Module 5 Digitization in Supply Chain Management and Sustainability

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Distribution and modifications of the content is prohibited.
MODULE 5: Digitization in SCM & Sustainability
• IT in supply chain - Role of IT in a supply chain, The supply chain IT

framework,
• Application of Bar coding, Significance of SAP/RFID, The future of IT
in the supply chain, Supply chain IT in practice,
• TMS (Transport Management System),
• WMS (Warehouse Management System),
• Green supply chain management,
• Supply Chain sustainability,
• Supply Chain sustainability index measurement with case studies.
• Social aspects of supply chain (CSR), Environment aspects of supply
chain (CO2 emission), resource utilization, recycling.
St. Francis Institute of Technology Logistics and Supply Chain Management
Department of Mechanical Engineering Dr. Ravindra Garmode 1
The material in this presentation belongs to St. Francis Institute of Technology and is solely for educational purposes. Distribution and modifications of the content is prohibited.
Automatic Identification & Data Capture (AIDC)
• Tools for automatically identifying objects, collecting data

about them, and entering that data directly into computer
systems
• Bar Codes: uses binary code with a series of lines and
spaces to embed information
• For bar codes to be scanned they must be accurately
printed and have adequate contrast
• Radio Frequency Identification: RFID tags are read by radio
waves and do not need to be seen to read
• RFID is estimated to speed the task of inventory by over
94%

GPS
• Allows for real-time, non-intrusive monitoring of freight and

personnel
• Allows drivers to map which routes are most efficient and

to monitor traffic
• GPS uses trilateration - geometric principle that is used in

conjunction with satellites to indicate the position of
objects anywhere on earth - uses three locations
BAR CODE TECHNOLOGY
• It is an automatic identification technology
• Bar code is a predefined format of dark bars and white spaces
• Structured to contain a specific piece of information
• It allows real-time data to be collected accurately and rapidly
• Combination of barcode technology with computer and application

software improves performance, productivity and profitability

BAR CODE TECHNOLOGY
Discrete Symbology

BENEFITS OF BAR CODING
• REPRESENT UNIQUE IDENTITY OF A PRODUCT

• ACCURACY OF DATA INPUT (ERROR FREE)
• AID EFFECTIVE MANAGEMENT OF RESOURCES AND INVENTORIES
• LABOUR SAVINGS BY AVOIDING MANUAL SYSTEM
• COST EFFICIENT
• REAL TIME DATA COLLECTION
• MEASUREMENT OF WORK IN PROGRESS THROUGHOUT THE FACTORY
• RAPID ACCESS TO TOTAL PRODUCTION COSTS
• MORE ACCURATE DESPATCH

BAR CODE TERMINOLOGY
• BAR: The darker, non reflective element of a Bar Code

•BI-DIRECTIONAL SYMBOL: A Bar Code symbol format which permits
reading in either direction across the bars
and spaces
•CHECK DIGIT: A calculated character included within the Bar Code for error
detection
•FIXED BEAM SCANNER: A stationary Bar Code Scanner. The symbol must
be moved through the light beam to
be read
•HAND-HELD SCANNER: A scanner held and operated by a human operator

BAR CODE TERMINOLOGY
•INTER-CHARACTER GAP: The space between the bars or

spaces
•MOVING BEAM SCANNER: A Bar Code scanner that uses a
moving light beam to dynamically scan and decode
a Bar Code symbol
•SPACE: The lighter, reflective element of a Bar Code
•START CHARACTER: A special pattern of bars and spaces used
to identify the beginning of a Bar Code symbol
•STOP CHARACTER: A special pattern of bars and spaces used
to identify the end of a Bar Code symbol











RFID Technology
• Used to track goods in supply chain.

• RFID tag attached to object.
• Similar to bar codes but uses radio frequency to transmit product
information to receiver.
• RFID eliminates need for manual counting and bar code scanning.


 Radio frequency identification (RFID) is an enabling technology for real time data
collection.
 RFID uses wireless non-contact radio-frequency electromagnetic fields for data
transfer, to automatically identify and track tags attached to objects
 RFID tracks the movement and flow of items in a supply chain and provides visibility
to managers about the location and condition of the tracked items.
 The real time information is valuable because it helps to increase asset utilization
and to minimize inventory and logistics related costs.
 RFID also minimizes delays in information transmission leading to improved
information sharing among the partners in a supply chain.
 The design of RFID systems is critical because installing RFID technology
infrastructure entails a large initial investment and significant potential risks
in technology adoption.

Business Value of RFID
The business value of RFID comes from the visibility it provides to managers about the
items tracked. It emanates from labor cost savings, shrinkage reduction and inventory
visibility.
RFID has an impact on reducing information asymmetries.
The stages in the evolution of RFID business value include (see Dutta
et al.*): Technology deployment and integration,
Integration with business processes,
Development of new business architectures for employees, policies
and organizational structures.
Three dimensions for an RFID value proposition
include: RFID technology
Quantification of the RFID business value
Incentives for RFID adoption and
implementation.

Examples:
Amini et al.* used RFID to track trauma patients in a hospital.

RFID improved the tracking of patients’ time from about 25% to 80% in the
trauma center where patients spent about ten to twelve hours for their
treatment.
RFID technology’s ability to collect data in a passive manner avoids interference
with medical procedures.
RFID-based simulation models help in analyzing healthcare processes more
thoroughly based on the data collected for process cycle time, patient
throughput rate, and equipment and personnel utilization.
Delen et al.* establish the business value of RFID for a retailer by analyzing
the movement of RFID-tagged cases between distribution centers and retail
stores.

Examples:
 The analysis provides insights about the distribution of lead times among
different products and different combinations of distribution centers and
retail stores.
 The RFID-generated information also helps in tracking recalls, delivering
products to the stores as per schedule, and in studying the backroom
process that involves moving the products to the sales floor.
In addition to providing immediate visibility, RFID data utilization leads to
gains due to limited process changes first and then to the major
modifications in the logistics system.

Adoption and Implementation of RFID
Ngai et al. * present a case study of the design, development and

implementation of an RFID-based traceability system. The critical success
factors for RFID implementation include:
1.High organizational motivation,
2.Implementation process efficiency,
3.Effective cost control,
4.RFID skills and knowledge transfer.
Several deployment issues that impede RFID implementation include:
5.Lack of in-house RFID expertise
6.Inadequate technology support from local RFID vendors
7.Existence of different sets of industry standards
8.Unreliable hardware performance. Underdeveloped RFID middleware.
Overall, the study reports that the RFID-based traceability system has resulted in:
• Improved lead times

• competitive differentiation
• savings from reusing RFID tags
• breakthrough productivity by automation
• reduction of human errors in handling the repairable parts
• improved inventory management
• reduced manpower and manual data recording
• real time monitoring and access to detailed information
• reduction of repairable parts loss, improved customer relationships
The return on investment, the business value, and the selection of
partners are important considerations at the strategic level in RFID
investment projects
Transportation Management Systems (TMS)
• An ideal solution for a company that produces good at multiple locations

• Powerful computer software that controls, coordinates, and manages
various transportation activities including:
• assist in carrier selection - rating the movement

• tendering the load -printing documentation
• tracking the load -billing the correct party

TMS Key Features
• Rating: helps a shipping manager with choosing the carriers at the

best cost by factoring in issues like FAK (Freight-all Kinds: shipment
weight and distance usually for TOFC trailer on a flatcar)
• Routing: helps a shipping manager select optimal routes to

deliver freight to customers
• Reporting: helps shipping manager by tracking carrier,

performance, customer
service, cost, and other measures of carrier quality









Digitization in SCM & Sustainability



Green Supply Chain - Definition

The concept of Green Supply Chain, initially proposed by Michigan State University in 1996, indicates
improving the efficiency of resource use throughout the entire supply chain based upon consideration of
environmental effects.
Green Design
Key Stages:
Green
Materials
Green
Recycling
Green Green
Marketing Manufacturing
Green Logistics



















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The material in this presentation belongs to St. Francis Institute of Technology and is solely for educational purposes.

Distribution and modifications of the content is prohibited.

MODULE 5: Digitization in SCM & Sustainability

• IT in supply chain - Role of IT in a supply chain, The supply chain IT

Automatic Identification & Data Capture (AIDC)

• Tools for automatically identifying objects, collecting data

St. Francis Institute of Technology Logistics and Supply Chain Management

• Allows for real-time, non-intrusive monitoring of freight and

• Allows drivers to map which routes are most efficient and

• GPS uses trilateration - geometric principle that is used in

BAR CODE TECHNOLOGY

• It is an automatic identification technology

• Bar code is a predefined format of dark bars and white spaces

• Structured to contain a specific piece of information

• It allows real-time data to be collected accurately and rapidly

• Combination of barcode technology with computer and application

St. Francis Institute of Technology Logistics and Supply Chain Management

BAR CODE TECHNOLOGY

St. Francis Institute of Technology Logistics and Supply Chain Management

BENEFITS OF BAR CODING

• REPRESENT UNIQUE IDENTITY OF A PRODUCT

St. Francis Institute of Technology Logistics and Supply Chain Management

BAR CODE TERMINOLOGY

• BAR: The darker, non reflective element of a Bar Code

St. Francis Institute of Technology Logistics and Supply Chain Management

BAR CODE TERMINOLOGY

•INTER-CHARACTER GAP: The space between the bars or

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

• Used to track goods in supply chain.

St. Francis Institute of Technology Logistics and Supply Chain Management

MODULE 4: Digitization in SCM & Sustainability

St. Francis Institute of Technology Logistics and Supply Chain Management

Business Value of RFID

St. Francis Institute of Technology Logistics and Supply Chain Management

Amini et al.* used RFID to track trauma patients in a hospital.

St. Francis Institute of Technology Logistics and Supply Chain Management

St. Francis Institute of Technology Logistics and Supply Chain Management

Adoption and Implementation of RFID

Ngai et al. * present a case study of the design, development and

• Improved lead times

Transportation Management Systems (TMS)

• An ideal solution for a company that produces good at multiple locations

• assist in carrier selection - rating the movement