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IT in Supply Chain Management

Management Information System

Group # 8

Submitted to

Prof. Bins Matthew

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Sendhil Nadar (36)

Gurdeep Nagi (37)

Kalpesh Nahata (38)

Angad Singh Oberai (39)

Gurmeet Singh Obhan (40)

Group Members

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Definition and Meaning

Functions and Activities of SCM

Supplier Manufacturer Distributor Retailer Customer

What is Supply Chain?

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Objective of Supply Chain

Maximize overall profit

Profit

Revenue generated from customer - costs incurred

along the entire chain

(e.g. manufacturing / storing / distributing the product)

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Strategic

Operational

Supply Chain Decisions

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So What is supply Chain

management?

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Location

Production

Inventory

Transportation

Major Decision Areas in SCM

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Bull Whip Effect

Small changes in consumer demand result in

large variations in orders placed upstream

Amplification of order size variation as one

moves up the supply chain

Supplier Manufacturer Distributor Retailer Customer

Buys 10Orders 15

Delay 2 weeksDelay 2 weeks

Orders 25

Delay 2 weeks

Orders 40

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Illustration

Proctor & Gamble coined the term bullwhip effect by

studying the demand fluctuations for Pampers (disposablediapers)

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Causes of Bull Whip

Forecast errors

Overreaction to backlogs

Lead time

No communication and coordination

Delay times for material and information flow

Batch ordering

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Impact of Bull Whip

Excessive inventory investments

Poor customer service levels

Lost Revenues

Reduced Productivity

More difficult decision making

Sub-Optimal transportation

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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

Role of Information Technology in a

Supply Chain

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Relevant information available throughout the

supply chain allows managers to make decisions

that take into account all stages of the supplychain

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

Importance of Information in a

Supply Chain

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E-commerce

Electronic data interchange

Data warehouse

Bar coding & scanner

Enterprise resource planning

Information & Technology:

Application of Supply Chain

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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

The Supply Chain IT Framework

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Supplier

Relationship

Management(SRM)

Internal

Supply Chain

Management(ISCM)

Customer

Relationship

Management(CRM)

Transaction Management Foundation (TFM)

Macro Process in a Supply Chain

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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

Customer Relationship Management

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Includes all processes involved in planning for andfulfilling 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

Internal Supply Chain Management

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Those processes focused on the interaction betweenthe enterprise and suppliers that are upstream inthe supply chain

Key processes: Design Collaboration

Source

Negotiate

Buy

Supply Collaboration

There is a natural fit between ISCM and SRM

processes

Supplier Relationship Management

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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 theenterprise

Real value of the TMF exists only if decision making

is improvedThe extent to which the TMF enables integration

across the three macro processes determines its

value

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The Transaction Management

Foundation

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At the highest level, the three SCM macro processeswill continue to drive the evolution of enterprise

software

Software focused on the macro processes will becomea 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

The Future of IT in Supply Chain

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