Lecture #1

Background of logistics and

Supply chain management.

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 SCM vs Logistics

SCM:
The integration of key business processes from
end user through original suppliers, that provides
products, services, and information that add value for
customers and other stakeholders.

Logistics:
is a part of supply chain process that plans,
implements and controls the efficient, cost-effective flow
and storage of goods, services, and related information
from point of origin to point of consumption in order to
meet customers’ requirements.

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 Lecture #2

background of the logistics

information systems.

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 What is information?
• Data are facts, events, and transactions which have
been recorded. They are basically the raw inputs which
further get processed to become information.
• When facts are filtered through one or more processes
(human or system), and are ready to give certain kind of
details… they are the information.
• Processed data when presented in some useful and
meaningful form, it is actually the information we are
looking at.
•
Appropriate Accurate Relevant
Data Information Decision

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 Difference between data & information?

Data Information

Raw facts Processed facts

Dead stored facts Live presented facts

Inactive (only exists in the Active (being processed data for

backend) knowledge base)

Technology oriented Business oriented

Why do we require information?

To ensure effective & efficient decision making leading
to prosperity of the organization.
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 Characteristics of Perfect Information

 Relevant

Information
Vertical
 Accurate

 Complete

 Understandable
Horizontal
Information
What is System?
System is a functional unit, which involves set of
procedures/functions to produce certain outputs
by processing data/information given as input.
Input Process Output
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 What is MIS?
• MIS is basically a software tool which gives a holistic
report of processed information based on which
management can take certain crucial decision on which
strategy and tactics could be figured out.

• MIS provides information that is needed to manage

organizations efficiently and effectively

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Effectiveness And Efficiency

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 The difference between effectiveness and
efficiency
Effective – Adequate to accomplish a purpose; producing the
intended or expected result.

Efficient – Performing or functioning in the best possible manner

with the least waste of time and effort.

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 Lecture #3

different functions of the

logistics information systems.

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 The Importance of Management Information
(MIS)
 Provide Useful information for management decisions.

 Comprises processed data (information), necessary for

making management decisions and generally gives
output in the form of tables, matrix, reports, dashboards,
graphs, trends, etc for logical and analytical
comparisons.

 Many Reports are available: (Market trend reports, sales

report, IT application usage reports, Management
dashboards, business information reports, research
reports, …etc.)

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 Role of MIS?
• Effective decision making based upon:
1. Quality analysis
2. Cost & budget analysis
3. Risk analysis
4. Market analysis
5. Inventory analysis
6. SWOT analysis
7. Stakeholder analysis
8. Feedback analysis
9. Behavior analysis
• Report & Dashboard preparation.

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 Types of MIS
 Management information systems (MIS):
produce fixed, regularly scheduled reports based on data extracted and summarized
from the firm’s underlying transaction processing systems to middle and operational
level managers to identify and inform structured and semi-structured decision
problems.

 Decision support systems (DSS) :

are computer program applications used by middle management to compile information
from a wide range of sources to support problem solving and decision making.

 Executive information systems (EIS):

is a reporting tool that provides quick access to summarized reports coming from all
company levels and departments such as accounting, human resources and operations.

 Marketing information systems:

are MIS designed specifically for managing the marketing aspects of the business.

 Office automation systems (OAS):

support communication and productivity in the enterprise by automating work flow and
eliminating bottlenecks. OAS may be implemented at any and all levels of management.

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 Advantages of MIS

1. Companies are able to highlight their strengths and weaknesses due to

the presence of revenue reports, employees' performance record etc.
The identification of these aspects can help the company improve their
business processes and operations.

2. Giving an overall picture of the company and acting as a

communication and planning tool.

3. The availability of the customer data and feedback can help the
company to align their business processes according to the needs of
the customers. The effective management of customer data can help
the company to perform direct marketing and promotion activities.

4. Information is considered to be an important asset for any company in

the modern competitive world. The consumer buying trends and
behaviors can be predicted by the analysis of sales and revenue
reports from each operating region of the company.

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 Outputs of MIS
 Scheduled reports
• Produced periodically, or on a schedule (daily, weekly,
monthly)
 Key-indicator report
• Summarizes the previous day’s critical activities
• Typically available at the beginning of each day
 Demand report
• Gives certain information at a manager’s request
 Exception report
• Automatically produced when a situation is unusual or
requires management action
Types of reports
 Planning reports
 Operating reports
 Control reports
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 Lecture #4

Information structures and key

figures of the logistics information
system

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 Role of Information System in Current
Business Scenarios
1- Information systems are transforming
business:
 Increase in wireless technology use, Web sites.
 Shifts in media and advertising.
 New federal security and accounting laws.

2- Globalization opportunities:
 Internet has drastically reduced costs of operating on
global scale
 Presents both challenges and opportunities

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 Role of Information System in Current
Business Scenarios

3- In the emerging, fully digital firm:

• Significant business relationships are digitally enabled and
mediated
• Core business processes are accomplished through digital
networks
• Key corporate assets are managed digitally

4- Digital firms offer greater flexibility in organization

and management:
• Time shifting, space shifting
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 Role of Information System in Current
Business Scenarios
5- Growing interdependence between ability to use
information technology and ability to implement
corporate strategies and achieve corporate goals
6- Business firms invest heavily in information systems
to achieve six strategic business objectives:

Operational excellence
New products, services, and business models
Customer and supplier intimacy
Improved decision making
Competitive advantage
Survival
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Role of Information System in Current Business
Scenarios
7- Operational excellence:
• Improvement of efficiency to attain higher profitability
• Information systems, technology an important tool in achieving
greater efficiency and productivity
• Wal-Mart’s Retail Link system links suppliers to stores for
superior replenishment system

8- New products, services, and business models:

• Business model: describes how company produces, delivers, and
sells product or service to create wealth
• Information systems and technology a major enabling tool for
new products, services, business models
• Examples: Apple’s iPod, iTunes, and iPhone, Netflix’s Internet-
based DVD rentals

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Role of Information System in Current Business Scenarios

9- Customer and supplier intimacy:

• Serving customers well leads to customers returning, which raises revenues and
profits
Example: High-end hotels that use computers to track customer preferences and use to
monitor and customize environment
• Intimacy with suppliers allows them to provide vital inputs, which lowers costs
Example: J.C.Penney’s information system which links sales records to contract
manufacturer
10- Improved decision making:
• Without accurate information, Managers must use forecasts, best guesses, luck
Leads to:
o Overproduction, underproduction of goods and services
o Misallocation of resources
o Poor response times
o Poor outcomes raise costs, lose customers
Example: Verizon’s Web-based digital dashboard to provide managers with real-time
data on customer complaints, network performance, line outages, etc
Role of Information System in Current Business Scenarios

11- Competitive advantage:

• Delivering better performance
• Charging less for superior products
• Responding to customers and suppliers in real time
Example: Toyota and TPS (Toyota Production System) enjoy a
considerable advantage over competitors – information systems
are critical to the implementation of TPS
12- Survival:
• Information technologies as necessity of business
• May be:
• Industry-level changes, e.g. Citibank’s introduction of ATMs
• Governmental regulations requiring record-keeping
Examples: Toxic Substances Control Act, Sarbanes-Oxley Act
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 Lecture #5

Information structures and key

figures of the logistics information
systems (Cont.)

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 Organization Hierarchy:

 Senior/Top management
 Middle management
 Operational management
 Knowledge workers
 Data workers
 Production or service workers

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 Enterprise Applications
BENEFITS:
• Span functional areas
• Execute business processes across firm
• Include all levels of management
• Enable:
• Coordination of daily activities
• Efficient response to customer orders
(production, inventory)
• Provide valuable information for improving
management decision making
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 Enterprise Applications Architecture

Enterprise applications
automate processes that
span multiple business
functions and
organizational levels and
may extend outside the
organization.
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SCM - Systems That Span the Enterprise !!

Manage firm’s Share information about

Orders, production,
relationships
inventory levels, delivery
with suppliers. of products and services.

Goal:
Right amount of products
to destination with least
amount of time and
lowest cost.
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 Importance of the logistics information system

1. It ensures of logistics functional operations into a process

pursuing customer satisfaction at the lowest total cost.
2. Information system facilitates planning and control of the
logistical activities related to order fulfillment.
3. It makes the firm more competitive, by making better tactical
and strategic decision for the benefits of the firm and its
customer.
4. Helps provide customers information regarding product
availability, order status, and delivery schedules promoting
customers service.
5. It reduces the requirements of inventory and human resources
by enabling requirements planning.

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 Importance of the logistics information system

6. It interfaces with marketing, financial, and manufacturing

information systems and provides information to top
management to help formulate strategic decisions for the
whole firm.

7. The use information technology in information systems has

enabled quick response to demand making forecasting
redundant. This has also helped in implementing “pull”
systems like just-in-time making the firm more competitive.

8. It promotes systems that link the operations of the firm, such

as manufacturing and distributing, with the suppliers
operations on the one hand the customer on the other.

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 Lecture #6

logistics and information

Technology.

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 IT in Logistics
 Service of customers
 Marketing channel
 Information correction
 Financial operations
 Strategic alliances
 Electronic procurement
 Internal and external communications
 Human resources and personnel management
 Computerization of trade personnel work
 Bar coding & RFID
 Electronic Data Interchange (EDI) ----- XML is the
replacement
 GIS , GPS Applications for Fleet mgmt.
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(Why!?) Logistics Information Management:

1. Decide when, what to produce, store, move.

2. Rapidly communicate orders.
3. Communicate orders, track order status.
4. Check inventory availability, monitor levels.
5. Track shipments.

TO
6. Plan production based on actual demand.
7. Rapidly communicate product design change.
8. Provide product specifications.
9. Share information about defect rates, returns.

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 Logistics Information System

LIS combine hardware and software to manage,

control, and measure logistics activities.

• Computers
• Servers System and
• Internet technologies
• Input and output devices
application
• Communication channels programs
• Barcode, RF, storage
media

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 Logistics Information System !!
 LIS perform three vital roles in firms.
– Logistics processes and operations,
– Logistics decision making; and
– Strategic competitive advantage

 LIS categories of information systems include:

– Operations Support Systems; and
– Management Support Systems

 LIS Benefits:
 Increased product visibility and control
 Improved knowledge of key logistics network component capabilities and
capacity
 Enhanced economic value
 Cost reductions
 Sales increases
 Creation of competitive advantage by Direct linkages to customers
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 Lecture #7

E-Commerce and decision

support systems in logistics.

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Introduction to e-Business Systems

 E-business is the use of the Internet and other
networks and information technologies to
support electronic commerce, enterprise
communications and collaboration, and Web-
enabled business processes, both within a
networked and information technologies
E-business includes e-commerce

 It involves the buying and selling and

marketing and servicing of products,
services, and information over the Internet
and other networks
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Introduction to e-Commerce

 Few concepts have revolutionized business

more profoundly than e-commerce
 E-commerce is the online process of
developing, marketing, selling, delivering,
servicing, and paying for products & services
transacted on internetworked, global
marketplaces of customers, with the support of
a worldwide network of business partners
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Introduction to e-Commerce (continued)

 E-commerce systems rely on the resources of the
Internet, intranets, extranets, and other computer
networks. Electronic commerce can include:
 Interactive marketing, ordering, payment, and
customer support processes at e-commerce sites on
the World Wide Web
 Extranet access of inventory databases by
customers and suppliers
 Intranet access of customer relationship
management systems by sales and customer service
reps
 Customer collaboration in product development
via Internet newsgroups and e-mail exchanges
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The Scope of e-Commerce

 Companies involved in e-commerce as either

buyers or sellers rely on Internet-based
technologies and e-commerce applications and
services to accomplish marketing, discovery,
transaction processing, and product and
customer service processes.
 Three Basic Categories

 Business-to-Consumer (B2C)

 Business-to-Business (B2B)

 Consumer-to-Consumer (C2C)
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The Scope of E-Commerce (continued)

Business-to-Consumer (B2C) – in this form of
e- commerce, businesses must develop
attractive electronic marketplaces to entice
and sell products and services to customers.
Companies may offer
 e-commerce websites that provide virtual
storefronts and multimedia catalogues.
 Interactive order processing

 Secure electronic payment systems

 Online customer support

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The Scope of e-Commerce(continued)

 Business-to-Business (B2B) – this category of
electronic commerce involves both electronic business
marketplaces and direct market links between
businesses. Companies may offer:
 Secure Internet or extranet e-commerce
websites for their business customers/suppliers.
 Electronic data interchange (EDI) via the
Internet or extranets for computer-to-computer
exchange of e-commerce documents with their
larger business customers and suppliers.
 B2B e-commerce portals that provide auction
and exchange markets for businesses.
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The Scope of e-Commerce(continued)

 Consumer-to-Consumer (C2C) e-Commerce – successes
of online auctions like e-Bay, allow consumers (and
businesses) to buy and sell with each other in an auction
process at an auction website.
 Online consumer or business auctions are an
important e-commerce alternative for B2C or B2B e-
commerce.
 Electronic personal advertising of products or services
to buy or sell by consumers at electronic newspaper
sites, consumer e-commerce portals, or personal
websites is an important form of C2C e-commerce.
 Electronic Commerce Technologies - next slide
illustrates an e-commerce architecture developed by
Sun Microsystems
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Scope of e-Commerce (continued)

 Electronic commerce technologies (continued)

 Trading and business partners rely on the Internet
and extranets to exchange information and
accomplish secure transactions
 Company employees depend on a variety of
Internet and intranet resources to communicate
and collaborate
 IS professionals and end users can use a variety of
software tools to develop and manage the content
and operations of the websites and other e-
commerce resources
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Essential E-Commerce Processes

 Nine key components of an e-commerce process
architecture :
1. Access control and security

2. Profiling and personalizing

3. Search management
4. Content management
5. Catalog management
6. Payment
7. Workflow management
8. Event notification
9. Collaboration and training
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Essential e-Commerce Processes (continued)

 Access control and security

 Processes MUST establish mutual trust and secure
access
 Authenticating users

 Authorizing access

 Enforcing security features

 Must protect the resources of e-commerce sites from

threats
 Hackers

 Theft of passwords or credit card numbers

 System failures
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Essential e-Commerce Processes (continued)

 Profiling and personalizing
 One-to-one marketing strategy
 Personalized view of the website
 Based on Personal data, and website behavior
and choices
 Used to help authenticate your identity for account
management and payment purposes
 Search management
 Helps customers find the specific product or service
they want
 SW may include a search engine component or a
company may acquire a customized e-commerce
search engine
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Essential e-Commerce Processes (continued)

 Content and catalog management

 Content management software helps
companies develop, generate, deliver, update,
and archive text data and multimedia
information
 Frequently takes the form of multimedia
catalogs of product information
 Works with profiling tools to personalize the
content of the website
May be expanded to include product
configuration processes that support mass
customization of a company’s products
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Essential e-Commerce Processes (continued)

 Workflow management
 Workflow software engine
 Predefined sets of business rules
 Roles of stakeholders
 Authorization requirements and routing alternatives
 Databases used
 Sequence of tasks
 Workflow systems ensure that..
 Proper transactions, decisions, & work activities are
performed
 Correct data and documents are routed to the right
employees, customers, suppliers, and other business
stakeholders
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Essential e-Commerce Processes (continued)

 Event notification
 Most applications are event driven
 New customer’s first visit
 Payment and delivery processes
 Customer relationship & supply chain
management activities
 Notifies those concerned when an event occurs that
might affect their status in a transaction
 Collaboration and training
 Supports the collaboration arrangements & trading
services needed by customers, suppliers, & other
stakeholders
 May be provided by Internet-based trading services
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Electronic Payment (E-Payment) Processes:

 Processesare complex
 Near anonymous nature of transactions
 Security issues
 Wide variety of debit and credit alternatives
 Wide variety of financial institutions and
intermediaries
 Web payment processes
 Credit cards
 Purchase orders
 Electronic shopping cart
 An example of a secure electronic payment system with
many payment alternatives is illustrated on next slide
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Electronic Payment Processes (continued)

 Electronic funds transfer (EFT)

Uses a variety of IT to capture and process
money and credit transfers between banks and
businesses and their customers
 ATMs and Pay-by-phone
 Web-based
 PayPal & Bill Point (cash transfers)
 CheckFree and PayTrust (automatic bill
paying services)
Electronic bill payment
 Point-of-sale terminals linked to bank EFT
systems
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Electronic Payment Processes - Secure

Electronic Payments
 Secure electronic payments – when you make an
online purchase on the Internet, your credit card info
is vulnerable to interception by network sniffers
 SW that easily recognizes credit card number
formats
 Several basic security measures are being used to
solve this security problem. They include:
 Encrypt data passing between customer and
merchant
 Encrypt the data passing between the customer
and the company authorizing the credit card
transaction
 Take sensitive information offline (cont-d)
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Electronic Payment Processes - Secure

Electronic Payments (cont-d)
 Secure Socket Layer (SSL) – automatically
encrypts data passing between your web browser
and a merchant’s server.
 Digital Wallet – you add security software add-on
modules to your web browser. This enables your
browser to encrypt your credit card data in such a
way that only the bank that authorizes credit card
transactions for the merchant can see it.
 Secure Electronic Transaction standard (SET) –
software encrypts a digital envelope of digital
certificates specifying the payment details for each
transaction. SET is expected to become the
dominant standard for secure electronic payments
on the Internet.
 Lecture #8

enterprise resource planning

(ERP) systems in logistics.

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Cross-Functional Enterprise Applications

 Many companies are using IT to develop integrated cross-
functional enterprise systems that cross the boundaries of
traditional business functions in order to reengineer and
improve vital business processes all across the enterprise
 Example of such business processes are presented below
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Cross-Functional Enterprise Applications

(continued)
 Figure on next slide is an excellent illustration of
the concept of enterprise application architecture
 It illustrates the interrelationships of the major
cross-functional enterprise applications that many
companies have or are installing today
 This architecture spotlights the roles that e-
business systems play in supporting the customers
 Focused on accomplishing fundamental business
processes in concert with the company’s customer,
supplier, partner, & employee stakeholders
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Cross-Functional Enterprise Applications

(continued)
 Enterprise resource planning (ERP) concentrates on the
efficiency of a firm’s internal production.. Distribution. And
financial processes.
 Customer relationship management (CRM) focuses on
acquiring and retaining profitable customers via marketing.
Sales. And service processes.
 Partner relationship (PRM) aims at acquiring and retaining
partners who can enhance the selling and distribution of a
firm’s products and services.
 Supply chain management (SCM) focuses on developing the
most efficient and effective sourcing and procurement
processes with suppliers for the products and services needed
by a business.
 Knowledge management (KM) applications focus on providing
a firm’s employees with tools that support group collaboration
and decision support.
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Enterprise Application Integration

How does a business interconnect some of the cross
functional enterprise systems?
 Enterprise application integration (EAI) software is
being used by many companies to connect their
major e-business applications (next slide).
 EAI software enables users to model the business
processes involved in the interactions that should
occur between business applications
 EAI also provides middleware that
Performs data conversion & coordination
Provides application communication & messaging
services
Provides access to the application interfaces
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Enterprise Application Integration (continued)

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Enterprise Application Integration (continued)

 Business value
 Integrates front-office and back-office applications
to allow for quicker, more effective response to
business events and customer demands
 Improves customer and suppler experience with
the business because of its responsiveness
 Lecture #9

Contemporary Logistics IT
(Electronic data interchange EDI)

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IT in Logistics
New Logistics Technologies based on informatics
are developing rapidly for the last decade
Service of customers
Marketing channel
Information correction
Financial operations
Strategic alliances
Electronic procurement
Internal and external communications
Human resources and personnel management
Computerization of trade personnel work
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Logistics Information Technologies

Bar coding
Most commonly used automatic
identification technology
Consistency of this technology important
factor in efficiency and effectiveness.
Electronic Data Interchange (EDI)

B2B, computer-to-computer exchange of

business data in a structured, machine-
processable format.
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Logistics Information Technologies

Extensible Markup Language (XML)
Method of packing information for
movement on the Internet.
Replacing EDI in the future.

Data management

Handheld input devices and optical scanning

popular in data management.
CD/DVDs are another data management
tool seeing increasing use.
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Logistics Information Technologies

Imaging

Both photographic and facsimile processes

are being used to image documents.
Artificial intelligence/expert systems

Attempts to transfer human intelligence to a

machine.
Expert systems replicate “best practices” of
humans to a computer-based system.
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Logistics Information Technologies

RF technology
Uses radio frequency to transmit computer
outputs, possibly from an expert system to
human operated devices, such as, a forklift.
Optimizes quality, efficiency, and accuracy.

Onboard computers and satellite tracking

Uses systems such as GPS to track and

communicate with mobile and/or remote
vehicles.
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Logistics Information System - Definition

 Logistics Information System keep a prime

position in Logistics Information Technologies.

 Logistics Information System is an interacting

structure of people, equipment, and
procedures that together make relevant
information available to the logistics manager
for the purposes of planning, implementation,
and control
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LIS Main Principles

Hierarchy (governance of tasks and data

sources)
Building-block principle of data

Design with glance of current and future tasks

as well.
Confidentiality

Adapting to changing demands

Coordination and information unity

System openness
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LIS Functions
 Data Bases
 customers applications

 production and reserves

 Planning

 inventory management

 demand forecasting

 Coordination

 scheduling of production

 material requirements planning

 Communication

 customer’s request status

 availability of reserves

 Control -level of customer service

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Logistics Information Systems:

1- Planning System
Providesdecision support for logistics managers
Logistics functional databases

Comprehensive Relational database

(RDBMS) that contains the type of
information needed to make effective
decisions
Greatest use in the transportation, inventory,
and product areas with warehousing and
customer areas .
Illustrated in next slide
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Logistics Information Systems:

2-Execution System
 Electronic Data Interchange
Responsible for short-term, day-to-day
functioning of the logistics system.
Include technologies that help manage
warehousing, transportation, international
trade, and inventory.
Many recent advances in technology and these
advances will most likely continue to evolve and
impact logistics management in the future.
Figure in next slide (EDI)
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Logistics Information Systems: Reports and

Outputs System
Many logistics managers do not believe that
reports communicate effectively.
Types of reports

Planning reports

Operating reports

Control reports
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Adapting to New Information Technologies

Relevant issues in the search for new technologies
Firms must have a scientific and intuitive
knowledge of customer and supplier
information requirements.
Lack of coordination and integration among
key logistics and supply chain processes.
See that logistics organizational strategies move
from a functional to a process orientation.
Early implementation efforts may suffer due to
poor data or the non-availability or non-sharing
of future data.
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Adapting to New Information Technologies

 Relevant issues in the search for new technologies
The organization must have the financial
resources needed to assure a smooth, full
implementation, and the people willing to
accept and use new technologies.
Firms must create opportunities for
interaction and team efforts among logistics
managers and those others most
knowledgeable about information
technologies.
 Lecture #10

Logistics information systems

"sales and distribution "module.

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 Overview of Logistics Information System

Internal External
Finance/Accounting Customers
Marketing LIS Vendors
Logistics Carriers
Manufacturing Supply chain partners
Purchasing

Order Management
System Warehouse Management Transportation
• Contact with customer System Management System
• Stock availability Stock level management Shipment consolidation
• Crediting checking Order picking Routing and scheduling
• Invoicing Picker routing Claims
• Product allocation to Picker assignments and Tracking
customer work loading Bill payment
• Fulfillment location Product availability Freight bill auditing
estimating
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Order processing system
• Customer location Industry/external data
• Order history • Market share
Operating data
• Salesperson • Product offering
• Freight payment
• Revenues • Demographic trends
• Transportation history
• Order status • Economic trends
• Inventory
• Credit files
• Product movement Company records
Management
• Competitive reactions • Cost of capital
• Sales forecasts • Cost of logistics
• Future trends activities
• New markets • Standart costs

Logistics Database

Report generation • Product traking and

• Order performance forecasting
• Shipment performance • Performace and cost
• Damages and returns reports
86
Organizational layers of an system

page 87
 88

Transaction Processing Systems

 Cross-functional information systems that process
data resulting from the occurrence of business
transactions
 Transactions – events that occur as part of doing
business
 Sales

 Purchases

 Deposits

 Withdrawals

 Refunds

 Payments
 89

Transaction Processing Systems (continued)

 Online transaction processing systems

(OLTP)
 Play a strategic role in electronic commerce

 Real-time systems that capture and

process transactions immediately
 OLTP systems add value to product or
service through superior customer
service
 90

Transaction Processing Systems (continued)

 Transaction Processing Cycle (see next slide)

 Data entry
 The capture of business data
 Transaction processing
 Two basic ways
 Batch processing where transaction data are
accumulated & processed periodically
 Real-time processing where data are
processed immediately after a transaction
occurs
 91

Transaction Processing Systems (continued)

 92

Transaction Processing Systems (continued)

 Database maintenance
 Corporate databases are updated to reflect the
day-to-day business transactions
 Document and report generation
 A variety of documents and reports are produced
 Inquiry processing
Inquiries and responses concerning the results of

transaction processing activity
 Examples of queries include:

 Checking on the status of a sales order

 Checking on the balance in an account

 Checking on the amount of stock in inventory

 93

Enterprise Collaboration Systems

 Cross-functional e-business systems that enhance
communication, coordination, & collaboration
 Communicate – share info with each other
 Coordinate – coordinate individual work
efforts & use of resources with each other.
 Collaborate – work together cooperatively on
joint projects and assignments
Tools for Enterprise Collaboration (next slide)
 Electronic communication
 E-mail and Voice mail and Fax
 Web publishing and Bulletin boards
 Paging and Internet (IP) phone
94
 95

Enterprise Collaboration Systems (continued)

 Electronic conferencing
Data & voice conferencing
 Videoconferencing
 Chat systems
 Discussion forums
 Electronic meeting systems
 Synchronous. Team members can meet at the same
time and place in a “decision room” setting
 Collaborative work management
 Calendaring & scheduling
 Task & project management
 Workflow systems
 Knowledge management
 Lecture #11

Logistics information systems

different modules (cont'd)
.

page 96
 97

Main Logistics Targets and Fields

 Its main targets are divided into performance related and

cost related
 They are high due date reliability, short delivery times, low
inventory level and high capacity utilization
 But when decisions need to be made, there is always a trade
off between these targets
 It’s making a logistician challenging and interesting
 Main Logistics fields:
 Procurement Logistics
 Production Logistics
 Distribution Logistics
 After sales Logistics
 Disposal Logistics
 98

Logistics Viewpoints

 Inbound logistics is one of the primary processes and

 it
concentrates on purchasing and arranging
inbound movement of materials, parts and/or
finished inventory from suppliers to:
 manufacturing or assembly plants, warehouses
or retail stores
 Outbound logistics is the process related to the
storage and movement of the final product and the
related information flows from
 the end of the production line to the end user
 99

Logistics –A system approach

 Logistics recognizes that all the activities of material
movement across the business process are interdependent
and needs close coordination and these are to be
maintained as a system
 Logistics System is an adaptive system including
following functional Areas:
1-Order Processing
2-Information Flow
3-Warehousing
4-Inventory control
5-Packaging
6-Transportation
 100

Order Processing
 Order checking for any deviation in agreed on
negotiated term
 Technical details; price; delivery period; payment
terms; taxes etc.
 Checking the availability of material in stock
(material requisition)
 Production & material scheduling for shortage.

 Acknowledging the order, indicating deviation if any

It is routine operation but require great deal of

planning training of people involved and investment
to bring about efficiency & accuracy
 101

Information Flow
 Itis basically info based activity of inventory
movement across the supply chain
 Hence role of info system plays a vital role in
delivering superior customer service
 This function is required to facilitate the following
info needs
 Order registration
 Order checking & editing
 Order processing
 Coordination - means to integrate the total supply
chain of the company with info needs as to time,
quantity, value
 102

Warehousing
 A storage place wherein finished goods are stored till
they are sold.
 Effectiveness of an organization`s marketing strategy
depends on making the right decision regarding
warehouse
 Warehouse are treated as switching facilities rather
than storage place
 Major decision of warehouse are as follows:
 Location ,Size & Number of warehousing facilities
 Warehouse layout
 Design of building
 Warehouse automation
 Ownership of the warehouse
 103

Packaging
 Itis also a critical element in physical distribution of
the product,
 which influences the efficiency of the logistic
system this is done with the view of following:
 For handling and damage prevention

 For communications

 For inter modal transportation

 Storage space economy

Thus to reduce packaging cost

 104

Transportation
 For goods movement of a transportation is the most
fundamental and important component of logistic
 E.g. for low unit value products the transportation
cost component is 20% of the product cost
 In logistic cost its share varies up to 65-70%

 There are the few decision involved in transportation

 Mode of transportation ( Cost & time factor)

 Own fleet or Outsourcing

 Route Planning

 Vehicle scheduling
 105

Logistics Management
 Logistics Management is that part of Supply Chain
Management
 that plans, implements, and controls the efficient,
effective, forward, and reverse flow and storage of
goods, services, and
 related information between the point of origin
and the point of consumption
 in order to meet customers’ requirements
 From a traditional point of a view a goal of any firm
is to produce competitive products and increase its
volume
 In this case management can boil down to a
General Manager + minor staff-see next slide
 106

Logistics' perspective: Three Forces

 Three Forces which have change the perspective of
logistics:
 1-Globalization

 2-Focus on Supply Chain Management

 3-Outsourcing of Non Core Competency

Functional Area
 107

Globalization
The entire world has become a global village for
marketers because of the liberalization of
economics of most countries, and
the emergence of World Trade Organization
which is forcing business organizations to
supply products beyond the national
boundaries wherever there is a market
opportunity
However in such conditions the role of
LOGISTICS will be
to provide time and place utility of the product
to the customer
 108

Focus on Supply Chain Management

Business the world over are striving for
competitiveness
In their struggle for survival their focus has
shifted to the supply chain i.e.
Integrating the process of Procurement ,
processing & distributing to deliver value for
money to the customer
Two key roles logistics planning & support are

Value delivery process

Success of Supply Chain Management
 109

Outsourcing of Non Core Competency

Functional Area
 Outsourcing is acceptable trend in business
 Corporation have realized that doing everything by
themselves does not result in effective & efficient use of
scare resources available to them
 It is better to outsource functional area to experts who
can do job at the lowest cost and that to efficiently &
Effectively
 LOGISTICS is one such area where most of business
org. do not have enough expertise thus needs to be
outsourced
 Thus Logistics have shaped into different service
industry offering complete & customized logistics
solutions
 110

Any Questions