Supply Chain Logistics Management Chapter 7: Information Networks

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Information Functionality Strategic Alliance Formulation Development and refinement of capabilities and opportunities Focused/profit-based customer service analysis Order entry Inventory Assignment Order Selection Shipping Customer Inquiry Pricing and Invoicing Vehicle routing and scheduling Inventory levels and management Network/facility location and integration Vertical integration vs. third-party/outsourcing Financial measurement: cost Asset management Quality Measurement Productivity Measurement Customer Service Measurement Strategic Planning Decision Analysis Management Control Transaction Systems

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. High Risk Extensive Options Analysis/evaluation Significant user expertise and training Effectiveness-driven activity focus Performance control systems Feedback for performance evaluation Proactive direction to users Competitive qualification Characteristics Justification SCIS Characteristics and Justification Competitive Advantage High hardware and software systems cost Structured training for a large number of users Efficiency-driven activity focus Measurement of competitive capability and addition of potential improvement areas Identification and evaluation of competitive alternatives Strategic Planning Decision Analysis Management Control Transaction Systems

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Integrated Supply Chain

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Enterprise Resource Planning

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Capabilities of ERP Systems Traditional Capabilities Bill of materials A/P and A/R General ledger Inventory control Order Entry Purchasing Project requirements planning Routings Capacity requirements planning Emerging Capabilities Enterprise application integration Visibility Collaborative planning, forecasting and replenishment Customer relationship management Web-enabled applications Hosting

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Communication Modules

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Extension Modules

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. APS Modules

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Application Service Providers Benefits Cost savings - Not necessary to purchase or upgrade software Staffing - ASP provides technical staff to support implementation and maintenance Flexibility - Client can remotely access software with a web browser Risks Security - Proprietary information possibly vulnerable due to ASP failures Infrastructure - ASP requires high-speed internet connection History - No clear business model yet

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Comparison of Communication Transaction Formats

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Primary Logistics Industry EDI Standards UCS (Uniform Communication Standards): Grocery VICS (Volunteer Inter-Industry Communication Standards Committee): Mass Merchandisers WINS (Warehouse Information Network Standards): Warehouse Operators TDCC (Transportation Data Coordinating Committee): Transportation Operators AIAG (Automotive Industry Action Group): Automotive Industry

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Value-Added Networks (VAN’s) Manufacturer Mass Merchant Grocery Retailer VAN UCC 128 UCS code VICS code The VAN collects transaction messages and information from a manufacturer and then translates those messages and information into appropriate industry-specific communication standards.

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Single Firm Exchange Portal Procurement Manufacturing Logistics Exchange Portal Suppliers Service Providers Customers

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Automobile Industry Exchange Portal Supplier A Supplier B Supplier C Supplier D Tier 2 Suppliers Johnson Controls DelphiVistcom Covisint.com Infomediary Daimler Chrysler Ford General Motors Major Automotive Suppliers Automobile OEM’s

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Cross Industry Exchange Portal

Supply Chain Logistics Management, First Edition, Bowersox, Closs, and Cooper Copyright© 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Logistics Satellite Communication Applications Geostationary Satellite Orders Inventory Status Credit Verification Location Update Directions Delivery Notification Retail Stores Headquarters