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• Module overview
• 1. Introduction to supply chain management
  • Introduction
  • 1.1 What is supply chain management?
    • 1.1.1 Supply chain management: The concept
    • 1.1.2 Supply chain management: Evolution
    • 1.1.3 Supply chain management: The search for a definition
    • 1.1.4 Supply chain management: The drivers:
  • 1.2 Technology and supply chain management
  • 1.3 Supply chain management: New business models and challenges
    • 1.3.1 New supply chain business models
    • 1.3.2 Challenges
  • 1.4 Key issues in supply chain management

• 2. Supply chain management and information systems

  • 2.1 Introduction
  • 2.2 Goals of supply chain IT systems
  • 2.3 Supply chain IT goals: Challenges and means
    • 2.3.1 Standardisation
    • 2.3.2 Infrastructure
    • 2.3.3 Electronic commerce
    • 2.3.4 Supply chain management issues and IT
  • 2.4 Integrating the supply chain information systems
  • 2.5 Decision support systems
    • 2.5.1 The characteristics of decision support systems
    • 2.5.2 DSS components
    • 2.5.3 DSS in supply chain management
  • 2.6 Summary

• 3. Logistic network configuration

  • 3.1 Introduction
  • 3.2 The supply chain network
    • 3.2.1 Network design decisions
    • 3.2.2 Design consideration
  • 3.3 Logistics and facility costs in logistics network configuration
  • 3.4 Logistics network design and decision support systems
    • 3.4.1 The supply chain model
    • 3.4.2 Data and a network model
    • 3.4.3 Model and data validation
    • 3.4.4 Solution techniques
  • 3.5 Key features of a network configuration DSS

• 4. Inventory management and risk pooling

  • 4.1 Introduction
  • 4.2 Inventory: Basic concepts
    • 4.2.1 Why hold inventory: Inventory functionality
    • 4.2.2 Inventory related definitions
    • 4.2.3 Inventory related issues
  • 4.3 The inventory policy
    • 4.3.1 Basic inventory decisions and EOQ
    • 4.3.2 Inventory policy under conditions of uncertainty
  • 4.4 Risk pooling
    • 4.4.1 The Square Root Law of Inventory
    • 4.4.2 Centralised versus the decentralised system
    • 4.4.3 Supply chain inventory
    • 4.4.4 Inventory management: Practical issues
  • 4.5 Summary

• 5. Supply chain integration: The value of information

  • 5.1 Introduction
  • 5.2 Information and supply chain integration
    • 5.2.1 The bullwhip effect
    • 5.2.2 The reasons for bullwhip effect
    • 5.2.3 Quantifying the bullwhip effect
    • 5.2.4 Measuring bullwhip effect: The practical issues
    • 5.2.5 Bullwhip effect: Managerial insight
    • 5.2.6 Reducing bullwhip effects
  • 5.3 Effective forecasts and supply chain integration
  • 5.4 Collaborative supply chains and information integration
  • 5.5 Supply chain systems and information integration
  • 5.6 Information and the synchronised supply chain
  • 5.7 Summary

• 6. Supply chain integration: Distribution strategies

  • 6.1 Introduction
  • 6.2 Transportation and distribution
    • 6.2.1 Transport modes
    • 6.2.2 Inbound transportation
    • 6.2.3 Distribution
  • 6.3 Centralised versus decentralised control
  • 6.4 Distribution strategies
    • 6.4.1 Direct shipment
    • 6.4.2 Cross docking
    • 6.4.3 Warehousing and distribution strategies
    • 6.4.4 Transhipment
  • 6.5 Central versus local facilities
  • 6.6 Push versus pull systems
    • 6.6.1 Push systems
    • 6.6.2 Pull systems
  • 6.7 Summary

• 7. Supply chain simulation games:

  • 7.1 Introduction
  • 7.2 The Beer Game
    • 7.2.1 The purpose
    • 7.2.2 The Beer Game scenario
    • 7.2.3 Features and options
  • 7.3 Playing the Beer Game
    • 7.3.1 Beer Game projects
    • 7.3.2 The Beer Game: The learning tool
  • 7.4 The Risk Pooling Game
    • 7.4.1 Playing the Risk Pooling Game
    • 7.4.2 Risk pooling project
  • 7.5 Summary

• 8. Supply chain integration: Strategic partnering

  • 8.1 Introduction
  • 8.2 Strategic partnering
    • 8.2.1 Strategic partnering: A framework
  • 8.3 Supply chain partnership models
    • 8.3.1 Manufacturer and supplier partnership
    • 8.3.2 Strategic partnering with logistics service providers
    • 8.3.3 RSP or retailer supplier partnership
    • 4.3.4 Distributor integration
  • 8.4 Summary

• 9. International issues in supply chain management

  • 9.1 Introduction
  • 9.2 Globalisation and SCM issues
    • 9.2.1 Global business forces
  • 9.3 International supp ly chain - risks and advantages
    • 9.3.1 Risks in international supply chain
    • 9.3.2 Risk management strategies
    • 9.3.3 Risk management framework
  • 9.4 Issues in intern ational supply chain management
  • 9.5 Logistics infrastructure: Regional issues
  • 9.6 Summary

• 10. Product design and supply chains

  • 10.1 Introduction
    • 10.1.1 Matching the supply chain to the product
  • 10.2 Design for logistics
    • 10.2.1 Packaging
    • 10.2.2 Manufacturing: Concurrent and parallel processing
    • 10.2.3 Postponement or delayed differentiation
  • 10.3 Mass customisation and supply chains
  • 10.4 Supply chain is sues and the push-pull boundary
  • 10.5 Summary

• 11. Supply chain management and customer value

  • 11.1 Introduction
    • 11.1.1 The concept of value
    • 11.1.2 Customer service and value
  • 11.2 Supply chain management and customer value
    • 11.2.1 Tailored logistics
    • 11.2.2 Customer value dimensions
  • 11.3 Customer value measures
    • 11.3.1 Customer based measures
    • 11.3.2 Supply chain performance measures
  • 11.4 Information technology and customer value
  • 11.5 Summary

2.3.1 Standardisation

The general IT trend in the last decades has been towards standardisation. There is a move away from proprietary systems to open systems. These standardisations are emerging in software, hardware, operating systems and network specifications. We all are familiar with the universally accepted Windows platform for personal computers. This is a big move away from the earlier trend where software vendors would be tied to a particular hardware manufacturer, making inter machine communication impossible. We all now are so dependent on the open standard of Internet communication and email that we often forget that integration of that level is still not possible for many firms when it comes to business process integration.

General trends in the IT field are increased standardisation of software and hardware. This is especially so with regard to communication and data transfer. There is another parallel development in the industry towards creating standards in supply chain related procedures which make IT implementation easier across the industry. The following examples highlight the emerging trends:

• Open Database Connectivity (ODBC)
  The standards applying to open database connectivity help ensure that software written to comply with these standards can be used with any ODBC-compliant database, making it easier to transfer and access data among different databases. Thus, when data resides in a compliant database, it can be exported, imported or have linked access with another compliant database, so long both are written according to ODBC standards. Database management software written by different vendors, residing within different applications, can be integrated when ODBC standards are followed.
  
• communication protocols
  Communication protocols make communication possible and there are a number of communication protocols used by companies and organisations of all sizes.
• Open Systems Interconnection (OSI) model
  The International Standards Committee has endorsed the open systems interconnection (OSI) model which serves as standard for network architecture.
• The Transmission Control Protocol/Internet Protocol (TCP/IP)
  TCP/IP has emerged as the major communication protocol for the Internet. There are standards like the X.400 standard which is a set of message handling standards used by international companies for electronic transaction.

For your information: How TCP/IP works

(Transmission Control Protocol) is a set of rules ( protocol ) used along with the Internet Protocol ( IP ) to send data in the form of message units between computers over the Internet. While IP takes care of handling the actual delivery of the data, TCP takes care of keeping track of the individual units of data (called packet s) that a message is divided into for efficient routing through the Internet.

For example: When an HTML file is sent to you from a Web server the Transmission Control Protocol (TCP) program layer in that server divides the file into one or more packets, numbers the packets, and then forwards them individually to the IP program layer. Although each packet has the same destination IP address, it may get routed differently through the network. At the other end (the client program in your computer), TCP reassembles the individual packets and waits until they have arrived to forward them to you as a single file.

TCP is known as a connection-oriented protocol, which means that a connection is established and maintained until such time as the message or messages to be exchanged by the application programs at each end have been exchanged. TCP is responsible for ensuring that a message is divided into the packets that IP manages and for reassembling the packets back into the complete message at the other end. In the Open Systems Interconnection ( OSI ) communication model TCP is in layer 4, the Transport Layer.

http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci214172,00.htmlTCP

• EDI (Electronic Data Interchange)
  In the last decades there have been tremendous developments in the fields of communication with developments in EDI, Internet, XML (the Extensible Markup Language) and satellite communication. EDI is defined as intercompany computer to computer exchange of business documents in standard formats to facilitate high volume transactions. This facilitates paperless transaction and rapid information processing between partners.

EDI is essentially a closed system as only established and agreed trading partners linked by a network can communicate in standard EDI format (EDIFACT). These communication standards are implemented via transaction sets which provide a single common standard to facilitate information interchange between partners in any industry. This is the limitation of EDI, as multi functional and multi organisational communication cannot be implemented by EDI.

This problem is solved by many firms by the use of value added networks (VANs). The VAN is like a translator which manages different industry transaction sets by sitting in the middle of the communication link. Figure 2.2 illustrates the way VAN works.

Figure 2.2 EDI link and value added networks (VANs). The VAN collects EDI transaction messages and information from a manufacturer and then translates those messages and information into appropriate industry-specific communication standards. (adapted from Supply Chain Logistics Management, Bowersox et al 2002)

• Internet
  The Internet is an open system with high connectivity. The Internet has become the prime choice of businesses for order entry, shipment tracking, inventory status checking, payments and data transfer of any type. The growth of Internet usage among businesses is growing at a very fast rate. The utility and popularity of Internet have aided in the development of exchange portals which can be firm specific, industry specific or cross industry.

These exchange portals act as infomediaries and provide transparent information to all supply chain partners. The Extensible Markup Language (XML) is emerging as the standard Internet language. It is a flexible computer language that facilitates information transfer between a wide range of applications and is readily interpretable to humans. This is preferred over EDI which is very structured, is comparatively expensive and which requires expertise. The current concept is EDI Internet.

While these trends are generally applicable for IT, there are some specific trends related with supply chain systems where standardisation is emerging. The relevant IT issues are concerned with the SCOR model, CPRF (Collaborative Planning Forecasting and Replenishment) and ERP vendor-based standards.

• SCOR
  The Supply Chain Operations Reference (SCOR) is the supply chain metrics promoted by the Supply Chain Council to advance supply chain best practice . The SCOR process reference models attempts to (among other things):

Characterize and describe the management practices and software solutions that will result in best-in-class performance. (Coyle et al 2001)

It is important here to note that as more and more firms adopt SCOR, the software used by firms will become standardised. The following reading discusses the supply chain metrics and its relationship with e-business.

Reading 2.2

Geary, S & Zonnenberg, JP (2000, 1 July) 'What it means to be best in class', Supply Chain Management Review . [7 pages]

The following reading will introduce you to the concept of Internet EDI and trends in standardisation.

Reading 2.3

Angeles, R (2000). 'Revisiting the role of Internet-EDI in the current electronic commerce scene', Logistics Information Management , volume 13, number 1. [13 pages]

• CPFR
  Collaborative planning forecasting and replenishment is a process initiated by consumer products industry by which manufacturers or suppliers share information, either by EDI or Internet, with their customers regarding promotions, forecasts, items data or orders in order to manage production and distribution more efficiently. This sort of collaboration is pushing firms to adopt standard communication systems.
• ERP
  Enterprise resource planning systems are software systems which eliminate many of the independent information systems within an organisation by replacing them with one centralised system for the firm. While ERP systems have been traditionally inward facing, the modern trend of collaborative supply chain is forcing ERP vendors to introduce standardised interface devices which allow linkage between the Enterprise system and other systems in the firm and with trading partners. Software vendors are incorporating ERP standards to ensure the marketability of their products. The following section covers ERP concepts.

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