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Roll of

Information
Technology in
Supply Chain
Management
Submitted to:

Submitted by:
Mir Asif Ahmed
ID: 617-35-28-062

Course:
Date of Submission:
Table of Contents
Roll of Information Technology in Supply Chain Management ...................................................... 4
Supply Chain Management: - ...................................................................................................... 4
Definition by Institute for Supply Management: - ...................................................................... 5
Definition by the Supply Chain Council: - ................................................................................... 5
Important Elements of Supply Chain Management: - ................................................................ 5
Information Technology: - ........................................................................................................... 6
Role of Information Technology in SCM: - ...................................................................................... 8
Standardized production:- .......................................................................................................... 9
Improved quality:- ....................................................................................................................... 9
Better communication:- .............................................................................................................. 9
Proper flow of information:- ....................................................................................................... 9
Time saving: - .............................................................................................................................. 9
Cost saving:- .............................................................................................................................. 10
Efficiency:- ................................................................................................................................. 10
Competitive advantage:- ........................................................................................................... 10
Avoid Collusion:-........................................................................................................................ 10
Collaboration:-........................................................................................................................... 10
Globalization: ............................................................................................................................ 11
Key suppliers certifications:- ..................................................................................................... 11
Fewer errors:- ............................................................................................................................ 11
Customer reviews:- ................................................................................................................... 11
Prompt delivery:-....................................................................................................................... 11
Opportunities for taking calculative risks:- ............................................................................... 11
Less paper work:- ...................................................................................................................... 12
Process Automation:- ................................................................................................................ 12
Alternative Suppliers:- ............................................................................................................... 12
Few IT based approaches to the Supply Chain Systems: -............................................................ 12
Real Life Example: A case of Bangladeshi Company Adopting Information Technology in Supply
Chain Management....................................................................................................................... 13
A brief about the Company:- ........................................................................................................ 13
Their working Strategies:- ......................................................................................................... 13
Here we will have a look at their basic working Strategies................................................... 13
Implementation of Information Technology in SCM:- .............................................................. 13
From purchasing raw materials to distribution to the customers, Bangladesh Toyota Ltd.
reinforces their IT infrastructure in an optimal way. ............................................................. 13
Let’s travel a bit deeper into their IT implementation in Supply Chain Management System.
............................................................................................................................................... 13
 Supply Chain Planning software (SCP): .............................................................................. 13
 Supply Chain Execution software (SCE): ............................................................................ 13
Website: - .................................................................................................................................. 14
Radio Frequency Identification (RFID): - ................................................................................... 14
RFID in manufacturing processes means: ................................................................................. 14
RFID in warehouse processes offers: ........................................................................................ 14
RFID in container management and tracking: .......................................................................... 15
RFID in distribution processes: .................................................................................................. 15
ERP:- .......................................................................................................................................... 15
 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. .... 15
 They have an ERP tool to get the things done properly. Centralized database is used to
connect all the sectors together. ............................................................................................. 15
 ERP software enables them to get all the information and current status of all level’s
transaction in an automated system. Talking to one of the employees gave me a clear
indication that Their ERP implementation has helped them to do all th things in a more
optimized and efficient way. ................................................................................................. 15
Use Social Media to Streamline Supply Chain:- ............................................................................ 16
Outsourcing: - ............................................................................................................................ 16
Computerized Shipping and Tracking: - .................................................................................... 16
Online Bidding to select suppliers: -.......................................................................................... 17
How Information technology optimized their SCM:- ................................................................... 17
CRM:- ......................................................................................................................................... 17
Proper monitoring:-................................................................................................................... 17
Tractability:- .............................................................................................................................. 17
Space Shifting: - ......................................................................................................................... 18
Mobility: - .................................................................................................................................. 18
Fraud management System:- .................................................................................................... 18
Improved global competitiveness: -.......................................................................................... 18
Improved distribution process :- ............................................................................................... 18
Strong Control system:- ............................................................................................................ 18
Simplified Supply Chain process:- ............................................................................................. 18
 Optimization: ..................................................................................................................... 19
 Reduced labor cost: ........................................................................................................... 19
Customer Satisfaction/ Responsiveness:- ................................................................................. 19
Reduced Stuffing levels:- ........................................................................................................... 19
Reduction of processing cycle time:- ........................................................................................ 19
Improved purchasing decision:- ................................................................................................ 19
Raw materials Just in Time:- ..................................................................................................... 20
Availability in case of emergency:-............................................................................................ 20
Improved order process speed:- ............................................................................................... 20
Better opportunities for innovation:......................................................................................... 20
Capability to capture reliable and real time information:- ....................................................... 20
Email:-........................................................................................................................................ 20
Flexibility:- ................................................................................................................................. 21
Reduced unused materials:- ..................................................................................................... 21
Target Market and demand:- .................................................................................................... 21
Roll of Information Technology in Supply Chain Management

Supply Chain Management: -


Supply Chain Management is the process of effectively
managing the components of an extended value chain--from
suppliers, through manufacturing and distribution chain, and to
the consumers.
For knowing a little better about the Supply Chain System, We
can have a look at this definition
A supply chain consists of the flow of products and services
from:
– Raw materials manufacturers
– Intermediate products manufacturers
– End product manufacturers
– Wholesalers and distributors and
– Retailers
Connected by transportation and storage activities, and
Integrated through information, planning, and integration
activities
Definition by Institute for Supply Management: -
The design and management of seamless, value-added process
across organizational boundaries to meet the real needs of the
end customer

Definition by the Supply Chain Council: -


Managing supply and demand, sourcing raw materials and parts,
manufacturing and assembly, warehousing and inventory
tracking, order entry and order management, distribution across
all channels, and delivery to the customer.
Now let’s have a look at the old and new paradigm of Supply
Chain Management System.

• Old paradigm- Firm gained synergy as a vertically


integrated firm encompassing the ownership and
coordination of several supply chain activities.
• New paradigm- Firm in a supply chain focuses activities in
its area of specialization and enters into voluntary and trust-
based relationships with supplier and customer firms.

Important Elements of Supply Chain Management: -


Purchasing- Supplier alliances, supplier management,
strategic sourcing
Operations- Demand management, MRP, ERP, JIT, TQM
Distribution- Transportation management, customer
relationship management, network design, service response
logistics
Integration- Coordination/Integration activities, global
integration problems, performance measurement

Information Technology: -
Information technology (IT) is the use of any computers,
storage, networking and other physical devices, infrastructure
and processes to create, process, store, secure and exchange all
forms of electronic data.
Typically, IT is used in the context of enterprise operations as
opposed to personal or entertainment technologies. The
commercial use of IT encompasses both computer technology
and telephony.
The term information technology was coined by the Harvard
Business Review, in order to make a distinction between
purpose-built machines designed to perform a limited scope of
functions and general-purpose computing machines that could
be programmed for various tasks. As the IT industry evolved
from the mid -20th century, it
encompassed transistors and integrated circuits computing
capability advanced while device cost and energy consumption
fell lower, a cycle that continues today when new technologies
emerge.

IT includes several layers of physical equipment (hardware),


virtualization and management or automation tools, operating
systems and applications (software) used to perform essential
functions. User devices, peripherals and software, such as
laptops, Smartphone’s or even recording equipment, can be
included in the IT domain. IT can also refer to the architectures,
methodologies and regulations governing the use and storage of
data.
Business applications include databases like SQL Server,
transactional systems such as real-time order entry, email
servers like Exchange, Web servers like Apache, customer
relationship management and enterprise resource
planning systems. These applications execute programmed
instructions to manipulate, consolidate, disperse or otherwise
affect data for a business purpose.
Computer servers run business applications. Servers interact
with client users and other servers across one or more
business networks. Storage is any kind of technology that holds
information as data. Information can take any form including
file data, multimedia, telephony data and Web data, data from
sensors or future formats. Storage includes volatile random
access memory (RAM) as well as non-volatile tape, hard
disk and solid-state flash drives.
IT architectures have evolved to
include virtualization and cloud computing, where physical
resources are abstracted and pooled in different configurations to
meet application requirements. Clouds may be distributed across
locations and shared with other IT users, or contained within a
corporate data center, or some combination of both
deployments.

Role of Information Technology in SCM: -


Prior to 1980s the information flow between functional areas
with in an organization and between supply chain members
organizations were paper based. The paper based transaction and
communication is slow. During this period, information was
often over looked as a critical competitive resource because its
value to supply chain members was not clearly understood. IT
infrastructure capabilities provide a competitive positioning of
business initiatives like cycle time reduction, implementation,
implementing redesigned cross-functional processes. Several
well know firms involved in supply chain relationship through
information technology. Three factors have strongly impacted
this change in the importance of information. First, satisfying in
fact pleasing customer has become something of a corporate
obsession. Serving the customer in the best, most efficient and
effective manner has become critical. Second information is a
crucial factor in the managers' abilities to reduce inventory and
human resource requirement to a competitive level. Information
flows plays a crucial role in strategic planning.
Now-a-days most of the business firms use advanced
technologies to get all the supply chain related tasks done easier
than before.
Some of the important beneficial parts of IT in SCM are
described below: -
Standardized production:-
Production quality should be standardized. Information
Technologies help in this regard with the implementation of
latest Software, hardware and networking tools.

Improved quality:-
IT helps to complete all the procedures within limited time and
cost. So the quality should also be improved if the beneficial
parts are properly applied on the purchasing and supplying
decisions.

Better communication:-
CRM software helps to communicate in real time among the
suppliers, customers, employees, stuffs and owners. Better
communication can lead to a efficient valance an organization
looks for.

Proper flow of information:-


Proper flow of information is also maintained as everyone can
see the latest status of any project in the Dashboard section of an
IT based tools like ERP.

Time saving: -
IT certainly helps to get the things done lot quicker as it could
need if done without the help of Information Technology.
Cost saving:-
Cost and revenues are the main objects of any business
procedures. Using Information technology, we get the
transactions done in an automated way and that reduces a lot of
costs of being dependant on paper work.

Efficiency:-
Efficiency Means getting the maximum output using the
minimum possible input.

Competitive advantage:-
This Era is all about capturing the latest technology faster than
your competitors. If you can’t cope up with the latest
technology, your competitors will not bother you leave behind.

Avoid Collusion:-
Proper flow of information leads the employees to be aware of
all specific situations. So there shouldn’t be any collusion
between the stuffs.

Collaboration:-
Achieving the same goal should be the motive for all the stuffs
and employees of an organization. IT helps all to keep track of
all the transactions and that collaboration is shared between all
the team members.
Globalization:
- IT helps to get connected with the outside world
and international business trends. So globalization is eased in
this regard.

Key suppliers certifications:-


Choosing the best suppliers is very important for adopting the
efficient Purchase decision. For that Certification to the eligible
suppliers is essential. It can be done through Email or any
software with the help of IT.

Fewer errors:-
Human made errors are generated more frequently than the
machines because machines like computer run through coding.
So if the coding is implemented properly into a software or tool.
Then possibility of error will obviously be less.
Customer reviews:-
Customer engagement has already gone to a high note. They can
opt their opinion anytime sitting at anywhere with the help of
internet.
Prompt delivery:-
Delivery is ensured within the deadline as Information
Technology helps us to get connected properly and be aware of
the current market demand.
Opportunities for taking calculative risks:-
Searching on the internet, we can research about the past
transactions and future opportunities. That certainly aids to take
new initiatives to reinvent the business model ensuring that the
risk is within the limits.
Less paper work:-
Requirement of less paper work is one of the most noticeable
benefits of IT in SCM. All the records are documented
automatically in website or any software. So the need of paper
work is lessened.

Process Automation:-
All the processes are automated so the hazards of paper work
and insecure transaction are totally avoided.
Alternative Suppliers:-
Technology helps to get many suppliers in one market place like
any bidding platform. So it needs less time to have a list of
suppliers available when needed.

Few IT based approaches to the Supply Chain 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
 Wide Area Network
 Internet (for E-commerce: B2B, B2C)
Real Life Example: A case of Bangladeshi Company Adopting
Information Technology in Supply Chain Management

A brief about the Company:-


Their working Strategies:-

Here we will have a look at their basic working Strategies.


Implementation of Information Technology in SCM:-

From purchasing raw materials to distribution to the customers,


Bangladesh Toyota Ltd. reinforces their IT infrastructure in an
optimal way.

Let’s travel a bit deeper into their IT implementation in Supply


Chain Management System.

 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.
Website: -
Their Website certainly helped the users to get connected and be
aware of the latest products and its prices.

Radio Frequency Identification (RFID): -


RFID in different sections that helps their cause in a big manner:
-
RFID in manufacturing processes means:

 less manual work


 less costs
 improved visibility
 improved planning

RFID in warehouse processes offers:

 visibility of accurate real-time information


 fast locating of products
 possibility to record losses
 ability to plan product locations strategically
RFID in container management and tracking:

 offers visibility of real-time cargo movement


 improves efficiency
 increase accuracy

RFID in distribution processes:

 accelerates the speed of delivery


 improves efficiency
 increases accuracy
 reduces distribution costs

ERP:-

 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.
 They have an ERP tool to get the things done properly.
Centralized database is used to connect all the sectors
together.
 ERP software enables them to get all the information and
current status of all level’s transaction in an automated
system. Talking to one of the employees gave me a clear
indication that Their ERP implementation has helped them
to do all th things in a more optimized and efficient way.

Use Social Media to Streamline Supply Chain:-

Bangladesh Toyota Ltd. has their social media activities which


help them to get connected with the latest trend and their
promotions. It also engages their users to get involved with their
products. It also helps to collect the customer opinions to judge
latest market demand. It will help to purchase and supply
according to the market demand.

Outsourcing: -
Bangladesh Toyota Ltd. Also uses online outsourcing while it’s
tougher and costlier to purchase locally. When purchasing from
local area costs more, then Outsourcing is absolutely a cost
effective way.

Computerized Shipping and Tracking: -


FlashView software enables their business owners to consolidate
all aspects of their supply chain in one place. It also allows them
to digitally organize inventory data, monitor and manage
shipping and tracking information, and create electronic invoices
with ease. It often greatly reduces the time spent shipping,
receiving, tracking, and compiling order data.
Online Bidding to select suppliers: -
It uses online bidding system to select suppliers matched to its
best demand.
Bidding system certainly helped them to get desired number of
suppliers when needed.

How Information technology optimized their SCM:-


CRM:-
Customer relationship management is enlarged through
software and social media activities which wouldn’t be
possible without the help of Information Technology.

Proper monitoring:-
Through RFID or ERP proper monitoring is ensured.

Tractability:-
It’s easy to track through RFID or website. So purchasing
function got improved in that company.
Space Shifting: -
In case of outsourcing or online bidding, space is not a big
issue anymore for Toyota Ltd. They can purchase raw
material or select suppliers from any part of the world.

Mobility: -
By the blessing of Information Technology, everything is
dynamic and mobile in Toyota Bd.

Fraud management System:-


Through RFID, they can track their product and employees.
So possibility of fraud is reduced.

Improved global competitiveness: -


Global competiveness is improved as they can research
about their global competitors through internet.

Improved distribution process :-


Using IT, Distribution process has become a lot easier.

Strong Control system:-


Through RFID and ERP controlling the whole system and
employees has become simpler than before.

Simplified Supply Chain process:-


With the help of Information Technology, whole supply
chain process is being simplified.
 Optimization:
- Everything is automated. So it has become
for the employees of Toyota Ltd. To optimize everything
easily.

 Reduced labor cost: -


Paper work is reduced. So less workers are needed as it is
automated.
Customer Satisfaction/ Responsiveness:-
There is more customer engagement through the social site
pages and software. So its easier to discover what customer
needs. So its as a whole beneficial for the supply chain
process.

Reduced Stuffing levels:-


This company has to have less paper works now. So
stuffing levels are reduced as the whole system is
automated through ERP software.

Reduction of processing cycle time:-


Better technology helped them to reduce the production
cycle time for each product.

Improved purchasing decision:-


Through proper flow of Information, everybody is aware of
the current status so purchasing decision became easier to
take.
Raw materials Just in Time:-
Through dashboard, they can calculate the current amount,
demand and raw materials to be purchased in coming days.
So they can have raw materials and produce as needed in
Just in Time (JIT).

Availability in case of emergency:-


Through good communication through internet, New
suppliers can be hired in case of emergency.

Improved order process speed:-


Order process speed is also increased by virtue of
Information Technology.

Better opportunities for innovation:


Thousands of information available in the world of internet,
innovation has become a good choice after gathering all the
information and analyzing about the consequences of the
would be taken approaches.

Capability to capture reliable and real time information:-


With the help of IT, Toyota Ltd. can exchange and share
the information with their suppliers and customers in real
time.

Email:-
For supplier certification, they use mail for keeping the
record and reducing the cost of paper work.
Flexibility:-
Supplier relationship management is also enriched through
their participation with the organization in Internet world.
So they can be a bit flexible as company demands them to
be.

Reduced unused materials:-


Amount of current materials and upcoming demand are
always recorded in the software and everybody can see
that. So there might be less wastage.

Target Market and demand:-


Through the social media profile or searching on the
Internet, Latest trend and customer demand are known. So
it helps to purchase raw materials more efficiently.