Chapter -Information

Technology and Supply

Chain Management

Dr Arvind Kalia
Supply Chain Management
(SCM) Systems
 SCM is the process of effectively
managing the components of an
extended value chain--from suppliers,
through manufacturing and distribution
chain, and to the consumers.
 SCM information systems use technology to
more effectively manage supply chains
I. What is SCM?
 Why Supply Chain
Management?
1950-1980s Manufacturing Parts $5,000
• 50 years ago, U.S. is the only country Labor 4000
that can manufacture cars.
● You buy a car from GM, all the money Overhead 2000
will go to the GM. Management
1980-2000s Supply Chain
Management Marketing 3000

• Today, foreign parts and labors are Total Cost $14,000

much cheaper than that in US.
● You buy a car from GM, only a portion
of money will go to the GM.
Value Chain Analysis
 Benefits of Value Chain Analysis -
Disintermediation to the Consumer
Cost/
Sweate
r
Manufacturer Distributor Retailer Customer $48.50

Manufacturer Customer $40.34

Retailer

Manufacturer Customer $20.45

Service
 The concept of Supply Chain
Management is also applied to Service.
 Business Process Management or
Business Process Reengineering
Stockless Inventory Compared to Traditional and
Just-in-time Supply Methods
Business Process Reengineering
 From an article published in Harvard
Business Review
 Radical business redesign initiatives that
attempt to achieve dramatic
improvements in business processes by
questioning the assumptions, or
business rules of the company.
II. Information Systems for
SCM
Information Technology for
Supply Chain Management
 Software Systems
 Electronic Data Interchange (EDI)
 Material Requirements Planning (MRP)
 Manufacturing Resource Planning (MRP II)
 Enterprise Resource Planning (ERP)
 Supply Chain Management Systems (SCM)
 Customer Relationship Management (CRM)
 Internet-based Software (Cloud)
 Network Infrastructure
 Wide Area Network
 Internet (for E-commerce: B2B, B2C)
III. ERP
Enterprise Resource Planning
(ERP) Systems
 Enterprise resource planning (ERP) is a
term used to refer to a system that links
individual applications (for example,
accounting and manufacturing
applications) into a single application that
integrates the data and business processes
of the entire business.
 Origins of ERP Systems
 ERP systems grew out of a function called materials
requirements planning (MRP) which was used to
allocate resources for a manufacturing operation
 MRP systems software ultimately became very
complex allowing for efficiencies of scale not
previously possible
 Even more sophisticated MRP II systems began to
replace MRP systems in the 1980s
 By the early 1990s, other enterprise activities were
being incorporated into ERP systems
 Origins of ERP Systems
 Today, an ERP system can encompass,
but is not limited to, the following
functions:
 Sales and order entry
 Raw materials, inventory, purchasing,
production scheduling, and shipping
 Accounting
 Human resources
 Resource and production planning
Major ERP Systems
 SAP Business One
 Oracle – e-Business Suite
 SAGE
 Microsoft Dynamics (formerly Microsoft
Business Solutions - Great Plains)
 Infor Global Solution
 NetERP, Lawson Software etc.
E-Business and ERP Systems
 An e-business must keep track of and process a
tremendous amount of information
 Businesses realized that much of the information they
needed to run an e-business — stock levels at
various warehouses, cost of parts, projected shipping
dates — could already be found in their ERP system
databases
 A major part of the online efforts of many e-
businesses involved adding Web access to an existing
ERP system
E-Business and ERP Systems
 Many e-businesses want the same
things from their business
infrastructure
 Thus, rather than custom build
applications, many companies prefer
to use prepackaged ERP system
software, which is often more efficient
and less expensive to implement
Cost of Implementing ERP
Systems
 Most businesses need extensive help from
consultants to configure their ERP system
software around their existing business
practices, or to suggest changes in business
practices in order to better fit the ERP system
requirements
 This process of mutual adaptation is called
systems integration
 The consultants who supervise the
integration process are often referred to as
systems integrators
Outsourcing ERP Systems
 One response to the challenge of
managing a complex ERP system is to
outsource it
 Some businesses choose to outsource
not only the installation but also the
ERP system software
IV. Supply Chain Systems
Supply Chain Management
(SCM) Systems
 A typical SCM system might address the
following issues:
 Planning
 Vendor selection
 Manufacturing
 Logistics
 Customer relationship
Supply Chain Management
(SCM) Systems
Supply Chain Management
(SCM) Systems
 With the advent of the Internet, e-businesses
began to demand different things from their
SCM systems
 Most importantly, SCM systems vendors
(largely the same vendors that provide ERP
systems software) had to modify their
products to include a Web-based interface
 The ultimate goal of a business ERP system is
complete optimization of internal business
processes
Supply Chain Management
(SCM) Systems
 The two basic types of SCM system software are:
 Supply Chain Planning software (SCP): uses
mathematical models to predict inventory levels
based on the efficient flow of resources into the
supply chain
 Supply Chain Execution software (SCE): is used
to automate different steps in the supply chain such
as automatically sending purchase orders to vendors
when inventories reach specified levels
Major Supply Chain Planning
(SCP) Players
 i2 Technologies
 i2’s strength began with its powerful
Advanced Planning and Scheduling (APS)
 Manugistics
 Oracle
 SAP
 Advanced Planner and Optimizer (APO)
SAP Advanced Planner and
Optimizer (APO)
 Supply Network Design (SND)
The Supply Chain Cockpit (SCC)
Levels of SAP APO
Demand Planning (DP)
Supply Network Planning (SND)
Collaborative Planning,
Forecasting, and Replenishment
(CPFR)
…

SAP R/3

ATP – Available to Promise

PP – Production and Procurement Planning Production Planning/Detailed Scheduling (PP/DS) is used to generate
LES – Logistics Execution procurement proposals to meet the production requirements.
Oracle Supply Chain Planning
 Oracle Supply Chain Planning is part of the
Oracle E-Business Suite's family of Supply
Chain Management solutions
 It includes
 Demand Planning
 Collaborative Planning
 Inventory Optimization
 Manufacturing Scheduling, and
 Global Order Promising
Customer Relationship
Management (CRM) Systems
 Customer relationship management (CRM)
systems, sometimes called e-CRM systems,
use technology to help an e-business manage
its customer base
 CRM allows an e-business to match customer
needs with product plans and offerings,
remind customers of service requirements,
and determine what products a customer has
purchased
V. CRM
Salesforce.com
Muiti-channels CRM
Data Mining/Web
Mining/Business Intelligence
 Data mining is the process of using
mathematical techniques to look for
hidden patterns in groups of data,
thereby discovering previously unknown
relationships among the many pieces of
information stored in a database
 A data warehouse is a database that
contains huge amounts of data, such as
customer and sales data
 What does Data Mining Do?

Explores Finds Performs

Your Data Patterns Predictions

Query, Reporting, Data Mining

Analysis
Why
What
How
SQL Server 2015
Business Intelligence

Integrate Analyze Report

 Data acquisition from  Data enrichment,  Data presentation

source systems and with business logic, and distribution
integration hierarchical views  Data access for
 Data transformation  Data discovery via the masses
and synthesis data mining
 SQL Server 2015 Algorithms

Decision Trees Clustering Time Series

Sequence Association Naïve Bayes

Clustering

Neural Net
Plus: Linear
and Logistic Regression
 Naïve Bayes

In machine learning, naive Bayes classifiers are a family of simple

"probabilistic classifiers" based on applying Bayes' theorem with strong
(naive) independence assumptions between the features
Relationship among SCM, ERP,
CRM

SCM ERP CRM

Broader SCM
V. SAP R/3
PARTIAL SAP CLIENT LIST

Spacenet
BEFORE SAP R/3

 Systems didn’t talk to the extent processes

required, in spite of 20 years of IS labor
 Human glue was required:
 to fill-in where systems don’t talk
 to reconcile multiple views of data to arrive at an
“answer”
 to monitor “hold-points” to ensure procedures are
followed amidst the disorganization of being part
paper and part automated
 to bridge systems and paper processes
 Primavera
Schedules
Artemis Project DOE DISCAS Paper Off-site Vendor
Fixed Assets
Fund Accounting receivers Custody

Paper batch file

Purchase
Requisition
Paper
milestone Catalog
Inventory Control
definitions Bar Coding
System
Purchasing

General Ledger batch file

Work Order
System
Pump/Motor Run Bench Stock
Time Paper Control
Stock
Paper level
Paper decision
parts
Contract
order Logistics Support
Analysis

MRP Models
Engineering
Change Control
Log
Journal
Entry Personnel
Payroll
Request Paper
Paper Legend
Paper
Accounts Payable
Invoices
Real Property
Paper
Legacy System
ECP
Training

batch file batch file

Disbursements
Security
Centra EDM/PDM

Paper DOE FIMS

checks
 Primavera
Schedules
Artemis Project DOE DISCAS Paper Off-site Vendor
Fixed Assets
Fund Accounting receivers Custody

Paper batch file

Purchase
Requisition
Paper
milestone Catalog
Inventory Control
defnitions Bar Coding
System
Purchasing

General Ledger batch file

Work Order
System
Pump/Motor Run Bench Stock
Time Paper Control
Stock
Paper level
Paper decision
parts
Contract
order Logistics Support
Analysis

MRP Models
Engineering
Change Control
Log
Journal
Personnel
Entry
Payroll Paper
Request
Paper
Records Legend
Paper
Accounts Payable
Invoices
Real Property
Paper
Legacy System
ECP
Training

batch file batch file Human

Disbursements Glue
Security
Centra EDM/PDM

Paper DOE FIMS

checks
PROCESS EFFICIENCY

Realized through ability to reduce the

personnel requirements to perform the
process
Transfer into processes that were able to

meet customer requirements

THE KEY ENABLER: ONE SYSTEM
SD FI
MM Sales & Financial SAP R/3
Distribution Accounting
CO
PP Materials Controlling
 Omni-functional
Omni-
Mgt. AM
Production
Fixed
Assets
 Fully integrated
Planning Mgt.
SAP R/3  Process--oriented
Process
Single Central

1
Quality Database Project  Off--the
Off the--shelf
Mgt. System

Plant
QM Maintenance Workflow PS
Exec.
Human
PM Information
Resources & Report WF
Writer
HR
Some SAP Products
 R/3
 APO
 Customer Relationship Management
(CRM)
 Business process improvement (BPI)
 Strategic Enterprise Management (SEM)
 Business Warehouse (BW)
VI. SCM/ERP for Small Businesses
– Microsoft Dynamics
Microsoft Dynamics
Screenshot
Microsoft Dynamics
 Formerly Microsoft Business Solutions – Great
Plains
 With Microsoft Dynamics, you can bring supply-chain
functions online and make information available for
team collaboration—wherever your employees,
vendors, partners and suppliers are.
 Business portal functionality lets you provide supply-
chain functions, documents, and information to
people across the chain, both inside and outside of
the organization.
 And you can use the same portal technology to let
your executives review and augment performance—
when, where, and how they need to.
Why Microsoft Dynamics is for
small businesses?
 Hardware considerations
 Database requirements
VI. Information Technology
for for E-Business
TOOLS FOR WEB PAGE DEVELOPMENT &
SITE MAINTENANCE

 Languages:
 HTML
 CGI (Common Gateway Interface)
 CSS (Cascading Style Sheets)
 Javascript
 Java (Java Applet)
 XML/XSL
 Software:
 Front Page
 Microsoft Word
 Macromedia Flash Player
 Macromedia Dreamweaver
TOOLS FOR WEB PAGE DEVELOPMENT &
SITE MAINTENANCE

 UI/UX and Web Design. ...

 HTML/CSS Development. ...
 Blog Design and RSS Integration. ...
 Social Media Integration. ...
 Content Development and Content Marketing. ...
 Website Maintenance.
TOOLS FOR WEB PAGE DEVELOPMENT &
SITE MAINTENANCE

 Firefox Developer.
 Photoshop. ...
 Panic Coda. ...
 Dreamweaver. ...
 Fireworks. Adobe Fireworks is a commercial raster
and vector graphics editor hybrid from Adobe that's
available for the Mac and Windows operating
systems. ...
V. Hardware Considerations
for SCM systems
 Intranet vs. Extranet
 Intranet is to use Internet technology
and protocol (TCP/IP) for the internal
communications
 Extranet is to use Internet technology
and protocol for the internal and
suppliers’ communications

TCP/IP, or the Transmission Control Protocol/Internet Protocol

 Network Infrastructure: Wide
Area Networks (WANs)
 WAN Technologies
 Ordinary telephone line and telephone modem.
 Point-to-Point Leased lines (such as T1 line)
 Public switched data network (PSDN)
 Such as ATM, Frame Relay

 Send your data over the Internet securely, using

Virtual Private Network (VPN) technology

PSDN
VPN
Global Considerations in Using
SCM/ERP Systems
 Time differences
 Language issues
 Currency exchange rates
 Tax
 Different accounting systems
 Internet and security restrictions
 Culture and religion holidays