Supply Chain Management module 5
- 1. INFORMATION TECHNOLOGY AND THE SUPPLY CHAIN MODULE 5
- 2. ROLE OF INFORMATION TECHNOLOGY IN A SUPPLY CHAIN • Information is the driver that serves as the “glue” to create a coordinated supply chain • Information must have the following characteristics to be useful: • Accurate • Accessible in a timely manner • Information must be of the right kind • Information must be shared • Information provides the basis for supply chain management decisions • Inventory • Transportation • Facility 2/16/2015 2 • Sourcing • Pricing and revenue management
- 3. CHARACTERISTICS OF USEFUL SUPPLY CHAIN INFORMATION • Accurate • Accessible in a timely manner • The right kind • Provides supply chain visibility • Information must be shared 2/16/2015 3
- 4. USE OF INFORMATION IN A SUPPLY CHAIN • Information used at all phases of decision making: strategic, planning, operational • Examples: • Strategic: location decisions • Operational: what products will be produced during today’s production run 2/16/2015 4
- 5. USE OF INFORMATION IN A SUPPLY CHAIN • Inventory: demand patterns, carrying costs, stockout costs, ordering costs • Transportation: costs, customer locations, shipment sizes • Facility: location, capacity, schedules of a facility; need information about trade-offs between flexibility and efficiency, demand, exchange rates, taxes, etc. • Sourcing and Pricing: information on the product margin, quality, delivery lead time are important in sourcing decisions. To set pricing policies information about demand, customer segments, product margin and availability are important. 2/16/2015 5
- 6. ROLE OF INFORMATION TECHNOLOGY IN A SUPPLY CHAIN • Information technology (IT) • Hardware and software used throughout the supply chain to gather and analyze information • Captures and delivers information needed to make good decisions • Effective use of IT in the supply chain can have a significant impact on supply chain performance 2/16/2015 6
- 7. THE IMPORTANCE OF INFORMATION IN A SUPPLY CHAIN • Relevant information available throughout the supply chain allows managers to make decisions that take into account all stages of the supply chain • Allows performance to be optimized for the entire supply chain, not just for one stage – leads to higher performance for each individual firm in the supply chain 2/16/2015 7
- 8. THE SUPPLY CHAIN IT FRAMEWORK • The Supply Chain Macro Processes • Customer Relationship Management (CRM) • Internal Supply Chain Management (ISCM) • Supplier Relationship Management (SRM) • Plus: Transaction Management Foundation • Why Focus on the Macro Processes? • Macro Processes Applied to the Evolution of Software 2/16/2015 8
- 9. MACRO PROCESSES IN A SUPPLY CHAIN Supplier Relationship Management (SRM) Internal Supply Chain Management (ISCM) Customer Relationship Management (CRM) Transaction Management Foundation (TFM) 2/16/2015 9
- 10. CUSTOMER RELATIONSHIP MANAGEMENT • The processes that take place between an enterprise and its customers downstream in the supply chain • Key processes: • Marketing • Selling • Order management • Call/Service center 2/16/2015 10
- 11. INTERNAL SUPPLY CHAIN MANAGEMENT • Includes all processes involved in planning for and fulfilling a customer order • ISCM processes: • Strategic Planning • Demand Planning • Supply Planning • Fulfillment • Field Service • There must be strong integration between the ISCM and CRM macro processes 2/16/2015 11
- 12. SUPPLIER RELATIONSHIP MANAGEMENT • Those processes focused on the interaction between the enterprise and suppliers that are upstream in the supply chain • Key processes: • Design Collaboration • Source • Negotiate • Buy • Supply Collaboration • There is a natural fit between ISCM and SRM processes 2/16/2015 12
- 13. THE MACRO PROCESSES AND THEIR PROCESSES 2/16/2015 13 TMF SRM •DESIGN COLLABORATION •SOURCE •NEGOTIATE •BUY •SUPPLY COORDINATION ISCM •STRATEGIC PLANNING •DEMAND PLANNING •SUPPLY PLANNING •FULFILMENT •FIELD SERVICE CRM •MARKET •CALL CENTRE •SELL •ORDER MANAGEMENT
- 14. THE TRANSACTION MANAGEMENT FOUNDATION • Enterprise software systems (ERP) • Earlier systems focused on automation of simple transactions and the creation of an integrated method of storing and viewing data across the enterprise • Real value of the TMF exists only if decision making is improved • The extent to which the TMF enables integration across the three macro processes determines its value 2/16/2015 14
- 15. THE GOAL OF SUPPLY CHAIN IT 2/16/2015 15 SRM ISCM CRM SUPPLY CHAIN VISIBILITY, COORDINATED PLANNING, FORECASTING, REPLENISHMENT, COLLABORATIVE PRODUCT DEVELOPMENT, COORDINATED LOGISTICS AND PROMOTIONS SUPPLIER CUSTOMERCOMPANY
- 16. THE FUTURE OF IT IN THE SUPPLY CHAIN • At the highest level, the three SCM macro processes will continue to drive the evolution of enterprise software • Software focused on the macro processes will become a larger share of the total enterprise software market and the firms producing this software will become more successful • Functionality, the ability to integrate across macro processes, and the strength of their ecosystems, will be keys to success 2/16/2015 16
- 17. SUPPLY CHAIN INFORMATION TECHNOLOGY IN PRACTICE • Select an IT system that addresses the company’s key success factors • Take incremental steps and measure value • Align the level of sophistication with the need for sophistication • Use IT systems to support decision making, not to make decisions • Think about the future 2/16/2015 17
- 18. ASSIGNMENT… • What is the importance of information and IT in the supply chain? • How does each supply chain driver use information? • What are the major applications of supply chain IT and what processes do they enable? 2/16/2015 18
- 19. END OF MODULE 5