Supply Chain Management

(MS-409)
Lecture _7

Information technology (IT)

in
Supply Chain Management

Course Instructor: Dr. Ammar ul Hassan

Email Id: [email protected]

Department of Mechanical Engineering,

University of Engineering & Technology,
Taxila
Information technology (IT)

• The study or use of systems (especially computers and

telecommunications) for storing, retrieving, and sending
information.
Role of IT in SCM

• The role of IT in supply chain management is to help organizations

make better decisions, cut costs, and boost performance across
various areas, from logistics and customer service to inventory
management and supplier collaboration.

• IT integrates various operations carried out by different companies

in the supply chain. It speeds up the business processes and
prevents bottlenecks.

• Companies are closer to achieving on-time procurement, shorter

inventory, and better efficiency, especially in manufacturing.
Role of IT in SCM

• IT is one of the most important enabler of the Supply chain in

modern complex world of Global Businesses.

• The IT is the engine of supply chain.

• IT has the potential to facilitate and improve collaborative planning

amongst supply chain partners by sharing information on demand
forecasts.
Information Technology in Supply Chain or
Logistics

• The following are the reasons why information technology

(IT) is important for the supply chain:
Information Technology in Supply Chain or
Logistics (Importance)

1. Effective Information Management

• Effective information management can help to ensure that a

firm meets the logistical needs of its customers.

• Firms need to place priorities on logistical elements such as

on-time delivery, stockout levels, order status, shipment
tracking, order convenience, order completeness, creation of
customer pick up, and product substitution.

• The logistics managers are responsible for these activities

and time and accurate flow of meaningful information enable
them to successfully implement the same
Information Technology in Supply Chain or
Logistics

2. Useful Combination of Software and Hardware

• Logistics information systems combine hardware and software to

manage, control, and measure logistics activities that occur
within specific firms as well as across the overall supply chain.

• Hardware includes computers and servers, internet technologies,

auxiliary technologies such as barcode and RF devices,
communication channels, and storage media.

• The software includes systems and application programs used for logistics
and supply chain activities.
Information Technology in Supply Chain or
Logistics

3. Helps in Decisions Support Systems

• Companies need better information on their customers (such as

customer service and sales forecasting), information on their
suppliers. (such as production planning and sourcing and
purchasing).

• Areas of technology systems including decision support

systems/information technology and logistics management activities
were delivering needed information to the management for making
strategic decisions.
Information Technology in Supply Chain or
Logistics
4. Digital Order Processing System

• The order processing system is the nerve center of the logistics

and supply chain system.
• A customer order provides the communication message
to set the logistics process in motion.
• The cost and efficiency of the entire communication can result in
loss of customers or excessive transportation, inventory, and
warehousing costs together with possible manufacturing
inefficiencies caused by frequent changes in the production line.
• The order processing and information systems form the
foundation for logistics and company management information
systems.
Information Technology in Supply Chain or
Logistics

5. Computerization of Firm Activities

• Leading-edge organizations are utilizing computers

extensively to support logistics activities.

• Computers are used in order entry, order processing,

finished goods inventory control, performance
measurement, freight audit/payment, and warehousing.

• World-class logistics practices include the use of logistics

information systems as a key to competitiveness.
Information Technology in Supply Chain or
Logistics

6. Fast Connectivity through WEB

• Today, companies are restructuring their businesses to function in the new

era of electronic commerce.

• Organizations can have a flood of information on websites, business to

business requirements, and online customer and supplier linkages.

• ERP (Enterprise resource planning) systems, purchasing databases and

data warehouses, electronic data interchange (EDI, business to business
electronic commerce are recent development which applied in logistics
and supply chain management.
Information Technology in Supply Chain or
Logistics

7. Competitive Advantages
• Systems such as a quick response (QR) just in time (JIT) and
efficient consumer response (ECR) are integrating a number of
information-based technologies in an effort to reduce order
cycle times, speed responsiveness, and lower supply chain
inventory.

• More sophisticated applications of information technology such

as decision support systems, artificial intelligence and export
systems are being used directly to support decision making in
logistics and supply chain management.
Supply Chain Technologies for Better
Supply Chain Management

• Following are the supply chain technologies that can help to

improve manufacturing processes, automate operations, and give a
competitive edge.
Supply Chain Technologies for Better
Supply Chain Management
• Supply chain technology is growing and changing with a new era of digitization
to improve manufacturing processes and automate operations.
• Digitization is the process of converting information into a digital format. The
result is the representation of an object, image, sound, document, or signal
obtained by generating a series of numbers that describe a discrete set of points
(0, 1).
• Implementing innovative technologies can provide your company with the
competitive edge you need to stand out within the industry and make an impact
on your customer base.
• Products are becoming more complex, companies are operating more globally,
and customers are making heightened demands.
• Going digital is the only way to organize and streamline your practices to ensure
quality performance from start to end.
Supply Chain Technologies for Better
Supply Chain Management
Supply Chain Technologies for Better
Supply Chain Management

• Seven supply chain technologies to progress your

manufacturing business forward include:
Supply Chain Technologies for
Better Supply Chain
Management

1. The Internet of Things (IoT)

The Internet of things describes

devices with sensors, ICs,
processing ability, software and
other technologies that connect and
exchange data with other devices
and systems over the Internet or
other communications networks.

The Internet of Things (IoT) is a network

of physical devices that can transfer
data to one another without human
intervention
Supply Chain Technologies for Better
Supply Chain Management

1. The Internet of Things (IoT)

• Industry insiders project the IoT market to grow by 24.9%

by 2027.
• As a result, more and more aspects of manufacturing will
become connected and integrated to deliver insights and
inform supply chain management.
• To invest most heavily on IoT deployments, taking
advantage of improved manufacturing operations,
production assets management, and freight monitoring and
fleet management
Supply Chain Technologies for Better
Supply Chain Management

1. The Internet of Things (IoT)

• For example, advanced tracking methods and analytics (traffic

flow) can alert suppliers to save goods that might otherwise spoil
enroute to consumers by rerouting packages to closer
distribution centers due to equipment malfunctions or poor
traveling conditions.

• Eliminating waste and having the ability to intervene with other

inventory mishaps or misplacements can reduce lost revenues
resulting purely from logistics failures or oversights, thereby
generating higher revenues based on more streamlined
processes and successful outcomes.
Supply Chain Technologies for Better
Supply Chain Management

1. The Internet of Things (IoT)

• IoT isn't without risks. Using the internet to control your
business operations opens you up to cybersecurity
dangers, but its impact on your manufacturing processes
can outweigh any inherent hazards.

• IoT can help pinpoint what you need to pay notice to and
what you can dismiss, detecting patterns and possible
problems before they happen, giving you insight into what
works and what doesn't, and how you can do better.
Supply Chain Technologies for Better
Supply Chain Management

2. 5G and Starlink

• Along with IoT associations, the introduction of 5G into supply

chain management will be a massive shift to the industry,
improving internet speed and processing time for manufacturing
processes.
• In less than five years, researchers expect that nearly 2 billion
mobile users worldwide will subscribe to 5G.
• 5G networks differ in that they involve cloud technologies to
drive wireless connections. Software-based capabilities can
advance automation and data processing.
• Cloud computing powered by 5G technology will facilitate real-time
streaming of data.
Supply Chain Technologies for Better
Supply Chain Management

Cloud Computing:

• Cloud computing is defined as the use of hosted services,

such as data storage, servers, databases, networking, and
software over the internet.

• Cloud computing is the on-demand availability of computer

system resources, especially data storage (cloud storage).
Cloud Computing:
Supply Chain Technologies for Better
Supply Chain Management

2. 5G and Starlink

• Additionally, Starlink may allow faster internet in more rural areas,

allowing for manufacturing expansion into these currently neglected
regions.

• Starlink provides satellite Internet access to extend online

communications and connections.

• This new technology replaces expensive and unreliable services,

giving remote locations an opportunity to invest more readily in
commerce and essentially opening an entirely new customer pool.
Supply Chain Technologies for Better
Supply Chain Management
3. Blockchains for Supply Chains

• Blockchain is a type of shared database that differs from a typical database in

the way it stores information; blockchains store data in blocks linked together via
cryptography.

• Cryptography is the process of hiding or coding information so that only the

person a message was intended for can read it.

• Blockchain technology ensures that transactions are validated, recorded, and

encrypted.

• Created to support bitcoin or cryptocurrency transactions, blockchains are

expanding into other business sectors, including the manufacturing industry, to
address supply chain management issues, such as tracing the ownership of goods.
Supply Chain Technologies for Better
Supply Chain Management

3. Blockchains for Supply Chains

• Permissionless ledgers exist on public domains allowing for

consensus verification.
• At the same time, known or trusted users can centralize
permissioned ledgers, which users cannot change once
"nodes" within the transaction approve all actions within
the sequence or data set.
• This distinction is important for supply chain management
to gain private validations of data in real-time for superior
analysis and visualization.
Supply Chain Technologies for Better
Supply Chain Management
4. AI and Machine Learning

• Artificial intelligence is the simulation of human intelligence processes by machines,

especially computer systems.

• The traumatic year of 2020 forced businesses to rethink their operations to remain
relevant and competitive within a pandemic that rocked the globe, making
innovation imperative to avoid disrupting demand and revenues and keep "doors
open" in new ways.

• As a result, digitization and automation became necessary to keep the wheels of

commerce turning.

• An Oxford Economics Survey found that

70% of businesses surveyed have implemented or tested artificial intelligence (AI) so
lutions
Supply Chain Technologies for Better
Supply Chain Management

4. AI and Machine Learning

• AI can make better decisions and has already been used to help
reduce empty freight trips or plan labor resources.
• Companies implementing AI perform stronger with better results
than companies lagging in technological advancements.
• The unconventional software uses algorithms modeled on
human thoughts and behaviors and can modify its processes
over time based on intel from past operations.
• In other words, it learns and evolves to improve methods
established by previous failures and successes.
Supply Chain Technologies for Better
Supply Chain Management

4. AI and Machine Learning

• In the manufacturing world, this means
smart manufacturing or using machines to analyze,
compute, and make decisions in real-time, often in ways far
superior to human capabilities.
• Machine learning leads to increased productivity and
accuracy to keep costs low and operations running
efficiently.
• The programming of machines to sense problems and send
data make it easier to maintain tools and avoid lapses in
production.
Supply Chain Technologies for Better
Supply Chain Management

4. AI and Machine Learning

• Manufacturers can use predictive analytics for more than
just real-time product intelligence.
• Supply chain analytics can help improve customer
experiences, reduce costs, and optimize inventory visibility
and strategic sourcing per
Deloitte's 2019 Supply Chain Digital and Analytics Survey.
• Supply chain management relies on details and data
quality to deliver big-picture values. Analytics is the way to
drive the technological elements that lead to insightful
tactics and beneficial results.
Supply Chain Technologies for Better
Supply Chain Management

5. Automation and Robots

• Robots are already utilized in the supply chain to move materials
or build products faster and more efficiently than humans.
• With the utilization of AI and IoT, robots will become more
sophisticated.
• Manufacturing automation isn't simply using machines to
replace human labor.
• It encompasses software and other advanced technologies to
enhance and streamline operations, such as using AI to quickly
detect errors in products, tools, or processes and find solutions
in real-time rather than identifying a problem post-production
and burdening the company with unnecessarily wasted
resources.
Supply Chain Technologies for Better
Supply Chain Management

5. Automation and Robots

• Engineers can program robots to do a repetitive task in the
exact form every time, eliminating human error and slight
deviations in product quality.
• For high-volume output, this type of robotic application
proves successful in repeating processes in the same way
and leaves room for flexibility when needed.
• Programmers can adjust mechanical rigidity with AI that
enables a more human-like mimicking of thought patterns
and problem-solving skills, giving manufacturers the speed,
accuracy, and efficiency of a machine and the adaptiveness
of human reasoning.
Supply Chain Technologies for Better
Supply Chain Management

5. Automation and Robots

• By integrating digital applications, such as IoT and PLM,
into your automation strategy, you can help your machines
communicate and better share data across your
organization.
• Management can use the information to adjust processes
based on its thorough analysis and measurement of
success and better plan for future production.
• The implementation might look different for every
company, but the benefits are the same. Automation allows
for heightened transparency, visibility, collaboration,
planning, results, and return.
Supply Chain Technologies for Better
Supply Chain Management

6. Digital Supply Chain Twin

• A digital twin is a digital representation of a physical object, person,

or process, investigate in a digital version of its environment.
• A digital twin of your supply chain system can help you optimize and
make business decisions by manipulating and finding how changes
would affect your supply chain management.
• In other words, it's a simulation model replicating current
performance to help forecast and analyze various supply chain
behaviors and potential problems to devise a plan.
• In addition, these digital supply chain twins are detailed and integral,
providing live data feeds, so information and predictions are
continually updated.
Supply Chain Technologies for Better
Supply Chain Management
6. Digital Supply Chain Twin

• Analysts create digital twins using specialized supply chain software

integrated within company systems to represent and connect hundreds of
assets and positions across a business chain.
• This software is flexible, scalable, and interoperable to identify risks in
advance and make changes accordingly. Users need transparency along
the supply chain for accurate and informed decision-making based on
anticipated events.
• Essentially, digital supply chain twins provide you with data-driven
insights to help improve or test processes before mistakes happen or as
they're happening to prevent significant company losses.
Supply Chain Technologies for Better
Supply Chain Management

6. Digital Supply Chain Twin

Manufacturers can use digital supply chain twins for the following
purposes:
• Understanding the way your supply chain operates
• Bottleneck discoveries.
• Testing changes or new developments to the supply chain
• Risk management and monitoring with the assessment of possible
contingencies
• Transportation planning
• Inventory optimization
• Forecasting and testing of various operational methods
Supply Chain Technologies for Better
Supply Chain Management

7. Product Lifecycle Management (PLM) Software

• Product lifecycle management (PLM) software manages data

and processes at each stage of production, servicing, and
sales across the supply chain.
• PLM is a cloud-based software built via Salesforce that aims
to get better quality products in the hands of consumers
faster.
• Mitigates a variety of issues faced by manufacturers
throughout the lifecycle of a product, helping companies align
and integrate critical resources and extend information to the
team quickly, accurately, and uniformly for quick and efficient
Supply Chain Technologies for Better
Supply Chain Management

7. Product Lifecycle Management (PLM) Software

• Its goal is to shorten delivery timelines and increase
company margins up to 20%.
The Future of Supply Chain Management
Technology

Supply chain management technology aims to take a good

thing and make it better.
Advanced manufacturing trends are getting consumers
higher quality products at a quicker pace and helping
manufacturers definitively pinpoint what's working and
where they can see improvement to continue serving the
customer per their ever-increasing and changing needs and
demands.
AI

• https://www.youtube.com/watch?v=dKjCWfuvYxQ
• https://www.youtube.com/watch?v=YlDLwTsRHtU
• https://www.youtube.com/watch?v=Qw5bebsqM3Y
• https://www.youtube.com/watch?v=2WuHfe1zOGM&t=18s
The End