lscm 3960 ch 6

optimization

(1) Optimization is the alignment of global supply chain resources - both tangible and intangible, own or outsourced - to facilitate the success of supply chain members.

What are the 10 Golden Rules for technology implementation? Discuss how they are important.

1. Secure the commitment of senior management. 2. Remember that it is not just an information technology project. 3. Align the project with business goals. 4. Understand the software capabilities. 5. Select partners carefully. 6. Follow a proven implementation methodology. 7. Take a step-by-step approach for incremental value gains. 8. Be prepared to change business processes. 9. Keep end users informed and involved. 10. Measure success with key performance indicators (KPIs).

The textbook provides an example of how SanDisk improved forecast accuracy by 25%, and achieved higher inventory turns and a lower cost structure as a result of implementing-

AN ADVANCED PLANNING SOLUTION

adaptability

Adaptability is the degree to which respective supply chain members can change practices, processes and/or structures of systems and networks in response to unexpected events, their effects or impacts.

Supply Chain software includes technologies that

All the above -Address virtually every function and task that occurs in the supply chain. -Help organizations plan, execute, and control supply chain activities in real time. -Help to maintain visibility of inventory

What are the key requirements of an SCIS system?

By themselves, software and other SCIS components cannot provide actionable knowledge for supply chain managers. Data must be collected and synchronized so that it can be used by skilled individuals in the planning and execution of supply chain processes. Scorecards and dashboards are also needed to monitor performance and make necessary adjustments. With these requirements satisfied, managers are able to take full advantage of SCIS data analysis and decision support capabilities. They are also properly positioned to pursue supply chain excellence. Data collection of relevant information is needed at every point in the supply chain. Whether it is captured via bar codes, radio-frequency identification, or other technology, the information must be relevant, accurate, and accessible to users in real time. A lack of timely information leads to dysfunctional decisions that spread across the supply chain. Data synchronization focuses on the timely and accurate updating of item information within and across enterprises to ensure dependable, consistent product information within a company's systems and between business partners. It is critical for every organization in the supply chain to have standardized, complete, accurate, and consistently aligned data in their SCIS to perform at peak effectiveness. It is impossible for supply chain partners to effectively collaborate, utilize automatic identification, or leverage demand-driven replenishment techniques if the product, price, or invoice data being transferred are inaccurate. Thus, organizations must clean and align data internally before sharing it with partners. Furthermore, processes have to be in place to maintain high-data quality. This requirement has both technology and organizational structure implications. First, the organization must be willing to make data management processes a priority. Second, there must be strong business ownership of product data and aligned SCIS that enables access to timely, accurate data. Those who succeed will achieve inventory and logistics cost reductions, as well as fewer out-of-stock situations.

What is Enterprise Resource Planning (ERP) software?

ERP systems are multimodal application software platforms that help organizations manage the important parts of their businesses. Initially concentrated on manufacturing issues, ERP systems now focus on integrating information and activities across the organization (i.e., the enterprise) via a common software platform and centralized database system. Key business processes linked via ERP include accounting and finance, planning, engineering, human resources, purchasing, production, inventory/ materials management, order processing, and more. The centralized and shared database system ties the entire organization together, allowing information to be entered once and made available to all users. Business processes can also be automated for rapid, accurate execution. As the ERP systems branch out to include supplier relationship management, customer relationship management, and other supply chain components, the connections between SCIS and ERP grow stronger. Supply chain members can access the organization through the ERP system to assess inventory availability, production schedules, and delivery information. In short, the ERP system provides a mechanism for supply chain members to efficiently share information so that visibility is improved, transactions are completed with more speed and accuracy, and decision making is enhanced.

What are the 7 Rs of a logistics information system?

Information quality is a critical characteristic of the knowledge flowing across the supply chain. If you think about it, the seven Rs definition of logistics applies to information as much as products with some slight alterations—getting the right information to the right partners, in the right quantity, in the right format, at the right place, at the right time, and at the right cost. Change any "right" to "wrong" and the capabilities of the decision maker will decline. Thus, information quality is paramount to effective management of the supply chain. To ensure that valuable, actionable knowledge readily flows across the supply chain, information must be accessible, relevant, accurate, timely, and transferable

Define and discuss the history of RFID adoption and the associated issues with the technology.

Over the last ten years, radio-frequency identification (RFID) has had an up-and-down roller coaster ride like no other technology. It is simultaneously hailed as a great SCIS tool and panned as an overpriced feature that does little more than what is accomplished by a much cheaper barcode. The reality is likely somewhere between these two extreme perspectives. RFID technology has been available for decades and is widely used for aircraft identification, toll collection, and library book tracking. However, supply chain applications did not receive much attention until major organizations like Walmart took an active interest in RFID. In 2005, the company issued mandates for major suppliers to tag select pallets and cases. The rollout was expected to gain momentum, but as of 2010 only 600 suppliers and a limited number of Walmart and Sam's Club distribution centers and stores were using RFID tags to capture key data. Initial results of RFID tests were positive. Users noted that out-of-stocks decreased, theft was reduced, and inventory level information could be quickly captured. Still, numerous issues—the high cost of RFID tags, read reliability problems related to liquid and metal products in particular, tag durability, and the economic downturn—limited deployment of the technology. Also, the technology has not always provided noteworthy benefits over less costly alternatives such as barcodes. Despite these challenges, industry experts are convinced that RFID will gain widespread acceptance. As the economy improves, cost and performance problems are mitigated, and future enhancements are made, RFID spending is expected to increase dramatically. The prospects of faster return on investment for RFID implementations, greater product visibility and traceability, and process automation will further propel RFID to the forefront of technology initiatives

profitability

Profitability is the result of creating value through supply chain activities. Asset performance, working capital, returns on investment for infrastructure, technology, and people are some of the critical parts that create value in a global environment.

What is event management software?

Supply chain event management tools collect data in real time from multiple sources across the supply chain and convert them into information that gives business managers a clear picture of how their supply chain is performing. These systems monitor the supply chain for events that are out of tolerance, such as a shortage of parts at a manufacturing location or the breakdown of a truck delivering an important order. When exceptions occur, the system notifies a decision maker by e-mail, pager or fax who can then take an action to correct the problem. As the geographic scope and number of companies involved in a supply chain grow, the ability to monitor activities exceeds manual capabilities. Hence, supply chain event management tools are becoming more important, and more organizations are turning toward these solutions to help them detect, evaluate, and resolve issues before they snowball into major problems. Some systems have built-in work flow rules that suggest solutions to the exception or initiate action based on established guidelines. Although they were once considered stand-alone applications, event management and visibility solutions are today increasingly integrated into other applications

What are supply chain execution tools?

Supply chain execution tools carry out key tasks from the time an order is placed until it is fulfilled. This order-driven category of software focuses on the day-today activities required to buy, make, and deliver the materials that flow through the supply chain. Traditionally, execution tools have focused on a company's internal logistics activities—order management, warehouse management, inventory management, labor optimization, and transportation management. As attention shifts to integrated supply chain capabilities, the category is encompassing a broader array of functionality, including procurement and supplier relationship management, manufacturing execution and shop floor control, and customer relationship management. Supply chain execution does not rely upon a single software program. Instead, it consists of a group of tightly integrated tools that link well with supply chain partners' systems to share relevant data and provide visibility. Interest and investment in execution tools is high because of the strong capabilities being developed, the costs being saved, and the return on investment being achieved. Successful implementation can provide users with improved inventory visibility, improved data accuracy, faster throughput and higher inventory turns, better control of transportation costs, and improved customer service. The tools also support supply chain planning, event management, and performance metrics.

synchronization

Synchronization is the ability to coordinate, organize and manage end-to-end supply chain flows - products, services, information, and financials - in such a way that the supply chain functions as a single entity.

Discuss how advances in mobile computing have led to the development of supply chain capabilities.

The rapid advent of smartphones and tablet computers such as the iPad has spawned an entire industry of applications that can be quickly downloaded at little or no cost to the user. While many of these "apps" are little more than entertaining time wasters (think Angry Birds), there is a growing focus on productivity tools and features. The ability to use a camera to capture barcode data for price lookup and the Internet connection for mobile commerce both have supply chain implications. Consumers can now shop any time, anywhere. Retail supply chains must have agile fulfillment capabilities to support these customers. Supply chain capabilities are emerging with data collection and transmission tools leading the way. An add-on feature turns an iPod Touch into the EasyPay Touch that has a barcode scanner and a credit card magnetic strip reader. It can be used for point-of-sale checkout and price lookup. Industrial add-on scanners have been developed so that smartphones and tablets can be used in distribution operations instead of higher cost handheld data terminals. Supply chain execution and event management tools are also going mobile with basic visibility and traceability functionality for smartphones starting to appear in the marketplace

velocity

Velocity is the speed at which end-to-end flows occur in the supply chain. It encompasses speed-to-market for new product introduction and execution which conditions are rapidly changing.

What is XML? Describe some of its benefits.

XML is a robust, logically verifiable text format based on international standards. It provides a flexible way to create structured, common information formats and share both the format and the data via the Internet, intranets, and other networks. XML can be used to define complex documents and data structures such as invoices, inventory descriptions, shipment records, and other supply chain information. The benefits of XML are numerous—it is a simultaneously human-readable and machine-readable format, it supports multiple languages, its plain text file displays are unencumbered by licenses or restrictions, and it is platform-independent and thus relatively immune to changes in technology. XML is gaining traction in the supply chain because it supports the integration of various information systems, is less complex than EDI, and eliminates the need for value-added networks, which reduces cost while speeding data transmission

On-demand supply chain software that is not installed on a company computer is gaining in popularity. An issue to be addressed with this purchase option is-

all the above -Functionality may not be as robust as traditional software -Data control is an issue -Total cost of ownership could exceed purchase cost over the long run

Managers have several options for software development and implementation. They include-

all the above Internal development. Third party logistics firms. External software vendors.

Supply chain software that provides a platform for manufacturers, distributors, and retailers to aggregate and organize item-related data such as item number, price, description, and weight is called

data synchronization tools

Which of the following is NOT one of the five drivers of sustainable supply chain management practice? -adaptability -synchronization -velocity -execution

execution

"It has been said that information is the lifeline of business, driving effective decisions and action. Quality of information is less and less important, given advances in technology." t/f

false

Business intelligence applications are being used to gather information on competitors and their suppliers. t/f

false

Now that people are computer-literate, they are no longer a major barrier to the effective use of information technology. t/f

false

Organizations are putting less emphasis on information technology to help them become more competitive, innovative, and adaptive, relying more on supply chain innovations. t/f

false

RFID applications have been widely embraced due to their low cost and high reliability. t/f

false

SCIS software selection is relatively straightforward as the choices have been simplified. t/f

false

Spreadsheets and database software no longer have a place in SCIS as newer tools have supplanted them. t/f

false

Supply chain software sales faltered during the 2007-2009 recession and remained flat in 2010 and 2011. t/f

false

Technological capabilities ultimately determine the success or failure of SCIS, rather than the technology users. t/f

false

The term supply chain information system (SCIS) is well defined and commonly understood. t/f

false

ERP systems

have information elements needed by SCIS applications.

The term supply chain information system (SCIS) is defined as

information systems that automate the flow of information between a firm and its suppliers.

What are the five drivers of sustainable supply chain management practice? Give a brief definition of each driver

optimization, synchronization, adaptability, velocity, & profitability.

___________ is/are a major barrier to the effective use of information technology.

people

Which of the below is not part of the seven Rs of logistics? -information -cost -quality -place

quality

Due to mergers and acquisitions in the software industry and ERP vendors moving into the supply chain applications market space, it is possible to purchase

supply chain software suites that combine planning, execution, event management, and related capabilities

ERP systems are multimodal application software platforms that help organizations manage the important parts of their businesses. t/f

true

Event management systems monitor the supply chain for events that are out of tolerance, such as a shortage of parts at a manufacturing location or the breakdown of a truck delivering an important order. t/f

true

Individual supply chain applications must work together to provide a holistic view of all relevant processes, and must also link effectively to supply chain partners. t/f

true

Information must be real-time, not just current. t/f

true

Information technology plays an important role in each of the five drivers of sustainable supply chain management practice. t/f

true

Supply chain execution tools have focused on a company's internal logistics activities—order management, warehouse management, inventory management, labor optimization, and transportation management—and are being expanded into new integration software applications. t/f

true

Supply chain information technologies can provide timely, cost efficient sharing of information between suppliers, manufacturers, intermediaries, logistics services providers, and customers. t/f

true

Supply chain software is now available over the Internet. These applications are collectively known as on-demand software. t/f

true

Web-enabled SCIS allows managers to monitor sourcing, transportation, and inventory data at the order and item level. t/f

true

The _________ of demand, customer orders, delivery status, inventory stock levels, and production schedules provides managers with the knowledge needed to make effective situational assessments and develop appropriate responses.

visibility

What are some of the questions that must be asked by senior management in order to establish and refine the software vision that guides their organization's supply chain strategy?

• Who will lead our implementation effort? Senior management must assign people with expertise in supply chain processes and software functionality to direct SCIS implementation. Team members must be given the authority to make boundary-spanning technology decisions. They must also be given the ability to manage the implementation process without interference. • How will technology support our business needs and processes? Senior management must ensure that their implementation team takes the time to document current processes and identify desired capabilities before embarking upon software reviews. Having a business plan prior to dealing with vendors will ensure that solutions support this plan rather than the business having to adapt to proposed solutions. • What is the status of our existing data? It is critical to assess data quality, relevance, and completeness to ensure that the needed information is available. • How well does our existing system integrate with suppliers and customers? SCIS will fall woefully short on vital capabilities if they are unable to communicate with supply chain partners in an efficient manner. Systems structures and capabilities should be mapped to identify where compatibility challenges exist. Senior management must use this knowledge to support improved linkages of SCIS with key partners. • What external issues must our systems address? Given the financial and product flow data contained within most SCIS, such systems have a major impact on an organization's ability to comply with government mandates such as Sarbanes-Oxley regulations. The SCIS must also provide visibility of orders from suppliers through customer delivery so that the organization can monitor and control its operations, its inventories and other assets, and its financial results. Visibility is also imperative for participation in international security initiatives such as the Customs-Trade Partnership Against Terrorism (C-TPAT).