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SCM TECHNOLOGIES AND THEIR APPLICABILITY IN THE SC OPERATIONS

RESHIN K.V. School of Management Studies, CUSAT, Kochi- 22. E-mail: kay ee!"#gmail.com

Abstract: Supply chain management (SCM) refers to the management of activities that procure raw materials, transform those materials into intermediate goods and final products, and deliver the products through a distribution system to the end-user. As we move on in the !st century, li"e all other functions supply chain management is in a state of metamorphic flu#. Several new technologies are creeping into SCM which are reshaping this crucial business function. Some of these forces and technologies include collaboration technologies, internet based procurement, web technologies, $%&, $'(, ')&% for inventory management, $-Commerce, and Cloud Computing. Keyw r!s: &.*. in SCM, collaboration technologies, internet based procurement, $%&, $'(, ')&%, $-Commerce, Cloud Computing, and *MS (*ransportation Management System).

".# INTROD$CTION
Supply Chain Management can be defined as the design, planning, e#ecution, control, and monitoring of supply chain activities with the ob+ective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchroni,ing supply with demand, and measuring performance globally. *he emergence of the &nternet has allowed firms to compete effectively and efficiently in both domestic and international mar"ets. &t is a well"nown fact that &nternet-based computing and communication has emerged as a "ey enabler to help organisations achieve greater coordination and collaboration among supply chain partners and automate the supply chain process (A""eren and Cavaye, !---). *his has created competitive pressures as manufacturers and distributors are forced to become more responsive to the retailers and consumers. *hese pressures are forcing manufacturers.buying organisations to reduce costs, decrease order cycle times, and improve their operating efficiencies. /owadays, the use of technologies help the organisations to better manage their supply chains, as supply chain management applications built on technology platforms have enhanced the ability of organisations to integrate their processes through collaborative information sharing and planning.

%.# SC TECHNOLOGIES AND ITS APPLICABILITY %." I&' r(at) & a&! Tec*& + ,y: A--+)cat) & ' SCM:
&n the development and maintenance of Supply chain0s information systems both software and hardware must be addressed. 1ardware includes computer0s input.output devices and storage media. Software includes the entire system and application programme used for processing transactions management control, decision-ma"ing and strategic planning. 'ecent development in Supply chain management software is2 3ase 'ate, Carrier select 4 match pay (version .5) developed by %istribution Sciences &nc. which is useful for computing freight costs, compares transportation mode rates, analy,e cost and service effectiveness of carrier. A new software programme developed by 'oss systems &nc. called Supply Chain planning which is used for demand forecasting, replenishment 4 manufacturing tools for accurate planning and scheduling of activities. (46 distributing company and Saber decision *echnologies resulted in a software system called *ransportation /etwor" optimi,ation for streamlining the bidding and award process. 7ogitility planning solution was recently introduced to provide a programme capable managing the entire supply chain.

%.% Tra&s- rtat) & Ma&a,e(e&t Syste( .TMS/


A transportation management system (*MS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system. A *MS usually 8sits8 between an $'( or legacy order processing and warehouse.distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the *MS (lanning Module offering the user various suggested routing solutions. *hese solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider. 9nce the best provider is selected, the solution typically generates electronic load tendering and trac".trace to e#ecute the optimi,ed shipment with the selected carrier, and later to support freight audit and payment (settlement process). 7in"s bac" to $'( systems (after orders turned into optimal shipments), and sometimes secondarily to :MS programs also lin"ed to $'( are also common.

%.0 C ++ab rat) & tec*& + ,)es


9ne of the biggest benefits technology has given to the supply chain concept is the ability for companies to collaborate. *hese collaborations are designed for the mutual benefit of all parties. 1 r e2a(-+e, a supplier of consumer goods may be lin"ed up via the &nternet to one of its

distributors so that when the supply gets too low an order for more of those goods can be placed automatically. &n this way, the distributor never has to worry about running out of a product and disappointing customers and the supplier doesn0t have to worry about maintaining a large inventory in e#pectation of demand. Similar systems have also been constructed to send out multiple re;uests to vendors when an order is placed. Collaborating this way ma"es better use of e#isting resources and paves the way for a larger profit margin on all sides of the e;uation. &nternet based Supply Chain Management is the solution that supports collaboration in the Supply Chain as the foundation for gaining competitive advantage and maintain mar"et share. *here are many :eb technologies necessary for the design and implementation of a :eb based SCM application, their employment being determined by the SC partner<s information systems and applications and the level of integration needed. *he combination of SCM concepts and the &nternet tools resulted in a :eb based application called e-SCM. E3SCM enables the integration and synchroni,ation of all SC information and processes. :eb based applications allow the reduction of transactional costs with =5> compared to private networ" cost. $-commerce standards (e.g. ?M7, @ava) enable low cost integration of customer, supplier, product information and competencies from SC partners, the transmission of documents and data in real time at every level in the Supply Chain. )ig !2 Rece&t a--+)cab)+)ty ' SCM )& SC -erat) &s

%.4 I&ter&et base! -r c5re(e&t


3usiness-to-business sales on the :eb are starting to gain popularity. Companies around the world are getting serious about &nternet-based procurement (&3() because the return on a relatively modest investment is high and the ris" is very low, at least for many items,companies buy routinely. *here are two distinct parts of the &3( mar"et2 %irect-Material (rocurement, which involves the ac;uisition of products directly re;uired for production. *hese include the

components and materials from "ey upstream supply chain partners. &ndirect-Material (rocurement, which is the purchase of products that are indirectly used in the production process. *hey include office suppliesA maintenance, repair and operating supplies (M'9). T*ere are se6e& (a)& ty-es ' e3-r c5re(e&t: 7eb3base! ERP .E&ter-r)se Res 5rce P+a&&)&,/2 Creating and approving purchasing re;uisitions, placing purchase orders and receiving goods and services by using a software system based on &nternet technology . e3MRO .Ma)&te&a&ce8 Re-a)r a&! O6er*a5+/2 *he same as web-based $'( e#cept that the goods and services ordered are non-product related M'9 supplies. e3s 5rc)&,2 &dentifying new suppliers for a specific category of purchasing re;uirements using &nternet technology. e3te&!er)&,2 Sending re;uests for information and prices to suppliers and receiving the responses of suppliers using &nternet technology. e3re6erse a5ct) &)&,2 Bsing &nternet technology to buy goods and services from a number of "nown or un"nown suppliers. e3)&' r()&,2 6athering and distributing purchasing information both from and to internal and e#ternal parties using &nternet technology. e3(ar9ets)tes2 $#pands on :eb-based $'( to open up value chains. 3uying communities can access preferred suppliers0 products and services, add to shopping carts, create re;uisition, see" approval, receipt purchase orders and process electronic invoices with integration to suppliers0 supply chains and buyers0 financial systems. *he e-procurement value chain consists of &ndent Management, e*endering, e-Auctioning, Cendor Management, Catalogue Management, and Contract Management. &ndent Management is the wor"flow involved in the preparation of tenders. *his part of the value chain is optional, with individual procuring departments defining their indenting process. &n wor"s procurement, administrative approval and technical sanction are obtained in electronic format. &n goods procurement, indent generation activity is done online.

%.: C+ 5! C (-5t)&,
Cloud computing supplies computational resources on demand via a computer networ". *raditional computing models re;uire both data and software to be fully contained on the user0s computer. &n cloud computing, the user0s computer may contain almost no software or data (only an operating system and a web browser). *he provider0s cloud computing services form the cloud. *hese services are provided via an &nternet connection within one or more of the ne#t layers2 application, platform and infrastructure. Application services (SaaS- Software as a Service) deliver software as a service over the &nternet to the client who doesn<t need to install and run the application on his own computers. All the software management, update, maintenance and support are e#ecuted centrali,ed, only on the provider<s computers. *he software allows

collaboration through the networ" with business partners due to its model D single instance, multi-tenant architecture. (latform as a Service provides a computing platform comprise hardware architecture and software framewor" to support the software. &nfrastructure as a Service (&aaS) provides computer infrastructure as a service2 servers with multi-core processors, software, data-center space or networ" e;uipment. Companies can use one or combinations of these services and they pay according to the pay for what- you-use model, achieving significant cost reductions. *he service provider will deal with investment in licenses, infrastructure maintenance and upgrades. Software implementation is simple, with minimal technical re;uirements and easy management. Cloud computing is an innovative business model which ensures an efficient outsourcing for Supply Chain collaboration software and infrastructure. SCM business processes are parallel and data are managed by each company<s integrated information system. &n order to e#tend these internal systems to SC level, companies have to connect them through networ"s. Cloud computing enables the networ"ing of multiple and interdependent end-to-end processes (order fulfilment, collaborative forecasting and replenishment, mar"et analysis). &t supplies a collaborative framewor" allowing an effective process management through standardi,ed processes. SaaS provides a high level of security, so that companies are able to share information without trust limitations. *his creates visibility for each Supply Chain member for the entire networ" o that to support the decisional process.

%.; EDI
$lectronic %ata &nterchange is an inter-organisation computer to computer e#change of standard business documents in a structured and machine-processable format with the ob+ective to eliminate duplicate data entry and to improve the speed and accuracy of the information flow. $%& based system has a significant advantage over the manual paper based system in terms of built-in delay due to several processing points during transit, data in accuracy or error due to repeated data entry at several steps, labour intensive uncertainty about delivery of information along with high costs of transmission.

A!6a&ta,es ' EDI are:


I(-r 6e! -erat) &a+ e'')c)e&c)es of manually intensive business processes by automating business document input, validation and auditing. *he sophisticated audit provides a simple view of business information across different systems, and its proactive alerts help you manage e#ceptions so you can respond immediately to unplanned events. I(-r 6e! C5st (er Ser6)ce by providing internal and e#ternal business partners with EstatusF information on business information flows inside and outside an organi,ation. I(-r 6e! b5s)&ess res- &s)6e&ess through greater visibility and adaptability to changing business re;uirements. /ew business partners, platforms, document formats, technologies and business processes can be added ;uic"ly and efficiently while maintaining centrali,e control. I(-r 6e! react) & t)(e t s5--+y c*a)& )ss5es. As =5> of a business document information flow now relies on electronic transfer of information, any loss of information flow is unacceptable for clients, suppliers, or trading partners (both internal and e#ternal). *o ma#imi,e '9&, proactive and intelligent surveillance of business document transfer is critical. 'eceiving an alert at the end of a day is not

longer acceptable as receiving information when problems occur along with how to solve the problem is re;uired. /otified of a problem, a user can rapidly identify the root cause and correct it by operations such as2 correcting incorrect information, retrying the transfer, canceling the transfer, e#ecuting an alert to the appropriate person(s) D by e-mail for e#ample D of the ris" of client-impact from a problem in the supply chain. C (-+)a&ce t re,5+at ry re<5)re(e&ts. )or reporting companies, regulatory re;uirements such as Sarbanes-9#ley and 1&(AA are a fact of life. $%&<s sophisticated audit and document management features allows an organi,ation to comply with regulatory re;uirements in one central solution. &n summary, $%& provides management, automation, format transformation, information routing and business process management with the purpose of streamlining business to meet the needs of an organi,ation. $%& manages the flow of business information from end to end, ensuring higher processing speeds, improved reactivity, and higher ;uality of service.

%.= R1ID Tec*& + ,y


Automatic identification, or auto &% for short, is the broad term given to a host of technologies that are used to help machines identify ob+ects. Auto identification is often coupled with automatic data capture. *hat is, companies want to identify items, capture information about them and somehow get the data into a computer without having employees type it in. *he aim of most auto-&% systems is to increase efficiency, reduce data entry errors, and free up staff to perform more value-added functions, such as providing customer service. *here are a host of technologies that fall under the auto-&% umbrella. *hese include bar codes, smart cards, voice recognition, some biometric technologies (retinal scans, for instance), optical character recognition, and radio fre;uency identification (')&%). *he 'adio )re;uency &dentification (')&%) $valuation Center covers criteria for tags and storage devices, readers, wireless hubs and servers, and the middleware necessary for evaluating an ')&% system deployment. ')&% systems are used in different situations that re;uire the trac"ing of uni;ue items. ')&% tags, in the conte#t of enterprise resource planning and supply chain management, ma"e items visible from manufacturing through distribution. ')&% tags may be used to carry basic information such as an address, to more comple# information used at different stages of an assembly line. &n general terms, 'adio )re;uency &%entification (')&%) is a means of identifying a person or ob+ect using a radio fre;uency transmission, typically ! G "1,, !H.GI M1, or =55--55M1,. *here are several methods of identification, but the most common is to store a serial number that identifies a person or ob+ect, and perhaps other information, on a microchip that is attached to an antenna (the chip and the antenna together are called an ')&% transponder or an ')&% tag). *he antenna enables the chip to transmit the identification information to a reader. *he reader converts the radio waves reflected bac" from the ')&% tag into digital information that can then be passed on to computers that can ma"e use of it.

A!6a&ta,es ' 5s)&, R1ID


Re!5ces C+er)ca+ Err rs8 I&crease Data >5a+)ty. ')&% gets the human out of the loop where clerical errors are about eliminated in terms of inventory levels and asset visibility. I(-r 6es Asset V)s)b)+)ty a&! $t)+)?at) &. ')&% can give you complete situational awareness. &f you "now where an asset is, you can use it.

I&crease E'')c)e&cy. /o more point and scan labor-intensive tas"s that are associated with bar codes. Also, people no longer need to be always loo"ing for stuff, nor do they have to do inventories by hand. *his frees them up to do their real +ob. Re!5ce T*e't. *heft can be a significant cost to businesses. ')&% can provide near real- time and historical information to reduce and prevent theft of products. 3y having near-real-time visibility of product, businesses can pin-point and eliminate theft that occurs along the supply chain as well as in retail stores. I(-r 6e C5st (er E2-er)e&ce. ')&% items enables businesses to further integrate service offerings, automate customer tas"s, and anticipate customer needs. ')&% technology can be integrated with smart shopping carts, "ios"s, and (oint-9f-Sale terminals to improve the customer<s shopping e#perience. ')&% tags enable businesses to up-sell and cross-sell other products and accessories in real-time. I(-r 6es Dec)s) &3Ma9)&,. ')&% technology gives real-time information that enable better decision-ma"ing as well as reduces the decision-ma"ing cycle. &mproved decision-ma"ing results in2 Re!5ce I&6e&t ry. ')&% technology improves inventory accuracy. *his enables businesses to eliminate e#cess and missing inventory as well as reduce losses and write downs. ')&% technology enables physical inventory in stores and warehouses to match what is in the system. I(-r 6e 1 recast)&, a&! P+a&&)&,. ')&% enable businesses to gain visibility of the entire supply chain to include supplier visibility, in transit visibility, and customer visibility. :ith better and e#panded current and historical information, businesses can improve forecasting capabilities. Re!5ce O5t3O'3St c9 C &!)t) &s. 9ut of stoc" items cause missed sales, and will eventually lead to lost customers. ')&% tags enable businesses to prevent out-ofstoc" conditions in warehouses and in retail stores. 3usinesses can get near-real-time and better historical information to eliminate conditions that cause out-of-stoc" conditions. ')&% technology proved to be the silent supervisor, monitoring and recording details of product movement and alerting shipping personnel of errors. ')&% tags are now placed on pallets at the stretch wrap machine. &n the outbound loading area, each for"lift is e;uipped with an ')&% reader and a screen, which signals the operator whether pallets for a particular order are included on the accompanying 3ill of 7ading. %uring loading, the operator is immediately given several warnings, including a flashing red screen and an audio alert if a pallet is about to be placed on the wrong truc" or if the number of pallets in the shipment is incorrect.

%.@ E&ter-r)se Res 5rce -+a&&)&, .ERP/ t

+s

$'( is a computeri,ed integrated business process of the organi,ation used by firms to derive competitive advantages in the production, distribution and financial areas. &n other words, it is an integrated set of application software modules providing operational, managerial and strategic information to improve the productivity, ;uality and competitive advantage. Many companies now view $'( system (eg. 3aan, SA(, (eople soft, etc.) as the core of their &* infrastructure. $'( system have become enterprise wide transaction processing tools which capture the data and reduce the manual activities and tas" associated with processing

financial, inventory and customer order information. $'( system achieve a high level of integration by utili,ing a single data model, developing a common understanding of what the shared data represents and establishing a set of rules for accessing data.

Be&e')ts ' ERP:


&mproving productivity and enhancing a competitive edge by optimi,ing the use of all its resources. 3ringing about a trade off between demand and supply. 3ringing together people who wor" on shared tas"s within the same firm or in their dealings with suppliers, customers and third party logistics service providers. $nsuring a smoother flow of inventory and information at all levels and between all parties, coupled with ready access of up-to-date information. 'educing the replenishment cycle time and hence capital loc" up. 9verall organi,ational loo"-ahead capability and control.

Supply chain management (SCM) software uses the information in $'( systems to provide analytical decision support in addition to the visibility of information. $'( systems show a company what is going on, while SCM systems help a company decide what it should do.

%.A GIS8 GPS a&! t*e)r a--+)cat) &


3ased on geography spatial data, 6eographical &nformation System (6&S), provide timely various spatial and dynamic geography spatial data with the help of geography model analysis. 6&S is utili,ed in logistics analysis mainly because 6&S<s powerful function on geography data can process data information on suppliers, storehouses, customers and retailers by the chart stratification way, and can display the processing results by the graph with the help of the arithmetic of delivery receiving model. *he application models based on 6&S logistics analysis are the vehicles route model, the most short-path model, the networ" flows model, and the assignment set model and the installation locali,ation model and so on. 6lobal (ositioning System (6(S) developed by means of satellite communication technology possess 9mni bearing, real- time H% navigation and locali,ation capacities in the air, the land and the sea. 6(S is finding its way into automobile self location, follow 4 dispatch, railway transportation management and military logistics management.

%."# E+ectr &)c C ((erce a&! SCM Base! & I&ter&etBI&tra&et


$lectronic commerce and the &nternet are fundamentally changing the nature of supply chains, and redefining how consumers learn about, select, purchase, and use products and services. *he result has been the emergence of new business-to business supply chains that are consumer-focused rather than product-focused. *hey also provide customi,ed products and services. $-commerce impacts supply chain management in a variety of "eyways. *hese include2 C st e'')c)e&cy: $-commerce allows transportation companies of all si,es to e#change cargo documents electronically over the &nternet. $-commerce enables shippers, freight forwarders and truc"ing firms to streamline document handling without the monetary and time investment re;uired by the traditional document delivery systems. 3y using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service.

C*a&,es )& t*e !)str)b5t) & syste(: $-commerce will give businesses more fle#ibility in managing the increasingly comple# movement of products and information between businesses, their suppliers and customers. $-commerce will close the lin" between customers and distribution centres. Customers can manage the increasingly comple# movement of products and information through the supply chain. C5st (er r)e&tat) &: $-commerce is a vital lin" in the support of logistics and transportation services for both internal and e#ternal customers. $-commerce will help companies deliver better services to their customers, accelerate the growth of the ecommerce initiatives that are critical to their business, and lower their operating costs. Bsing the &nternet for e-commerce will allow customers to access rate information, place delivery orders, trac" shipments and pay freight bills. $-commerce ma"es it easier for customers to do business with companies2 Anything that simplifies the process of arranging transportation services will help build companies0 business and enhance shareholder value. S*)-(e&t trac9)&,: $-commerce will allow users to establish an account and obtain real-time information about cargo shipments. *hey may also create and submit bills of lading, place a cargo order, analy,e charges, submit a freight claim, and carry out many other functions. &n addition, e-commerce allows customers to trac" shipments down to the individual product and perform other supply chain management and decision support functions. *he application uses encryption technology to secure business transactions. S*)--)&, & t)ce: $-commerce can help automate the receiving process by electronically transmitting a pac"ing list ahead of the shipment. &t also allows companies to record the relevant details of each pallet, parcel, and item being shipped. 1re),*t a5!)t)&,: *his will ensure that each freight bill is efficiently reviewed for accuracy. *he result is a greatly reduced ris" of overpayment, and the elimination of countless hours of paperwor", or the need for a third-party auditing firm. 3y intercepting duplicate billings and incorrect charges, a significant percent of shipping costs will be recovered. &n addition, carrier comparison and assignment allows for instant access to a database containing the latest rates, discounts, and allowances for most ma+or carriers, thus eliminating the need for unwieldy charts and tables. S*)--)&, D c5(e&tat) & a&! Labe+)&,: *here will be less need for manual intervention because standard bills of lading, shipping labels, and carrier manifests will be automatically producedA this includes even the speciali,ed e#port documentation re;uired for overseas shipments. (aperwor" is significantly reduced and the shipping department will therefore be more efficient. O&+)&e S*)--)&, I&<5)ry: *his gives instant shipping information access to anyone in the company, from any location. (arcel shipments can be trac"ed and proof of delivery ;uic"ly confirmed. A customer0s transportation costs and performance can be analy,ed, thus helping the customer negotiate rates and improve service.

Tab+e ": S5r6ey ' Tec*& + ,y $sa,e by H),* Tec* $sers ' r S5--+y C*a)& Ma&a,e(e&t $'( *MS @&*. Janban C'M C()' SC $vent Mgt. Systems S'M Collaborative product design ')&% I5.=> H .G> -. > K.H> .G> !K. > !I.K> !G.H> -.!>

0.# CONCL$SION
*he adoptions of integration technologies to support the supply chain management can be seen either as a way to provide efficiency savings, or as a strategic response either driven by necessity or due to competitive pressure. &t provides benefits li"e standardised production, simplified supply chain process, and automated process, upon the implementation of supply chain integration by the case companies involved in the study. *he &nternet has had an enormous impact on the personal and professional lives of businesspersons. 9n the business side, the &nternet has brought new life to e#isting technologies and offered businesses the opportunity to engage in the world mar"etplace. *he harnessing of the &nternet by business has enabled greater cooperation and information e#change up and down the supply-chain. *he &nternet has enabled businesses to improve the supply-chain by the way they manage inventory, place orders, and communicate critical information with each other.

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