IT for Supply Chain Management - Coursework Example

INFORMATION TECHNOLOGY FOR SUPPLY CHAIN MANAGEMENT 2007 Broadly, this paper encompasses the field of Supply Chain Management (SCM). Particularly, this outlines the uses of Information Systems (IS) and Information Technology (IT). This shows how the advances in Information and Communication Technology have enabled Electronic Supply Chain Management. This highlights the potential benefits and limitations of converting to Electronic Supply Chain Management. An example is also included to illustrate the points made. I. USES OF INFORMATION TECHNOLOGY (IT) AND INFORMATION SYSTEMS (IS) FOR SUPPLY CHAIN MANAGEMENT (SCM) To clearly discuss the uses of information technology (IT) and information systems (IS) for supply chain management (SCM), the following definitions that are relevant to the use of information technology (IT) and information systems (IS) for supply chain management (SCM) will be used: Information technology (IT) as defined by the Information Technology Association of America (ITAA) is: "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." In short, IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit and retrieve information, securely. Information system (IS) is the discipline concerned with the development, use, application and influence of information technologies. An information system, following a definition of Langefors, is a technologically implemented medium for recording, storing, and disseminating linguistic expressions, as well as for drawing conclusions from such expressions. One of the better descriptions of this discipline came from Alan Lee, "...research in the information systems field examines more than just the technological system, or just the social system, or even the two side by side; in addition, it investigates the phenomena that emerge when the two interact." Lee AS (2001) "Editor’s Comments" MIS Quarterly 25(1), iii-vii Supply chain, a logistics network, or supply network is a coordinated system of organizations, people, activities, information and resources involved in moving a product or service in physical or virtual manner from supplier to customer. Supply chain activities (aka value chains or life cycle processes) transform raw materials and components into a finished product that is delivered to the end customer. Supply chains link value chains.. Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption. The term supply chain management was coined by consultant Keith Oliver, of strategy consulting firm Booz Allen Hamilton in 1982. Logistics is the art and science of managing and controlling the flow of goods, energy, information and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible. The use of information is of prime importance in every human endeavours, be it in the personal or in the business level. However, this report tackles only the use of information on the business level in relation to supply chain management (SCM). One of the most important endeavours that a human being must do is to find a job or work. He/she must strive to work in order to live, and to continue to live in order to work. This is a continuous process wherein he/she must do for a lifetime. One way of doing work is to have your own business or find a job or employment in another business entity like a sole proprietorship, a company, a corporation, or in the government. All these employments use information daily in the conducting any activities related to their respective businesses. Acquiring business information before can easily be handled by the employees within a specific business setup. Business information was then seen to be as a business resource. Business information is very crucial or critical to the success of ones business organization. Business information also contributes considerably in providing the business organization with a competitive advantage. For several decades ago we could safely conclude then that these findings were sufficient and could support a business organization in combating the competition that poses them. However, with the fast growing economy, that is rapidly conducting ones business activity from a simple into a bigger one. The competition among the business organizations also turned complex. Thus, necessitates the strategic use of information and technology emerged. Strategic use of information simply means the use of an additional tool, that is, technology aside from just seeing business information as business resource; considering business information as very crucial or critical to the success of the business organization; and the considerable contribution of business information in providing the business organization with a competitive advantage. The utilization of technology as an additional tool among others will pole-vault the activities of the business organization efficiently and effectively. This will pave way to the growth of the organization in all business aspects. However, appropriate and careful use of technology should be done, as information needs to be managed and planned. To appropriately and carefully manage and plan the use of technology in business information the following qualities of good information should be observed and utilized: accuracy, completeness, relevance, clarity, timely, reliability, communicated appropriately, volume, and cost. The latter qualities of good information purports that business information should be accurate, complete, relevant, clear, time-bound, reliable, appropriately communicated, with the right magnitude or volume, and with the proper cost. Business information is used in transaction systems, management control, decision analysis, and strategic planning. In transaction systems, business information are utilized to initiate and record, to formalize rules, to accommodate large volume of transactions, and to have an operational day to day focus. In management control, business information are utilized for performance measurement; for management feedback; for evaluative, tactical, intermediate-term focus; for evaluating past performance and identification of alternatives; for importance of exception reporting; and used for predicting future problems. In decision analysis, business information are utilized for identification, evaluation and comparison of strategic and tactical alternatives; for modelling and analysis; for tactical, evaluative focus based on future tactical alternatives; for being relatively unstructured and flexible; for the users require more training and expertise, and for emphasis on effectiveness rather than efficiency. In strategic planning, business information are utilized for information support to develop and refine logistics strategy; for long-term in focus, for more abstract and less structured decisions; and for incorporating lower level data collection. In order to fully exploit the use of business information and technology, collectively coined as information technology (IT) in supply chain management (SCM), logistics should be present. Business information is considered to be the key element in logistics. According to Ballou (1992), logistics’ is described as ‘The mission of logistics is to get the right goods or services to the right place, at the right time, and in the desired condition, while making the greatest contribution to the firm’. II. ADVANCES OF INFORMATION TECHNOLOGY (IT) AND INFORMATION SYSTEMS (IS) FOR SUPPLY CHAIN MANAGEMENT (SCM) Information technology (IT) solutions for supply chain management (SCM) The following information technology (IT) solutions for supply chain management (SCM) are available in the market: EPOS & EFTPOS; EDI links with suppliers; GIS; hand held terminals; optical scanning/character recognition; FAX; Bar-coding & scanning; Communications (radio frequency, satellite communications); Artificial intelligence (Robotics, Expert systems); and Internet E-commerce. Historically, the information flow was overlooked, the speed of information exchange was slow, the dependence on paper was found to be unreliable and error prone, the operating costs was high, and the customer satisfaction was low. Currently, the advances in information technology (IT) resulted to reduced costs, and the electronic information resulted to increased opportunities Information System (IS) Models for Supply Chain Management (SCM) The following information system (IS) models are present to help with strategic distribution planning: the inventory policy, the centre of gravity-depot location, the distribution network, the linear programming, the transport planning, and the warehouse simulation. Information System (IS) Solutions for Supply Chain Management (SCM) The following information system (IS) solutions for supply chain management (SCM) are currently available in the market: the depot stock replenishment systems, the warehouse management systems, the transport management systems, and the international distribution system. Each of these information systems (IT) are described below. 1. Depot Stock Replenishment Systems The aim of the depot stock replenishment systems are to initiate movements of appropriate quantities of each product to each stock holding depot at the correct time, to achieve the required in-stock service level. These typically include the following modules: Demand Forecasting Module, and Inventory Management Module. The depot site location is very crucial in the use of the depot stock replenishment systems. The depot should be located in an optimal site location where the depot stock replenishment systems will be used as decision support tools. In selecting an optimal site location the following variable are to be considered: the shipments-particularly the number and size, the transportation rates, the supply sources, and the markets. 2. Warehouse Management Systems The warehouse management systems include the following: the stock rotation control, the space allocation control, the picking order systems, and the hand-held terminals. 3. Transport Management Systems Transport management systems involve routing and scheduling. Routing involves decisions about which road to take and scheduling involves allocating calls to individual vehicles to achieve an optimum result. This is concerned with resource management & cost optimization. III. BENEFITS OF INFORMATION TECHNOLOGY (IT) AND INFORMATION SYSTEMS (IS) FOR SUPPLY CHAIN MANAGEMENT (SCM) Information technology (IT) benefits for supply chain management (SCM) The following information technology (IT) benefits for supply chain management (SCM) can be achieved: increased productivity, increased customer satisfaction, increased market share, reduced stock levels, reduced lead times, competitive advantage, cost savings, reduced administration, increased security, and enhanced relationships with suppliers. Information systems (IS) benefits for supply chain management (SCM) The benefits in using these depot stock replenishment systems are the following: maintain high levels of customer service, reduce stock holding within agreed service levels, reporting by exception, and modelling capabilities. The following benefits can be achieved in utilizing the warehouse management systems: increased productivity, improved space utilization, more accurate inventory records, improved management information, efficient stock rotation, and more reliable quality control. The following are the benefits in using the transport management systems can be achieved: improved customer service, improved asset utilization, employee benefits, reduced costs, and greater level of control IV. EXAMPLE COMPANY NAME Del Monte Foods COMPANY BACKGROUND Del Monte Foods is a distributor of processed foods, such as canned fruits and vegetables and other products. The organization, with employees in offices around the world, has been steadily building an IT infrastructure based on products and technologies from Microsoft. Del Monte employees use these cutting-edge technologies to communicate and collaborate via e-mail and to share critical business information. However, managing this increasingly complex infrastructure, and staying ahead of security threats such as viruses and malware, has proven to be challenging. To help achieve this, the company now uses Microsoft® System Center IT management solutions and Microsoft Forefront™ line of business security products. This gives Del Monte an integrated, easy-to-manage solution that has simplified administration, improved overall system security and reliability, and boosted IT productivity. SITUATION Del Monte Foods, headquartered in San Francisco, California, is one of the largest manufacturers and distributors of branded food products in the United States. The company, which has total annual sales of more than U.S.$3.5 billion, sells processed fruits and vegetables, seafood, and pet foods at grocery stores, mass merchandisers, and other retail outlets. Del Monte currently employs 8,400 salaried and 8,900 seasonal employees in offices across the world, including the United States, Ecuador, Mexico, and American Samoa. About 3,500 of these workers rely on the organization’s Microsoft® Exchange Server 2003 and 2007 messaging systems to send and receive e-mail messages every day. In fact, the system receives more than 200,000 e-mail messages each week. Many Del Monte employees use Microsoft Office SharePoint® Server 2007 to share important documents on the company’s portal sites. Employees also use Microsoft Office Live Communications Server 2005 to collaborate in real time through instant messaging and other collaboration tools. The Del Monte IT infrastructure consists of the Windows Server® 2003 R2 Enterprise Edition operating system, Microsoft Systems Management Server, Windows Server Update Services (WSUS), Microsoft SQL Server™ 2005 database software, and the Active Directory® service. For the past several years, the organization has relied on Microsoft Operations Manager 2005 to monitor all of these technologies. Managing this complex infrastructure is a challenge for Del Monte IT administrators. “We have a dispersed work force, and we need to ensure that our critical systems do not have downtime, so these people can stay productive,” says Jonathan Wynn, Manager of Advanced Technology and Collaborative Services, Del Monte. Security is also critical for Del Monte. “We have employees across the world constantly uploading and downloading documents on SharePoint sites. Because I need to focus on managing the overall infrastructure, I don’t have time to worry about someone’s computer in Ecuador or Thailand getting a virus,” says Wynn. “It is vital that we are able to easily secure our server computers running Exchange Server and SharePoint Server, to stop spyware and viruses from entering our SharePoint document libraries and our e-mail system.” To stay ahead of security threats, Del Monte had used several security software solutions. However, administration of those solutions was a time-consuming process. “I would have to manually monitor Exchange Server to look for security alerts, as an example,” says Wynn. “Also, finding the people who really needed security patches and updates was difficult, because we didn’t have a simple way of viewing that information.” Del Monte needed a comprehensive solution that would allow it to easily manage and secure its complex, growing infrastructure of Microsoft products and technologies. SOLUTION Del Monte chose to deploy an IT management and security solution including Microsoft Forefront™ Security for Exchange Server, Forefront Security for SharePoint, and Microsoft System Center IT management solutions. Forefront Security for Exchange Server protects Del Monte by managing multiple antivirus scan engines at several layers throughout the e-mail infrastructure. Forefront Security for SharePoint uses the same technology to ensure that documents are safe before they are saved to or accessed from the Del Monte SharePoint document library. Microsoft System Center includes Operations Manager, which allows IT administrators to track event and performance monitors across all operating systems and applications in the IT infrastructure. Operations Manager also provides access to more than 50 management packs for Microsoft products, including Forefront line of business security products. System Center also includes Microsoft Systems Management Server 2003, which provides patch management, inventory management, and other features. Forefront and System Center fully integrate with a company’s existing Windows®-based IT infrastructure, such as the one used by Del Monte. “We have one solution that’s integrated with our environment, and it was very easy for us to implement,” says Wynn. BENEFITS With its integrated IT infrastructure management and security solution, Del Monte has an easy way to manage its mission-critical systems while experiencing simplified administration and a better way to stay ahead of security threats. The company has also been able to decrease system downtime and increase IT productivity. Easy Management of Critical Systems The Forefront and System Center solutions deployed at Del Monte have given the company integrated solutions that ease the management of critical systems and applications. The Forefront security products and Operations Manager are optimized for Active Directory and other technologies in the existing Del Monte infrastructure, making policy configuration and enforcement easy. “The integration is seamless,” says Wynn. “With the Microsoft Operations Manager 2005 management packs, we can easily manage Forefront for Exchange Server and Forefront for SharePoint, while effectively monitoring the Active Directory service and all our other important systems. I now have a full view into everything and an easy way to monitor security. Because our entire infrastructure is easy to manage, we have better visibility into system health.” As a result, Del Monte can better manage and secure its infrastructure. “The System Center IT management and Forefront security solutions have played a key role in helping us manage the complexity of our global supply chain while protecting the information channels that serve that chain,” says Wynn. Simplified Administration The combined Forefront and System Center solution also gives Del Monte a single view into security on the network, which simplifies overall IT administration. Using this solution, Del Monte can reduce the number of management consoles it needs to use and can provide a unified policy-based security management approach. “The integration gives me a way to use Systems Management Server 2003, for example, in tandem with WSUS to easily deploy security patches and updates,” says Wynn. “That gives me the ability to get the right security updates to the right people when they need them.” More Secure Infrastructure The new Forefront products give Del Monte multiple antivirus engines from around the world, providing the company with global system protection 24 hours a day, every day of the week. “We now have excellent security for our Exchange Server e-mail messages and our SharePoint documents,” says Wynn. Additionally, as a result of the integration with System Center, Wynn can use Operations Manager to easily monitor the Del Monte server computers running SharePoint Server, Exchange Server, and Live Communications Server. “I can have much more detail about virus outbreaks, for example,” he says. “Using Operations Manager 2005 to manage our Forefront security solutions is a first step on the road to a more integrated security and IT management infrastructure. That infrastructure will help us ensure system availability and more dynamically allocate IT resources to service the business.” Increased Uptime As a result of deploying the Forefront and System Center products, Wynn reports that Del Monte has increased its overall Exchange Server reliability. “We now have this holistic system to manage the entire security infrastructure, and that has led directly to increased uptime,” he says. “We deployed Forefront Security for Exchange Server seven months ago, and since that time, we’ve only had 15 minutes of total Exchange Server downtime. And that was only due to some configuration work that we had previously scheduled.” Wynn adds that the Del Monte Exchange Server environment is now operating at close to 100 percent reliability. “That would have been difficult to achieve in the past,” he says. “But with this solution, we have not had an e-mail outage. Nor have we had a virus problem.” Increased Productivity The System Center and Forefront solutions also automate routine, manual IT administration tasks. For example, Systems Management Server 2003 automates computer and server updates, and Forefront automates signature updates. “Previously, I would have to manually monitor Exchange Server to look for security alerts, as an example,” says Wynn. “Now, Operations Manager automates those capabilities. I have an effortless way of looking into and managing processes.” The result is increased productivity for Wynn, because he can focus on maximizing the company’s software investments and can explore additional new technologies. “In terms of deployment, too, everything is automated,” he adds. “There’s no need to manually monitor our systems. Instead, I can concentrate on my job as an IT manager.” REFERENCES http://en.wikipedia.org/wiki/Information_technology http://en.wikipedia.org/wiki/Information_systems http://en.wikipedia.org/wiki/Supply_chain http://en.wikipedia.org/wiki/Supply_chain_management http://en.wikipedia.org/wiki/Logistics Kaushik K.D., & Cooper, M. (2000). Industrial Marketing Management. Volume29, Issue 1 , January 2000, Pages 65-83 Rolf G. Poluha, Application of the SCOR Model in Supply Chain Management. Youngstown, NY 2006, ISBN 1-934043-10-9. Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R. (2006), Management Information Systems For the Information Age (3rd Canadian Ed.), Canada: McGraw Hill Ryerson ISBN 0-072-81947-2 Handfield and Bechtel, 2001; Prater et al., 2001; Kern and Willcocks, 2000; Bowersox and Closs, 1996; Christopher, 1992; Bowersox, 1989 ENDNOTES 1. Baziotopoulos, 2004 2. MacDuffie and Helper, 1997; Monden, 1993; Womack and Jones, 1996; Gunasekaran, 1999 3. Drucker, 1998; Tapscott, 1996; Dilts, 1999 4. Macneil ,1975; Williamson, 1974; Hewitt, 1994 5. Stevens, 1989; Ellram and Cooper, 1993; Ellram and Cooper, 1990; Houlihan, 1985 6. Cooper et al., 1997; Lambert et al.,1996; Turnbull, 1990 7. Zhang and Dilts, 2004;Vickery et al., 2003; Hemila, 2002; Christopher, 1998; Joyce et al., 1997; Bowersox and Closs, 1996; Williamson, 1991; Courtright et al., 1989; Hofstede, 1978 8. Stevens, 1989 9. Ellram and Cooper, 1993 10. Mills et al., 2004 11. Lewis and Talalayevsky, 2004 12. Hedberg and Olhager, 2002 13. Hemila, 2002 14. Vickery et.al., 2003 15. Yusuf et al., 2003 Read More