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Chapter 9. Information Flows and Technology Lee, Yen-Feng. Introduction. Information flows: Trigger and support physical flows. Core sections Role of information in GSC Information visibility and transparency IT applications Radio frequency identification (RFID)

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Chapter 9

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Chapter 9

Chapter 9

Information Flows and Technology

Lee, Yen-Feng



  • Information flows:

    • Trigger and support physical flows.

  • Core sections

    • Role of information in GSC

    • Information visibility and transparency

    • IT applications

    • Radio frequency identification (RFID)

    • Supply chain knowledge management



  • How can we order goods without IT systems?

  • How about Dell, IBM, HP…in USA?

    • International phone call? Costly

    • Time differences

    • Mail? Waiting for weeks.

  • How can we manage without IT systems?

    • Order 1 item? 1minute per order

    • How about 1,000 items? 1,000 minutes = 16.66 hours

The role of information in global supply chains

The role of information in global supply chains

Three key flows in supply chain

1. Material

2. Resource

3. Information

Role of information flows:

Delivery products

At right time

In right quantity

To customer’s specification


The role of information in global supply chains1

The role of information in global supply chains

Key drivers supply chain IT:

Increasing information complexity

Increasing information proliferation

Increasing information diffusion

Increasing information velocity

Increasing information accuracy

Effective SCM

Timely and accurate information

Networked desktop

Laptops, PDAs

Mobile phones

Other electronic devices

Provide 24/7 visibility

Information visibility

Information visibility

Information visibility

Ability to see information at the various points

Across the supply chain as and when required

To help to manage complexity

Highly desirable, but difficult to achieve

Effective information visibility

Facilitated by IT

Integrated and collaborative between partners.

Barriers to information visibility

Barriers to information visibility


Reluctance to share information with partners


High costs of implementing

Maintaining supply chain spanning IT


Information systems’ ability to ‘talk’ to each other.

Hardware and Software

Partners’ capability

Information security


Align the numerous disparate processes

Across multiple supply chain

Highly complex program of activities

The benefits of information visibility

The benefits of information visibility

Customer oriented operations

Time compression

Reduced schedule variability

Shorter planning periods

Consistent partnerships

Supply chain synchronization and coordination

A single point of control

Integrated information systems

It applications

IT applications

  • Information technologies (IT)

    • Material requirements planning (MRP)

    • Enterprise resource planning (ERP)

    • Collaborative planning forecasting and replenishment (CPFR)

    • Electronic data change (EDI)

    • Warehouse management systems (WMS)

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Figure 9.1 Information technologies in global logistics and supply chain management (adapted from Sherer, 2005)

E business


  • As the utilization of information and communication technologies (ICT) in support of all the activities of business.

    • Integral to trade and commerce

    • Allows customers to purchase on-line

    • Include all electronically information exchange

    • Essential to maintain and improve supply chain.

Electronic data interchange edi

Electronic Data Interchange (EDI)

Technology for

Electronic interchange of data between companies

Automated without human intervention

Predominant uses:

1. Purchase orders from customers to suppliers

2. Invoices for payment from suppliers to customers

3. Delivery schedule data

4. Payment instructions

5. Can be linked to an electronic funds transfer (EFT) application to enable automated payment


Enterprise resource planning erp

Enterprise Resource Planning (ERP)

Company-wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stores.

Developed in late 1980s

Core application today

Spans an enterprise to integrate the various business functions across multiple locations

In multinational manufacturing and logistic company

Offer visibility and integration

For planning and control of resources

Enterprise resource planning erp1

Enterprise Resource Planning (ERP)

Commonly requires

Business process reengineering to align work organization with the technology

Solution to integration problem

Need to consider the organization structure


1. financial

2. resource

3. time


Collaborative planning forecasting and replenishment cpfr

Collaborative Planning, Forecasting and Replenishment (CPFR)

Developed in late 1990s

Fill inter-organizational gap

Wal-mart: enable with first tier supplier

Scheduling logistics between suppliers and customers

IT-enabled CPFR

Essential in high velocity supply chains such as those of the major supermarkets

Commonly offered as a ‘bolt-on’ to ERP to enable ERP to extend beyond a single organization

Warehouse management systems

Warehouse management systems

  • Manage and control warehouse and distribution center

Primary rfid applications in logistics and scm

Primary RFID applications in logistics and SCM

RFID application

Tag, barcode and readers

RFID enabled receiving area

Trucks or products pass through the gate

Time and quantity are recorded automatically

Do you have RFID applications?


  • Source:

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Figure 9.2 A basic logistics-related RFID application

Primary rfid applications in logistics and scm1

Primary RFID applications in logistics and SCM

4 headings:

Asset tracking and management

Increased security of freight

Improved stock management and availability

Reduced errors in product data handling


Automatically identify and locate physical assets

Quick response supply chain

Resist extreme temperatures

Harmful chemicals

Scan multiple items


Operational improvements from rfid

Operational improvements from RFID


Shipping consolidation

Conveyance loading

Conveyance tracking

Shipment and item tracking



Item tracking within a manufacturing plant

Warehouse efficiency, reach, productivity and accuracy

Reduced retail out-of-stock, labor requirements, pilferage, and phantom stock problems

RFID adopters

Walmart, Tescom Metro and Marks & Spencers

Predicted future applications of rfid

Predicted future applications of RFID

The ‘store of the future’:

Continuous shelf inventory checking

More frequent replenishment

‘Future warehousing’:

Reducing floor space requirements in warehouses

Enabling them to be located closer to urban areas

Increased customization in manufacturing:

Increase visibility of end customer requirements

RFID reduce 20%~67% cost of distribution

Supply chain knowledge management

Supply chain knowledge management


Multitude of information and data

Filled with knowledge: Tacit and explicit

Knowledge management:

Capture, storage, use and sharing of knowledge


knowledge management processes that span a supply chain

Building up

Complex knowledge of demand

Enables a supply chain to begin to sense and respond to actual demand

Hence the knowledge creating supply chain is able to be


Gaining competitive advantage

Supply chain knowledge management1

Supply chain knowledge management

Supply-side and demand-side

Critical to managing supply chain performance

Knowledge in individual

Critical to maintain & improving

Knowledge worker

Long-term supply chain improvement

Capture knowledge

Create knowledge

Make explicit


Chapter 9 3533299

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