chapter 2 ppt

Data & Information• Data are simply facts – recorded measures of certain phenomena• Information is a body of facts in a format suitable for decision making• Big data – the collection of

Chapter 2

Logistics and Information Technology

Benefits of efficient and effective utilization of information

1 Greater knowledge and visibility across the supply chain, which

makes it possible to replace inventory with information.2 Greater awareness of customer demand via point-of-sale data,

which can help improve planning and reduce variability in the supply chain

3 Better coordination of manufacturing, marketing, and distribution

through enterprise resource planning (ERP) systems.4 Streamlined order processing and reduced lead times enabled by

coordinated logistics information systems

Data & Information

• Data are simply facts – recorded measures of certain phenomena• Information is a body of facts in a format suitable for decision making• Big data – the collection of large amounts of near-real-time data

collected through a variety of sources, i.e sensors, smartphones, RF tags and business-to-business data exchanges

• The opportunity will be to use this data to sense changes in demand and then

use logistics activities to effectively and efficiently respond to these changes.

General types of information management systems

Office Automation Systems

• Office automation systems provide effective ways to process personal

and organizational business data, to perform calculations, and to create documents

• Eg: word processing, spreadsheet, presentation, and database management applications.

• Today spreadsheets have developed to the point that they are able to solve for basic logistics optimization models

• Logistics optimization models utilize spreadsheet software and add-ins to

help logisticians make complex judgments and decisions about key logistics issues at strategic, tactical, operational and collaborative levels.

Communication Systems

information in many forms

• Global positioning systems (GPS) – refers to a network of

satellites that transmits signals that pinpoint the exact location of an object

• An increase in worker productivity, reduced operating costs, and improved customer relations.

• Tablets becoming important contributors to logistics decision making.

Eg: fax machines, personal computers, electronic mail, cellular phones, tablets and smart phones were considered “luxuries” but is viewed as

essential in today’s workplace.

Transaction Processing Systems (TPS)

• Transaction processing system (TPS) - collects and stores information about

transactions and may also control some aspects of transactions.• The primary objective of a TPS is the efficient processing of transactions, and org

can choose to do batch or real-time processing.

• Electronic data interchange (EDI) – the computer-to-computer transmission of

business data in a structured format.

• Automatic identification technologies – essential component in point-of-sale

(POS) systems and the idea behind POS systems is to provide data to guide and enhance managerial decision making.

• Radio-frequency identification (RFID) technology is another automatic

identification technology.

With batch processing, data are collected and stored for processing at a later time, with the later time perhaps being based on schedule (e.g., process every six hours) or volume (e.g., process once 25

transactions have accumulated) considerations.Real-time processing means that transactions are processed as they are received Although batchprocessing might be somewhat out of step with the contemporary emphasis on speed and time reduction, it can be quite effective when real- time processing is not necessary Moreover, in comparison with real- time systems, batch processing tends to be less costly and easier for employees to learn.

Radio-frequency identification (RFID)

• Conceptually, RFID involves the use of radio frequency to identify objects that have been implanted with an RFID tag.

• Operationally, RFID consists of three components: a scanning antenna, an RFID tag (chip) that conveys the relevant data, and a transceiver that interprets the data.

• Compared to bar codes, RFID (1) does not require clear line of sight between an object andRFID hardware, (2) can store much larger quantities of data, and (3) can offer both read and write capabilities.

• Drawback to RFID involves privacy concerns, such as the inappropriate use of the technology For example, a major retailer embedded RFID chips into a particular line of cosmetic products, and consumers who selected this product from the store shelf were beamed, via webcam, to the manufacturer’s headquarters!

• Yet another drawback is that data accuracy can be lower in items with high moisture content, such as fruits and vegetables.

• aMajor drawback of RFID adoption involves the costs of installing the related hardware andsoftware, which can range from $100,000 for smaller companies to $20 million for larger companies.

Management Information Systems (MIS) and Executive Information

Systems (EIS)

• Logistics information systems (LIS) – the people, equipment and procedures to

gather, sort, analyse, evaluate, and distribute needed, timely, and accurate

information to logistics decision makers.

• For logistics managers to receive needed information, it’s important that they

be fairly specific when submitting requests.

• Timely information would appear to be incumbent on the effectiveness and

efficiency of a company’s particular LIS.

• Timely also can refer to how quickly managers receive the information requested; this is

affected by each company’s retrieval and dissemination procedures.

• Accurate information may also reflect the effectiveness and efficiency of a

company’s logistics information system.

Decision Support Systems (DSS)

• Decision support systems help managers make decisions by providing information, models, or analysis tools, and they can be

widely applied and used by logisticians.

• Simulation is a technique that models a real-world system, typically using mathematical equations to represent the

relationships among the system’s components.

• Application-specific software help managers deal with specific logistics processes or activities.• On-demand software (also referred to as software-as-a-service or cloud computing) is software that users access on a per-

use basis instead of software they own or license for installation.

• Transportation management systems (TMS) are software package that automates the process of building orders, tending

loads, tracking shipments, audits, and payments.

• Warehouse management systems (WMS) are software packages that provide oversight of the storage and flow of materials

within a company’s operations i.e inventory management, product receiving, determination of storage locations, order selection processes, and order shipping.

• Data mining utilizes sophisticated quantitative techniques to find “hidden” patterns in large volumes of data; these patterns

allow managers to improve their decision-making abilities as well as enhance their organization’s competitive advantage.

• Data warehouses is a central repository for all the relevant data collected by an organization.• Machine learning is a computer-based discipline leverages algorithms that can “learn” from data These algorithms use data

to build and constantly update their prediction models for activities such as forecasting.

Enterprise Systems

• Enterprise systems create and maintain consistent data processing methods and an integrated database across multiple business functions.

• Enterprise resource planning (ERP) systems, which “lets a company

automate and integrate the majority of its business processes, share common data and practices across the enterprise, and produce and access information in a real-time environment.”

• Shortcomings:1 ERP software is relatively expensive; however, the software is only one part of

ERP implementation costs.2 Implementation of ERP systems can be a very time-consuming process.

THE INTERNET’S INFLUENCE ON LOGISTICS

• Online retailing• Cloud computing• Electronic Procurement• Internet of Things (IoT)

Online Retailing

Characteristics of online retailing:• More plentiful and in much smaller quantities

high volumes of orders• Packaging implications – small cartons, envelopes, bags• Transportation and returned orders

• Variety of logistics strategies is required

• Updates are too numerous and too frequent• Security issues i.e data protection

Electronic Procurement (e- procurement)

Characteristics of e-procurement:• Uses the Internet to make it easier, faster, and less expensive for an organization to purchase goods and

services

• Transactional benefits are a measure of the benefits of enhanced transactional efficiency (e.g., a reduced

invoice-to-payment time) associated with e-procurement

• Compliance benefits focus on the savings that come from adherence to established procurement policies• Managementinformation benefits encompass those that result from management

information, customer satisfaction, and supplier satisfaction levels after implementation of electronic procurement

• Price benefits are those that are given as the result of adopting e-procurement

• Drawbacks

• Security issues• Impersonal

Internet of Things (IoT)

Characteristics of IoT:• Refers to the sensors and data-communication technology that is built

into physical objects that enables them to be tracked and controlled over the Internet

• Provide valuable information and business insights• Drive value in the supply chain and logistics disciplines through

improvements in employee productivity and enhanced customer interactions

The potential benefits of the IoT extend across all types of logistics activities, including such areas as warehousing, transportation, and last- mile delivery For example, a forklift being used within a warehouse

setting to move products can now be the source of valuable information accessed via the Internet This forklift can be equipped with wireless

connectivity, data storage, and sensors that can provide a variety of operational data about itself and the environment it operates within For example, the forklift could alert a warehouse manager to potential

mechanical or safety issues prior to anything occurring The forklift could also provide enhanced visibility of inventory within the warehouse

Thus, the forklift moves beyond just moving a product, to become a mobile information hub that collects and processes information for enhanced logistics performance

INFORMATION TECHNOLOGY CHALLENGES

1 The recognition that information technology is a tool that can help

managers address organizational problems.2 Security concerns

• Theft of proprietary information• Decreasingsize and increasing portability of technology

devicesare susceptible to loss of theft of device and DATA.

3 Human resource issues

• People-related factors such as employee resistance have been identified as a major cause of information technology implementation.

• Technology addiction – uses of smart phone obsessively and addictively.

Technology is not a panacea or a be-all/end-all solution for

organizational problems This can be illustrated by the situation of a senior manager whose dis- organization caused him to often miss regularly scheduled meetings with various constituencies The senior manager and his boss decided to “solve” the missed meeting problem by providing the manager with a smart phone that contained a

calendar detailing the time and place of his various meetings.Unfortunately, the senior manager continued to miss regularly scheduled meetings because he occasionally failed to (1) carry the smart phone with him; (2) have the smart phone turned on; and (3) upload the meeting information into the smart phone’s calendar In this situation, the technological “solution” could not address—and may

have actually exacerbated—the manager’s disorganization

Discussion Questions

1 In what ways can information be helpful in logistics and supply

chain management?2 What advances in technology do you view as being most beneficial

to logistics management? Why?3 From a logistical perspective, what are some of the differences

between online and in-store retailing?

1) In what ways can information be helpful in logistics and supply chain management?• There are several ways in which information can be helpful in logistics

and supply-chain management These include, but are not limited to, greater knowledge and visibility across the supply chain, which makes it possible to replace inventory with information; greater awareness of customer demand via point-of-sale data, which can help improve planning and reduce variability in the supply chain; better

coordination of manufacturing, marketing, and distribution through enterprise resource planning tools; more streamlined order

processing and reduced lead times enabled by coordinated logistics information systems

Correct ans for q1

• To make decisions -logistics and supply chain managers can work together to create an integrated supply chain you

know what customers want, which raw materials to use in the production process, how much inventory is in stock, when the product should be distributed or shipped.

secondly, firm's performance increases coz with accurate info that leads to effective decisions, it helps to avoid error hence, firm's productivity increases as well as performance everyone is happy third, greater knowledge within all the functions of business everyone know what is going on with the info available, therefore, achieving organizational

objectives and goals.

2) What advances in technology do you view as being most beneficial to logistics management? Why?

• Today, most companies are using social media to enhance the growth of their businesses as well as improving the value of the businesses In the logistics and supply chain industry, the adoption of social media has been relatively recent, and it has brought about its share of

benefits These include increasing the visibility of the organizations, building brand images, driving campaigns, and attracting new

customers, hence expanding markets This is along with increasing both the market and business intelligence (Murphy & Knemeyer, 2014)

• I believe that one of the most important advances in telecommunications technology is the smart phone and tablet I used to think that personal computers were the future of

telecommunications, but they are thing of the past Laptops, tablets, and smartphones have taken over They are lightweight and compact and can pack as much power as a personal computer We are making the transition into the “wireless” phase of communication from calling, texting, e-mailing, to video conferencing The fact that this technology is wireless, it can be taken virtually anywhere, and logistics updates can be made at any time This makes inputting data and communicating with vendors and suppliers extremely easy Certain apps can be used to manage inventory, shipping, and transportation The ADC (automatic data capture) need is changing from wireless handheld scanners, and bar code printers to rugged tablets that can do the same Supervisors want mobile access to applicants to tweak labor resources and monitor real-time trends.