426 W6: Case Discussion
CHAPTER 14
Supply Chain Technology: Managing Information Flows
Supply Chain Management: A Logistics Perspective (10e)
Coyle, Langley, Novack, and Gibson
© 2016 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Outline
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2
Information requirements
Systems capabilities
Supply chain management software
Technology selection
Supply chain technology innovations
Information Requirements
Information connects the extended supply chain, providing cross-chain insights regarding demand, customer orders, delivery status, inventory stock levels, and production schedules.
Three principle supply chain information requirements:
Meet quality standards
Support multidirectional flows
Provide decision support
3
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Source: Figure 14-1
Information Requirements (continued)
4
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Seven information quality standards:
Accuracy
Accessibility
Relevancy
Timeliness
Transferability
Usability
Reliability
Meet Quality Standards
Internal information sharing
External information sharing
Suppliers
Logistics service providers
Financial institutions
Government agencies
Support Multidirectional Flows
Strategic decisions: Long-range supply chain plans
Tactical planning: Cross-organization linkages and supply chain activity coordination.
Routine decisions: Rules-based decision making.
Execution and transaction processing: Completion of fulfillment activities
Provide Decision Support
Systems Capabilities
Enable Process Excellence
Link Network Elements
Mitigate Technology Risks
Systems Capabilities Enable Process Excellence
6
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The system must facilitate excellent performance across the plan, buy, make, move, and return processes of a supply chain.
1
2
3
4
5
6
7
Cross-chain visibility
1
2
3
4
5
6
7
Agility
Velocity
Synchroni-zation
Adapta-bility
Segmenta-tion
Optimiza-tion
Supports process variability reduction, performance optimization, & cost control.
Support analytics that help to understand volatility and respond appropriately.
Adjust speeds according to situations.
Facilitates data synchronization & real-time information sharing between partners.
Enable strategic adaptation of supply chain design & capabilities to evolving conditions.
Help define customer segments, understand cost to serve & prioritize service execution.
Enable consideration of trade-offs, effectively deploy resources, & make decision.
Systems Capabilities Link Network Elements
7
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A cohesive network of integrated technologies, skilled people, and robust processes must be established.
Source: Figure 14-2
Systems Capabilities Mitigate Technology Risks
8
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Common risks must be identified and mitigated to maximize the return on technology investments.
The pitfalls associated with systems adoption or upgrades
Unrealistic assumption that supply chain technologies will readily solve or fix flawed supply chains.
Weak technology-process alignment, leading to ill-fitting solutions that fail to achieve their promise
Technology gaps as a result of piecemeal purchases and deployment of technologies
Challenges in cross-chain systems integration with suppliers, service providers, and customers
Poor planning and preparation for technology implementation
Supply Chain Management (SCM) Software
SCM Software Four Software Categories
10
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Source: Figure 14-3
SCM Software: Planning Applications
11
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SCM planning applications help organizations shift from autonomous planning activities to synchronized planning processes that use real-time data for collaboration across departments, suppliers & customers.
| Available/capable to promise Sales and operations planning/integrated business planning Collaborative planning, forecasting, and replenishment Event planning (promotion, life cycle) Demand planning Supply planning Inventory planning | Production/multiplant capacity planning Production/factory planning and scheduling Vendor-managed inventory/direct point of sale Distribution planning Strategic network design Inventory strategy optimization |
Source: Table 14-1
SCM Software: Execution Applications
12
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Companies deploy a variety of execution software to facilitates desired performance of day-to-day operating tasks required to support customer demand.
| Warehouse Management Systems Inventory management Labor management Order processing Yard/dock management Returns management Order Management Systems Sales order entry Pricing and credit checks Inventory allocation Invoice generation Distributed Order Management Order assignment | Transportation Management Systems Mode and carrier selection Route planning and optimization Dispatching and scheduling Freight audit and payment Performance analysis Global Trade Management Trade compliance International logistics Global order management Global trade financial management Manufacturing Execution Systems Work-in-process management |
Source: Table 14-2
SCM Software: Event Management Tools
13
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply chain event management tools collect data in real time from multiple sources across the network and convert them into information that allows companies to automate the monitoring of supply chain events as they occur on a day-to-day basis.
Provide the cross-chain visibility needed to detect, evaluate, and adapt to changing conditions before they snowball into major problems.
Built-in work flow rules initiate automated responses that are either preemptive or reactive.
Integrated into other applications, event management solutions help to close the loop between planning and execution to support synchronization of end-to-end activities.
SCM Software: Business Intelligence Tools
14
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The data collection & “big data” analytics
Self-service reporting
Performance scorecarding versus goals
Development of graphical dashboards
Activity monitoring supporting event mgnt.
Access to data residing on multiple SCIS
BI Capabilities
BI Opportunity Areas
Generating valuable insights about complex global operations
Providing more granular visibility of spending
Improving
Resolving logistics bottlenecks
S&OP & demand forecasting
SCM Software: Facilitating Tools
15
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Facilitating systems and applications provide critical links between supply chain processes, the organization, and external stakeholders. Collectively, they create a holistic view of the supply chain.
Enterprise resource planning (ERP) systems
Incorporate internal and external systems into a single unified solution that spans the enterprise.
Supplier relationship management (SRM)
A controlled and systematic approach to managing an organization’s sourcing activities for goods and services.
Customer relationship management (CRM)
Focuses on practices, strategies & technologies used to manage and analyze customer interactions & data throughout relationship lifecycle
Automatic identification (auto-ID) & data capture technologies
Recognize objects, collect relevant information, and feed the data directly into the SCIS.
SCM Technology Implementation
SCM Technology Implementation
17
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The key to harnessing the capabilities of supply chain technology within a reasonable time frame is informed decision making, with a clear vision regarding how technology spending will facilitate supply chain strategy and satisfy specific requirements.
1
Need Assessment
Mitigate Implementa-tion Issues
3
2
Software Selection
Understand the supply chain that the technology is intended to support.
1
A multifaceted decision, involving development alternatives (off the shelves vs. in-house), types of applications (individual applications vs. integrated suite), and purchase options (on-premise vs. SaaS)
2
Training, cultural change, systems interoperability, data synchronization, data standardization, and application integration
3
SCM Technology Implementation 10 Golden Rules for Success
18
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Secure commitment of senior management.
1
Remember that it is not just an information technology project.
2
Align the project with business goals.
3
Understand the software capabilities.
4
Select partners carefully.
5
Follow a proven implementation methodology.
6
Take a step-by-step approach for incremental value gains.
7
Be prepared to change business processes.
8
Keep end users informed and involved.
9
Measure success with key performance indicators (KPIs).
10
Supply Chain Technology Innovations
Supply Chain Technology Innovations
20
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Connected devices, with sensors, on/off switches, & Internet linkages, allowing intelligent connection of people, processes, data, and equipments.
Internet of Things (IoT)
Advancements in GPS technology, auto-ID, wireless connectivity, tablets, and smartphones improve visibility, asset control, and agility of supply chain.
Mobile Connectivity
Automation has long been a part of the manufacturing plant.
Warehouse automation has gained tremendous traction.
Connective technologies needed to support driverless vehicles are under rapid development.
Functional Automation
Images courtesy of Aria Systems, Eric D. Brown, Fathom
Summary
To produce actionable knowledge, supply chain information must be high quality, readily flow between organizations, and support a variety of decision types.
A well-designed SCIS links people, processes, and technology in a manner that provides actionable information and enhances decision making.
four general categories of supply chain software are: (1) planning tools for forecasting and related activities, (2) execution systems for management of day-to-day processes, (3) event management tools to monitor supply chain flows, and (4) business intelligence applications used to analyze performance.
To maximize SCIS investment success, managers must effectively assess the SCM requirements, understand software options, and address the technical issues.