Chapter 2 - Logistics and information technology (1)

Topic areas Benefits of effective and efficient use of information for logistics management  Types of information systems and their logistical applications  The Internet’s influence o

IBS3002 Logistics & International Trade

Topic areas

 Benefits of effective and efficient use of information for logistics management

 Types of information systems and their logistical applications

 The Internet’s influence on logistics

 Information technology challenges

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Benefits of effective and efficient use of information

 Greater knowledge and visibility across the supply chain

 Greater awareness of customer demand via point-of-sale data

 Better coordination of manufacturing, marketing, and distribution

 Streamlined order processing and reduced lead-times

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General types of information management systems

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General Types of Information Management Systems

 Office automation systems

Provide effective ways to

Process personal and organizational business data

Database management applications

Spreadsheet (most relevant for logisticians)

Able to solve for basic logistic optimization models through add-in packages such as “What’s

Best”

 Hệ thống tự động hóa văn phòng Cung cấp những cách hiệu quả để Xử lý dữ liệu kinh

doanh cá nhân và tổ chức

 Thực hiện các phép tính

 Tạo tài liệu

-Bao gồm các gói phần mềm chung

Xử lý văn bản

Bảng tính (phù hợp nhất cho nhà hậu cần)

Bài thuyết trình

Ứng dụng quản lý cơ sở dữ liệu Bảng tính (phù hợp nhất cho nhà hậu cần) Có thể giải quyết các

mô hình tối ưu hóa hậu cần cơ bản thông qua các gói bổ trợ như “What’s Best”

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General Types of Information Management Systems

Cellular phones Tablets

Smart phones

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Giúp các bên liên quan làm việc cùng nhau bằng cách tương tác và chia sẻ thông tin dưới nhiều hình thức khác nhau Ví dụ về công nghệ viễn thông: Máy fax Những máy tính cá nhân Thư điện tử Điện thoại di động Máy tính bảng Điện thoại thông minh

General Types of Information Management Systems

Examples of logistics information technology

Electronic data interchange (EDI)

Viewed as the measuring stick in the 1990’sWireless communication

Emerged as the measuring stick during the first decade of the twenty-first century

Device examples include

Global positioning systems (GPS)

General Types of Information Management Systems

Collects and stores information about transactions

Efficient processing of transactions with a choice of

Real-time processing or Batch processing

Xử lý hiệu quả các giao dịch với sự lựa chọn Xử lý thời gian thực hoặc Xử lý hàng loạt

Những ví dụ bao gồm Trao đổi dữ liệu điện tử (EDI) Công nghệ nhận dạng tự động Thành phần thiết yếu trong hệ thống điểm bán hàng (POS)

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General Types of Information Management Systems

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Benefits of EDI

Reduced document preparation and

Reduced inventory carrying costs Increased billing accuracy Reduced personnel costs Increased productivity Reduced Information float Increase customer satisfaction Reduced shipping errors

Reduced lead times Reduced order cycle times Reduced ordering costs

General Types of Information Management Systems

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Benefits of EDI

Reduced document preparation and processing time

Increased cash flow

Reduced inventory carrying costs Increased billing accuracy Reduced personnel costs Increased productivity Reduced Information float Increase customer satisfaction Reduced shipping errors

Reduced lead times Reduced order cycle times Reduced ordering costs

General Types of Information Management Systems

Examples of automatic identification technologies

Optical character recognitionMachine vision

Voice-data entryMagnetic stripsBar code scannersRadio-frequency identification (RFID)

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General Types of Information Management Systems

RFID Consists of:

1 A scanning antenna

2 An RFID tag (chip) that conveys relevant data

3 A receiver that interprets the dataCompared to bar codes, RFID

1 Does not require clear line of sight between an object and RFID

hardware

2 Can store much larger quantities of data

3 Can offer both read and write capabilities 12

General Types of Information Management Systems

 Management Information System (MIS) and Executive Information System (EIS)

- Convert TPS data into information for monitoring performance and managing an organization

- Objective is to provide managers and executives the information they really need

- A logistics information system (LIS) can be defined as “the people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to logistics decision makers.”1

Hệ thống thông tin quản lý (MIS) và Hệ thống thông tin điều hành (EIS)

- Chuyển đổi dữ liệu TPS thành thông tin để theo dõi hiệu suất và quản lý một tổ chức

- - Mục tiêu là cung cấp cho các nhà quản lý và điều hành thông tin họ thực sự cần

- - Hệ thống thông tin hậu cần (LIS) có thể được định nghĩa là “con người, thiết bị và thủ tục để thu thập, sắp xếp, phân tích, đánh giá và phân phối thông tin cần thiết, kịp thời và chính xác cho những người ra quyết định hậu cần”.

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General Types of Information Management Systems

System (EIS)

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General Types of Information Management Systems

Help managers make decisions by providing information, models, or analysis tools

Examples of specific uses include

Vehicle routing issues

Inventory control decisions

Developing automatic order picking systems

Optimization models for buyer-seller negotiations

Giúp người quản lý đưa ra quyết định bằng cách cung cấp thông tin, mô hình hoặc công cụ phân tích

Ví dụ về cách sử dụng cụ thể bao gồm

Các vấn đề về định tuyến xe

Quyết định kiểm soát hàng tồn kho ;Phát triển hệ thống chọn đơn hàng tự động Các mô hình tối ưu hóa cho thương

General Types of Information Management Systems

Several prominent DSS techniques include:

Simulation

Technique that models a real-world system, typically using mathematical equations to represent the relationships among the system’s components

Application specific software

Technique developed to help managers deal with specific logistics processes or activities

Popular option includes on-demand software (also referred to as software-as-a-service or cloud computing) 16

General Types of Information Management Systems

Examples of logistics-related application-specific software:

Transportation management systems (TMS)

Software package that automates the process of building orders, tending loads, tacking shipments, audits, and payments1

Warehouse management systems (WMS)

Software package that provides oversight of the storage and flow of materials within a company’s operations2

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General Types of Information Management Systems

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General Types of Information Management Systems

Data mining – a DSS technique

Is the application of mathematical tools to large bodies of data in order to extract correlations and rules1

Dependent on data warehouses

Central repository for all relevant data collected by an organization

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General Types of Information Management Systems

Create and maintain consistent data processing methods and an integrated database across multiple business functions1

Enterprise Systems example:

Enterprise resource planning (ERP)

“lets a company automate and integrate the majority of its business processes, share common data and practices across the enterprise, and produce and access information in a real-time environment” 1

Shortcomings of Enterprise resource planning (ERP)

Costs of installation

Time-consuming installation process

Initially lacked strong application-specific logistical capabilities such as

TMS or WMS

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The Internet’s Influence on Logistics

Approximately 35% of the world’s population uses the internet – up from 5% at the beginning of the 21st century

3 Specific Influences on Logistics Include:

1 Online retailing

2 Cloud computing

3 Electronic procurement

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The Internet’s Influence on Logistics

Similarities between online retailing and in-store retailing

• Bar coding

• WMSs

The Internet’s Influence on Logistics

Differences between online retailing and in-store retailing

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Online Retailing

•More, smaller orders

•Order management systems must handle large volumes of orders

•Information management systems capable of

correctly transmitting each order so it can be filled in a timely fashion

•Smaller orders dictate open-case picking

In-store Retailing

• Fewer, larger orders

• Order management system is set up to handle orders from resellers, not

consumers

• Full-case picking

• Warehouse set up to handle large volume orders

The Internet’s Influence on Logistics

Differences between online retailing and in-store retailing

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Online Retailing

•Products slotted to facilitate picking smaller orders

•Totes and push carts used

•Packaging is small cartons, envelopes, bags suited to holding small quantities

In-Store Retailing

• Variety of materials handling equipment used

• Packaging generally cartons that hold large volume orders

The Internet’s Influence on Logistics

Differences between online retailing and in-store retailing

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Online Retailing

•Transportation companies used with extensive delivery networks; experience in parcel shipments

•Outbound shipments usually picked up by vans

•Return rates much higher and from ultimate

consumers

In-store Retailing

• Transportation methods and companies vary by request of buyer

• Outbound shipments may be picked up by tractor trailers or

railcars

• Return rates lower and from resellers

The Internet’s Influence on Logistics

Cloud Computing

Worldwide public cloud services market – where software, services, or information are shared via the Internet without the users having control over the technology infrastructure – grew almost 20% between 2011 and

20121

Advantages of Cloud Computing

Pay-per-use allows firms to avoid high capital investment which speeds up ROI for the software

Since it involves operational as opposed to capital expenditures, it is

a viable option for firms that could not afford to purchase, install, and maintain application-specific software such as TMS and WMS

Due to the economic slowdown of 2007, many firms were forced to slash IT expenditures, thus benefitting cloud-based applications

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The Internet’s Influence on Logistics

Cloud Computing

Advantages of Cloud Computing continued

Faster and less costly installationSmaller IT staff

Regular upgrades and updates from the software providerDrawbacks of Cloud Computing

Upgrades and updates can be too numerous and too frequentLimited amount of customization

Security issues

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The Internet’s Influence on Logistics

- Uses the internet to make it easier, faster, and less expensive for

an organization to purchase goods and servicesBenefits realized from e-procurement include:

Transactional benefits

Measures the benefits of enhanced transactional efficiency

associated with e-procurementCompliance benefits

Focus on the savings that come from adherence to established

procurement policies

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The Internet’s Influence on Logistics

Electronic Procurement, or e-procurement

Benefits realized from e-procurement include:

Management information benefits

Encompass those that result from management information,

customer satisfaction, and supplier satisfaction levels after implementation of e-procurement

Price benefits

Are those that are given as a result of adopting e-procurement

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The Internet’s Influence on Logistics

Electronic Procurement, or e-procurement

- Drawbacks of using e-procurement

Security risk of transmitted informationImpersonal as human interaction is replaced by computer

transactions

- Drawbacks of using e-procurement

Security risk of transmitted informationImpersonal as human interaction is replaced by computer

transactions

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Information Technology Challenges

IT is a tool that can help manage organizational problems, but it is not a be-all/end-all solution for organizational problems

Theft of proprietary information

Websites protected from viruses and hackers

Decreasing size and increasing portability of technology devices

Employee resistance to IT implementations

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