS system,

which was subject to accuracy degradation under
the government-imposed Selective Availability
(SA) program.
• 15 meters: Typical GPS position accuracy without
SA.
• 3-5 meters: Typical differential GPS (DGPS)
position accuracy.
• < 3 meters: Typical WAAS position accuracy.
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WASS Accuracy
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Automated Material Handling

• Automatic Guided Vehicle System (AGVS)

Makes use of magnetic or optical guidance

system.
Magnetic system uses an energized wire
laid on floor. In optical system, light beam
focuses on guided path.

Clip 11, 12, 13

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