Chapter Three Logistics Information Systems
I. Learning objectives and requirements
1. to know why timely and accurate information is critical for effective logistics systems design and operations 2. to know four levels of SCIS’s functionality including transaction systems, management control, decision analysis, and strategic planning 3. to understand the comprehensive information system integration 4. to know how firms obtain access to supply chain applications 5. to understand the comprehensive information system integration 6. to know the remarkable advances in logistics communication systems capability
II. Learning contents Section I. Information System Functionality
1. Main ...view middle of the document...
The integration builds on four levels of functionality: (I) transaction systems, (2) management control, (3) decision analysis, and (4) strategic planning. Figure 7-1 illustrates logistics activities and decisions at each level of information functionality. As the pyramid shape suggests, management control, decision analysis, and strategic planning enhancements require a strong transaction system foundation. a) Transaction Systems A transaction system is characterized by formalized rules, procedures, and standardized communications; a large volume of transactions; and an operational, day-to-day focus. The combination of structured processes and large transaction volume places a major emphasis on information system efficiency. Transaction activities ( processes) include order entry, inventory assignment (which product is assigned to which customer), order selection (select or pick the products from the warehouse storage location), shipping (transport of the order to the customer),
pricing and invoicing (develops the invoice and records an account receivable), and customer request (usually represented by orders) for product into the information system. b) Management Control Management control focuses on performance measurement and reporting. Performance measurement is necessary to provide management feedback regarding supply chain performance and resource utilization. Common performance measures include cost, customer service, productivity, quality, and asset management measures. c) Decision Analysis Decision analysis focuses on software tools to assist managers in identifying, evaluating, and comparing supply chain and logistics strategic and tactical alternatives for improved effectiveness. d) Strategic Planning Strategic planning organizes and synthesizes transaction data into a wide range of business planning and decision-making models that assist in evaluating the probabilities and payoffs of various strategies. Essentially, strategic planning focuses on information support to develop and refine supply chain and logistics strategy. 2. Key concepts and points Strategic Advantage, Channel Relationship, Supply Chain Information System (SCIS), Transaction Systems, Order Management, Inventor Assignment, Order Selection, Shipping, Pricing and Invoicing, Customer Inquiry, Management Control, Financial Measurement, Cost, Asset Management, Customer Service Measurement, Productivity Measurement, Quality Measurement, Decision Analysis, Vehicle Routing and Scheduling, Inventory levels and Management, Network/Facility Location and Integration, Vertical Integration VS. Third-Party/Outsourcing, Strategic Planning, Strategic Alliance Formulation, Development and Refinement of Capabilities and Opportunities, Focused/Profit-Based Customer Service Analysis 3. Issues of application Students shall understand that Supply chain information systems (SCIS) are the thread that links logistics activities into an integrated process. The integration builds on four...