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It in-scm
This document discusses how information technology can be used to manage the supply chain. It begins by explaining how IT enables data and information to flow readily throughout the entire supply chain. Computer-aided decision support systems then use this complex information to enable better and faster decisions. Internally, integrated systems like ERP link different business functions and processes. Externally, inter-organizational systems connect a firm's systems to external entities to share data and integrated processes. The benefits of an integrated supply chain management system include an integrated view of resources, improved channel efficiency, reduced inventory levels and production costs, and enhanced quality.
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It in-scm
- 1. Information Technology in Managingthe Supply Chain S G Deshmukh
- 2. Advanced use ofIT DATA AND INFORMATION FLOW READILY TO ALL PARTS OF THE SUPPLY CHAIN. COMPUTER-AIDED DECISION-SUPPORT SYSTEMS USE THIS COMPLEX INFORMATION TO ENABLE BETTER, FASTER DECISIONS THAT THEN ARE QUICKLY COMMUNICATED THROUGHOUT THE SUPPLY CHAIN
- 3. Internal Integration Integrated Systems(e.g. ERP) Linking various business functions – – – – – – Purchasing Manufacturing Inventory Finance Marketing Distribution etc Shared data & integrated processes
- 4. External Integration Inter-organizational Systems(Extranet) Link firm’s systems with external entities (Suppliers, distributors, retailers etc.) Shared data & integrated processes
- 5. Benefits due toIntegrated SCM Integrated view of resources and constraints Improved channel efficiency by sharing of information between suppliers & customers Reduced inventory levels Reduced production costs Enhanced Quality Customer driving the entire chain
- 6. IT capabilties Capability Organizational impact/ benefit Typical example Transactional IT can transform unstructured processes into routine transactions. Accounts receivables and accounts payable procedures, Evaluation of various modes of transport Automatica l IT can replace or reduce human labor in a routine process Preparation of vendor rating reports, goods inspection report etc. Analytical IT can bring complex analytical methods to bear on a process Calculations of economic ordering quantity, supplier evaluation using multi-attribute decision making models Information al IT can bring vast amounts of detailed information into process, Data on extensive profile of customer required for customer relationship management etc. Sequential IT can enable changes in the sequence tasks in a process often allowing multiple tasks to be worked on simultaneously Various steps required for checking credit worthiness of a customer. Tracking IT allows the detailed tracking of task status, inputs, and outputs Tracking the status of a particular purchase order., tracking inventory of an item using bar code in a warehouse etc.
- 7. IT Enablers ERP Information integratedwithin the organization Intranet Collaborative working Internet Global linkage of various entities e-commerce Managing the ‘money’ flow faster Datawarehousing/ Data mining Storage of data and tracking of customers
- 8. E-commerce application inSC Marketing & Sales On line product information Electronic selling Product offerings/e-supermarkets Procurement/Logistics Electronic auctioning/bidding Low cost transportation Point-to-point selling Point-to-point warehousing Customer Service Repair/return/replacement On-site fixing Technical support Product usage information Inventory Management High visibility Removal of obsolete items On-line status information on inventory Spot sell of items
- 9. Advantages of E-procurement solutions Indirectprocurement Direct procurement Sourcing Price reduction Visibility demand Unit cost reduction Improved compliance contract of customer Visibility of supply chain capacity Enhanced making Shortened cycle times Accuracy capacity Improved intelligence Reduced admin costs Reduced inv/op costs Enhanced management Shortened proc cycle times inventory of production decision market
- 10. INSIGHTS Inventory & Informationare inter linked uncertainty inventory Buffer more ( lack of proper information ) Better information Less Inventory Systems that accomplish this : Forecasting Customer Needs, Tracking of Distributors
- 11. IT Applications in SCM Point- of - sales information systems for customer voice - For better understanding Tracking of vehicles in Real-Time - For better distribution Tracking of prices, Government policies, Competition etc. - For better understanding of environment
- 12. IT Enables SCto become Lean by cutting down inventory Flexible by reorganization of infrastructure Agile by responding quickly to various needs Green by reducing / eliminating paper & Recycling
- 13. Case: XYZ TyreCompany Tyre Industry at a glance – – – – 16 Major Players 34 Plants Top 5 companies hold 70% market share Rs 9000 Crore Industry Buyers OEM’s Replacement Exports 30 % 60 % 10%
- 14. XYZ at aGlance Product range : Truck Tyres, LCV Tyres , Radial Tyres, Tubes/Flaps etc. Sales Turnover : Rs 1500 Crores. Manufacturing Plants at Baroda, Cochin, Kolkata etc. RDC’s at Gujrat, MP, Delhi, UP etc. DO’s at 98 Locations Extensive network of Exclusive Dealers
- 15. SWOT Analysis Strengths Significant market share. GoodQuality Product Lowest cost producer Tie up with Continental for passenger car radials Modernization and expansion plans in progress Weaknesses Purchasing actions not coordinated Main business functions work in isolation High inventory levels Currently using a PC based package for solving transportation problem (not taking in to account of all production constraints)
- 16. SWOT Analysis (Contd.) Opportunities Growingurbanization, change in buying habits Growing automobile market Export Potential Passenger radial market growing Threats Competition by rival companies in domestic Increase in input costs, severe power cuts Recessionary pressures Free import under Exim policy
- 17. Inbound Logistic Supplier Indigenous –5 days Imported – 30 days 10 days Raw Material Banbury Master Batch – 1/3 day 2/3 days Manufacturing Link in Supply Chain Ope rations 1 days Di p unit – 2/3 day Dual Extruder – 1/3 day 2.7 days 2/3 days Final B atch – 1/3 day Warehousing 4 Roll cal – 2/3 day 1 days Tyre Buil ding – 0.6 day Dealers Tyre Curing and final Assembly – 1/3 day DO 15 days Outbound Logistic 10 days RDC 15 days
- 18. Problems with existingSC Not having quick response layers in the distribution system Lack of proper information flow between the echelon and head office Dispatch schedule based on Transportation model Various business functions such as Forecasting, Production and, Distribution acting in isolation
- 19. IT Enablers…1 Instead ofexisting TRANSPORTATION Model use of TRANSSHIPMENT Model
- 20. Existing SC Plants RDC’s 1 2 DO’s1 2 ……. F01 3 4 30 F04 5 6 7 8 47 60 80 98 Fig 1(a) : Existing Distribution network model of XYZ
- 21. Proposed SC basedon TRANSHIPMENT model Plants RDC’s 1 2 DO’s 1 2 ……. F01 3 4 30 F04 5 6 47 60 80 Fig 1(b) : Proposed distribution network model of XYZ 98
- 22. Advantages of theproposed approach Any node (plant,RDC,DO) can act as a supply point or demand point More sharing of information Supply chain becomes responsive Overall cost reduces
- 23. IT Enablers…2 Decision SupportSystem – – – Model base Data Base User interface
- 24. IT Enablers…2... DSS User Dialogue Module Database Module Modelbase Forecast Logistics Master production schedule dispatches inventory relocation Fig 2 : A Decision Support System for integrated supply chain
- 25. Model base LP modelto optimize the costs Forecasting model for aggregate planning Inventory model to manage inventory
- 26. Various models andpurpose of the model Model Forecast( Trend Analysis) Logistic (Transportation Algorithm) MPS (Linear programming) Dispatches(Transshipment Algorithm) Inventory Reallocation Purpose of the Model Using Trend lines, Moving average to forecast the demand for Do’s Prepare appropriate product mix- Plant wise, item wise taking consideration of total Logistic cost. Prepare the MPS taking in to consideration the contribution and capacities of each item at each plant. Unifying the inventory at various nodes and minimize the transportation cost. Using MPS to find the Material requirement at each plant for a month and to decide whether to place order. To minimize the total distribution cost.
- 27. Databases for Various Models Model Forecast(Trend Analysis) Logistic (Transportation Algorithm) MPS (Linear programming) Dispatches(Transshipment Algorithm) Inventory Reallocation Databases AVG9697,AVG9798, COST_MAS,FORE_OUT,FORE_DO TRA_COST,DEMAND,CAP,MFG_Y_N,C OST,LOG_MIN,MPS,CAPACITY VX_TEMP,VX_ICODE,PM_EQ1,PM_TEM P TRANSP,TOT_DEM,TOT_SUP,T_COST,T _COST2,TOT_OUT BOM,RM_DEM,LOG_MIN,MPS,REVIEW, RM_DE_HS, VENDOR,ORDER_P1 RELOCOUT,INPUT1,INPUTR-1
- 28. Benefits of theapproach Enhancement of effective Information flow Better monitoring of Inventory Reduction in Transportation costs Reduction in lead time Reduction in inventory Reduction in Hidden costs
- 29.