Supply Chain

Management,
11e
Chapter 14: Supply Chain Technology:
Managing Information Flows

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Discussion Outline
• Information requirements

• Systems capabilities

• Supply chain management software

• Technology selection

• Supply chain technology innovations

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Information Requirements (1 of 2)
• Information connects the
extended supply chain, providing
cross-chain insights regarding
demand, customer orders,
delivery status, inventory stock

Source Figure 14.1: Brian J. Gibson, Ph.D. Used with permission.

levels, and production schedules.

• Three principle supply chain

information requirements:
− Meet quality standards
− Support multidirectional flows
− Provide decision support

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Information Requirements (2 of 2)
Meet Quality Support Multidirectional
Provide Decision Support
Standards Flows
Seven • Internal information • Strategic decisions: Long-
information sharing range supply chain plans
quality • External information • Tactical planning: Cross-
standards: sharing organization linkages and
• Accuracy • Suppliers supply chain activity
• Accessibility − Logistics service coordination.
• Relevancy providers • Routine decisions: Rules-
• Timeliness − Financial based decision making.
• Transferability institutions • Execution and transaction
• Usability − Government processing: Completion of
• Reliability agencies fulfillment activities

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Systems Capabilities
Enable Process Excellence
Link Network Elements
Mitigate Technology Risks

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Systems Capabilities
Enable Process Excellence
The system must facilitate excellent performance across the plan, buy,
make, move, and return processes of a supply chain.

1. Cross-chain visibility. Supports process variability reduction, performance optimization, & cost
control.
2. Agility. Support analytics that help to understand volatility and respond appropriately.
3. Velocity. Adjust speeds according to situations.
4. Synchronization. Facilitates data synchronization & real-time information sharing between
partners.
5. Adaptability. Enable strategic adaptation of supply chain design & capabilities to evolving
conditions.
6. Segmentation. Help define customer segments, understand cost to serve & prioritize service
execution.
7. Optimization. Enable consideration of trade-offs, effectively deploy resources, & make decision.
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Systems Capabilities
Link Network Elements
A cohesive network of integrated technologies, skilled people, and robust
processes must be established.

Source Figure 14.2: Brian J. Gibson, Ph.D. Used with permission.

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Systems Capabilities
Mitigate Technology Risks

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

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SCM Software

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SCM Software
Primary Categories

Source Figure 14.3: Brian J. Gibson, Ph.D. Used with permission.

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SCM Software: Planning Applications
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 • Inventory planning

• Sales and operations planning/integrated • Distribution planning
business planning
• Strategic network design
• Collaborative planning, forecasting, and
replenishment • Inventory strategy optimization
• Vendor-managed inventory/direct point of sale • Supply planning
• Event planning • Production/multiplant capacity planning
• Demand planning • Production/factory planning and scheduling

Source Table 14.1: Adapted from Gartner IT Glossary. Retrieved from https://www.gartner.com/it-glossary/scp-supply-chain-planning/

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SCM Software: Execution Applications
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 Transportation Management Systems

• Inventory management • Mode and carrier selection
• Labor management • Route planning and optimization
• Order processing • Dispatching and scheduling
• Yard/dock management • Freight audit and payment
• Returns management • Performance analysis
Order Management Systems Global Trade Management
• Sales order entry • Trade compliance
• Pricing and credit checks • International logistics
• Inventory allocation • Global order management
• Invoice generation • Global trade financial management
Distributed Order Management Manufacturing Execution Systems
• Order assignment • Work-in-process management
Source Table 14.2: Adapted from Gartner IT Glossary. Retrieved from http://www.gartner.com/it-glossary/ sce-supply-chain-execution/

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SCM Software: Event Management Tools
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.

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SCM Software: Analytics & Intelligence Tools
Capabilities
• The data collection & “big data” analytics • Development of graphical dashboards
• Self-service reporting • Activity monitoring supporting event mgmt.
• Performance scorecarding versus goals • Access to data residing on multiple SCIS

Opportunity Areas
• Generating valuable insights about complex global operations
• Providing more granular visibility of spending
• Improving S&OP & demand forecasting
• Resolving logistics bottlenecks

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SCM Software: Facilitating Tools
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.

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SCM Technology
Implementation

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SCM Technology Implementation
Informed Decision Making
1. Need assessment. Understand the supply chain that the technology is
intended to support.
2. Software selection. 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)
3. Implementation issues. Training, cultural change, systems
interoperability, data synchronization, data standardization, and application
integration

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SCM Technology Implementation
Golden Rules for Success
1. Get sponsorship of senior leaders
2. Choose the right technology solutions
3. Select an implementation leader with project management skills
4. Choose the right consultants to support implementation
5. Staff the project team with the best and brightest people
6. Manage “scope creep” to avoid implementation delays
7. Secure adequate resources for training and post-go-live support

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Supply Chain Technology
Innovations

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Supply Chain Technology Innovations
Smart Technologies
To enable the supply chain evolution, companies must effectively digitize their
supply chains and deploy smart technologies

• Supply Chain Digitization

• Artificial Intelligence & Machine Learning
• IoT
• Blockchain
• Digital Twin
• Quantum Computing
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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.
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