CHAPTER 14

Supply Chain
Technology:
Managing
Information Flows

Supply Chain Management: A Logistics Perspective (10e)

Coyle, Langley, Novack, and Gibson
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in part.
Discussion Outline
 Information requirements
 Systems capabilities
 Supply chain management
software
 Technology selection
 Supply chain technology
innovations
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accessible website, in whole or in part.
2
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
Source: Figure 14-1
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support
or duplicated, or posted to a publicly
accessible website, in whole or in part. 3
Information Requirements (continued)

Support
Meet Quality Provide Decision
Multidirectional
Standards Support
Flows

  Strategic decisions:
Seven Internal information
information sharing Long-range supply chain
quality  External information plans
 Tactical planning:
standards: sharing
 Accuracy  Suppliers Cross-organization
 Accessibility  Logistics service linkages and supply
 Relevancy providers chain activity
 Timeliness  Financial coordination.
 Transferability  Routine decisions:
institutions
 Usability  Government Rules-based decision
 Reliability agencies making.
 Execution and
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Systems
Capabilities

Enable Process Link Network Mitigate

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

7 1 Supports process variability reduction,

performance optimization, & cost
Cross- control.
Optimiza chain 1 2 Support analytics that help to
6 -tion visibilit understand volatility and respond
y appropriately.
3 Adjust speeds according to situations.
Agility
Segment
a-tion 4 Facilitates data synchronization &
2 real-time information sharing
between partners.
5 Velocit 5 Enable strategic adaptation of supply
Adapta- chain design & capabilities to evolving
bility y conditions.
Synchron 6 Help define customer segments,
i-zation 3 understand cost to serve & prioritize
4 service execution.
7 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

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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
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Poor planning and preparation for technology
accessible website, in whole or in part. 8
Supply Chain
Management
(SCM) Software
SCM Software
Four Software Categories

Source: Figure 14-3

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accessible website, in whole or in part. 10
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 Production/multiplant capacity

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

Source: Table 14-1

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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

Inventory management Systems
Labor management Mode and carrier selection
Order processing Route planning and optimization
Yard/dock management Dispatching and scheduling
Returns management Freight audit and payment
Order Management Systems Performance analysis
Sales order entry Global Trade Management
Pricing and credit checks Trade compliance
Inventory allocation International logistics
Invoice generation Global order management
Distributed Order Management Global trade financial
Order assignment management
Manufacturing Execution
Systems Source: Table 14-2
Work-in-process management
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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- Built-in work flow Integrated into

chain visibility rules initiate other applications,
needed to detect, automated event management
evaluate, and adapt responses that are solutions help to
to changing either preemptive close the loop
conditions before or reactive. between planning
they snowball into and execution to
major problems. support
synchronization of
end-to-end
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13
SCM Software: Business Intelligence
Tools
BI Capabilities BI Opportunity
Areas
The data collection & “big data”  Generating valuable
analytics insights about
Self-service reporting complex global
operations
 Providing

Performance scorecarding versus more granular

goals visibility of
Development of graphical spending
 Improving
dashboards S&OP &
Activity monitoring supporting demand
event mgnt. forecasting
 Resolving logistics
Access to data residing on multiple bottlenecks
SCIS

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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
SCM Technology Implementation
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.

3 1 Understand the supply chain that

the technology is intended to
support.
Need
Mitigate
Implement
Assessmen 2 A multifaceted decision, involving
t development alternatives (off the
a-tion shelves vs. in-house), types of
Issues applications (individual
applications vs. integrated suite),
1 and purchase options (on-premise
vs. SaaS)
2Software Selection 3 Training, cultural change, systems
interoperability, data
synchronization, data
standardization, and application
integration
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SCM Technology Implementation
10 Golden Rules for Success

Follow a proven
1 Secure commitment of senior
management.
6 implementation
methodology.
Remember that it is not just Take a step-by-step
2 an information technology 7 approach for incremental
project. value gains.
3 Align the project with 8 Be prepared to change
business goals. business processes.

4 Understand the software 9 Keep end users informed

and involved.
capabilities.
1 Measure success with key
5 Select partners carefully.
0 performance indicators
(KPIs).

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accessible website, in whole or in part. 18
Supply Chain
Technology
Innovations
Supply Chain Technology
Innovations
Internet of Things Mobile Functional
(IoT) Connectivity Automation

 Connected devices,  Advancements in  Automation has long

with sensors, on/off GPS technology, been a part of the
switches, & Internet auto-ID, wireless manufacturing plant.
linkages, allowing connectivity, tablets,  Warehouse
intelligent and smartphones automation has
connection of improve visibility, gained tremendous
people, processes, asset control, and traction.
data, and agility of supply  Connective
equipments. chain. technologies needed
to support driverless
vehicles are under
Images courtesy of Aria Systems, Eric D. Brown, Fathom rapid development.
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accessible website, in whole or in part. 20
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.