use of IT in supply chain management
- 1. PRESENTATION ON INFORMATION TECHNOLOGY MANAGEMENT IN SUPPLY CHAIN A CASE STUDY OF WAL-MART SUPPLY CHAIN By Rohit Bhabal HPGD/JA15/1299 Specialization: International Business
- 2. Table of Contents Section I: Introduction 1. Introduction to Supply Chain 2. Complex Supply Chain Network 3. Introduction to IT in supply chain Section II: Theoretical View 1. Traditional View of Supply Chain 2. Consequences of Traditional View 3. Supply Chain Integration 4. Importance of IT Management In Supply Chain
- 3. 5. Areas In Which IT Use For Optimizing Supply Chain 6. Benefits of Information Technology In Supply Chain 7. Various Types of IT Used In Supply Chain 7.1 Enterprise Resource Planning (ERP) Systems 7.2 Decision Support System 7.3 Transportation Management Systems 7.4 Advantaged of Transport Management System 7.5 Inventory Management System 7.6 Order Delivery Information Flow Without EDI 7.7 Order Delivery Information Flow With EDI 7.8 Bar Coding And Scanner
- 4. 7.9 Tracking and Tracing Shipment 7.10 Process Flow of Tracking and Tracing In Shipment 7.11 Radio Frequency Identification 7.12 Reading Through RFID 7.13 Software Agents 7.14 Web Service Architecture 7.15 Distribution Requirement Planning 7.16 E-Commerce 7.17 Sales force Automation 8. Management of Information System 8.1 Objectives of Supply Chain MIS
- 5. 8.2 Supply Chain MIS Development Process 9. E-SCM 9.1 Need for E-SCM 9.2 Benefits of E-SCM Section III: Methodology of The Study 1. Summarized View of The Wal-Mart case 2. SWOT Analysis Section IV: Conclusion and Suggestion Section V: Limitation of Study Section VI: Bibliography
- 7. Material Flow Material Flow Material Flow Material FlowManufacturing Distribution Retailer Consumer Information Flows Order, Status Supplier Money Flows Supply Chain is when two or more parties linked by a flow of resources, typically material, information & money that ultimately fulfill a customer request. Introduction to Supply Chain
- 9. Introduction to IT used in Supply Chain Recent development in technologies enables the organization to avail information easily in their premises. These technologies are helpful to coordinates the activities to manage the supply chain. In the field of supply chain management, there has always been an abundance of data. Shipping bills alone make a lot of information. Gathering the data is important; evaluating the information, setting benchmarks and measuring performance and progress is critical, the purity of raw material is important. The small issues can have a measure impact. From the data available many reports are generated, which can pinpoint simple solutions that can generate cost saving and or service improvements.
- 11. Traditional View of Supply Chain 1 • Focus on competition 2 • Supply Chains contain far more than the required inventory 3 • Products are handled too many times (5/6 average) 4 • Physical carriers struggle to maintain costly equipment on slim margins 5 • No player has enough information to synchronies /optimizes the entire chain.
- 12. Consequences of Traditional View 1 • Lack of knowledge of the end-to-end demand function – high levels of uncertainty 2 • Erratic variations in demand (Bull whip effect) 3 • Fragmentation of processes and operations 4 • Lack of process integration with partners 5 • Need for integrated information systems
- 13. Supply Chain Integrati on Technolo gy Assimilati on ECR Workflow Coordina tion Synchron ization Quick Respons e Integration of Information in Supply Chain Information integration is sharing of information among supply chain members. It is exploiting the information collectively by all the people. In SCM the information factor is
- 14. Importance of IT Management In Supply Chain Gathering and evaluating information For report generation and decision making Competitive advantage Integrating and coordinating processes of supply chain Cost of information sharing Quick response
- 15. Benefits of Information Technology In Supply Chain Provide information availability and visibility Enable a single point of contact for data Allow decisions based on total supply chain Information Enable collaboration with Partners
- 16. Type of IT Use in SCM Drivers of Using IT in SCM Transaction processing Supply chain planning and collaboration Order tracking and delivery coordination •Reduction of Cost. •Volume of Transactions. •Speeding up Information transfer. •Elimination of Human Errors. •Unpredictable and logistically demanding Environment. •Project Orientation of the Business. •In Transit Delivery Consolidation. Areas In Which IT Use For Optimizing Supply Chain
- 17. Enterprise Resource Planning (ERP) Systems Enterprise Resource Planning (ERP) Systems are Enterprise-wide Information Systems used for automating all activities and functions of a business. Basically these are transaction - based information systems that are integrated across the whole business.
- 19. Transportation Management Systems Transportation Management Systems provide more visibility into shipments and orders. Scheduling issues are also addressed on time. Multiple transportation options can be explored as a result of earlier visibility into the supply chain. Timely communication and status reports can also be obtained. By having control on its supply chain, businesses can make efficient routing decisions.
- 20. Advantaged of Transport Management System Increase customer service Increase in Warehouse Efficiency Develop New Delivery Capabilities Inventory Reductions Cash Flow Improveme nts
- 21. Inventory Management System Defective inventory Return Inventory Inventory forecasting Inventory valuation Inventory visibility Future inventory Inventory price Availability of place for inventory Inventory in Hand Demand forecasting Inventory carrying cost
- 22. Purchase request initiated in the organization Finance department Purchasing department Paper-based information Inventory and warehousing Receiving department Manufacturin g department Shipping department Sales department Paper-based information Finance department Buyer Seller Order Delivery Information Flow Without EDI Payme nt Order delivery Order confirmation Bill
- 23. Finance department Sales department EDI capable computer Manufacturing department Shipping department Purchase request initiated in the organization EDI capable computer Purchasing department Receiving department Inventory and warehousing Finance department Buyer Seller Payment Automated order confirmation Billing details Purchase order delivery Order Delivery Information Flow With EDI
- 24. Central Warehouse Distribution center 1 Distribution center 2 Retailer 1 Retailer 2 Retailer 3 Retailer 4 Retailer 5 Retailer 6 Material Flow Information Flow Distribution Requirement Planning DRP system is a widely used and potentially powerful technique for helping outbound logistics systems manage and minimize inbound inventories.
- 25. Bar Coding And Scanner Bar Codes are the representation of a number or code in a form suitable for reading by machines. Bar codes are widely used throughout the supply chain to identify and track goods at all stages in the process. Bar codes are a series of different width lines that may be presented in a horizontal order, called ladder orientation, or a vertical order, called picket fence orientation.
- 26. Process Flow of Tracking and Tracing In Shipment Run the tracking list report in the client’s system Go to carrier website Get the carrier name Master BOL# Container# Get the unique File number for each shipment transactions Update the status in client’s system Output will reflect in client’s web tracking page Track the current container movement status
- 27. Radio Frequency Identification Both RFID and Bar codes are indeed, quite similar, both being auto- ID technologies, which are intended to provide item identification. The primary difference is the reading data from the items. In bar coding, the reading device scans a printed label with optical laser or imaging technology and in RFID; the reading device scans a tag by using radio frequency signals.
- 29. Software Agents Buyer agents or shopping bots User agents (personal agents) Data mining agents Monitoring and Surveillance Agent.
- 31. E-Commerce Electronic commerce refers to the wide range of tools and techniques utilized to conduct business in a paperless environment. Electronic commerce therefore includes electronic data interchange, e-mail, electronic fund transfers, electronic publishing, image processing, electronic bulletin boards, shared databases and magnetic/optical data capture.
- 32. Sales force Automation Software that automates an organization’s sales activities such as lead distribution and tracking, contact management, sales process management pipeline management, sales forecasting tools, and automated generation of quotes and orders. It is
- 33. Supply Chain Management of Information System SC Management Information System (MIS) is a planned system of collecting, storing, and disseminating data in the form of information needed to carry out the functions of
- 34. Objectives of Supply Chain MIS 1 • Operational Excellence 2 • New Products, Services and Business Models 3 • Services and Business Models 4 • Customer and Supplier Intimacy 5 • Improved Decision-making 6 • Competitive advantage, and Survival
- 35. Supply Chain MIS Development Process • The Supply Chain management information system needs good planning. • This system should deal with the management information not with data processing alone. • It should provide support for the management planning, decision-making and action. • It should provide support to the changing needs of Supply Chain business management.
- 36. E-SCM E-SCM can be defined as “The collaborative use of technology to improve the operations of supply chain activities as well as the management of supply chains”.
- 37. Need for E-SCM • Globalization • Change in SCM method • To meet with growing demand of customer • The effort to optimize the organization by having lower inventory levels both in manufacture and distribution • To carry out production with low inventory and low cost and higher production. • Outsourcing of some operational functions • E-business and E-commerce of new era
- 38. Benefits of Adopting E-SCM Real time communication Faster delivery Cost savings Reduced resources Increased profits etc. Increased customer satisfaction Faster market adaptation
- 39. Section III: Methodology of the Study
- 40. Summarized View of the CaseWal-Mart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores and grocery stores. Wal-Mart has 11,539 stores and clubs in 28 countries, under a total of 63 banners. Wal-Mart is the world's largest company by revenue, according to the Fortune Global 500 list in 2016, as well as the largest private employer in the world with 2.2 million employees. Wal-Mart’s SCM process is not based entirely on technology. The company has a sprawling network of nearly 160 distribution centers covering almost 120 million square feet and all within 130 miles of the stores it supplies, the retailer also instituted cross-docking at its warehouses. Wal-Mart also uses its own trucking fleet and drivers. Wal-Mart can improve its HR management standards and product quality standards to improve firm performance. Wal-Mart Stores Data Integrity
- 41. Wal-Mart has been able to stay ahead of the pack by taking market share from competitors, but as consumers pull back on discretionary spending, there is only so much business to go around. The company has responded by increasing the energy efficiency of its U.S. trucking fleet and many of its buildings in the United States, Canada, and China. Supply chains worldwide are reducing their packaging in response to the company's demands. Wal-Mart already demands that some suppliers evaluate their environmental footprints and adhere to sustainability standards. For almost five years, Wal-Mart executives have been complaining about the company's struggles to keep its shelves well stocked with merchandise. In April 2013, Wal- Mart executives acknowledged it has an inventory management problem; the company lost $3 billion in 2013 sales due to out of stock merchandise. That problem was successfully solved by implementing technology called Radio
- 42. SWOT Analysis Strengths of Wal-Mart: Wal-Mart has 11,539 stores and clubs in 28 countries, under a total of 63 banners, majorly based in US, Canada, UK, Argentina, Brazil, Japan and India Wal-Mart is the world's largest company by revenue, according to the Fortune Global 500 list in 2016, as well as the largest private employer in the world with 2.2 million employees, it had become the largest in terms of revenue. The company has a sprawling network of nearly 160 distribution centers covering almost 120 million square feet and all within 130 miles of the stores. The operations portion of a supply chain focuses on demand planning, forecasting and inventory management. Wal-Mart committed to improving its environmental track record in 2005 after environmental and social concerns began to erode its public image. Environmentalists cited the sprawling warehouse-sized stores as sources of air and water
- 43. Weaknesses of Wal-Mart - Wal-Mart’s Dirty Secret Since the start of the current economic downturn, Wal-Mart has outperformed its peers. And while it continues to do so, the spread between them keeps shrinking, further dimming hopes for an across-the-board recovery. Wal-Mart plans to combine data on water use, greenhouse gas emissions, solid waste production, and worker ethics into a database shared worldwide, which the company said could be used to form the first index of a product's lifecycle impact. Wal-Mart Opportunities - Consumers have begun to realize that shopping for food online is not only more time-efficient and cost-effective, but is also more organized compared to the in-store experience and can be done with less physical effort. Food shopping online, this trend can only be strengthened by rapidly advancing mobile technology accessibility. It is also a chance for Wal-Mart. The company, in order to take advantage of emerging new means of distribution, needs to
- 44. Wal-Mart’s Threats - Wal-Mart has been able to stay ahead of the pack by taking market share from competitors, but as consumers pull back on discretionary spending, there is only so much business to go around. Discounter Target recently announced that its own same-store sales are below plan, and Federated Department Store has said that it, too, may miss its September target. In early afternoon trading, Wal- Mart shares were down 4.4%, Target sank 8% and Federated fell 4.7%. The consumer is climbing into a shell, “especially with regard to discretionary spending.” While sales of consumables like groceries are holding up well, apparel, for instance, which accounts for about 17% of Wal- Mart’s earnings, has been quite weak for all retailers. When you lose apparel sales, you lose more on the margins, because they’re much higher in that segment.
- 47. Conclusion of This Report Industry trends like globalization, outsourcing, customization, time to market and pricing pressure have compelled enterprises to adopt efficient and effective supply chain management technologies, practices, and policies. Customer’s expectations are also increasing and companies are prone to more and more uncertain environments in the face of increasing competition. To survive, companies will find that their conventional supply chain integration will have to be expanded beyond their boundaries so as to integrate all stakeholders. Adoption of Information Technology tools is vital for such efforts. This report discusses the role of IT as an enabler in Supply Chain Management and also highlights the vast benefits to companies with a comprehensive IT strategy.
- 48. Suggestio n I Would Like To Suggest Some Technical Aspects That Are Needed For The Implementation of IT In Supply Chain. Project Management: The absence of full time and dedicated project management is a recognized contributing factor to unsuccessful implementations. A Project Sponsor needs to be appointed and may be the same person who sponsored the vendor software selection. The Project Sponsor should be a senior SCM executive, or another senior executive who clearly understand SCM strategy. Implementation Methodology: Once objectives, deliverables and project plans have been analyzed, most supply chain management IT implementation can then be structured into a four phase implementation methodology, i.e. Building Phase, Test Phase, Training Phase, and Documentation Phase.
- 51. E-commerce text book of Welingkar Institute of Management by Prof. Nitin C. Kamat Introduction to supply chain video of We Lecture (Welingkar Institute of Management) http://www.forbes.com/2002/09/30/0930walmart.html http://blog.cayenneapps.com/2015/04/14/walmart-swot- analysis/ http://www.worldwatch.org/node/6200 http://www.forbes.com/sites/paularosenblum/2014/05/22/wal mart-could-solve-its-inventory-problem-and-improve- earnings/#6516df5240ca