Information System for Logistics and Supply
Chain Management
Information System for Logistics and Supply Chain Management
The different information systems used in logistics and supply chain
management are:
1. Planning and execution system
2. Communication systems
3. Identification systems
4. Electronic marketplaces
Planning and Execution Systems:
1. Enterprise resource planning system:
Contains computer system support for all business processes in the
company. It is characterized by its capacity to store large amounts of
data and handle large volumes of transactions.
2. Specialized and advanced planning system:
They are intended for more specific applications. They utilize data
stored in parallel ERP system. They are characterized by advanced
data-processing.
Enterprise Resource Planning Systems
It is a database and a collection of software programs which provide and
process information required for administrative management and control of
activities in a company.
It is also called an integrated system as it includes database which is shared
between all program functions, and which provide the necessary information
for all business processes.
ERP database related to logistics and supply-chain activities can be
distinguished between:
a. Basic database: contains information about products which are
manufactured and distributed.
b. Transactional database: contains information about manufacturing and
distribution operations which are in large volumes. They may be purchase
orders, manufacturing orders, customer orders or transport orders.
c. Planning database: contains forecasts and plans for future use of
resources and flows of material provided with aid of the ERP system.
ERP application areas are: Finance, production, marketing/sales, distribution
and human resources.
Warehouse Management Systems:
ERP system support both planning and execution of material flows. Sometimes they
don’t have sufficient detail support, but are supplemented with specialized programs
designed to support more specific planning needs.
WMS is an example of this, which contains support for storage related activities.
It contains support for storage related activities.
Common Functions in WMS are:
1. Goods reception: registration of incoming goods.
2. Putting in stores: to identify the optimal location for each package to be stored.
3. Stock management: to update stock balances after withdrawals.
4. Order reception and order picking: to automatically generate picking orders and
advance shipment notices.
5. Dispatch
6. Materials management: to re-order point calculations and generation of purchase
orders.
For efficient use of WMS they are integrated with systems for automatic data capture
such as bar codes and radio frequency identification and Web-basedEDI.
Transport Management System
It supports transport planning with the aim of optimizing total costs and delivery service
requirements which are affected by how goods are transported between different points in
the supply chain.
Examples of functions in TMS:
1. Design of transport network
2. Transport optimization
3. Route planning
4. Load Planning
5. Manifesting
6. Tracking and tracing
Advance Planning and Scheduling systems:
It is seen as a natural development of ERP and incorporates recent knowledge and
development from logistics, planning, mathematics, IT, computer hardware and so on.
Basic principles of APS system:
1. They allow very frequent re-planning to enable adaptation to changes in planning
conditions.
2. They make concurrent priority and capacity planning with the aim of identifying possible
and feasible plans.
3. They support planning that considers business limitations in planning process.
4. They support multi-site available to promise in real time.
5. The decision engine is based on advanced mathematics and logical algorithms.
Other Planning and execution systems:
1. Customer relationship management
2. Labour management system
3. Product content data management system
4. Supply-chain event management
5. Supply- chain visibility
Information exchange:
The information which is required to manage material flows in, through and out of a
company in a supply chain is either generated internally or externally. There must be
a communication system to manage these information flows.
External information: information coming from customers, suppliers
Internal information: created within the company
Externally generated information is used together with internally generated
information to manage flows in the company.
Types of Information exchange:
1. Spontaneous exchange
2. Routine exchange
Information processing: 1. online or offline
2. momentarily or simultaneously
Information exchange: Aims:
i. Requests ii. Updating iii. Transfer
Information communication methods:
1. EDI (electronic data interchange) types – EDI, Web-EDI and XML
2. EDA-electronic data access
3. Internet
4. Telephone, letter, fax and email
5. Radio- frequency communication
6. Satellite communication
Data Capture Systems:
Identification systems are used to enable automatic data capture, or to
identify objects, capture information about them and transfer that
information to a computer system without any manual inputs being required.
Advantages of automatic data capture:
1. Speed of registration of object
2. Fewer faulty registrations compared with manual registrations
3. Releasing personnel from registration work.
Examples of Data Capture Systems: Bar codes, RFID
Other Identification System:
1. Magnetic strips
2. Optical character recognition
3. Global positioning system
Electronic marketplaces and Businesses:
• Sometimes called e-commerce or e-business
• It sometimes replaces physical processes for communicating and doing business
between purchases and vendors.
• It may be B2B or B2C
• An electronic marketplace or exchange is an internet based solution which enables
purchasing and selling activities between companies and other companies.
• By buying and selling production materials indirectly or directly via an electronic
marketplace, it is possible to work together without a large number of paired
interfaces created between players.
• Marketplace may be vertical or horizontal
E- tendering:
It means that activities and exchange of necessary documents in the tendering process
with suppliers is automated and takes place electronically.
The following activities may be involved in e-tendering:
• Advertising the requirements for goods and services
• Automatically evaluating, selecting and registering approved suppliers to co-operate
with.
• Issuing documents for request for quotation to qualified suppliers
• Receiving tender documents from suppliers
• Automatically evaluating tenders received
• Automatically selecting suppliers
• Automatically offering a contract to the selected supplier
The principle of e-tendering is that all necessary documents are communicated
electronically.
Information Quality:
Different dimensions of Information quality:
1. Valid
2. Reliable
3. Timely
4. Complete
5. Easy to understand and use
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