MODULE 1: Introduction to Logistics information system: Information System: Concept of

Information System, Elements of Information System, Structure of Information System, Logistics

Information-Meaning & Need; Forms: LIS-Definition-Information functionality, Activities.

Information:

Information is data that is processed and presented in a form that assists decision-making. It may contain an element of
surprise, reduce uncertainty or provoke a manager to initiate an action. Data usually take the form of historical records.
In contrast to information, raw data may not be able to surprise us, may not be organized, and may not add anything to
our knowledge.

DATA-------→PROCESSING →INFORMATION

Definition of Information

Information is organized or classified data with some meaningful values for the receiver. Information is the
processed data on which decisions and actions are based. Information can be defined as “data that has been
transformed into a meaningful and useful form for specific purposes”. Information is data that has been
processed to make it meaningful and useful. Information is the meaning that a human assigns to data by means
of the known conventions used in its representation. (Holmes, 2001). Information is produced through
processing, manipulating, and organizing data to answer questions, adding to the knowledge of the receiver.
Information can be about facts, things, concepts, or anything relevant to the topic concerned. It may provide
answers to questions like who, which, when, why, what, and how.

If we put Information into an equation it would look like this:

Data + Meaning = Information

Attributes of Information

Accuracy: Accuracy means more than just one plus one equals two. It means that information is free from
mistakes and errors, is clear and accurately reflects the meaning of data on which it is based. It also means
that information is free from bias.

Relevance: Information is said to be relevant if it answers, What, Why, Where, When, Who, and How For the
recipient. However, what is relevant for one may not be relevant for another. For example, the relevance of a
specific customer order may vary among the employees of a company

Adequacy: Means information must be sufficient in quantity. MIS report should not give inadequate
information or more than adequate information.Whereas inadequacy of information leads to a crisis, its
overload results in chaos.

Completeness: Information must be complete and should meet all the needs of a manager. Incomplete
information may result in wrong decisions.
 Explicitness: Means fully and clearly expressed A report is said to be of good quality if it does not require
any further analysis by the recipient. Reports should be such that manager does not waste any time on further
processing, and must be able to extract the required information directly.

Exception-Based: Today most of the organizations are being run on the principle of management by
exception. Top managers need only exception reports. The exception reporting principle states that only those
items of information be reported which will be of particular interest to a manager. Usually, these items
indicate that normal operations have gone away from the expected direction. This approach helps save
precious time of the top management

System:

The term system is the most loosely held term in management literature because of its use in different contexts.
However, a system may be defined as a set of elements that are joined together to achieve a common objective.
The elements are interrelated and interdependent. The set of elements for a system may be understood as input,
process, and output. A system has one or multiple inputs; these inputs are processed through a transformation
process to convert these inputs into outputs. The three elements of a system are

INPUT------→PROCESS →OUTPUT.

TYPES OF THE SYSTEM

1 Conceptual & Physical system 1. Conceptual (abstract) system is an orderly arrangement of independent ideas.
For example: Economic theory, Theory of relativity. 2. Physical system: These are the concrete operational
systems made up of people , material, machines energy & other physical things. For example: Management
information system. Physical systems being operational systems can display activities or behavior. While
conceptual system as it works on different ideas or concepts it displays theoretical structures.

.2 Natural & Artificial systems 1. Natural systems: All the naturally occurring systems are called as natural
systems For example: Solar system. 2. Artificial system: All man made systems are called as artificial systems.

3 Open & Closed systems 1. Open system: Open system is that system which interacts with its environment.
For example: Any business organization system exchanges its material, manpower, money & information with
its environment. 2. Closed system: Closed system is that system which does not interact with its environment.
It has only controlled & well defined input & output. For example: Television is itself is closed system which
controls its sharpness, brightness automatically with sensors.

4 Deterministic & probabilistic system: 1. Deterministic system: It is a system which operates in predictable
manner. Stepwise execution is always possible & output is sure. For example: computer system.2. Probabilistic
system: It is a system which operates in unpredictable manner & degree of error is always possible. Also output
is not sure. For example: Weather forecasting system.

5 Integrated system System integration is the combination of related subsystems to form a larger subsystem or
total system. For example: Airline reservation system
Information System

An information System can be seen as the organized combination of people, hardware, Software,
communication, networks, data resources, policies and procedures, that stores, retrieves, transforms and
disseminates, information in an organization. Various types of physical devices (hardware), information
processing instructions in the form of flow charts and structured languages (software), communication
channels (Networks), and stored data or information are used by people or machines to communicate and
gather information knowledge, and wisdom in this digital age.

Definition :

“Information systems are combinations of hardware, software, and telecommunications networks that people
build and use to collect, create, and distribute useful data, typically in organizational settings.”

“An information system is a set of interrelated components that work together to collect, process, store, and
break down the information to support decision-making. ”

Characteristics of Information System:

Availability/accessibility: Information should be easy to obtain or access. Information kept in a book of some
kind is only available and easy to access if you have the book to hand. A good example of availability is a
telephone directory, as every home has one for its local area. It is probably the first place you look for a local
number. But nobody keeps the whole country’s telephone books so for numbers further afield you probably
phone a directory enquiry number. For business premises, say for a hotel in London, you would probably use
the Internet.
Accuracy :Information needs to be accurate enough for the use to which it is going to be put. To obtain
information that is 100% accurate is usually unrealistic as it is likely to be too expensive to produce on
time. The degree of accuracy depends upon the circumstances. At operational levels information may need to
be accurate to the nearest penny – on a supermarket till receipt. Accuracy is important. As an example, if
government statistics based on the last census wrongly show an increase in births within an area, plans may be
made to build schools and construction companies may invest in new housing developments. In these cases
any investment may not be recouped.
Reliability or objectivity :Reliability deals with the truth of information or the objectivity with which it is
presented. You can only really use information confidently if you are sure of its reliability and objectivity.
When researching for an essay in any subject, we might make straight for the library to find a suitable
book. We are reasonably confident that the information found in a book, especially one that the library has
purchased, is reliable and (in the case of factual information) objective. The book has been written and the
author’s name is usually printed for all to see. The publisher should have employed an editor and an expert in
the field to edit the book and question any factual doubts they may have. In short, much time and energy goes
into publishing a book and for that reason we can be reasonably confident that the information is reliable and
objective.
Relevance/appropriateness :Information should be relevant to the purpose for which it is required. It must be
suitable. What is relevant for one manager may not be relevant for another. The user will become frustrated if
information contains data irrelevant to the task in hand.
Completeness :Information should contain all the details required by the user. Otherwise, it may not be useful
as the basis for making a decision. For example, if an organisation is supplied with information regarding the
costs of supplying a fleet of cars for the sales force, and servicing and maintenance costs are not included,
then a costing based on the information supplied will be considerably underestimated.
Level of detail/conciseness :Information should be in a form that is short enough to allow for its examination
and use. There should be no extraneous information. For example, it is very common practice to summarise
financial data and present this information, both in the form of figures and by using a chart or graph. We
would say that the graph is more concise than the tables of figures as there is little or no extraneous
information in the graph or chart. Clearly there is a trade-off between level of detail and conciseness.
Presentation :The presentation of information is important to the user. Information can be more easily
understand if it is aesthetically pleasing. For example, a marketing report that includes graphs of statistics will
be more concise as well as more aesthetically pleasing to the users within the organisation. Many
organisations use presentation software and show summary information via a data projector. These
presentations have usually been well thought out to be visually attractive and to convey the correct amount of
detail.
Timing :Information must be on time for the purpose for which it is required. Information received too late
will be irrelevant. For example, if you receive a brochure from a theatre and notice there was a concert by
your favourite band yesterday, then the information is too late to be of use.
Value of information :The relative importance of information for decision-making can increase or decrease
its value to an organisation. For example, an organisation requires information on a competitor’s performance
that is critical to their own decision on whether to invest in new machinery for their factory. The value of this
information would be high. Always keep in mind that information should be available on time, within cost
constraints and be legally obtained.
Cost of information :Information should be available within set cost levels that may vary dependent on
situation. If costs are too high to obtain information an organisation may decide to seek slightly less
comprehensive information elsewhere. For example, an organisation wants to commission a market survey on
a new product. The survey could cost more than the forecast initial profit from the product. In that situation,
the organisation would probably decide that a less costly source of information should be used, even if it may
give inferior information.

Elements/Components of the information system are as follows:

1. Computer Hardware:
Physical equipment used for input, output and processing. The hardware structure depends upon the
 type and size of the organization. It consists of an input and an output device, operating system,
processor, and media devices. This also includes computer peripheral devices.

2. Computer Software:
The programs/ application program used to control and coordinate the hardware components. It is used for
analysing and processing of the data. These programs include a set of instruction used for processing
information.
Software is further classified into 3 types:
1. System Software
2. Application Software
3. Procedures

3.Databases:
Data are the raw facts and figures that are unorganized that are later processed to generate information.
Softwares are used for organizing and serving data to the user, managing physical storage of media and
virtual resources. As the hardware can’t work without software the same as software needs data for
processing. Data are managed using Database management system.
Database software is used for efficient access for required data, and to manage knowledge bases.

4. Network:
 Networks resources refer to the telecommunication networks like the intranet, extranet and the internet.
 These resources facilitate the flow of information in the organization.
 Networks consists of both the physical devices such as networks cards, routers, hubs and cables and
software such as operating systems, web servers, data servers and application servers.
 Telecommunications networks consist of computers, communications processors, and other devices
interconnected by communications media and controlled by software.
 Networks include communication media, and Network Support.

5. Human Resources:
It is associated with the manpower required to run and manage the system. People are the end user of the
information system, end-user use information produced for their own purpose, the main purpose of the
information system is to benefit the end user. The end user can be accountants, engineers, salespersons,
customers, clerks, or managers etc. People are also responsible to develop and operate information systems.
They include systems analysts, computer operators, programmers, and other clerical IS personnel, and
managerial techniques.

Role/benefits/applications of information systems

Modern technology can significantly boost your company's performance and productivity. Information
systems are no exception. Organizations worldwide rely on them to research and develop new ways to
generate revenue, engage customers and streamline time-consuming tasks.

With an information system, businesses can save time and money while making smarter decisions. A
company's internal departments, such as marketing and sales, can communicate better and share information
more easily.

Since this technology is automated and uses complex algorithms, it reduces human error. Furthermore,
employees can focus on the core aspects of a business rather than spending hours collecting data, filling out
paperwork and doing manual analysis.
Thanks to modern information systems, team members can access massive amounts of data from one
platform. For example, they can gather and process information from different sources, such as vendors,
customers, warehouses and sales agents, with a few mouse clicks.

This kind of technology allows for faster, more accurate reporting, better business decisions and more
efficient resource allocation. Another major benefit is data visualization, which enables analysts to interpret
large amounts of information, predict future events and find patterns in historical data.

Organizations can also use enterprise resource planning (ERP) software to collect, manage and analyze data
across different areas, from manufacturing to finance and accounting. This type of information system
consists of multiple applications that provide a 360-degree view of business operations. NetSuite ERP,
PeopleSoft, Odoo and Intacct are just a few examples of ERP software.

Like other information systems, ERP provides actionable insights and helps you decide on the next steps. It
also makes it easier to achieve regulatory compliance, increase data security and share information between
departments. Additionally, it helps to ensure that all of your financial records are accurate and up-to-date.

In the long run, ERP software can reduce operational costs, improve collaboration and boost your revenue.
Nearly half of the companies that implement this system report major benefits within six months.

At the end of the day, information systems can give you a competitive advantage and provide the data you
need to make faster, smarter business decisions. Depending on your needs, you can opt for transaction
processing systems, knowledge management systems, decision support systems and more. When choosing
one, consider your budget, industry and business size. Look for an information system that aligns with your
goals and can streamline your day-to-day operations.

Types of Information system

Following are the TYPE of information system:
1. Transaction Processing System (TPS):
A transaction encompasses all of the purchases and sales of products and services, along with any daily
business transactions or activities required to operate a company.
Quantities and the types of transactions performed vary, depending on the industry and size/scope of the
company. Examples of typical transactions include billing clients, bank deposits, new hire data, inventory
counts, or a record of client-customer relationship management data.
A transaction processing system ensures that all of the contractual, transactional, and
customer relationship data is stored in a safe location and accessible to everyone who needs it. It also assists in
the processing of sales order entries, payroll, shipping, sales management, or other routine transactions needed
to maintain operations.

By utilizing a TPS, organizations can have a high level of reliability and accuracy in their user/customer data
while minimizing the potential for human error.

 Transaction Processing System are information system that processes data resulting from the occurrences
of business transactions
 Their objectives are to provide transaction in order to update records and generate reports i.e to perform
store keeping function
 The transaction is performed in two ways: Batching processing and Online transaction processing.
 Example: Bill system, payroll system, Stock control system
 2. Management Information System (MIS):
 Management Information System is designed to take relatively raw data available through a Transaction
Processing System and convert them into a summarized and aggregated form for the manager, usually in
a report format. It reports tending to be used by middle management and operational supervisors.
 Many different types of report are produced in MIS. Some of the reports are a summary report, on-demand
report, ad-hoc reports and an exception report.
 Example: Sales management systems, Human resource management system.

3. Decision Support System (DSS):

A decision support system processes data to assist in management decision-making. It stores and gathers the
information required for management to take the proper actions at the correct time. For example, a bank
manager can use a DSS to assess the evolving loan trends to determine which yearly loan targets to meet.
Decision models are programmed into the IS to analyze and summarize large quantities of information and put
it into a visual that makes it understandable.
Because a DSS is interactive, management can easily add or delete data and ask important questions. This
provides the evidence required for mid-management to make the right choices that will ensure the company
meets its targets.
 Decision Support System is an interactive information system that provides information, models and data
manipulation tools to help in making the decision in a semi-structured and unstructured situation.
 Decision Support System comprises tools and techniques to help in gathering relevant information and
analyze the options and alternatives, the end user is more involved in creating DSS than an MIS.
 Example: Financial planning systems, Bank loan management systems.

4. Experts System/ Executive Support System

 Experts systems include expertise in order to aid managers in diagnosing problems or in problem-solving.
These systems are based on the principles of artificial intelligence research.
 Experts Systems is a knowledge-based information system. It uses its knowledge about a specify are to
act as an expert consultant to users.
 Knowledgebase and software modules are the components of an expert system. These modules perform
inference on the knowledge and offer answers to a user’s question

Executive support systems are similar to a DSS but are primarily used by executive leaders and owners to
optimize decision-making.
An expert system helps enterprise leaders find answers to non-routine questions so they can make choices that
improve the company's outlook and performance. Unlike a DSS, an executive support system provides better
telecommunication functionality and a bigger computing functionality.
Graphics software is integrated within an ESS to display data about tax regulations, new competitive startups,
internal compliance issues, and other relevant executive information. This allows leaders to track internal
performance, monitor the competition, and pinpoint growth opportunities.

Knowledge Management Systems

A knowledge management system stores and extracts information to help users enhance their knowledge and
optimize collaboration efforts to complete tasks. Examples of documents found in a knowledge management
system include employee training materials, company policies, and procedures, or answers to customer
questions.
A KMS is used by employees, customers, management, and other various stakeholders involved with the
organization. It ensures that technical abilities are integrated throughout the company while providing visuals
to help employees make sense of the data they see.
Because a KMS shares expertise and provides answers to essential questions, using one can improve
communication among team members and assist everyone in meeting performance goals.
 Office Automation Systems
An office automation system is a network of various tools, technologies, and people required to conduct
clerical and managerial tasks.
An OAS can integrate with e-mail or word processing applications to ensure all communication data is easily
accessible and in one centralized location. By utilizing an office automation system, businesses can improve
communication between workers, streamline managerial activities, and optimize knowledge management.

Logistics Management

It concerns the flow of goods and services facilitated by information support. With advances in information
technology, business-to-business (B2B) transactions or business-to-customer (B2C) deals are done through
the internet. Presently logistics uses the information resources of the enterprise and creates a database
specifically for its needs consisting of elements like data source, users, etc. Information Systems is an applied
science for the processes of the creation and operation of systems that manage information.

Logistics management may be defined as follows: According to the Council of Logistics Management,
logistics can be defined as “that part of supply chain process that plans, implements and controls the efficient,
effective flow and storage of goods, services and related information from the point of origin to the point of
consumption”.

Logistics Management is an all-inclusive term that encompasses both planning and execution of four key
aspects of logistics, i.e. transportation, distribution, warehousing and purchasing. Another pertinent factor that
logistics management takes into account is the flow of goods in forward and reverse order.

Logistics management consists of the process of planning, implementing and controlling the efficient flow of
raw-materials, work-in-progress and finished goods and related information- from point of origin to point of
consumption; with a view to providing satisfaction to the customer.

ROLE OF LOGISTICS INFORMATION SYSTEM

Logistic s Information System (LIS) is a system of records and reports whether paper-based or electronic,
used to aggregate, analyse, validate and display data from all levels of logistics system that can be used to
make logistics decisions and manage the supply chain. The role of LIS can be understood from the following:
a)LIS ensures the transformation of logistics functional operations into a process with the goal of pursuing
customer satisfaction at the lowest cost. It facilitates planning and control of logistics activities related to order
fulfilment.

b)LIS provides information on goods and tracks the delivery, by giving their status.

c)Logistics systems depend on outside information and international standards to comply with regulations
and use laid down ways of sharing logistic information with others.

d)The manufacturers and traders monitor the actual products to know whether they will arrive on time and in
proper condition at the delivery places, and to be able to take prompt action in case of any lapse.
e)Transporters focus on the progress and status of the means of transport. In case of any delays or exigencies,
transporters can report these to their customers who can consider the impact.

f)Customs authorities and those responsible for ensuring the safety and security of goods during
transportation are given details about the content of goods and their means of transport.

g)Enables planning and control of the logistical activities related to order fulfilment.

h)Fosters better tactical and strategic decisions for the benefit of the firm and its customers.

i)Gives information to customers regarding product availability, order status, and delivery schedules.

j)Enables resource planning thereby reducing the requirements of inventory and human resources.

k)Provides information to top management to formulate strategic decisions by interface with marketing,
financial, and manufacturing information systems.

l)Links the operations of the business, such as manufacturing and distribution, with the supplier’s operations
and the customers.

m)Facilitates ‘virtual’ inventory management or electronic inventory management by managing dispersed

inventories through information technology. Inventory management becomes centralised and decisions on
replenishment and other quantities are taken based on a single stock.

The benefits of implementing LIS are:

a)Improvement in customer service and satisfaction.
b)Establishing communication within the logistics chain.
c)Reduction in stock levels and costs particularly of transportation and storage. d)Synchronising the processes
of supply, production, and distribution.
e)Handling the problems caused by shortage of materials for production.
f)Improvement of delivery schedules and lessening probable orders errors.
g)Reduction of documentation required in supply chain management.
.

C lassification of Logistical Activities:

Logistics (or Logistical Activities) may be broadly classified into two categories:
I. Inbound logistics; which is concerned with the smooth and cost effective inflow of materials and other
inputs (that are needed in the manufacturing process) from suppliers to the plant. For proper management of
inbound logistics, the management has to maintain a continuous interface with suppliers (vendors).

II. Outbound logistics (also called physical distribution management or supply chain management); is
concerned with the flow of finished goods and other related information from the firm to the customer. For
proper management of outbound logistics, the management has to maintain a continuous interface with
transport operators and channels of distribution.
Significance (or Objectives) of Logistics Management:

Logistics management is significant for the following reasons:

(i) Cost Reduction and Profit Maximization: Logistics management results in cost reduction and profit
maximization, primarily due to: 1. Improved material handling 2. Safe, speedy and economical transportation
3. Optimum number and convenient location of warehouses etc.
(ii) Efficient Flow of Manufacturing Operations: Inbound logistics helps in the efficient flow of
manufacturing operations, due to on-time delivery of materials, proper utilization of materials and semi-
finished goods in the production process and so on.
(iii) Competitive Edge: Logistics provide, maintain and sharpen the competitive edge of an enterprise by: 1.
Increasing sales through providing better customer service 2. Arranging for rapid and reliable delivery 3.
Avoiding errors in order processing; and so on.
(iv) An efficient information system is a must for sound logistics management. As such, logistics
management helps in developing effective communication system for continuous interface with suppliers and
rapid response to customer enquiries.
(v) Sound Inventory Management
Sound inventory management is a by-product of logistics management. A major headache of production
management, financial management etc. is how to ensure sound inventory management; which headache is
cured by logistics management.

FUNCTIONS OF LOGISTICS:
Logistics is a process of movement of goods across the supply chain of a company. However, this process
consists of various functions that have to be properly managed to bring effectiveness and efficiency to the
supply chain of the organization.
 Order Processing: Customers’ orders are very important in logistics management. Order processing
includes activities for receiving, handling, filing, recording of orders. Herein, management has to ensure that
order processing is accurate, reliable and fast. Further, management has to minimize the time between receipt
of orders and date of dispatch of the consignment to ensure speedy processing of the order. Delays in
execution of orders can become serious grounds for customer dissatisfaction; which must be avoided at all
costs.

Inventory Management: The basic objective of inventory management is to minimize the amount of
working capital blocked in inventories; and at the same time to provide a continuous flow of materials to
match production requirements; and to provide timely supplies of goods to meet customers’demands.

Warehousing: Warehousing is the storing of finished goods until they are sold. It plays a vital role in
logistics operations of a firm. The effectiveness of an organization’s marketing depends on the appropriate
decision on warehousing. In today’s context, warehousing is treated as switching facility rather than a storage
of improper warehousing management. Warehousing is the key decision area in logistics. The major
decisions in warehousing are:
Location of warehousing facilities
Number of warehouses
Size of the warehouse
Warehouse layout
Design of the building
Ownership of the warehouse

Transportation: For movement of goods from the supplier to the buyer, transportation is the most
fundamental and important component of logistics. When an order is placed, the transaction is not completed
till the goods are physically moved to the customer’s place. The physical movement of goods is through
various transportation modes. In logistics costs, its share varies from 65 to 70 percent in the case of
massconsumed, very low unit-priced products. Firms choose the mode of transportation depending on the
infrastructure of transportation in the country or region. Cost is the most important consideration in the
selection of a particular mode of transport. However, sometimes urgency of the good at the customer end
overrides the cost consideration, and goods are sent through the fastest mode, which is an expensive
alternative.

Material Handling and storage system: The speed of the inventory movement across the supply chain
depends on the material handling methods. An improper method of material handling will add to the product
damages and delays in deliveries and incidental overheads. Mechanization and automation in material
handling enhance the logistics system productivity. Other considerations for selection of a material handling
system are the volumes to be handled, the speed required for material movement and the level of service to be
offered to the customer. The storage system is important for maximum space utilization (floor and cubic) in
the given size of a warehouse. The material handling system should support the storage system for speedy
movement (storage and retrieval) of goods in and out of the warehouse.

Logistical Packaging: Logistical or industrial packaging is a critical element in the physical distribution of
a product, which influences the efficiency of the logistical system. It differs from product packaging, which is
based on marketing objectives. However, logistical packaging plays an important role in damage protection,
case in material handling and storage space economy. The utilization of load has a major bearing on logistical
packaging with regard to the packaging cost.

Information: Logistics is basically an information-based activity of inventory movement across a supply

chain. Hence, an information system plays a vital role in delivering a superior service to the customers. Use of
IT tools for information identification, access, storage, analysis, retrieval and decision support which is vital
among the functions of logistics is helping business firms to enhance their competitiveness.

Key Components of LIS

LIS is designed to manage the flow of materials and information within and between organisations and their
business environment. Globally information technology is a critical enabler of the logistics supply chain
networks that businesses use to acquire, produce, and deliver goods and services. The key
components include:
a) Logistics Information Portal
b) Logistic Classification of Logistical Activities: Logistics (or Logistical Activities) may be broadly
classified into two categories: I. Inbound logistics; which is concerned with the smooth and cost effective
inflow of materials and other inputs (that are needed in the manufacturing process) from suppliers to the plant.
For proper management of inbound logistics, the management has to maintain a continuous interface with
suppliers (vendors). II. Outbound logistics (also called physical distribution management or supply chain
management); is concerned with the flow of finished goods and other related information from the firm to the
customer. For proper management of outbound logistics, the management has to maintain a continuous
interface with transport operators and channels of distribution.cs Computing and Simulation
c) Decision Support System
d) Database
e) E-Logistics and E-Commerce
f) Software applications relating to Customer Relations Management (CRM),
Enterprise Resource Planning (ERP), Radio Frequency Identification (RFID)
Tags, Transport Management System (TMS), and Warehouse Management
System (WMS)
LOGISTICS INFORMATION SYSTEM: CONCEPTS & TECHNOLOGIES
The effectiveness of LIS is based on real time accurate information enabling a reliable accurate forecast from the raw
material suppliers to the ultimate consumer with a large geographical spread. Managing this information is possible only
with the use of various systems continuously evolving which need ingenuity for adaption in the LIS. Information
Network: The traditional elements of logistics are integrated by a web of IT networks, and integrated management
systems, with virtual and network companies within an information grid. This LIS incorporates all information relating
to plans, implementation, and control, for efficient and effective flow and storage of goods and services.
Electronic Data Interchange (EDI): IT plays an important role in providing real time information for proper
forecasting and planning of manufacture or for supply of finished products to the end users. EDI can link suppliers,
manufacturers, customers, and intermediaries. IT as the key component facilitates speeding up delivery time by
transmitting information to the warehouse directly triggering an order for immediate shipment. In global context, EDI
links exporters with customs, ports, and transporters for quick processing of customs documents thus speeding up the
deliveries.
Supply Chain Management Software (SCMS): These software modules complete supply chain transactions and
manage supplier relationships for controlling the business processes. It can identify the activities that can reduce and
eliminate non-value-added activities. It can deliver and market better quality products and services more quickly and
cost-effectively to gain an advantage over less efficient competitors. Effective supply chain management systems help
businesses to improve the entire supply chain network by reducing waste and shipping delays. SCMS reduces overhead
expenses by enabling effective demand planning, improving inventory management, and relationships with vendors and
distributors etc.
Enterprise Resource Planning (ERP): It encompasses software technologies in supply chain, bringing together the
information from within the firm and from different geographical areas, integrating all businesses of the firm together
for efficient use of resources. It is a process used by a company to manage and integrate important parts of its business.
It refers to the software and systems to plan and manage all the supply chain, manufacturing, services, financial and
other processes of the organisation.
Inventory Management Module: Inventory management being a key component of logistics, firms should manage
their inventories efficiently as huge cost is involved in the inventories piling up. Therefore, an IT module for finished
goods, semi-finished goods, raw materials, and work in progress inventories is convenient in ordering, based on
suppliers or customers’ demands.
Just-In-Time (JIT) System: JIT concept was introduced by Toyota in Japan and Maruti Suzuki in India. Generally,
inventory carrying cost in terms of warehousing is extremely high due to large capital expenditure involved in building
and maintain warehouses. Thus, suppliers are required to supply components or raw material when the demand is just
placed at 24-hour notice, saving cost of transportation and warehousing. The required components or raw material are
supplied jmaintainingust-in-time when needed by the factory.
Transportation Management System: Transportation is a key element of logistics being an important dimension as
third-party intermediaries, to link together the suppliers and manufacturers to final consumers. A range of services are
available starting from factory door pick up, custom freight station, rail transportation using high speed wagons from
container depot to ports and further movement if needed by sea to port of discharge and again hinterland transportation.
In these activities, communication technologies, satellite tracking, bar coding applications, EDI, automated material
handling systems etc., are employed.
Data Mining: Data mining is a process used of extracting usable data from a larger set of any raw data by companies to
turn it into useful information through understanding a pattern and determine customers’ behaviour for repeat sale. By
using software to look for patterns in large batches of data, businesses can learn more about their customers to develop
effective marketing strategies, increase sales and decrease costs. It implies analysing data patterns by using one or more
software. Accordingly, based on the feed-back obtained from dissatisfied customers, services for such customers can be
fine-tuned and customised to meet their requirement.
 Data Warehousing: A data warehouse is built by integrating data from multiple sources that support analytical
reporting, and decision making. Data warehousing is the process of constructing and using a data warehouse, being the
electronic storage of a large amount of information by a business or organisation. These are solely intended to perform
queries and analysis and often contain large amounts of historical data. It combines information from several sources
into one comprehensive database. For example, in the corporate world, a data warehouse might incorporate customer
information from a company’s sales systems, website, mailing lists etc.
Customer Relations Management (CRM): It is a technology used to manage interactions with customers by merging
practices, strategies and technologies used by companies. Data mining and data warehousing are two important elements
of CRM technologies. CRM systems compile customer data across different channels, or points of contact, between the
customer and the company, that include the company’s website, telephone, live chat, direct mail, marketing tools and
social networks. CRM systems can provide the staff dealing with the customers, a detailed information on customers’
personal information, purchase history, buying preferences and concerns. CRM technology creates various value-added
services for customers, making the interaction more accurate, timely, responsive, and reliable. The basic CRM system
could be enhanced by automation of marketing, sales force, contact centre and workflow; location-based services,
human resource management, etc.The usage of CRM depends on a company’s business needs, resources and goals, as
each has different costs associated with it as can be seen by the undermentioned examples
a)Contact Centre. The sales and marketing teams procure data and update the system with information relating to
customers and revise customer history records through service calls and technical support interactions.
b)Social Customer Relations Management: To add value to customer interactions on social media, businesses use
various social CRM tools that monitor social media conversations, to determine their target audience. Other tools are
designed to analyse social media feedback and address customer queries and issues. They capture customer sentiments,
such as the likelihood of recommending products and overall customer satisfaction, to develop marketing and service
strategies.
c)Mobile Customer Relations Management: Mobile CRM apps take advantage of features that are unique to mobile
devices, such as GPS and voice recognition capabilities, to give sales and marketing employees access to customer
information from anywhere.