Role

of

IT in
Introduction to IT used in Supply Chain
• Recent development in technologies enables the organization to avail
information easily in their premises.
• Helps to coordinates the activities to manage the supply chain.
• In the field of supply chain management, there has always been an
abundance of data.
• Shipping bills alone make a lot of information. Gathering the data is
important; evaluating the information, setting benchmarks and measuring
performance and progress is critical, the purity of raw material is
important.
• The small issues can have a measure impact. From the data available
many reports are generated, which can pinpoint simple solutions that can
Traditional View of Supply Chain
• Focus on competition
1

• Supply Chains contain far more than the required inventory

2

• Products are handled too many times

3
• Physical carriers struggle to maintain costly equipment on slim margins
4

• No player has enough information to synchronies/optimizes the entire chain.

5
Consequences of Traditional View
• Lack of knowledge of the end-to-end demand function – high levels of uncertainty
1

• Erratic variations in demand (Bull whip effect)

2

• Fragmentation of processes and operations

3

• Lack of process integration with partners

4

• Need for integrated information systems

5
Areas In Which IT Use For Optimizing Supply
Chain
Work flow
• Information coordination
integration is
sharing of
information Technology synchroniz
among supply Assimilation ation
Supply
chain members. chain
• It is exploiting integration
the information
collectively by all
the people. ECR
Quick
response
Importance of IT Management In Supply
Chain
Gathering and evaluating information

For report generation and decision making

Integrating and coordinating processes of supply chain

Cost of information sharing

Quick response
Benefits of Information Technology In supply
Chain

Provide Enable single Allow

information point of decisions Enable
availability contact based on collaboration
and visibility total supply with partners
chain
information
Type of IT Use in SCM Drivers of Using IT in SCM

•Reduction of Cost.
Transaction •Volume of Transactions.
processing •Speeding up Information transfer.
•Elimination of Human Errors.

Supply chain
•Unpredictable
and logistically
planning and demanding Environment.
collaboration

Order tracking •Project Orientation of the Business.

and delivery •In Transit Delivery Consolidation.
coordination
 Data Mining
agents

Buyer
User agents
(personal
Software agents or
agents) Agents Shopping
bots

Monitoring
and
Surveillance
Agent.
Enterprise Resource Planning (ERP)
Systems

• Enterprise Resource Planning (ERP) Systems are Enterprise-wide

Information Systems used for automating all activities and functions
of a business.
• These are transaction - based information systems that are
integrated across the whole business.
Integrate Current Compare Sales
Information Information

DSS

Information About
Consequence of different Forecast Revenue
Alternative Decisions Information
Transportation Management
Systems
• Transportation Management Systems provide more visibility into
shipments and orders. Scheduling issues are also addressed on time.
Multiple transportation options can be explored as a result of earlier
visibility into the supply chain.
• Transportation Management Systems provide more visibility into
shipments and orders. Scheduling issues are also addressed on time.
Multiple transportation options can be explored as a result of earlier
visibility into the supply chain.
Advantages of Transport Management
System
• Increase customer service
• Increase in Warehouse Efficiency
• Develop New Delivery Capabilities
• Inventory Reductions
• Cash Flow Improvements
Electronic Commerce

• Electronic commerce involves the broad range of tools and

techniques used to conduct business in a paperless environment.
Hence it comprises electronic data interchange, e-mail, electronic
fund transfers, electronic publishing, image processing, electronic
bulletin boards, shared databases and magnetic/optical data capture.
• Electronic commerce
helps enterprises to
automate the process
of transferring records,
documents, data and
information
electronically between
suppliers and
customers, thus making
the communication
process a lot easier,
cheaper and less time
consuming.
Electronic Data Interchange
• Electronic Data Interchange (EDI) involves the swapping of business
documents in a standard format from computer-to-computer. It
presents the capability as well as the practice of exchanging
information between two companies electronically rather than the
traditional form of mail, courier, & fax.
Order Delivery Information Flow Without EDI

Buyer Seller
Purchase request
Finance Finance
initiated in the
department department
organization

Payment

Purchasing Paper-based Paper-based Sales

department information information department

Order delivery

Inventory and Receiving Shipping Manufacturing

warehousing department department department
 Order Delivery Information Flow With EDI

Buyer Seller
Purchase request
Finance Billing Finance
initiated in the
department details department
organization

Payment Purchase
order delivery

Purchasing EDI capable EDI capable Sales

department computer computer department

Automated order
confirmation
Inventory and Receiving Shipping Manufacturing
warehousing department department department
 The major advantages of EDI

• Instant processing of information

• Improvised customer service
• Limited paper work
• High productivity
• Advanced tracing and expediting
• Cost efficiency
• Competitive benefit
• Advanced billing
The application of EDI supply chain partners can
overcome :
• The deformity and falsehood in supply and demand
information by remodeling technologies to support real
time sharing of actual demand and supply information.
Barcode Scanning
• Bar Codes are the representation of a number or code in a form
suitable for reading by machines. Bar codes are widely used
throughout the supply chain to identify and track goods at all stages
in the process. Bar codes are a series of different width lines that may
be presented in a horizontal order, called ladder orientation, or a
vertical order, called picket fence orientation.
Radio Frequency Identification
• RFID is a vital piece of technology that can provide innumerable
benefits to the business owner.
• RFID chips are placed on every product and provide a way for
business owners to easily track their inventory. Due to the increased
visibility RFID chips provide, they will substantially improve your
supply chain efficiency by detecting any order anomalies as they
occur, enabling employees to immediately correct mistakes.
• In addition, it allows for easier and more consistent tracking, enabling
business owners to have maximum control and visibility over their
products at all times.
• RFID chips provide computerized product management, they can
eliminate the potential for errors, simplify the supply chain, and
reduce operating costs.
 Sales force Automation
• Sales force automation is a technique of using software to :
• Automate the business tasks of sales
• Including order processing
• Contact management
• Information sharing
• Inventory monitoring and control
• Order tracking
• Customer management
• Sales forecast analysis
• Employee performance evaluation
THANK
You