Design and Development of an Integrated Supply Chain Management System in an Internet Environment

By Rajib, Prabina; Tiwari, Deepak et al. | Journal of Services Research, April 1, 2002 | Go to article overview

Design and Development of an Integrated Supply Chain Management System in an Internet Environment


Rajib, Prabina, Tiwari, Deepak, Srivastava, Gaurav, Journal of Services Research


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INTRODUCTION

With IT tools in place, companies are strengthening their supply chain processes. Be it Cadbury India, Hindustan Lever, Colgate-Palmolive, Marico Industries or Godrej, the story is the same (Rath, 2001). The most striking example of successful supply chain management is HLL (Hindustan Lever Limited - Indian arm of Unilever Limited), which operates on negative working capital. This means that their supply chain is so efficient that they deliver the product and recover the capital before paying their own suppliers of the raw material and their services.

But this is not only true for FMCG companies; in fact in the new economy it is increasingly becoming critical for all the industries. The product life cycle is getting shorter and all the companies are looking to become leaner and meaner. The Supply Chain Management has played a critical role in cutting down costs by providing new and fast business strategies.

But all is not rosy! It is quite alarming that many of the supply chain/ERP/customer relationship management solutions have not yielded expected results. This is because of the fact that systems have not been integrated properly; there is a lack of understanding between the objectives of the company and the people who are actually implementing the system. This has also occurred because inefficient and incompatible systems and architecture were implemented.

In order to overcome this basic flaw:

* The computer systems should be fully integrated. It is not beneficial to have islands of information scattered at multiple location. More recent architecture is to centralize the information system.

* Information flow and Supply Chain Architecture that is used should be compatible with the latest trends in the industry.

We have dealt with these two factors in our work. We have tried to illustrate as to how IT can be optimally exploited so that visible difference and tangible results do not become a far-fetched idea but a reality.

AN OVERVIEW OF THE CONCEPT

Information Systems

* The Enterprises using the Information systems implement their Information System Architecture based on the need and the extent of data accessibility and outsourcing of the information. The information sharing maybe free or restricted depending on the individual, organization or the utility accessing it. An Enterprise Information Architecture (EIA) provides communication and information services supporting:

* Persistent storage of information to be shared among the multiple functional agents in the corporate network.

* Deductive capabilities allowing new information to be inferred from existing information.

* Automatic distribution of information to the agents that need it.

* Automatic retrieval, processing and integration of information that is relevant to agents.

* Checking and maintaining various forms of consistency of the information.

* Performing information access control functions such as determining who is allowed to see and change the available information.

Information Flow in Supply Chain

In a typical supply chain the direction of the flow of initial information that activates the chain, is largely opposite to the direction of flow of material. The mechanism works this way, the generation of a demand or an activity at one end flows down the supply chain till it reaches the root from where the basic flow of material begins. This information flow activates all the intermediate nodes it passes through on its way down the chain. This chain is usually a tree structure. On generation of a demand at the top (say at retail shop) it travels down the tree structure and ultimately generates information for all the suppliers that might be supplying raw materials for manufacturing the product. This is information flow in a typical product supply chain.

But this information flow will not be restricted to logistics chain only. …

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