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IT in Supply Chain Management

This document discusses management information systems and the role of IT in supply chain management. It covers key topics like the definition of a supply chain, major decision areas in SCM like location, production and inventory. It also explains concepts like the bullwhip effect and how IT can help address issues in the supply chain through applications like ERP, e-commerce and data sharing. Finally, it discusses the importance of information flow across the three main SCM processes of customer relationship management, internal supply chain management and supplier relationship management.

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44 views

IT in Supply Chain Management

This document discusses management information systems and the role of IT in supply chain management. It covers key topics like the definition of a supply chain, major decision areas in SCM like location, production and inventory. It also explains concepts like the bullwhip effect and how IT can help address issues in the supply chain through applications like ERP, e-commerce and data sharing. Finally, it discusses the importance of information flow across the three main SCM processes of customer relationship management, internal supply chain management and supplier relationship management.

Uploaded by

naag1000
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Management Information System

IT in Supply Chain Management

Submitted to
Prof. Bins Matthew

Group # 8
Group Members

 Sendhil Nadar (36)

 Gurdeep Nagi (37)

 Kalpesh Nahata (38)

 Angad Singh Oberai (39)

 Gurmeet Singh Obhan (40)


What is Supply Chain?
 Definition and Meaning

Supplier Manufacturer Distributor Retailer Customer

 Functions and Activities of SCM


Objective of Supply Chain

 Maximize overall profit

 Profit
• Revenue generated from customer - costs incurred
along the entire chain
(e.g. manufacturing / storing / distributing the product)
Supply Chain Decisions

 Strategic

 Operational
So What is supply Chain
management?

17-6
Major Decision Areas in SCM
 Location

 Production

 Inventory

 Transportation
Bull Whip Effect

 Small changes in consumer demand result in


large variations in orders placed upstream

 Amplification of order size variation as one


moves up the supply chain

Delay 2 weeks Delay 2 weeks Delay 2 weeks

Supplier Manufacturer Distributor Retailer Customer

Orders 40 Orders 25 Orders 15 Buys 10


Illustration
Proctor & Gamble coined the term “bullwhip effect” by
studying the demand fluctuations for Pampers (disposable
diapers)
Causes of Bull Whip

 Forecast errors

 Overreaction to backlogs

 Lead time

 No communication and coordination

 Delay times for material and information flow

 Batch ordering
Impact of Bull Whip
 Excessive inventory investments

 Poor customer service levels

 Lost Revenues

 Reduced Productivity

 More difficult decision making

 Sub-Optimal transportation
Role of Information Technology in a
Supply Chain
 Information is the driver that serves as the “glue”
to create a coordinated supply chain

 Information must have the following


characteristics to be useful:
• Accurate
• Accessible in a timely manner
• Information must be of the right kind
Importance of Information in a
Supply Chain
 Relevant information available throughout the
supply chain allows managers to make decisions
that take into account all stages of the supply
chain

 Allows performance to be optimized for the


entire supply chain, not just for one stage – leads
to higher performance for each individual firm
in the supply chain
Information & Technology:
Application of Supply Chain
 E-commerce

 Electronic data interchange

 Data warehouse

 Bar coding & scanner

 Enterprise resource planning


The Supply Chain IT Framework
 The Supply Chain Macro Processes

• Customer Relationship Management (CRM)


• Internal Supply Chain Management (ISCM)
• Supplier Relationship Management (SRM)
• Plus: Transaction Management Foundation

 Why Focus on the Macro Processes?


 Macro Processes Applied to the Evolution of
Software
Macro Process in a Supply Chain

Supplier Internal Customer


Relationship Supply Chain Relationship
Management Management Management
(SRM) (ISCM) (CRM)

Transaction Management Foundation (TFM)


Customer Relationship Management
 The processes that take place between an
enterprise and its customers downstream in the
supply chain

 Key processes:
• Marketing
• Selling
• Order management
• Call/Service center
Internal Supply Chain Management
 Includes all processes involved in planning for and
fulfilling a customer order

 ISCM processes:
• Strategic Planning
• Demand Planning
• Supply Planning
• Fulfillment
• Field Service

 There must be strong integration between the ISCM


and CRM macro processes
Supplier Relationship Management
 Those processes focused on the interaction between
the enterprise and suppliers that are upstream in the
supply chain

 Key processes:
• Design Collaboration
• Source
• Negotiate
• Buy
• Supply Collaboration

 There is a natural fit between ISCM and SRM


processes
The Transaction Management
Foundation
 Enterprise software systems (ERP)
 Earlier systems focused on automation of simple
transactions and the creation of an integrated
method of storing and viewing data across the
enterprise
 Real value of the TMF exists only if decision making
is improved
 The extent to which the TMF enables integration
across the three macro processes determines its
value
17-20
The Future of IT in Supply Chain
 At the highest level, the three SCM macro processes
will continue to drive the evolution of enterprise
software

 Software focused on the macro processes will become


a larger share of the total enterprise software market
and the firms producing this software will become
more successful

 Functionality, the ability to integrate across macro


processes, and the strength of their ecosystems, will
be keys to success
17-22

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