Information Systems in SC Integration & Management

Information systems
in SC Integration
& Management
Submitted by:-
Sanchita Baidya 09609010
Ankita Goel 09609089
Bharti Batra 09609121
15/08/2010 Information systems in SC Integration and Management 1
Agendum
Introduction
Role of IT in SCM
Review of literature
Application of IT in
SCM
Conclusions

Introduction
SCM is defined as the
Integration of key BP from end
user through original suppliers
that provides products, services,
& information and hence add
value for customers and other
stakeholders.
SCM is based on the integration of all
activities that add value to customers
starting from product design to
delivery.

IT in SCM
 To overcome the ever-increasing complexity
of the systems driving buyer–supplier
relationships.
 SCM emphasizes the overall and long-term
benefit of all parties on the chain through co-
operation and information sharing.
 To reduce uncertainty and enhance shipment
performance of suppliers.

Classification of the literature on IT in SCM
Five major broad categories focusing on developing an

IT-enabled SCM are:-
(a)Strategic planning for IT in SCM
(b)Virtual enterprise and SCM
(c)E-commerce and SCM
(d)Infrastructure for IT in SCM
(e)Knowledge and IT management in SCM
(f)Implementation of IT in SCM

(a) Strategic planning for IT in SCM
 Developing long-term plans and changes to their
organization and in turn to improve their
competitiveness.
 Organizational restructuring may be required if a
company decides to go for an enterprise resource
planning (ERP) systems
 Manufacturing IS strategic role includes minimizing
manufacturing's negative potential, achieve parity with
competitors, provide credible support to the business
strategy and pursue a manufacturing-based competitive
advantage.

Cont....
1. MARKETING REASONS OF IT IN SCM
 Organizations to have an effective supply chain or physically distributed

enterprises.
 IS that specifically addresses the requirements of leveraging the emerging
developments in IT
 Includes strategic interests of powerful corporate players and the
struggles of these players for domination in the marketplace.
2. ECONOMIC REASONS
 Flexibility and responsiveness are interconnected with cost.

 IT helps to improve the accurate information flow and in turn accurate
decisions to support the business process in an effort to meet the
changing market requirements.
 Four critical performance measures:- flexibility, quality, time & cost.

3. ORGANIZATIONAL
 Strategic planning of IT includes organizational structure, awareness of top

management, BP’s, strategic alliances, and IT that influence the overall
performance of IT-enabled SCM.
 Emergence of new network technologies and expansion of the Internet can
improve an organization’s internal and external communication
capabilities.
 Organizational design for IT-enabled SCM is flexible.
4. TECHNOLOGICAL
 IT-enabled SCM facilitate effective technology transfer between partners

in a network of firms.
 Opportunities for a radical redesign of supply chains.

(b) Virtual Enterprise In SCM
 VE/VO is based on developing a network of collaborative firms
with necessary core competencies for reaching the market on time
with right products.
 IT is so important in developing and operating a VE/VO. Virtual
enterprise is a network of independent companies, often former
competitors, who come together quickly to exploit fast-changing
opportunities.
 Some of the key factors in virtual enterprise development are IT-
enabled SCM, partnership, virtual enterprise and supply chain, and
virtual enterprise and IT.

1. PARTNERSHIP
 Managerial and cultural aspects of strategic partnerships

in logistics involving such issues as ‘‘openness to
innovation’’ and ‘‘trust’’ are just as critical as IT.
2. VIRTUAL TEAMS AND SUPPLY CHAIN
 To examine the relationship between all parties along the

value chain.
 Virtual team needs to be built by concentrating on
process, teaming and technology factors.
3. VIRTUAL ENTERPRISE AND IT
 Without IT, one could hardly imagine a virtual

enterprise development.

(c) E-Commerce & SCM
 The Internet helps to manage

supply chain activities.
For example, ERP systems
such as SAP, via Extranets
connect not only different
functions within a firm but
also among the firms supply
chain partners (i.e. suppliers,
distributors, and third party
logistics providers).

1. PURCHASING
The increased popularity of e-commerce is due to a multitude of
Operational benefits it can bring to purchasing practices.
 cost savings resulting from reduced paper transactions
 shorter order cycle time
 subsequent inventory reduction
 enhanced opportunities for the supplier/buyer partnership
2. OPERATIONS
 Building a dynamic model of the web-based supply chain in each

of the collaborative industrial sectors
 Sector-based models and prototypes
3. LOGISTICS
 With virtual logistics, the physical and information aspects of

logistics operations are treated independently from each other.

(d) Infrastructure for IT in SCM
 Consists of Internet connectivity, hardware and software including
application systems integration.
 Two major dimensions that will influence the formation process.
-type of organizational structure and relationships
-Major dimension is the electronic commerce environment.
1. ORGANIZATIONAL
Adaptation of e-business infrastructure involves deep level changes that
affect core elements of an organization.
2. TECHNOLOGICAL
Developments in hardware and telecommunication technologies have
occurred in order to meet the rising demands from companies.

(e) Knowledge and IT management in SCM
 KM is concerned with recognizing and managing all of an

organizations intellectual assets to meet its business objectives.
 To improve operational and strategic efficiency and effectiveness.
1. TECHNOLOGY MANAGEMENT
 IT such as XML for representing corporate data, ERP infrastructure

that provides support for logistics operations, and web infrastructure
allow B2B commerce successful or SCM.
 ERP is increasingly being used as a technology enabler for SCM
and problems associated with its implementation.

2. EDUCATION AND TRAINING .
 Most important component of any change process in an organization.
 To implement and subsequently use any IT/IS, workforce needs to be
motivated to work in a transparent and open communication environment.
 Technologies alone will not help to improve the organizational
competitiveness.
3. IMPLEMENTATION OF IT IN SCM
 Integration of the SC activities and processes before development and

implementation of the IS in SCM is needed.
 ADAGE(the powerful ERP and SCM solution) is a software solution
designed specifically for the process and hybrid industries.
 By implementing ADAGE, Cumberland has been able to reduce inventory,
shorten delivery lead-times, improve customer service, and better plan and
forecast demand, thereby cutting production costs.

Implementation of IT in SCM is
ORGANIZATIONAL  Support of top management and overall

organizational structure.
 Decisions of a structural nature contain three
dimensions: system competencies, (ii) technology
scope, and (iii) IT alliance.
METHODOLOGICAL  Implementation framework included the
following steps: (i) develop strategy, (ii)
assessment, (iii) create culture, (iv) prioritize
improvements, (v) plan the change, (vi)
implement improved situation and support
implementation.
HUMAN RESOURCE  level of education, knowledge in computers,
international exposure, training and education,
reward and employee empowerment and incentive
scheme.

A framework for the development of IT for effective SCM

.
IMPLEMENTATION ISSUES OF IT IN SCM
 Requires IT knowledgeable managers from all functional

areas.
 Before implementing IT, there is a need to look at the
business model and then identify suitable IT systems
required to support the objective of achieving agility in a
supply chain.
 BPR has been considered as one of the most important
strategies for streamlining the BP.
 BPR and IT compliment each other in their efforts to
achieve dramatic improvements by radical changes.
 Lack of case studies and empirical research continue to put
the companies behind in terms of coming forward to
implement various IT for achieving an integrated SCM.

.
CONCLUSION
 IT is an essential ingredient for business survival and improves the

competitiveness of firms.
 The SC activities are driven by the need to streamline operations
to achieve quality service to customers.
 A lack of critical review of the literature that would influence the
successful application of IT in SCM.
 Commercial enterprise information systems require flexibility.
 Performance measures and metrics need to be established for
measuring the performance and suitability of IT in SCM.
 The alignment between information model and supply chain
model or objectives needs further investigation.
Information systems in SC Integration and

15/08/2010 19
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Information systems

15/08/2010 Information systems in SC Integration and Management 2

15/08/2010 Information systems in SC Integration and Management 3

15/08/2010 Information systems in SC Integration and Management 4

Five major broad categories focusing on developing an

15/08/2010 Information systems in SC Integration and Management 5

15/08/2010 Information systems in SC Integration and Management 6

 Organizations to have an eﬀective supply chain or physically distributed

 Flexibility and responsiveness are interconnected with cost.

15/08/2010 Information systems in SC Integration and Management 7

 Strategic planning of IT includes organizational structure, awareness of top

 IT-enabled SCM facilitate effective technology transfer between partners

15/08/2010 Information systems in SC Integration and Management 8

15/08/2010 Information systems in SC Integration and Management 9

 Managerial and cultural aspects of strategic partnerships

2. VIRTUAL TEAMS AND SUPPLY CHAIN

 To examine the relationship between all parties along the

3. VIRTUAL ENTERPRISE AND IT

 Without IT, one could hardly imagine a virtual

15/08/2010 Information systems in SC Integration and Management 10

 The Internet helps to manage

15/08/2010 Information systems in SC Integration and Management 11

 Building a dynamic model of the web-based supply chain in each

 With virtual logistics, the physical and information aspects of

15/08/2010 Information systems in SC Integration and Management 12

15/08/2010 Information systems in SC Integration and Management 13

 KM is concerned with recognizing and managing all of an

 IT such as XML for representing corporate data, ERP infrastructure

15/08/2010 Information systems in SC Integration and Management 14

 Integration of the SC activities and processes before development and

15/08/2010 Information systems in SC Integration and Management 15

ORGANIZATIONAL  Support of top management and overall

15/08/2010 Information systems in SC Integration and Management 16

15/08/2010 Information systems in SC Integration and Management 17

IMPLEMENTATION ISSUES OF IT IN SCM

 Requires IT knowledgeable managers from all functional

15/08/2010 Information systems in SC Integration and Management 18

 IT is an essential ingredient for business survival and improves the

Information systems in SC Integration and

15/08/2010 Information systems in SC Integration and Management 20

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