Lecture #3

Supply Chain Strategy,

Design, and Compliance

Information Technology
in Supply Chain
Management

Dr. Zaroni, CISCP, CFMP, CMILT

Program Magister Teknik Industri|Fakultas
Teknologi Industri|Universitas Islam Indonesia
Jogjakarta, 17 April 2021
Learning Objectives

• What is the role of IT in supply chain management?

• What are the key challenges in adapting IT to improve the
efficiency of the supply chain?
• What are the future trends in terms of the way IT is going to
influence supply chain management?
 Introduction

• Supply chain managers use this information

to make many important decisions related to
key building blocks of the supply chain, that
is, inventory, transportation and facility.
• Setting the inventory level requires
information about customers on demand,
information about suppliers on availability
and information about current inventory
levels, costs and margins.
 • Determining transportation policies requires information on delivery and
shipping locations, routes, rates, transportation time and quantities to be
shipped.
Introduction • Warehouse/store/plant decisions require information on customer and
supplier locations, tax implications as well as information on capacities,
revenues and material/operating costs.
Enabling Supply Chain Management
Through Information Technology

• IT in an organization has multiple roles:

• it increases scale efficiencies of the firm’s operations;
• it processes basic business transactions;
• it collects and provides information relevant to
managerial decisions and even makes decisions;
• it monitors and records the performance of employees
and function units;
• it maintains records of status and change
Use of information across the supply chain
IT map for a supply chain
Application modules map of
enterprise systems.
IT map for a supply chain transaction execution.
IT map for supply chain collaboration and coordination
systems.
IT map for supply chain DSS
IT map for supply chain reporting
Strategic Management Framework for IT Adoption in Supply
Chain Management
Future Trends
RFID Technology

Radio frequency identification (RFID) can be used to identify, track, sort or detect a wide
variety of objects.

It is evolving as a major technology enabler for tracking goods and assets around the
world, while taking supply chain and inventory management to a whole new level by
making them transparent in real time. An RFID system exchanges information between
the tagged object and a reader/writer in the wireless medium.
Future Trends
Mobile Technology
Future Trends
Cloud Computing

• Infrastructure-as-a-service – services related to accessing

storage capacity and raw computing power over internet
• Platform-as-a-service – web-based development
environments are made available over internet.
• Software-as-a-service – standardized enterprise
applications such as finance and human resources are made
available over internet.
 Future Trends
The Internet of Things (IoT)

Chui et al. (2010) define the ‘Internet of

Things (IoT)’ as ‘ . . . sensors and actuators
embedded in physical objects - from
roadways to pacemakers - are linked
through wired and wireless networks, often
using the same Internet Proto- col (IP) that
connects the Internet’.

The ‘Internet of Things’ generally refers to

the notion that many different ‘things’ are
connected to the internet, and thus, they
can be con- nected to each other.
[Reference: Chui M, Loffler M, Rob- erts R.
2010.
 Future Trends
Big Data and Analytics

Big data has the characteristics usually defined by the 3

‘V’s
1. Variety – data can be in structured (e.g., relations, logs,
raw text), unstructured or semi-structured (e.g., logs,
video, sound, images) forms.
2. Velocity is about moving data at very high rates (e.g.,
CERN atomic facility → 40 TB per second).
3. Volume of data scale from Terabytes to Petabytes (1 k
TB) to Zettabytes (e.g., 300 billion emails sent per day)

*Zettabytes = 1 billion terabytes

Future Trends
Social media driven collaborative demand forecasting

Social media typically refers to internet-based applications

(e.g., Twitter, Facebook, LinkedIn, Blogging, etc.) that pro-
vide platform for users to generate information and interact
with each other.

It also typically refers to technology-based media that allow

users to communicate with each other be- yond direct one-
to-one relationships.
Future Trends
Location-based tracking

Location-based services (LBS) use positioning technologies to

provide individual subjects (e.g., asset, resources) with
reachability and accessibility that would otherwise not be
available in the conventional commercial realm.

Location-based services (LBS) are the applications that use the

geographical information of the subject in order to pro- vide
various services. It calculates the location of the sub- ject and
resolves the navigating queries in real time.
Future Trends
Unmanned Aerial Vehicles (e.g., UAV/Drone) driven Supply Chain

Drones also known as unmanned aerial vehicles

There are numerous applications for drones along the sup- ply
chain.
• Drones can deliver freight
• Drones carrying freight payloads will significantly reduce air
transportation charges, speed up transit times and enable
cost effective delivery to remote or sparsely populated
locations.
Future Trends
Robotic fulfilment

Robotic fulfilment integrates three technologies to deliver

efficient fulfilment solution for warehouse.
- Wi-Fi,
- digital cameras and
- low-cost servers capable of parallel processing
Future Trends
3D Printing

3D Printing can impact the traditional supply chain

management processes in multiple ways:
• the reduced need for inventory space for finished goods (as
products become made-to-order);
• Increased need for inventory space for several types of raw
materials and disparate finished products (as 3D printers
become multipurpose machines);
• reduced need for inventory space for spare parts (as these
can be printed on demand, or perhaps by the end user
directly) and
• restructuring the supply chain network and stakeholders (as
the new manufacturing mantra would be to ‘print at the
point of consumption’).
Summary
• Supply chain managers can take effective decisions if they have
access to timely information about the activities of all the other
entities in the supply chain. IT can link all activities in a supply chain
into an integrated and coordinated system that is fast and flexible
so that supply chain managers get the needed information.
• There are four major functional roles of IT in supply chain
management: transaction execution, collaboration and
coordination, decision support and supply chain measurement and
reporting. Each of these functions needs different sets of
capabilities to be enabled by IT.
• IT in supply chain management has broad and long- term
implications for an organization’s competitive advantage as it is
integrating not only the functions and processes of an organization,
but also those of suppliers who are external to it.
Summary

• IT systems on their own have limited use unless

they are ensured that the right kind of information
is accurately captured in a timely manner.
• At early stages of IT enablement of a supply chain,
interest of all the stakeholders involved are
properly understood and a realistic expectation is
set on what IT can do.
• Advancement in technology is further changing
the landscape of supply chain solutions and what
it can do.
Reference
• Supply Chain Management, Text and Case, Janat
Sah, Pearson India Education Services Pvt. Ltd, 2016
Assignment #1
Literature review
• Topic
• Supply chain/logistics strategy for competitive advantage
• Network design in SCM
• ICT in SCM
• Pilih salah satu dari topik tersebut
• Pilih jurnal-jurnal yang relevan dan terbaru (5 tahun terakhir)
• Kerangka teoritis:
• Definisi
• Keterkaitan antarvariabel
• Riset-riset terdahulu
• Peluang riset (research gap)
• Ketik, dikirim dalam waktu 2 minggu (24 April 2021)
• [email protected]