43
ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

Embed Size (px)

Citation preview

Page 1: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

ICT & Logistics – an overview

Rommert Dekker

Erasmus School of Economics

Page 2: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

2

Contents

• Introduction – relation ICT & Logistics

• Information systems – ERP

• Decision support systems

• Examples

Page 3: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

3

What is logistics?

• Right (type and number of) products at right time at the right place

• Thinking about customer needs

• Plan, control and check execution

• Apart from products also services & information

• Apart from forward also reverse logistics

Page 4: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

4

Start with customer – marketing interface

• Who is the customer?

• Through which channel does he / she buy?

• When does he / she wants what?

• What are the right product characteristics

• What are the right delivery conditions?

Page 5: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

5

1. What are my products?(source P. de Wit - HIDC)

46.13

Page 6: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

6

Product coding

• Pictures are misleading

• It is all about standardized product codingwho defines and maintains the code (costly).

• Major problem: products have short lifecycles, moreover they are changed often during their lifes.

• Example: do you buy Aspirin, or acetyl salicyl acid (workable substance) from a generic brand. A major issue in pharmacies.

Page 7: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

7

2. What is my sales channel?

Distributors

Consumers

VAR

Branch office

Wholesaler

?E-commerce

Page 8: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

8

Problem

• Each organisation in the supply chain is likely to treat data in their own way

• Each organisation has own objectives

• Each organisation is likely to distort information to others.

Page 9: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

9

HelsinkiStockholm

NetherlandsBonn

Vienna

Rome

Oslo

Copenhagen

LondonBrussels

ParisBerne

MadridLisbon

Shaded Areas Indicate Economic Activity3.Where are my customers ?

Page 10: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

10

Location code

• Knowing addresses of customers is a major logistical issue.

• Postal codes are not standardized in Europe and are also not unique (several addresses, backhouses, living boats etc).

• Distinction between delivery address, office addresses, billing address

Page 11: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

11

4.What are my requested customer response times?

Page 12: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

12

Desired and actual Response / lead times

• There is a trade-off between speed and costs. Longest acceptable times are not registered.

• Major issue for industrial customers: what is the actual leadtime. ERP systems contain for every product a leadtime, but how did they ever enter 150.000 leadtimes in a package? Info is likely to be outdated.

• Difference between: original leadtime, supplier accepted leadtime and actual leadtime. In fact it is a negotiation process.

Page 13: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

13

What are main logistic drivers?

• Transportationships, planes, trucks, trains

• Facilitiesports, airports, stations, sorting centers, warehouses

• Products – inventoriesin factories, pipeline, warehouses, shops, customer

Page 14: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

14

Elicit demand, plan delivery and control execution

• Register customer orders (and preferably also the unsatisfied demand)in a shop is different from a website

• Make sure the products arrive at the customer at the right time and placeoptions: customer pickup or delivery at home

• Check whether the right products arrive in the right quality

• Take care of after-sales support (where is the product)

Page 15: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

15

Contents

• Introduction – relation ICT & Logistics

• Information systems – ERP

• ICT and reverse logistics

• Decision support systems

Page 16: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

16

Example of an IT system (based on MRP)

Page 17: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

17

Information components

Supplier info: what products can be purchased, what price, with what lead time, and where can they be delivered.

Manufacturing info: what products can be made, how many, by what facilities, with what lead time, with what trade-offs, at what cost and in what batch size.

Distribution and retailing information: what is to be transported where, in what quantity, by what mode, at what price, how much is stored at each site, and with what lead time.

Demand information: who is buying what, at what price, where and in what quantity. Info includes forecasts?

Page 18: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

18

Distribution/retailing system

Page 19: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

19

Information should be

• accurate(it should give a right picture of the supply chain)

• accessible in a timely manner (often information comes available too late)

• of the right kind (no overflow with non-informative details)

InformationGlobal Scope

GoodDecisions

Supply Chain Success

Page 20: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

20

Examples of not good info

- ProRail – platform lengths of stations in spreadsheet vs official construction drawings

- University – students following courses (background, year class, etc)

- OTIS getting information on every elevator movement, instead of a matrix of people wanting to move from i to floor j.

Page 21: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

21

The very Past - Legacy systems

- older IT systems based on mainframe technology that usually work at an operational level on only one stage or even one function within a stage of the supply chain.

- they have seen many updates and exist beyond original life span.

- they can cover a variety of functions.

- examples: Amadeus: airline ticket booking system: indicates nr of empty seats per fare class (9 means no limit)

Page 22: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

22

IT systems -legacy systems

Page 23: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

23

IT systems -legacy systems

Advantages- are able to get the operation done- take less incremental investment

Disadvantages- focus on only a small part of a stage in the supply

chain- usually have only transactional capabilities- based on mainframe technology which is difficult

to modify

Page 24: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

24

Example legacy systems - GDS

- A GDS (global distribution system) is a system that keeps track of the number of free seats in an airplane flight.

- Typically it uses booking classes and digits to keep track:B9, C5, …

- Database structure is difficult to change and not really modern

Page 25: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

25

IT systems -the present: ERP systems

Enterprise resource planning (ERP) systems are operational IT systems that gather information across all of a company’s functions, resulting in a common database of all a company’s data.

Functions- finance- logistics- manufacturing- order fulfillment- human resources- supplier management

Page 26: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

26

IT systems -the present: ERP systems

Advantages ERP systems- ERP systems provide a wider scope to managers

of supply chains- ERP systems are fairly good at giving real-time

information- ERP systems are better at using enabling

technology like Internet

Disadvantages- weak analytical capabilities in providing decision

support- very expensive and difficult to implement

Page 27: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

27

IT systems -ERP players

SAP - 30% market share, German

Oracle - based on a general database language

Peoplesoft -

JD Edwards -

Page 28: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

28

Track and tracing tools

• RFID, Barcode and other auto-id

• Container portals: INTTRA, GTNexus booking tool over several shipping lines

• Port Community Systems: link and exchange information over several parties in a port e.g. Portinfolink

• General tracking systems: link several computer systems (e.g TNT’s Matrix)

Page 29: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

29

RFID and Barcode

• Standards maintained by GS1 (earlier EAN) which allows exchange of data over several companies

• Barcode took many years to become established

• RFID is upcoming fast but will take also some time.

Page 30: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

30

Logistics, SCM and IT systems – a vision

Consider a company Maurice Philips,

importer of home textile and soft furnishing products in UK

It would like to concentrate on its core competences- knowing what type products of customers want- buying them / letting them make at the right (cheap / quality) place

It would like to leave all logistics issues to a fourth party logistic provider!Yet it needs to know where its orders are and when it can be in its shops.

Page 31: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

31

Issues in tracking and tracing?

• The 4PL has to face many parties in the supply chain and accommodate messages from very many parties.

• Demo Matrix

• Consider e.g. the messages just in the port of Rotterdam!

• Shipping lines have also developed their internet booking systems (INTTRA, GTNexus, CargoSmart), which do not match the alliances by the way.

Page 32: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

32

The transport chain consists of players who accompany goodflows and the related document and information

flows (source vd Zande PWC)

Port Authority / Stevedore

Ocean / Air Transport Operator

Port Authority / Stevedore

Liner Agent / Freight Forwarder

Pre-carriage Operator

Trade Officials

On-carriage Operator

Trade Officials

Consignee

Insurance Company

Shipper

Exporter’s Bank Importer’s Bank

Goods receipts

Container messages

Stowage instructions

Dangerous Goods

Discharge report

Dangerous Goods

Container StatusArrival NoticeBooking ManifestBill of Lading

Load List

Discharge List

Release Order

Goods receipts

Transport order Transport order

Insurance Certificate

Certificate of Origin

Insurance Certificate

Bill of Lading / Waybill

Transport Documents

Letter of Credit Advice

PaymentLetter of Credit Insurance

PaymentLetter of Credit Advice

Letter of Credit Documents

Payment

Contract / Order

Delivery Forecast

Despatch Advice

Request for Quote / Quote

Invoice

Remittance Advice

Status

Arrival Notice

Status

Arrival Notice

Inspection Certificate

Export Licence

Certificate of Origin

Shipping Instructions

Status

Bill of Lading

Page 33: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

33

High efficiency gains can be made through optimisation of information streams

Inhoud van de informatiestroom

Cha

rter

par

ty

B/L

Laad

brie

f

Maa

tbrie

f

Mat

e's

rece

ipt

Sch

eeps

man

ifest

Vra

chtm

anife

st

Del

iver

y or

der

Laat

vol

gen

ScheepsnaamNaam van de rederijNaam van de agentLoshavenAankomstdatumLaadhavenMerken/num. goederenAantal colli'sAard van de verpakkingAard van de goederenWaarde van de goederenGewicht van de colliPlaats van herkomstBestemmingVervoermiddel aan/afvoerDatum ontvangst aan boordReisnummerBehandelingskostenVrachttarief/prijsRabattenCommissiesPlaats betaling van de vrachtAantal originele connossementen + nr.Naam van de expediteur

• Large number of players and goods results in a very large information exchange

• The same information is exchanged in several documents

• A use of information systems will result in optimisation because of

• Less administrative work;

• Better planning by faster and more accurate information

• (Source: vdZande PWC)

Page 34: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

34

Several ports developed already a ‘Port Community System’

• Several ports in the world have already developed ïntegrated port community systems.

• Port community Systems differ in content, structure and architecture, but all intend to optimise the chain by streamlining information and document streams

• Although the Port of Rotterdam does not have a PCS, several applications for specific problems have already been developed.

Page 35: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

35

Contents

• Introduction – relation ICT & Logistics

• Information systems – ERP

• IT and reverse logistics

• Decision support systems

• Examples

Page 36: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

36

Decision support systems

• What are they?Interactive computer systems that help decision makers utilize data and models to solve (unstructured) problems (Sprague and Carlson 1989)

• DSS Generatorsaimed at general problems, like Excel, Aimms, SAS

• Specific DSS – aimed at particular problemslike personnel planning, Vehicle Routing

• DSS Tools – special languages to create a DSS

• Read article in wikipedia.org (english)

Page 37: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

37

DSS Generators – Examples

• Aimms, CPLEX / ILOG – aiming at LP solver

• SAS – oriented around a statistical analyzer

• Matlab – oriented at facilitating mathematical computation

• Arena, ED – oriented around simulation

Page 38: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

38

IT systems present - Analytical Applications

Advantage of analytical application lies in use for planning and strategic decisions.

Procurement and content cataloging applications

focus on relationship between manufacturer and supplier and the procurement process. They allow comparisons of suppliers and part vs part.

Advanced Planning and Scheduling (APS)

produce schedules for what to make, where and when, while taking plant availability, capacity and business objectives into account.

Page 39: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

39

• Transportation Planning and Content Systemsvehicle routing systems

• Demand Planning and Revenue Management

• Customer Relationship Management and Sales Force Automation (Siebel Systems)

• Supply Chain Management

• Inventory Management

• Manufacturing Execution Systems

• Transportation Execution Systems

• Warehouse Management Systems

IT systems present - Analytical Applications

Page 40: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

40

Overview Business Software (source IT and Logistiek)

intern oriëntatie extern

vereistesoortkennis

key-user

generalis-tisch

specialis-tisch

oper

atio

neel

takt

isch

stra

tegi

sch

IT-infrastructuur backoffice frontoffice

Networkmanagement

Supply Chain Event Management

Word processor, spreadsheet, presentation software

Automation finance personnel R&D production warehousing transport purchasing marketing sales service

e-business

Business simulation

business intelligence

ProductLife-cyclemanagement

collaborativedesign

PDM/EDM

CAD/CAM

knowledge &documentmanagement

HumanCapitalPlanning

e-learning

employeeportal

risk &profitabilitymanagement

e-payment &e-invoicing

webservices

EnterpriseApplicationIntegration

workflowmanagement

Enterprise Resource Planning (ERP) / Professional Service Automation (PSA)

AccountingPersonneladministration

Productadministration

Material Requirements Planning(MRP)

Distribution Resources Planning(DRP)

Purchasingadminstration

Customeradministration

order entryServicecontractsadministration

balancedscorecard

Companyconsolidation

Supply Chain Planning

supply chaindesign demand

planning &forecasting

supply planning

Productionplanning

Productionscheduling

ManufacturingExecutionSystem

projectplanning

EnterpriseAssetManagement

Supply Chain Execution

Order management

International Trade Logistics

Inventorycontrol

Trip planning

WarehouseManagement

routeplanning

transportmanagement

SupplierRelationshipManagement

sourcing

e-procurement

vender rating

EDI

E-marketplace

privateexchange

e-commerce

click-throughanalyse

productconfigurator

contentmanagement

Web catalogue

virtual agents

e-selfservice

e-billpresentment

PartnerRelationshipManagement

collaborativeCRM

Analytic CRM

Operational CRM

MarketingAutomation

Sales ForceAutomation

Contact centermanagement

Addressmanagement

Contactregistration

servicemanagement

w

info-security

Data-extraction

database/-warehouse

hardware

Page 41: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

41

Assignment – write an essay about

• Compare Ortec’s Transport and Distribution planning software with that of competitors (e.g Descartes Routing and Scheduling, Direct Route). Write a short summary in your own words (DO NOT COPY).

• Which quantitative models are likely to be present in these software?

• Sketch the relation / interface with an ERP system like SAP

• Sketch the relation with TomTom’s navigation software

• What is the relation with a Truck board computer?

• How would it relate to an Truck appointment system?

• What do you foresee in the future (which extra functionality do you think is useful); will it be integrated in SAP? Will it be combined with other software?

Page 42: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

42

Assignment cont.

• Consider a truck company (called G) transporting containers within The Netherlands, Belgium and Germany upon demand.

• G receives orders during a day and makes aplanning for the next day. Orders are typically- pick up container 453l71 at ECT Terminalsand transport it to the warehouse of C1000 in Amersfoort to arrive between 10h-12h next dayand when the container has been unloaded, move the empty container to the depot of Maerskshipping line in Houten (between 9h – 20h)

• What information systems / decision support systems would play a role in this case / or alternatively, do you consider to be presently available / available in the near future. Considerorder intake / acceptance, transfer information to trucker / contact ECT / inform C1000, allocate job to trucker, check execution and take care of payments.

Page 43: ICT & Logistics – an overview Rommert Dekker Erasmus School of Economics

43

Help

• Search the web for help, e.gsearch on vehicle routing software survey (from Lionheart publishing) Informs

• Search at Ortec’s website (www.ortec.com or .nl)

• Info on a Truck Appointment system can be obtained from blackboard.

• State in your report always the sources of your statements: either from a reference or from your own inferences.