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Value of Information in SCM

This document discusses the value of information in supply chain management (SCM). It outlines key roles of information in SCM like visibility, demand forecasting, and inventory management. Common sources of SCM information are described such as ERP systems, supplier data, and customer orders. Challenges of information management like data quality, security, and volume are also covered. Examples of how companies like Amazon, Walmart, and Zara use information to improve SCM operations and reduce costs are provided. Emerging trends involving digital twins, blockchain, AI/ML, IoT, and sensors are presented.

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23 views

Value of Information in SCM

This document discusses the value of information in supply chain management (SCM). It outlines key roles of information in SCM like visibility, demand forecasting, and inventory management. Common sources of SCM information are described such as ERP systems, supplier data, and customer orders. Challenges of information management like data quality, security, and volume are also covered. Examples of how companies like Amazon, Walmart, and Zara use information to improve SCM operations and reduce costs are provided. Emerging trends involving digital twins, blockchain, AI/ML, IoT, and sensors are presented.

Uploaded by

rashminagar611
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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*Value Of

Information in
SCM
By: Kunal & Devpiya Tyagi
* Supply chain management (SCM) is the process of
managing the flow of goods and services to and from a
business, including every step involved in turning raw
materials and components into final products and getting
them to the ultimate customer.
* EffectiveSCM can help streamline a company's activities
to eliminate waste, maximize customer value, and gain a
competitive advantage in the marketplace.

*Supply Chain
Management
 Supply Chain Management (SCM) plays a crucial role in
the success and efficiency of businesses across various
industries. Its importance can be highlighted in several
ways:
• Cost Efficiency
• Customer Satisfaction
• Inventory Management
• Risk Management
• Sustainability

*IMPORTANCE
*Role of information in
SCM
* Information plays a crucial role in Supply Chain Management and is
often considered one of its critical components. The effective flow of
information throughout the supply chain enables better decision-
making, improved coordination, and enhanced efficiency. Here are
some key roles of information in SCM:
 Visibility
 Demand Forecasting
 Inventory Management
 Supplier Collaboration
 Order Management
 Transportation and Logistics
 Quality Control
 Risk Management
 Communication and Collaboration
*Types of Information
in SCM

 Demand Information
 Inventory Information
 Supplier Information
 Production Information
 Transportation Information
 Financial Information
 Regulatory Information
 Risk Information
 Supplier Performance Data
 Customer Data
*Common sources of
information in SCM
Enterprise Resource Planning (ERP) Systems: ERP systems
centralize data from various departments within an organization,
providing a comprehensive view of supply chain activities, including
procurement, manufacturing, inventory, and sales.
Supplier Data: Information provided by suppliers includes product
availability, pricing, lead times, quality data, and performance metrics .
Customer Orders and Demand Data: Customer orders, sales
forecasts, and historical sales data are crucial for demand forecasting and
production planning.
Inventory Systems: Inventory management systems track stock levels,
reorder points, and order history, offering insights into stock availability
and movement.
Transportation Management Systems (TMS): TMS provides
information on shipping options, carrier performance, and
transportation costs, helping optimize logistics and distribution.
Warehouse Management Systems (WMS): WMS tracks the
movement and storage of goods within warehouses, providing real-time
visibility into inventory and order processing.
* Challenges in Information
management

* Information management in supply chain management (SCM) can be


challenging due to various factors. These challenges can hinder the
efficient flow and use of information within the supply chain. Some
common challenges include:
* Data Quality and Accuracy: Ensuring data quality and accuracy can be
difficult. Inaccurate or incomplete data can lead to flawed decisions and
inefficiencies in the supply chain. Data validation and cleansing processes are
often required to maintain data quality.
* Data Silos: Many organizations have data stored in different systems and
departments, creating data silos. Integrating data from various sources to
gain a holistic view of the supply chain can be complex and time-consuming.
* Data Security and Privacy: Protecting sensitive supply chain data from
breaches and cyberattacks is a constant concern. Compliance with data
protection regulations such as GDPR or HIPAA adds an additional layer of
complexity to data management.
* Real-time Data Management: Managing and processing real-time data
from IoT sensors and other devices can be demanding, particularly when a
high volume of data needs to be collected and analyzed promptly.
* Data Volume and Scalability: As the supply chain grows, the volume of
data also increases. Ensuring that the systems and infrastructure can handle
large volumes of data and scale appropriately can be a challenge.
* Data Standardization: Standardizing data formats and definitions across
the supply chain can be challenging when dealing with various stakeholders,
each with their own data standards and systems.
* Some Examples of Information
helps in improving operations
* Amazon:
Amazon is known for its advanced SCM and extensive use of data. The company
uses predictive analytics and machine learning to forecast demand, optimize
inventory, and plan logistics. By using data-driven decision-making, Amazon has
reduced shipping costs and improved delivery times, enhancing customer
satisfaction.
* Walmart:
Walmart introduced Retail Link, a platform that shares real-time sales data with
suppliers. This enables suppliers to adjust their production and inventory levels
based on actual demand, reducing overstocking and improving efficiency.
Walmart's SCM innovations have allowed the company to maintain low prices and
increase profitability.
* Zara:
Zara, a fast-fashion retailer, uses real-time sales data and customer feedback to
inform its production and distribution decisions. By reducing lead times and
optimizing inventory, Zara has minimized excess inventory and markdowns,
resulting in significant cost savings.
*Future Trends
* Digital Twins and Simulation: Digital twins are virtual representations
of physical supply chain assets and processes. They enable real-time
monitoring and simulation to optimize supply chain operations,
including predicting and preventing disruptions, enhancing decision-
making, and reducing costs.
* Blockchain Technology: Blockchain is increasingly being used for
secure, transparent, and traceable transactions in the supply chain. It
enhances trust and reduces fraud, while also improving traceability,
particularly in industries like food, pharmaceuticals, and luxury goods.
* AI and Machine Learning: AI and machine learning algorithms are
being employed to improve demand forecasting, inventory
management, route optimization, and supplier performance. These
technologies enable more accurate decision-making and can
autonomously adapt to changing conditions.
* IoT and Sensor Integration: The Internet of Things (IoT) is expanding,
with sensors and devices being integrated into the supply chain. Real-
time data from IoT devices, such as temperature sensors, location
trackers, and RFID tags, enhance visibility, monitoring, and control.
THANK
YOU

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