Information Systems (Is) in the Supply Chain Management (Scm): A Case of Liquefied Petroleum Gas (Lpg) of Bangladesh

By Hossain, Md Akram; Hasan, Md Mehedi et al. | The Journal of Developing Areas, January 1, 2015 | Go to article overview

Information Systems (Is) in the Supply Chain Management (Scm): A Case of Liquefied Petroleum Gas (Lpg) of Bangladesh


Hossain, Md Akram, Hasan, Md Mehedi, Ahmed, Niaz, The Journal of Developing Areas


INTRODUCTION

The principle of supply chain activity is receiving input from firm's suppliers - add value - deliver to customers (Chopra and Meindl, 2010). To achieve effective supply chain integration, the firms need to implement information technology (Sufian (2010). Previous research shows that unless the firm integrates information systems with its major supply chain partners to allow for more information and data sharing, the firm will hardly stay competitive in the market in the long run (Hult et al., 2007). After being produced from crude oil in refinery, LPG is stored in storage tank in the terminal and then bottled inside the cylinder which reaches to the end user through the distributors and dealers/ retailers spread all over the country by the four private companies (Omera LPG, Basundhara LP Gas Ltd, Premier LP Gas Limited, Jamuna Spacetech Joint Venture Limited) as per their own business strategies beside BPC, the only Government owned LP Gas Company in Bangladesh (Authors).

Analyzing the future aspect and business growth of the business, other private companies have shown keenness to set up LPG bottling plant whereas the prevailing companies who have already 6-8% business growth per year are trying to boost up their business more vigorously by making new satellite terminal, Regional Distribution Point (RDC), developing new technologies (for example, LPG driven automobiles), increasing product range (Cylinder banking technology, Vaporizer, SNG, LNG), strengthening their distribution network, creating customer loyalty to their brand by launching diverse programs (Chowdhury, 2012).

In Bangladesh, 92% people are familiar with Biomass as cooking fuel among the 70% people who are leaving in bucolic areas (M.Tanim, 2013). About 6% of the entire inhabitants use NG for cooking purpose whereas around 68% power generation is dependent on NG that still can't serve power to 75% of the rural people (M.Elahi, 2013). Supply Chain Information System is an organized combination of people, hardware, software, communications networks, and data resources that stores, retrieves, transforms, and disseminates information in an organizatio n's people, activities, information, and resources involved in moving a product or service from supplier to customer.

LITERATURE REVIEW

Petroleum and Gas supply chain can be divided into upstream and downstream process. Upstream process means receiving raw materials from suppliers before it goes for further manufacturing and downstream process means getting goods from manufacturing division and serving it to the targeted consumers (Chopra 2010). Ajay Selot (2009) studied that, natural gas supply chain planning, coordinating and optimization is important to ensure security, safety and reliability of natural gas supply. And, it is challenging due to the technical and distinctive features of natural gas supply chains.

Raslavicius, L. et al. (2014) discussed that, the last 20-25 years has been due to pressure from emission standards and fuel based economy requirements becoming ever stricter. These rules and regulations have equally influenced the all stages (from 1st to 5th generation) of LPG technology development while looking earlier and back in retrospective.

Dehning et al (2007) examined the financial benefits of information technology investments around newly adopted IT-based supply chain management (SCM) systems by 123 manufacturing firms over the period 1994-2000. Information and communication systems are widely recognized to be an effective approach to manage supply chains under disruptions (Blos et al., 2009). It can contribute and well improve flexibility of supply chains (Skipper and Hanna, 2009). Tomlin (2006) recommended that advance and prior information could be used to deal with certain risks, solve labor disputes: if a firm can develop advance information systems in decision making process, that a strike is imminent then mitigation inventory may be built in advance (Tomlin, 2006)

OBJECTIVE

The main objective of the paper is to find the information gap in supply chain process of LPG business in Bangladesh and recommending some techniques to develop the information system as a cost and time reduction tool in supply chain process. …

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