Chapter 10, information systems and supply chain management

Supply chain management
Integration of suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain
The science of moving merchandise
-the aspect of supply chain that refers to planning, implementation, and control of the efficient flow and storage of goods, services, and related info from the point of origin to the point consumption to meet customers’ requirements
Importance of supply chain management
-opportunities to increase sales by making sure the right merchandise is in the right place at the right time
-opportunities to reduce costs
-improved return on assets
-higher roi
Benefits of efficient supply chain management to customers
-reduced stockouts; merchandise will be available when the customer wants them
-Tailoring assortments; the right merchandise is available at the right store
Return on assets
net profit margin x asset turnover
Efficient supply chain management leads to…
-increased sales
-improved net profit margins
-lowered inventory
Electronic data interchange
computer to computer exchange of business documents between retailers and vendors
EDI security
Authentication- system assures person on other end of session is who it claims to be
Authorization- that person has permission to carry out the request
Integrity- info arriving is the same that was sent
Radio frequency identification (RFID)
-Allows an object or person to be identified at a distance using radio waves
-reduces warehouse and distributor labor costs
-reduces point of sale labor costs
-inventory savings by reducing inventory errors
-reduces theft
-reduces out of stock conditions
Activities performed by distribution channels
-managing inbound transportation
-receiving and checking merchandise
-storing or cross docking merchandise
-getting merchandise floor ready
-preparing to ship merchandise to a store
-managing outbound transportation
Advantages of using a distribution Center
-More accurate sales fulfillment when retailer can get stock from distribution center to send to a specific store
-enables retailers to carry less merchandise in the store
-easier to avoid running out of stock
-retail store space is more expensive than space at the distribution center
Push supply chain
Merchandise is allocated to stores on the basis of forecasted demand
-less costly than a pull supply chain
-less sophisticated information system needed to support it
-Efficient for merchandise that has steady, predictable demand
Pull supply chain
Orders for merchandise are generated at the store level on the basis of POS sales data
-less likely to be overstocked or out of stock
-increases inventory turnover
-Efficient when demand is uncertain, and hard to forecast
Advantages of Direct Store Delivery
-gets merchandise faster, and is thus used for perishable goods
-Helps the retailers image of being the first to sell the latest product
-some vendors provide direct store delivery for retailers to ensure that their products are on the store’s shelves, properly displayed, and fresh
The bullwhip effect
The built up inventory in an uncoordinated channel where retailers and vendors do not coordinate their supply chain activities
***CPFR (collaborative planning, forecasting, and replenishment)*** very important
-The sharing of forecast and related business information and collaborative planning between retailers and vendors to improve supply chain efficiency and product replenishment
Pick ticket****
Devise on a fork lift that tells it what to get from the shelves and brings it back to the people packing boxes
Advance shipping notice
Document that tells details of shipment to person receiving the shipment
Cross docking
products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time
quick response
A type of barcode which can be read by a digital device, and which stores information