LOGISTICS MANAGEMENT

AIMS INSTITUTES
Module 6

COURSE CO-ORDINATOR : Dr.L.R.S.Mani

Role of Information

 Information connects various stages of the supply

chain and allows them to coordinate their actions
and provides many benefits of maximizing total
supply chain profitability.
 Information plays a crucial role in day-to-day
operations of each stage in a supply chain. For e.g. a
production scheduling system uses information on
demand to create a schedule that allows the
manufacturing plant to produce the right products in
the right time to meet the demand.
Role of Information

 The key component of information which a firm must

analyze to increase efficiency and improve
responsiveness within a supply chain are:
1. Push vs Pull phase – push systems require information
in the form of MRP systems to implement MPS. Pull
systems require information on actual demand to be
transmitted quickly throughout the supply chain to
facilitate production and distribution of parts and
products that reflect the real demand accurately.
Role of Information

2. Coordination and information sharing – it is necessary

to share relevant information between different stages
of the supply chain to accomplish the objective of
maximizing total supply chain profitability.
3. Forecasting and aggregate planning – the aggregate
plan becomes an important piece of information to be
shared within the supply chain as it transforms
forecasts into plans or activity to meet the projected
demand.
Role of Information

4. Enabling technologies – some of the technologies

like EDI, Internet, ERP etc are used to share and
analyze information in the supply chain. Managers
must decide which technologies to be used and
how they will be integrated into their firms and
their supply chain partners.
The trade-off is between the cost of information
and the responsiveness that information creates in
the supply chain.
Integrated Logistics Information
Requirements
1. Inventory flow – information on the movement of
materials right from the initial shipment from the
supplier till the delivery of finished goods to the
customer.
2. Logistical operations – three areas
a. Physical distribution – linking manufacturers,
wholesalers & retailers to provide product availability.
b. Manufacturing support – managing WIP, help in
formulation of MPS.
c. Procurement – co-ordination with suppliers.
Integrated Logistics Information
Requirements
3. Information flow – integrates the three operating areas i.e. physical
distribution, manufacturing support and procurement. Information
facilitates co-ordination of planning and control in day-to-day operations.
In the absence of information, there will be wastage of effort in the
logistics system.
Integrated Logistics Information System
(ILIS)
 An ILIS can be defined as the involvement of people, equipment and
procedures required to gather, sort, analyze, evaluate and then distribute
needed information to the appropriate decision maker in a timely and
accurate manner so that they can make quality logistics decisions.
Integrated Logistics Information System
(ILIS)
 ILIS is all about:
1. Getting the right information
2. Keeping the information accurate
3. Communicating the information effectively
 Components of ILIS:
1. Order processing system
2. Research and intelligence system
3. Decision support system
4. Reports and output system
Integrated Logistics Information System
(ILIS)
 Order processing system has direct impact on the
customer
 Research and intelligence systems scans and
monitors both the internal and external environment.
It covers (1) the integration of logistics planning with
overall corporate planning (2) the management of
interface with other functions (3) strategic options
for organization and staffing (4) integration of
information technologies (5) make or buy decisions
(6) emphasis on productivity and quality
Integrated Logistics Information System
(ILIS)
 Decision support systems (DSS) – provide solutions to complex logistics
problems making use of analytical modelling. It consists of (1) basic file of
internal & external data (2) critical factor data file which defines the scope
of decision making (3) policy and parameter data files for each functional
area (4) solution file of past analysis results which are compared against
future analyses.
Integrated Logistics Information System
(ILIS)
 Reports and output system – planning outputs
include sales trends, economic forecasts and
other information pertaining to market place.
 Operating reports are useful for inventory control,
transportation scheduling and routing, purchasing
and production scheduling.
 Control reports are used to analyze expenses,
budgets & performance.
Integrated Logistics Information System (ILIS)
Integrated Logistics Information System
(ILIS)
 Electronic data interchange (EDI) – it is the electronic transfer of standard
business documents between organizations. EDI is used extensively in ILIS to
enhance the breadth, timeliness & quality of data. EDI transmissions allow a
development to be directly processed and acted upon by the organization
which receives the information.
Integrated Logistics Information System
(ILIS)
 Advantages of EDI:
1. Cost reduction
2. Increased productivity
3. Faster order cycle times
4. Better customer focus
5. Reduced clerical work
6. Reduced paper and postage
7. Better working relationships with partners
8. Means to achieve a competitive advantage
Integrated Logistics Information System
(ILIS)
 Artificial intelligence (AI) – it is concerned with the concept and methods of
inference by a computer and the symbolic representation of the knowledge
used in making inferences.
 AI includes a number of areas such as computer aided instruction, voice
synthesis and recognition, robotics etc.
Integrated Logistics Information System
(ILIS)
 Artificial intelligence is used in logistics management to:
1. Model response time requirements for customer delivery
2. Model transportation cost and time for various
transportation modes and routings
3. Determine which warehouses should serve which plants
and which products
4. Model customer service response with various levels of
reliability
Logistics Information System

Co-ordinated Flow of Information

Unit 2 - Logistics Activities 18

Logistics Information System

A logistics management information system (LMIS) is
a system of records and reports – whether paper-based
or electronic – used to aggregate, analyze, validate and
display data (from all levels of the logistics system)
that can be used to make logistics decisions and
manage the supply chain.
19
Distinct elements of Logistics
Information
Sl. System
Element Description
1 The Inputs Data items needed for planning and operating
logistics system obtained from sources like
customers, company records, and published
data and company personnel.

2 The Database and its Selection of the data to be stored and

associated Manipulations
3 The Outputs
retrieved, choice of the methods of analysis
and choice of the basic data-processing
procedures
Summary reports of cost or performance
statistics,
status reports of inventories or order progress,
exception reports that compare desired
performance with actual performance, and
reports that initiate action.

4 The Resources Human Resources, Hardware Resources,

Software Resources, Data Resources20
Integrated Information Technology
Solutions System type Logistics examples
Office automation system: provides effective ways to process Spreadsheet applications to calculate optimal order
personal and organizational business data, to perform quantities. facility location, transport cost minimization,
calculations, and to create documents among others
Communication system: helps people work together by Virtual meetings via computer technology Voice-based order
interacting and sharing information in many different forms picking
Transaction processing system (TPS):collects and stores Electronic data interchange, Automatic identification
information about transactions; controls some aspects of technologies such as bar codes, Point-of-sale systems
transactions

Management information system (MIS) and executive

information system (EIS):
converts IPS data into information for monitoring performance Logistics information system
and managing an organization; provides executives information In
a readily accessible format

Simulation
Decision support system (DSS): helps people make decisions by Application-specific software such as warehouse
providing information, models, or analysis tools
management systems, Data mining
Enterprise system: creates and maintains consistent data
processing methods and an integrated database across multiple Logistics modules of enterprise resource planning systems
business
Unit 2 - Logistics functions
Activities 21
Logistics Information System

Global Positioning System - network of satellites that transmits signals that

pinpoint the exact location of an object

Unit 2 - Logistics Activities 22

Logistics Information System

Voice based order picking - use of speech to guide order-picking activities

Unit 2 - Logistics Activities 23