MODULE -5 IT IN THE SUPPLY CHAIN

BY:

LAKSHMI NARAYANA REDDY.K

MBA,PGDFM,M.Phil

MODULE 5
Information Technology in the supply

chain IT Framework customer relationship management internal supply chain management supplier relationship management transaction management future of IT.

Role of IT in supply chain

Information is the most important of the four supply

chain drivers, without this they cannot deliver high level of performance. Information provides foundation, Supply chain process execute transactions and managers make decision. IT consists of the hard ware and software throughout supply chain that gather, analyze and act an information. The application of IT to the process of planning and control of supply chain activities has grown rapidly with the introduction of micro computers in 1980s . IT systems to capture and analyze information can have significant impact on firms overall performance.

 Information is the driver that serves as the glue to create

a coordinated supply chain Information must have the following characteristics to be useful:
1. 2. 3.

Accurate Accessible in a timely manner Information must be of the right kind

basis for supply chain

Information
1. 2. 3.

provides the management decisions

Inventory Transportation Facility

Information used at all phases of decision making:

strategic, planning, operational Examples:

Strategic: location decisions Operational: what products will be produced during todays production run

 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.

 Information technology (IT)

Hardware and software used throughout the supply chain to gather and analyze information. 2. 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. 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.
1.

IT framework in Supply Chain

Developing a framework that helps a manager

1. 2. 3. 4.

understand how this information is utilized by the various segments of IT within the supply chain. It describes supply chain macro process: Supplier relationship management (SRM) Internal Supply chain management (ISCM) CRM Transaction management foundation. Why Focus on the Macro Processes? Macro Processes Applied to the Evolution of Software

Macro Processes in a Supply Chain

Supplier Relationship Management (SRM)

Internal Supply Chain Management (ISCM)

Customer Relationship Management (CRM)

Transaction Management Foundation (TFM)

CRM
CRM process that focus on downstream interaction 1. 2. 3. 4.

between the enterprise and its customers. The goal of CRM is to generate customer demand and facilitates transmission and tracking of orders. Four major key processes in CRM : Marketing Sell Order Management Call / Service center CRM is a starting point in improving the supply chain performance.

Internal Supply Chain Management

This focus on internal operations within the enterprise.

ISCM includes all processes involved in planning for

1.
2. 3.

4.
5.

and fulfilling a customer order. It includes: Strategic planning Demand planning Supply planning Fulfillment Field services. The main objective is to fulfill the demand generated by CRM

Supplier Relationship Management

This focus on upstream interaction between the

1. 2. 3. 4. 5.

enterprise and its suppliers There is very natural fit between SRM process and the ISCM process or interacting supplier constraints is crucial when creating internal plans. It involves major process: Design collaboration Source Negotiate Buy Supply collaboration.

Transformation management foundation

It acts as a software building block that provides foundation upon which the macro process rest. It includes basic ERP systems, information software, and integration software. TMF software is necessary for the 3 macro processes to function and to communicate with each others. ERP systems are rapidly gaining popularity there was little focus on the 3 macro process we discussed earlier. Many ERP players includes oracle, people soft, JD Edwards and Baan.

Future of IT in Supply chain

It provides an integrated product that increases

the linkages between the macro processes. 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

Supply chain IT practice

Select

I.T system that addresses the companys key success factor. Take incremental steps and measure value. Align the level of sophistication with the need for sophistication. Use of IT systems to support . Future of IT.

THANK YOU