IS in International Supply Chains

Problems with Manual Supply Systems

• Human-Intensive: All processes/decisions manual.

• Difficult to Scale: What happens if you want to build something
new?
• Unreliable: Knowledge stored in human beings.
• Slow Information Feedback: Hard to make real-time decisions.
• Inflexible: Hard-coded and cannot respond to changing needs.
• Costly: All equipment physical and slow to build.
How can IS Transform Business Operations?

• Efficient: Centralised, minimal human intervention.

• Quicker to Implement: Using the cloud, scale in minutes.
• Robust: Knowledge encoded in systems and is shared.
• Rich Information: Standardised, with informed decision making.
• Responsive: Can respond to new market opportunities.
The Need to Improve Information Visibility
and Transparency

• Modern supply chains combine and transfer the various

components of a service and product – putting the final service
or product into the hands of the customer.

• This often means the co-ordination of a global network of

suppliers.

• Using a very complex, carefully designed chain of systems and

processes.
The Need to Improve Information Visibility
and Transparency

• A supply chain needs shared and accurate information to work

effectively… because the supply chain needs to ensure
products/services meet the 7 R’s.

• What are the 7 R’s of Logistics?

• Right Product/Service, Right Quantity, Right Condition, Right

Place, Right Time, Right Customer and, Right Price.
How do Organisations Achieve all 7 R’s?

• Visible Information: Lots of it at every stage of the supply

chain.
• Integrated Systems: That can share up-to-date information
quickly and accurately.
• Fast Decision Making: Based on good information.

Loss of information visibility will break the supply chain… very

quickly!
Class Exercise: 7 R’s

Think of the classic Big Mac and its supply chain:

• What information is needed to make sure each of the 7 R’s can
be achieved? List the information next to each of the 7 R’s.
• What would be the impact on McDonalds if ‘Right Price’
cannot be achieved?
• Which of the 7 R’s would be affected if the food ordering
system went offline at the McDonalds restaurant?
 Class Exercise: 7 R’s

PRODUCT FLOW

Burgers,
Ingredients Burgers
Raw Ingredients bread & Customer
shipped to and bread Food Food
Ingredients stored at salad served
production made and stored cooked
Produced warehouse transported burger
plan frozen
to outlet

DEMAND FLOW
IS for Transparency – ERP Systems

• “...to optimise an enterprise’s internal value chain by

integrating all aspects of the business, from purchasing and
inventory management to sales and financial accounting. By
providing common database and the capability to integrate
transaction management processes, data are made
instantaneously available across business functions, enabling the
visibility necessary for effective planning and decision making”
(Ross, 2011, P. 72).

• https://www.youtube.com/watch?v=lYCEQqSM08I
• https://www.youtube.com/watch?v=Nfq3OC6B-CU
Importance of Internal IS

• A supply chain needs at its heart an effective internal set of IS.

Internal IS play 5 ‘enabling’ roles:
1. Enterprise Data Storage.
2. Management of Transactions.
3. Management Control.
4. Assist Decision Making.
5. Aid Strategic Planning.
External IS and the Supply Chain

• Effective management of the whole supply chain means

exchanging information with many systems which are managed
by suppliers, partners and even customers.

• The speed and agility of supply chain fulfilment will massively

depend on how well organisations ‘integrate’ with these
systems – ideally in a real time and ‘seamless way’.
External IS and the Supply Chain

• The performance of the supply chain is only as good as the flow

of information across it… electronic integration between
internal and external system ‘STREAMS’ is VITAL!

Three Main ‘Streams’ of Information Flow Across the Supply

Chain (joining the Internal and External IS):
• Product.
• Information.
• Financial (Olson, 2012).
Why Integrate Internal and External IS?

• Reduce cost per transaction.

• Reduce cycle time per transaction e.g. reduce human intervention.
• Improve accuracy of transaction i.e. Right First Time (RFT) – avoiding
rework and waste.
• Make decisions just in time/just enough based on latest operational
status.
• Make it easier for clients to order goods/services.
• Improve traceability and visibility of processes.
• Operate internationally without constraint.
• Exchange information in a common and consistent format.
SRM: Supplier Relationship Management

Software which manages all interactions with suppliers &

integrates into suppliers ordering & fulfilment systems:
• Stores static supplier ‘master data’ e.g. address.
• Provides internal ‘portal’ for employees to self-serve purchase
of goods.
• Maintains internal catalogue of goods.
• Electronically transfers purchase requests.
• Manages supplier contract arrangements.
Example of Integration