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1、Logistics information systems An analysis of software solutions for supply chain co-ordination Petri Helo and Bulcsu Szekely University of Vaasa, Industrial Management, Vaasa, Finland Abstract Purpose To review the development of software applications and their functionalities/benefi ts in relation
2、to supply chain management and present scenarios on future development. Design/methodology/approach A range of recently published academic and non-academic pieces of work that can be classifi ed as pertinent to the area in question. These sources employ both theoretical and practical views on the to
3、pic of supply chain co-ordination software and related functionalities and resulted benefi ts. Findings There is a signifi cant overlap regarding the functionalities of software applications and the trend of convergence is about to intensify. At the same time the need for real time information will
4、become crucial, putting emphasis on fl exible IT-systems that can deal with large amounts of data and are easy to interconnect. In turn this will lead to the growing importance of system integration software and the process of creating standards. Research limitations/implications As a result of cont
5、inuous development and convergence of IT-solutions and turbulent business environment more applied research will be needed in the area of product confi guration, RFID-technology, standards in relation to interoperability of software applications (EAI technologies). This scrutiny is based only on wri
6、tten resources and no consultants or manager interviews were employed. Therefore the views of companies are not presented on the issues covered. Practical implications The selection of the appropriate software solutions for a company will need more time, expertise and money and the role of suppliers
7、 of software packages will become more signifi cant. Originality/value This scrutiny stipulates the way the functionalities of software applications evolve with overlap one another and thus helps both researchers and companies to gain a clearer view on the development of supply chain software applic
8、ations. Keywords Distribution management, Computer software, Supply chain management Paper type General review 1. Introduction Supply chain management (SCM) is an integrative philosophy to manage the total fl ows of a distribution channel from suppliers level to production, distribution and the ulti
9、mately the end customer (Houlihan, 1987; Cooper et al., 1997; Simchi-Levi et al., 2000; Tam et al., 2002, p. 28). The aim is to achieve goals related to total system performance rather than optimisation of a single phase in a logistics chain. Typically the goals for SCM are to increase productivity
10、by reducing total inventory level and cycle time for orders. To achieve these objectives business processes pertaining to material handling, information processing and capital control need to be optimised in relation to the limited resources. In a longer perspective, the customers should see the ben
11、efi ts, which result in the increase in customer satisfaction, market share and ultimately profi ts (Stevens, 1989). Figure 1 illustrates an example of supply chain. First-tier suppliers are the fi rst part of the system. The next stage, production, is a The Emerald Research Register for this journa
12、l is available atThe current issue and full text archive of this journal is available at Logistics information systems 5 Industrial Management Holmstro m et al., 2002; Fisher et al., 2000). The technology progress in information technology and the increasing use of Internet in everyday business has
13、 created possibilities for software based supply chain management. There are several developers originating from different schools such as ERP, application integration and mathematical supply chain optimisation. Still the basic objectives remained the same: to lower inventory levels and enhance cust
14、omer service via improved agility of manufacturing (Spathis and Constantinides, 2003, p. 677) This paper investigates the range of software applications vendors, their products functionalities with regard to SCM, the ways of integration of different software applications and the future trends of dev
15、elopment of the software applications in these sectors. The ultimate objective is to grasp a picture about the state of development in the software markets linked to the management of supply chains. First the categories of software applications will be presented and after that each sector of SCM wil
16、l be considered with a view of forthcoming automation prospects. In the end of this scrutiny topics will be outlined open to further research. 2. Aspects for classifi cation of SCM software applications All the software applications of SCM are ready-made package applications usually targeted for dea
17、ling with a certain set of tasks, e.g. for tracking product related information during the transportation process. These ready made package-software applications are mass-customised products ignoring the specifi c requirements of a certain business sector and so they are quite problematic. Many comp
18、anies thus use mix of packages software applications to manage their business. According to a classifi cation SCM-related software applications can be divided into two groups: intra-fi rm and inter-fi rm applications. From the data management point-of-view of supply chains software, applications can
19、 be grouped into two classes: transactional and analytical software applications. Transactional software applications are engaged with acquiring, processing and communicating raw data about the fi rms past and current supply network operations. This group of software build up POS systems, general le
20、dger systems, quarterly sales reports, e-commerce systems, etc. Analytical software applications deal with developing and applying systems for evaluating and disseminating decisions models based on supply chain decision databases. For instance, one can mention Figure 1. An example of supply chain st
21、ructure IMDS 105,1 6 production scheduling systems, forecasting systems, or supply chain optimisation systems. There are six different dimensions differentiating these two classes of software (Shapiro, 2002, pp. 7-9): (1) The time-frame addressed: past and present (transactional)/future (analytical)
22、. (2) Purpose: reporting (transactional)/forecasting and decision making (analytical). (3) Business scope: myopic (transactional)/hierarchical and longitudinal (analytical). (4) Nature of databases: raw and lightly transformed objective data (transactional)/ raw, moderately and heavily transformed d
23、ata that is both objective and judgemental (analytical). (5) Response time for queries: real-time (transactional)/real-time and batch processing. (6) Implications to business process reengineering: substitute for, or eliminate ineffi cient human effort (transactional)/improve managerial decision mak
24、ing (analytical). From the process point-of-view of supply chains there are two main types of SCM software: planning applications and execution applications. The former group of applications use advanced algorithms to determine the best way to fi ll an order. The latter group of applications track t
25、he physical status of goods, the management of materials, and fi nancial information involving all parties. Some SCM software applications are based on open-data models that support the sharing of data both inside and outside the enterprise. This ideal extended-enterprise model contains key supplier
26、s, manufacturers, and end-customers of a specifi c fi rm. This shared data may reside in diverse database systems, or data warehouses at several different sites and companies. By sharing this data, key supplier and customers in the supply chain, SCM applications have the potential to improve the tim
27、e-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources for the future needs (Infoscaler, 2001). Transactional and execution SCM software applications are usually for operational level and serve short-term needs while analytical and plannin
28、g software packages such as advanced planning and scheduling systems fuel strategic and tactical level operations of further future (Figure 2). The different types of classifi cation framework are related to actual functionality of the software. It seems that the software types are overlapping and c
29、oming closer to each other in different functionalities. In software selection for an enterprise, sometimes very different types of applications may compete with each other. 3. SCM software 3.1 Warehouse and transport management systems (WMS/TMS) WMS systems are providing real time views on material
30、 fl ows within the warehouse, i.e. tracking and keeping note of the movement and storage of material within a warehouse facilitating the optimal use of space, labour, and equipments (ARC News, 2004; Piasecky, 2003). From the managers point-of-view this means that a WMS enables to optimise transactio
31、ns to and from warehouse operators, recognise problem areas and major shifts in activity levels and patters, while making it possible Logistics information systems 7 continuously determine performance indicators, such as productivity, shipping and inventory accuracy, warehouse order cycle time, and
32、storage density (Frazelle, 2002; Lee, 2002). Typically WMS systems are well connected to material handling automation and transportation systems. Some WMS systems also include a route planning functionality that makes them related with the TMS systems. Some of the large suppliers of these software p
33、roducts are, amongst others, Marc Global Services, PeopleSoft, SSA Global, Microsoft Business Solutions, Oracle Corporation, JD Edwards, and PULSE Logistics Systems. Table I lists some key functionality of WMS systems and the claimed benefi ts of using the software. Transportation management systems
34、 (TMS) are software applications that facilitate the procurement of transportation services, the short-term planning and optimisation of transportation activities, and the execution of transportation plans with continuous analysis and collaboration (ARC News, 2004; Rider, 2003, p. 62). They typicall
35、y provide route planning, transportation control features and advanced Figure 2. Levels of analysis of production systems Functionality Claimed benefi ts Inventory management Maintain items, groups, ordersReal time enterprising in material management Order fl ow Retrieval orders Storage orders Track
36、 and trace Improved operations in terms of accuracy; reduced paper work. Integration to automated warehouses Table I. Functionality and benefi ts for WMS IMDS 105,1 8 reporting. These software packages also automate the work of traffi c controllers and provide a systematic way to generate documents
37、and labels. Table II presents the functionality provided by typical TMS systems and the claimed benefi ts for business. 3.2 Enterprise resource planning systems (ERP) ERP is a business management system made up from a collection of applications that integrates all facets marketing, fi nance, human r
38、esources, sales, manufacturing, logistics, etc. of the company into a common database (Hsu and Chen, 2004; p. 42; OLeary, 2002, pp. 27-28; Al-Mashari, 2003, p. 23; Chang et al., 2002, p. 3). The basic structure of most ERPs reminds the others. Figure 3 describes typical modules in ERP systems. The n
39、ames of software modules may vary, but they all have similar functionality. From an information management point-of-view, the information fl ows from the upper part of the picture downwards: . Production master schedule inputs sales orders and forecasts. In case of complex products, the products may
40、 be confi gured prior to taking the salesorder in. Order entry and promise system may be connected if all required information is stored in the system. . MPS generates schedule, whereas materials requirements planning creates purchasing orders for suppliers and production orders for plants based on
41、MPS, capacity, bill-of-materials, and inventory records. . Inventory statuses are updated based on shipments and receiving of parts, components and fi nished products. . Financial control follows the real process. Invoices are sent to customers, employees are paid according to payroll accounting and
42、 suppliers are paid with regards to received goods and services. Financial records end up with bookkeeping, which creates the balance sheet as well as profi t/loss statement for the fi scal period. Each part of the software is connected to each other and every piece of information should be stored i
43、n only one place. Duplicate records are avoided by linking the information in the single database. In many cases these information systems are Functionality Claimed benefi ts Optimise delivery routes for retailersImprove processes, drive savings and manage more business without increasing resources
44、Operational transportation control: booking, labelling and document printing, track and trace Improve operational costs in collecting goods from suppliers and delivering to distribution centres. Improved utilisation of fl eet Transportation business control: load tenderingReduced costs: improved inv
45、oicing and tendering system Route planningMore precise scheduling: managing scale, constraints, and seasonal fl uctuations of its operations Real time informationStreamlining reporting and analysis procedures: to achieve real-time inventory information Table II. Functionality and benefi ts for TMS L
46、ogistics information systems 9 required to support multiply currencies and languages, specifi c industries, and an ability to customise without programming as well (OLeary, 2002, p. 28). Currently, the leading vendors of ERP software applications include SAP, Oracle, BAAN, PeopleSoft, and JD Edwards
47、. Table III summarises the core functionalities and benefi ts stemming from ERPs. Figure 3. General structure of ERP system IMDS 105,1 10 3.3 Supply chain management software applications Supply chain management software applications focus on optimisation of future planning and scheduling activities
48、 of inter-enterprise material fl ow related processes, such as procurement, production, transport, distribution and sales (Kovacs and Paganelli, 2003, pp. 167-168). These advanced planning and scheduling systems employ optimisation technologies of linear programming, heuristics programming, genetic
49、programming and constraint-based programming (Miller, 2003; Van Eck, 2003). High data loads and demanding analysis requirements put robust data storage and processing capabilities into a critical position in these applications. Another application fi eld of SCM optimisation software is advanced planning and scheduling systems, which help scheduling and order promising in large networks. The main functionalities and benefi ts are listed in Table IV. The leading SCM software solutions are the fo