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Chapter 16 Information Technology and the Supply Chain Supply Chain Management (3rd Edition) Outline The Role of Information Technology in the Supply Chain The Supply Chain IT Framework Customer Relationship Management Internal Supply Chain Management Supplier Relationship Management

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chapter 16 information technology and the supply chain

Chapter 16Information Technology and the Supply Chain

Supply Chain Management(3rd Edition)

outline
Outline
  • The Role of Information Technology in the Supply Chain
  • The Supply Chain IT Framework
  • Customer Relationship Management
  • Internal Supply Chain Management
  • Supplier Relationship Management
  • The Transaction Management Foundation
  • The Future of IT in the Supply Chain
  • Supply Chain Information Technology in Practice
role of information technology in a supply chain
Role of Information Technologyin a Supply Chain
  • 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
  • Information provides the basis for supply chain management decisions
    • Inventory
    • Transportation
    • Facility
characteristics of useful supply chain information
Characteristics of UsefulSupply Chain Information
  • Accurate
  • Accessible in a timely manner
  • The right kind
  • Provides supply chain visibility
use of information in a supply chain
Use of Information in a Supply Chain
  • Information used at all phases of decision making: strategic, planning, operational
  • Examples:
    • Strategic: location decisions
    • Operational: what products will be produced during today’s production run
use of information in a supply chain6
Use of Information in a Supply Chain
  • 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.
role of information technology in a supply chain7
Role of Information Technologyin a Supply Chain
  • Information technology (IT)
    • Hardware and software used throughout the supply chain to gather and analyze information
    • 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
the importance of information in a supply chain
The Importance of Informationin a Supply Chain
  • 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
the supply chain it framework
The Supply Chain IT Framework
  • The Supply Chain Macro Processes
    • Customer Relationship Management (CRM)
    • Internal Supply Chain Management (ISCM)
    • Supplier Relationship Management (SRM)
    • Plus: Transaction Management Foundation
    • Figure 16.1
  • Why Focus on the Macro Processes?
  • Macro Processes Applied to the Evolution of Software
macro processes in a supply chain figure 16 1
Macro Processes in a Supply Chain(Figure 16.1)

Supplier Relationship Management (SRM)

Internal Supply Chain Management (ISCM)

Customer Relationship Management (CRM)

Transaction Management Foundation (TFM)

customer relationship management
Customer Relationship Management
  • 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
internal supply chain management
Internal Supply Chain Management
  • Includes all processes involved in planning for and fulfilling 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
supplier relationship management
Supplier Relationship Management
  • Those processes focused on the interaction between the enterprise and suppliers that are upstream in the supply chain
  • Key processes:
    • Design Collaboration
    • Source
    • Negotiate
    • Buy
    • Supply Collaboration
  • There is a natural fit between ISCM and SRM processes
the transaction management foundation
The Transaction Management Foundation
  • 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 the enterprise
  • Real value of the TMF exists only if decision making is improved
  • The extent to which the TMF enables integration across the three macro processes determines its value
the future of it in the supply chain
The Future of IT in the Supply Chain
  • 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 information technology in practice
Supply Chain Information Technology in Practice
  • Select an IT system that addresses the company’s key success factors
  • Take incremental steps and measure value
  • Align the level of sophistication with the need for sophistication
  • Use IT systems to support decision making, not to make decisions
  • Think about the future
summary of learning objectives
Summary of Learning Objectives
  • What is the importance of information and IT in the supply chain?
  • How does each supply chain driver use information?
  • What are the major applications of supply chain IT and what processes do they enable?