WEEK10 – Information Technology for LSCM

Panayiotis Η. Ketikidis & Adrian Solomon

The University of Sheffield International Faculty, CITY College
Outline of this session

Business goals and

Understanding the How to manage
required
information flow the information
information

Examples of
Technology and its
technologies for Theoretical
impact on
using the insights
businesses
information

Example –
Weekly
Emerging Case study
presentation !
technologies

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What exactly does the SC Manager manage ?

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 Supply chain components

Transportation Infrastructure Society, Business, Regulations

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 Huge data flow for decision making !!!

Data

Data Data

How do we grasp and use all

these data ?? Data
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 Supply Chains Are Global !

• Nowadays, business are global & decentralized!

• Products are sold and produced at various

locations on the planet and then again sold
worldwide.

• Thus, supply chains become global, which means:

– Business partnerships/chains among translational enterprises
– Longer transportation distances & time
– Wider geographical area and societies covered
– Various legislations and restrictions
– More issues/risks can appear throughout the global supply chain !

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 In a global context, issues & pressures appear !

Businesses always want more and more cost efficiency !

Large geographical span - > more natural disasters risks !

Increased environmental efficiency & CSR pressures !

More business partners chained– big problems if one fails !

Different types and status on infrastructures – Time delays !

Big complex system –hard to govern – but it must function !

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So the job gets tougher for the SC Manager…

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So what do businesses want ?

Reduced
costs

Happy
Be green –
Clients and
care about
Business
CSR
partners

HOW ?

Comply to Faster
regulations production

Less risks &

disruptions

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 Lets see each business goal in details !

Competitiveness ! Best option selection !

Risks ! Risk avoidance / mitigation – history ?

Environment & CSR! Additional decision making variables

Partner Failure! Fast reconfiguration

Delays ! Better forecasting & planning

Interoperability Standardisation, interpretation

Global context Exact location of resources required

Happy stakeholders Relationship management methods

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OMG ! How can we measure all data ? But in the
same time, not all data ?

“If you don’t measure it,

you can’t manage it.”

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And the solution is…

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Are you aware of such applications ?

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 Knowledge based decision support systems I

• A Decision Support System (DSS) is a computer-based

information system that supports business or organizational
decision-making activities.

• They employ all the data related to a supply chain, analyze it

and according to specific business rules, they provide
managers with automated
decisions for specific problems.

• Optimization
• Forecasting/Predictions
• Real-time risk management
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 Knowledge based decision support systems II

• Data – raw facts;

• Information – processed data (SQL)
• Knowledge – resource used after applying data mining !

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 Track and Trace Technologies

• The real-time process of determining the current and past

locations (and other information) of a unique item or property
– in order to assist in proper decision making !
• Components:
– Identification mechanisms (barcodes, RFIDs, etc)
– Reading/Transmission mechanisms
– Software to process and store the transmitted data

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When would you use barcodes and when RFIDs ?

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 Geographic information systems (GIS)

• ICT that integrates, stores, edits, analyzes, shares, and displays

geographic information for informing decision making
processes (such as knowing the location of trucks/cargo ships
when monitoring performance or doing forecasting).

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What are the limitations of GPS technologies ?

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 Enterprise resource planning (ERP)

• Is a business management software that a company can use

to store and manage real time data from every stage of
business, including:

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 ICT impact & new ways of doing business !

• ALL ICT Applications are interconnected and useful for LSCM !

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 Example: Kuehne Nagel

• Use of FleetBoard & Telematics management

systems
• Savings regarding fuel consumption
• Optimizing vehicle usage and driving style
• Reducing vehicle abrasion
• Reduction of maintenance contract costs
• Cost and time savings for data downloads
• (driver card, mass storage device)
• Advanced planning possibilities of deadlines
• (workshop, maintenance, technical control board
[TÜV])

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Technological evolution

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Cost reduction due to technology !

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Do you agree that technology saves money on the long term ?
Why ?

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Factories of the future !

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Factories of the future – examples !

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What are the main blockers/issues of factories of the future ?
Any technological limitations ? Trust ?

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Going into details – Overview

Direct IT applications for logistics

Repetitive transactions Creating customer orders or making payments

through EDI and EPOS
Creating operations planning systems (e.g.
ERP) Operating computerised routing and vehicle
scheduling
Achieving a greater level of systems control
Performing load and item tracking and tracing,
Supporting strategic decision making using RFID
Automating warehouse operations and
monitoring performance

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Categories of applications

Types of technology

Point solutions: support the ‘Best of breed’ solutions: where

execution of one link or point in two or more existing stand-alone
the supply chain (TMS, WMS) solutions are integrated.

Extended enterprise solutions (XES):

support the collaborative sharing of
Enterprise solutions:
information and processes between the
based on the logic of
partners along the supply chain (using
ERP.
ERP and/ or a web-based platform to
communicate).

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 TMS

Point & Best of breed solutions link planning and control activities.

Aim: to optimise the management of product shipping.

Functionalities:
ü Freight payment auditing
ü Transportation planning
ü Carrier performance
ü Trailer loading
TMS ü Vehicle/fleet management

Benefits:
ü The capacity of the firm to increase the speed of order processing with a
high service level without incurring additional operating costs.
ü TMS allows the automation of the above activities, thus allowing a
company’s transportation function to manage, instead of reacting to,
transportation events and opportunities.

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 WMS

Aim:
ü To enable maximisation of the use of space, equipment and labour.
ü To enable the execution of inventory planning commands, inventory and
location control
ü To enable the management of the flow of warehouse orders and processes
on a day-to-day basis.
WMS
Benefits:
ü Reductions in order fulfillment lead time and inventory management.
ü Improved customer service
ü Quicker turnover of inventory
→ substantial potential savings in warehousing operational costs.

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 EDI

Shift from traditional internally oriented to more integrated

process-oriented logistics and SCM models

Benefits:
ü Enable upstream and downstream supply chain partners to use
common data → facilitating agility as companies can act based
on real-time demand rather than be dependent on the distorted
process of order transmission among partners in an extended
EDI/ Internet chain.

ü Facilitate higher levels of inventory visibility throughout the

supply chain
→ reduction in stockholding and forecasting.

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Specific roles

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Specific roles - Strategic

Aim: to embrace a firm’s corporate strategy and the entire supply chain
configuration and planning.

Time-frame: the time-frame of decisions at this level spans many years

Information requirements:
ü target customer segments
ü types of products to manufacture
ü the number of production sites to be involved and their location
ü the type of distribution systems to be adopted
ü decisions about vertical integration and outsourcing.

Planning decisions:
focus on analysing rather than gathering information.

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 Specific roles - Tactical

Aim:
ü To develop and refine logistics activities within a firm.
ü To enable accurate planning for each logistics activity
→ to allocate available resources among the different logistics activities.

This level links the supply chain decision level and decisions affecting a firm’s logistics functions.
Tactical level
Time frame: several months to a year.

Information requirements:
ü Costs
ü Capacities
ü Demand
→ to assist managers in identifying, evaluating and comparing tactical logistics alternatives.

Planning decisions: focus on analysing rather than gathering information.

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Specific roles - Operational

Aim:
To focus on performance measurement and management reporting
for each logistics function.

Time frame: days.

Information requirements: exceptions that allow the solution for

problems related to specific customers or orders.

Planning decisions: focus on both gathering and analysing

information.

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Specific roles - Transactional

Aim:
ü To initiate and record individual logistics activities.
ü To execute what has been planned earlier in higher levels.

Time frame: minutes/ hours.

Information requirements:
At this level IT systems execute and record transactions that
include:
ü Order entry, Inventory assignment, Order selection
ü Transportation, Pricing, Invoicing, Customer enquiry.

This level is information intensive as it requires that information

be available for every transaction executed.

Planning decisions: focus on system efficiency (faster processing

or higher transaction volume with fewer resources).
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 EDI

EDI is the electronic, computer-to-computer transfer of standard business documents between firms.

The use of electronic information technologies to conduct business

How?
transactions among buyers, sellers and other trading partners.

Benefits:
ü Improvement of customer service
ü Cost reduction
ü Increase shareholder value
ü After initial software purchase and systems set-up, EDI over the
internet is virtually ‘free’ versus transmission by a third-party
value-added network (VAN).

Protocols: OFTP or HTTP

Security issues: A secure website uses a secured socket layer

(SSL) that functions by using a private ‘key’ to encrypt data that is
transferred over the SSL.

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 EDI and Barcoding

Barcode standards:
Europe: European Article Numbering (EAN) Uniform Code Council
(UCC), with over 1 million firms operating under that system.

How to obtain a barcode:

1. A firm must register with EAN International to receive an assigned
and unique barcode prefix to use with all its products.
2. The firm must then allocate a unique number to each product.

Benefits:
ü Barcoding can be useful in logistics applications, particularly in track-and-trace
situations.
ü Receiving also can be automated, which further contributes to cycle time reduction
and data accuracy.
ü These data can automatically be used by the accounts payable department for
generating cheques and reconciling invoices with purchase orders and receiving.

Thus, barcoding represents a logical extension of the organisation’s information

systems and a linkage with EDI.

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 EDI and Barcoding
Benefits:
QR codes can hold several hundred digits and function even if they
are partially damaged.
They are readable from any direction →high-speed scanning.

Technical advantages: QR codes have more advantages than other

barcodes. Universal product codes (UPCs) are only capable of storing
up to 20 digits and can easily be corrupted.

Many firms, including Metro, Tesco, Calvin Klein, eBay and P&G, are
leveraging the advantages of QR codes at a B2C level for their
brands.

Disadvantages: lack of a standard reader

What is it:
ü A QR code is a specific two-dimensional matrix barcode readable by dedicated QR readers, smartphones and,
to a less common extent, computers with webcams.
ü The code consists of black modules arranged in a square pattern on a white background.
ü The information encoded may be text, URL or other data.

Initial use: tracking parts in vehicle manufacturing.

Current use: commercial tracking applications and convenience-oriented applications.

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Did you hear about cloud computing ? What is it all about ?

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Cloud computing

What is it?
Cloud computing is a technological solution that removes the need
for a firm to have its own premises-based IT server in favour of a
supplied and managed remote service accessible over a high-speed
network connection. The firm has access to its data and software
over the internet which in most diagrams is shown as a ‘cloud’ or
virtual server.

How it works Cloud based servers are placed in secure, serviced, custom-built
locations and have reliable, high-speed, high-bandwidth network
connections. Server operating systems, databases and software are
installed and maintained by the supplier’s staff and data is backed up
according to automated schedules as required.

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 Cloud computing

Cost: No need for expensive inter-branch network connections, company computer servers
Benefits
and support → cost savings. Computing capacity on a rental basis → no capital costs.
Technical support is usually provided as part of the service.

Speed of access and usability: It is possible to scale-up at pace & switch applications
entirely with minimal waste of time and capital, and without a lot of added cost or
complexity.
This allows firms to enter new markets or launch new services quickly.

Reliability and resilience: Data from existing in-house stock management systems can be
uploaded to the cloud for secure remote access, interrogation and storage.

Operational support and upgrades for the servers and network: Support and upgrades for
the servers and network are included in the service and provided by the supplier.

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 Cloud computing

ü Integration with existing applications such as a TMS or WMS à no

need to replace working in-house systems.
ü Integration with existing transportation carrier systems.
ü Provision of access to carrier brokerage services.
ü Transit shipment visibility.
ü Production and completion of necessary paperwork.
ü A simple but secure interface via Internet browser for staff and trading
partners from any web enabled location.
ü System resilience, auto backups and capacity upgrades as part of the
service.

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So… benefits of technology for LSCM

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What is business intelligence ?

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Applications: Business Intelligence

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Applications: Business Intelligence

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Applications: Business Intelligence

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Applications: Business Intelligence

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Applications: Business Intelligence

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Are you familiar with social enterprises ? What about social
supply chains ?

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Applications: Social Supply Chain

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Applications: Social Supply Chain

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Applications: Social Supply Chain

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What about green supply chain ? How can technology enable
it ?

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Applications: Green Supply Chain

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Applications: Green Supply Chain

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Applications: Green Supply Chain

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Applications: Green Supply Chain

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Applications: Green Supply Chain

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What issues do you foresee in relation to the implementation
and utilization of such technologies ?

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 Issues With ICT Applications for LSCM

Data sharing/storage/security issues !

Liability issues for wrong decision making !

Precision/Accuracy of the calculations/estimations !

Technology failure

Technology adoption issues

Implementation cost

Standardisation/compatibility Issues

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Other Future challenges of ICT for LSCM !

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Can you design an information system for LSCM
at a high level ?

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 Case study
We have an international supply chain which is producing perishable food and
drink resources (mostly fresh/short lasting products) and which has as main
customers an isolated island but with a very high amount of touristic activity –
with tourists constantly changing their demands in terms of their products. The
entire economy of the island is 90% based on that tourism and thus, the supply
chain must make sure that everything is delivered on time and in the required
amounts. No food & drinks => unhappy tourists => loss of 90% business =>
island gets bankrupt. The business partners of this supply chain are the
following:
1. A production factory on the main which produces all the necessary resources
2. A land transportation company which takes the resources from the factory and
takes them to the nearest port.
3. A water shipping company which ships the resources to the remote island.
4. A small distribution facility on the remote island which distributes the received
resources to each hotel/tourist facility on the island.
5. Each partner is in a different country.
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Looking from above …
From a
technology view,
these are
individual
companies that
just share data !!

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 What you need to do …

1. Identify what info is being exchanged between the entities ?

2. How do you store that communication/info ? Do you need

databases ? Centralized ? Distributed ? Why ?

3. From what external sources does each entity take the data
(think about hardware… RFIDs, chips, sensors, manual input etc)
4. What cutting edge technologies/features would each entity
take advantage of ? Any nice algorithms, decision making,
tracking ?

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 What you need to do …

5. What data security issues does each entity bear ?

6. Think about automated invoicing, would it be good for these

entities to have such a feature ?

7. If you were to implement this system…

7.1 What infrastructure would you use ? How would you enable
this communication ? Web/Cloud ? Local ?
7.2 Would you add something to moderate the information and
take real time automated decisions ?
7.3 What technological limitations do you foresee …. Both hard
and soft !
7.4 Are there any societal/policy/fiscal issues involved ?
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Did you just sketch an IS for LSCM ?

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Key points !

Technology is one
Technology Technology
of the key
changed the way enables real time
enablers of
LSCM operates decision making
efficient LSCM

Technology It is important to Keep updated with

requires full master the latest
integration and technological advancements -
visibility limitations competitiveness!!

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Resources
Readings: Chapter 8, Grant, D.B. (2012) Logistics Management. Pearson Education Ltd

Gao, J., Ma, J., Zhang, X. and Lu, D. (2012) Cloud computing based logistics resource dynamic Integration and Collaboration.
Proceedings of the 2012 IEEE 16th Conference on Computer Supported Cooperative Work in Design, p.393- 943.

Karagiannaki, A., Papakiriakopoulos, D. and Bardaki, C. (2011) Warehouse

contextual factors affecting the impact of RFID. Industrial Management & Data
Systems, 111 (5), p. 714-734.

Connolly, C. (2008) Warehouse Management Technologies. Sensor Review, 28 (2),

p. 108-114.

Arnold, U., Oberlaender, J. and Schwarzbach, B. (2013) Advancements in cloud computing for logistics. Proceedings of the 13th
Federated Conference on Computer Science and Information Systems, p. 1055-1062.

Carlo, H.J., Vis, I.F.A., and Roodbergen, K.J. (2013) Transport operations in container terminals: Literature overview, trends,
research directions and classification scheme. European Journal of Operational Research.

Elg, U. and Johansson, U. (2010) International alliances: how they contribute to managing the interorganizational challenges of
globalization. Journal of Strategic Marketing, 9 (2), p. 93-110.

Pereira de Abreu, D.A., Cruz, J.M. and Paseiro Losada, P. (2013), Active and Intelligent packaging for the food industry, Food
Reviews International, 28 (2), p. 146-187

Dekker, R., Bloemhof, J., and Mallidis, I. (2012) Operations research for green logistics- An overview of aspects, issues,
contributions and challenges. European Journal of Operational Research, 219, p. 671-679.

Sandkuhl, K., Lin, F. Shilov, N. and Smirnov, A. (2013) Logistics-as-a-service : Ontology-based architecture and approach. Revista
Investigación Operacional, 34 (3), p. 188-194.

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Contact us !
Prof. Panayiotis H. Ketikidis
Vice Principal
The University of Sheffield International Faculty, CITY College
Thessaloniki, Greece
ketikidis@city.academic.gr www.citycollege.sheffield.eu

Mr. Adrian Solomon

Project Manager – Resource Efficiency, Environmental Sustainability & Digital Projects
South East European Research Centre
Thessaloniki, Greece
ssolomon@seerc.org www.seerc.org https://www.facebook.com/adrian.solomon.12

Prof. Panos H. Ketikidis, PhD Mr. Adrian Solomon

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