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Supply Chain Information Systems, WMS using RFID implementations, Supply…
Supply Chain Information Systems
Supply Chain Management
This became a common term in the 1980s, which was heavily influenced by Japanese manufacturing processes like those developed by Toyota, like JIT and lean manufacturing
In the 1990s Electronic Data Interchange (EDI) made it possible to coordinate chains of organisations worldwide.
This enabled the integration of participant supply chains elements into cooperative components sharing information and enabling coordinated planning, operations, and monitoring of performance
There was a focus on core competencies, abandoning the vertical integration of Standard Oil, U.S. Steel, and Alcoa and replacing it with linkages of independent organisations specialising in what they did best
This encompassed the entire product process to include design, manufacture, distribution, marketing, selling, and service
Key measurements of effective SCM
Cost
usually implemented through monitoring customer perceptions, and identifying best practices as benchmarks to evaluate supply chain performance
Service
Productivity
Usie of assets
Quality
SCM stream can be divided into three main streams:
Product – Goods moving from sources through manufacturing processes and ultimately on to a customer, to include services such as customer returns
advances in manufacturing and distribution systems, the cost of developing new products and services is dropping and time to market is decreasing
Information – Transmitting orders and updating delivery status
SCM software links suppliers to databases that show forecasts, current inventory, shipping, or logistics timeframes within the customer organisation
better meet their customers’ demands and monitor unexpected supply chain disruptions to organise alternative routing
Primary types of SCM software:
Planning applications are capable of generating improved plans through use of mathematical algorithms
Execution applications enable tracing goods, managing materials, and exchanging financial information
Finances – Credit terms, payment schedules, shipment, and contractual relationships
Original Equipment Manufactures
shifted from making products to become brand owners.
These brand owners needed to know what was going on across their entire supply chain, with the need to control from above rather than from within
Supply Chain Processes
Collaboration across supply chains requires the integration of all supply chain activities, which require a continuous flow of information
Key processes
Product Development (development can be obtained by linking customers and suppliers)
Procurement to include outsourcing or partnerships
Manufacturing (developed based on what the OEM organisation selects as the best combination of cost and risk over the total product life cycle)
Physical distribution
Customer Relationship Management (management of the relationships between the providing organisations and its customers)
Linking independent elements to work together to deliver goods and/or services is flexible and enables rapid change to comply with new circumstances that are commonly encountered in contemporary business
By expanding beyond the core organisation, a need to monitor performance is needed
Evolution of Supply Chain systems
Materials Requirements Planning (MRP), which was extended to include planning schedules (MRP-II)
Enterprise Resource Planning (ERP) systems seek to integrate all organisational information systems, although of course companies will always have special needs outside of an ERP
Advanced Planning Systems (APS) software
Warehouse Management Systems (WMSs), Transportation Management Systems (TMSs), Manufacturing Execution Systems (MESs), and the more general logistics management systems, targeted for specific industries such as the military and/or construction
continued expansion of ERP systems to include additional functionality, such as CRM and SCM systems as part of the Enterprise Information System (EIS)
MRP
MRP-I (i.e., materials requirements planning)
Closed-loop MRP (i.e., MRP-I with capacity planning and shop floor management)
MRP-II (i.e., Closed-loop MRP integrated with the other functions such as finance and marketing)
Benefits
Reduction in inventories
Improved customer service
Enhanced efficiency and effectiveness
allows a plant manager to plan production and raw materials requirements by working backward from the sales forecast, the prediction of future sales
For a company with many products, raw materials, and shared production resources, this kind of projection is impossible without a computer to keep track of various inputs
EDI, the direct computer-to-computer exchange of standard business documents, allows companies to handle the purchasing process electronically, avoiding the cost and delays resulting from paper purchase order and invoice systems
SCM began with the sharing of long-range production schedules between manufacturers and their suppliers
Provide
When to place an order
How much to order
Who to order from
When the items need to be on hand
are used to acquire or fabricate component quantities on time for both internal purposes and sales and distribution
at its core is a time-phased order release system that schedules and releases manufacturing work orders and purchase orders, so that subassemblies and components are available at the assembly station when they are required
Aim of the evolution of MRP
tackle the problem of dependent demand, that is, determining how many of a particular component is required knowing the number of finishing products
Evolution of MRP-II = JIT
Types of Business functions using MRP - II
Order processing as in MRP
Business planning
Sales and operations planning
Production plans
Master production scheduling
Capacity requirements planning
Capacity planning
Integrated with accounting and finance subsystems
Business plans
Shipping budgets
Inventory projections
Purchase plans
MRP- II is a method to plan all resources for a manufacturer
Major purpose of MRP - II
to integrate primary functions (i.e., production, marketing, and finance) and other functions, such as personnel, engineering, and purchasing into the planning process
Advanced Planning Systems
APSs provide decision support by using operational data to analyse material flows throughout the supply chain
This supports the business functions of purchasing, production, and distribution through the entire spectrum of planning
Here
Purchasing is supported by planning and MRP
Production is supported by strategic, master, and production planning as well as short-term scheduling
Distribution is supported by distribution planning and transport planning
These planning systems interact, enabling the management of demand across the supply chain
List of APS products
Adexa
I2
JDA (acquired Manugistics)
Logility
Webplan (Kinaxis)
Warehouse Management Systems
WMSs provide the functionality of tracking parts throughout a supply chain
electronic inputs such as bar code scanning
Radio-frequency Identification (RFID) technology provides another form of electronic data inputs to WMSs
Manufacturing Execution Systems
Its original focus was to manage demand on manufacturing organisations with respect to quality, standards, cost reduction, schedule, and ability to react to change
MES functionality now integrates support to most manufacturing execution processes for release of production orders to finished goods delivery
MES also triggers supply chain replenishment upstream (telling sources that replenishment inventory is needed)
These systems use a common interface and data system to integrate to multiple locations or organisations within a supply chain
Functionalities
Scheduling
Process management
Document control
Data collection or acquisition
Labor management
Quality management
Production unit dispatch
Maintenance management
Production tracking
Performance analysis
Resource allocation and tracking
An MES can interact between the organisation ERP and the shop floor, taking production orders form the ERP and allocation machines and labour to tasks or products
Real status from the shop floor in turn is passed on to the ERP to update resource availability, track products, and record production
Logistics functions in the ERP include plant production and scheduling, shipping, and inventory
Transport Management Systems
TMSs provide software support at an affordable level to control shipping
A variety of alternative sources are available to increase visibility and generate more efficient solutions to move material in an increasingly complex environment involving many risks (privacy, war, regulations)
Functionality provided includes transportation mode planning, optimisation models, and workflow management
Vendors
Accyship
EPICOR
HighJump (acquired Pinnacle)
IBM (acquired Sterling Commerce and others)
Infor
JDA (acquired Manugistics)
USP Logistics Technologies
Other means of TMS acquisition include in-house development, hosting by an ASP, or software as a service
WMS using RFID implementations
1.Warehouse process analysis. The Chinese government required that all tobacco products have a barcode that communicated with a government database.
a. The warehouse operation involved the receipt of new products, a storage assignment made by an operator relying on experience, and the transportation of the item to its designate storage location
b. When products were distributed from the warehouse, two operators scanned the barcode as items left and a quality control person monitored the results to ensure tat barcode information was correct
c. At the end of the day, a manual inventory of products in the warehouse was conducted.
i. A business process reengineering analysis was conducted to recommend improvements to this set of processes
Requirements analysis evolved from interviews with warehouse managers and operators
a. Warehouse managers needed more racks for storage capacity and RFID tags to store barcode information and enable improved operations
b. They also had to maintain operator records and needed a visual display of all warehouse information and current inventory reports
i. The requirements of warehouse operators were an automatic assignment of storage or retrieval actions, a guide map to show them where they had to go, and an alert if an operation did the wrong thing
Warehouse layout design was accomplished to most efficiently lay out drive-in racks
a. Forklift crashes were minimised by fixing RFID readers in the receiving space linked with the DESM software
c. Forklifts had a touch-screen computer linked to the DWMS database
b. Data collection and tag writing were performed by a barcode scanner and RFID reader at the same time
i. When forklifts passed a second reader in the warehouse, data were collected in real time. This required RFIDs with readability at a distance
System design included a human resources management subsystem for personnel
a. It also included stock-in and stock-out subsystems to maintain real-time inventory data
i. A digital shelf map gave the manager a visual view of all warehouse inventory with statistical report capabilities
Forklift guidance was driven by the touch-screen computer on each forklift
a. Operators were given guide maps to make it easy to see locations
Rule management gave a rules maintenance platform that allowed addition, modification, and deletion to the rule base
a. Priorities for storage and retrieval could also be specified
Implementation involved some issues:
Barcode data needed to be compressed into a new data format (a digital pallet held 30 boxes)
A system was applied to provide a check to obtain data reliability and both storage and retrieval operations were reengineered for efficiency
The RFID-DWMS improved operations in four ways:
Inventory was visualised with Inventory accuracy was increased from 80% to 99%
Storage/retrieval assignment was automated
Forklifts were automatically guided
Loading time was reduced from 50 minuets to 18 minuets
Supply Chain Information Systems #2
Enterprise Resource Planning
These systems proved valuable by providing a systematic way to measure what business did financially
The reports these systems delivered could be used for the analysis of variance with budgets and plans, and served as a place to archive accurately. And on a massively large scale than was possible through manual means
Functionality
Payroll and accounting functions - generate accurate paychecks, considering tax and overtime regulations of any degree of complexity
account systems for tax, cost, and other purposes because these functional applications tend to have precise rules that cover almost every case
Evalution
Prior to 2000, ERP systems catered to very large firms, who could afford the rather high costs of purchasing ERP systems
After 2000, demand dropped, in part because firms were often concerned with Y2K issues prior to 2000, which outvote many ERP system acquisitions (demand then fluctuated from coming up and down)
Vendor's reactions
Firstly, the market consolidated, with Oracle purchasing PeopleSoft (who had earlier acquired JD Edwards)
Microsoft acquired a number of smaller ERP software products, consolidating them into Microsoft Dynamics, which caters to a smaller priced market, thus serving a needed gap in ERP coverage for small businesses
There, in addition, are many other systems to include open sourced ERP systems (at keasr for acquisition) like Compiere in France
Enterprise Information Systems
the addition of what used to be independent add-on software such as SCM systems and CRM to the core ERP
Trend
Oracle purchased Sieble Systems, the leading CRM provider
SAP responded by acquiring their own CRM, and both vendors have added SCM functionality within their systems as well
Difference
marketing semantics
Functionality
Early ERP facilitates enterprise-wide integrate information systems covering all functional areas and performs core corporate activities and enlarge customer service
ERP is a business management system that seeks to combine all aspects of the organisation (planning, manufacturing, sales, and marketing)
Features
Best business practices – Incorporation of processes evaluated as the best in the world
Comprehensive – Integrating as many business computing functions as possible, with a single database
Modular – An open system architecture allowing incorporation of those modules needed for the organisation
Flexible – Capable of response t changing enterprise needs, to include Open DataBase Connectivity
External linkage – capable of linking external organisations, especially within supply chains
Reasons for adoption
offer an integrated system shared by all users rather than a diverse set of computer applications, which can rarely communicate with each other, and with each having its own set of data and files
elimination of sub-organisational silos that focus on their own problems rather than serving the interests of the overall organisation
data can be entered once, at the most accurate source, so that all users share the same data, which can be very beneficial because shared data is used more and by more people which leads to much more complete and accurate data
ERP systems also can provide better ways of doing things, with this idea being the essence of best practices (a key SAP system component)
yield lower computing costs in the long run
Key rationales
Technology – More powerful, integrated computer systems with greater flexibility and lower IT cost
Business practices – Implementation of better ways of accomplishing tasks yielding better operational quality and greater productivity
Strategy – Cost advantages can be gained through more efficient systems leading to improved decision making, more business growth, and better external linkages
Competitive advantage – If an organisation’s competitors adopt ERP and gain cost efficiencies as well as serve customers better, organisations will be left with declining clientele, competitive advantage will also arise from providing better customer service
System integration
A
Improved understanding across users
D
Less flexibility
Data Integration
A
Greater accuracy
D
Harder to make corrections
Best Practices
A
Most efficient method
D
Imposition of how people do their work
Less freedom and creativity
Cost of Computing
A
More efficient system planned
D
Changing needs
Under-budgeted training expenses
Hidden costs of implementation
Drawback
best practice takes a great deal of effort in identifying the best way to proceed with specific business functions, and that they often can involve significant change in how organisational members do their work
ERP and SCM
ERP applications help in effectively delivering SCM in the following ways
Data sharing – They can create opportunities to share data across supply chain members, which can help managers in making better decisions. They also make available wider scope to supply chain managers by providing access to much broader information
Real-time information – ERP systems can provide real-time information, which can be of great help in supply chain decisions (for example, ordering raw materials can be based on the inventory details provided by the ERP systems)
WMS using RFID
Warehousing operations include inventory storage, order product mixing, cross docking, and customer service
Current technology such as RFID is often incorporated within these systems
This application was in China, applied specifically to managing the supply chain of tobacco, which has a much larger market in China than in the U.S.
The user was the Wuhan Tobacco Corporation, which had over 100 warehouses storing thousands of different products
The RFID-DWMS reported was installed in a distribution centre warehouse, and the DWMS consisted of four components: a digital shelf manager, a reader adopter, a storage or retrieval manager, and an event processor manager