information systems and supply chain management

8/2/2019 Information Systems and Supply Chain Management

1/24


2/24

Have you thought of how products are made

available to customers in department stores,

supermarkets, sari-sari stores and other

distribution channels? This is done through the process we call

supply chain management.


3/24

The delivery of economic value to customers

through management of theflow of physical

goods and associated information from

vendors to customers


4/24

Opportunity to reduce costs (transportation

and inventory)

Provide value to customers by making the

right merchandise is in the right place at theright time

Fewer stockouts (merchandise will be available

when the customer wants them)

Greater assortment with less inventory Improved ROI (increased sales due to

attractive assortments, improved net profit,

lesser inventory levels)


5/24

1. Customer makes purchase, sales associate

scans UPC code or RFID chip on

merchandise and customer credit

card/loyalty card2. Information about purchase is transmitted

from POS terminal to the buyer/planner

3. Information about purchases are

aggregated by buyer/planner and sent todistribution center and vendor to ship

merchandise


6/24

4. Buyer/planner communicates with vendor

and places a purchase order to re-supply

stores

5. Buyer/planner notifies distribution centerabout the incoming orders and how they

are to be distributed to stores

6. Store managers inform distribution center

about receipt of merchandise andcoordinate deliveries


7/24

Purchase data collected at the point of sale

goes into a huge database know as data

warehouse.

The computer-to-computer exchange ofbusiness documents in a structured format is

called electronic data interchange or EDI

There are three main benefits of EDI namely

reduction of cycle time, improvement of overallquality of communication, and easier analysis of

data


8/24

A supply chain in which orders for

merchandise are generated at the store level

on the basis of sales data captured by POS

terminals is called a PULL SUPPLY CHAIN.Merchandise is allocated to stores based on

forecasted demand is called a PUSH SUPPLY

CHAIN

Which do you think is better?


9/24

The physical flow of merchandise or logistics

is the aspect of supply chain management

that refers to the planning, implementation,

and control of the efficient flow and storageof goods, services and related information

from the point of origin to the point of

consumption to meet customers

requirements


10/24

There are two options retailers have in

managing the flow of merchandise: direct

store delivery or distribution centers

Advantages of distribution centers are: moreaccurate sales forecast is possible, less

merchandise to carry in stores, easier to

avoid out-of-stock situations and less rent

expense


11/24

The types of retail stores and merchandise

that are most efficiently supplied through

distribution centers are: Non-persihable merchandise

Merchandise that has highly uncertain demand such as

fashionable apparel

Merchandise that needs to be replenished frequently such as

grocery items

Retailers that carry a relatively large number of items shipped

to stores like drug stores

Retailers with large number of outlets that are not

geographically concentrated

Retailers that do not require in-store servicing such as snacks,

soda, or non-store-made baked goods


12/24

However, distribution centers are not

appropriate for all retailers or types of

merchandise. Thus direct store delivery is

more appropriate for the following: Retailer that has few outlets

Retailer with many outlets concentrated in

metropolitan areas

Perishable goods such as meat and produce

In cases where vendors prefer direct store

delivery


13/24

A warehouse that receives merchandise from

multiple vendors and distributes it to

multiple stores


14/24

Functions of Distribution Centers:

Inbound Transportation and Management

Receiving and Checking

Storing and Cross DockingGetting Merchandise Floor Ready

Ticketing and Marking

Preparing to Ship Merchandise to Store

Outbound Transportation


15/24

The process of moving returned goods back

through the supply chain from the customer

to the stores, distribution centers and

vendors


16/24

Orders from individual customers are shipped

in small packages with one or two items to a

large number of different places


17/24

Third party logistics companies facilitate the

movement of merchandise from

manufacturer to retailer but are

independently owned

They provide transportation, warehousing,

consolidation of orders and/or

documentation


18/24

Both have to make sure that merchandise is

available in the stores when customers want

it. This can be accomplished through shared

information using Electronic data

interchange (EDI),Vendor-Managed Inventory

(VMI) and Collaborative Planning,

Forecasting, and Replenishment (CPFR)


19/24

The use of EDI reduces the time it takes for

retailers to place orders and vendors to

acknowledge the receipt of orders and

communicate delivery information about these

orders

VMI is an approach for improving supply chain

efficiency in which vendors are responsible for

maintaining the retailers inventory levels in

each of its stores CPFR is the sharing of forecast and related

business information between retailers and

vendors


20/24

What happens when both do not collaborate?

Excess inventory builds up which is called the

bullwhip effect

The bullwhip effect can be due to thefollowing factors: delays in transmitting

orders and receiving merchandise,

overreacting to shortages, ordering in

batches


21/24

A technology that allows an object or person

to be identified at a distance using radio

signals.

The electronic chips are inserted intooceangoing containers, on shipping cartons,

or even behind merchandise labels; they

then transmit data about the object in which

they are embedded


22/24

The benefits of RFID include:

Reduced warehouse and distribution labor costs

Reduced point of sale labor costs

Inventory savings Eliminate counterfeit merchandise

Facilitates selling process

Reduced theft

Reduced out of stock conditions


23/24

The disadvantages of RFID are:

High cost (15 cents per tag)

It generates more data than can be

efficiently processed Invasion of privacy


24/24

Video

information systems and supply chain management

Documents