Introduction to IT for Logistics

Introduction to IT for
What are Logistics?
According to Oxford Dictionary
◦ The detailed organization and implementation of a complex operation.
◦ The activity of organizing the movement, equipment, and accommodation of
◦ The commercial activity of transporting goods to customers.
◦ The business of transporting and delivering goods.
◦ The activity of moving equipment, supplies and people for military operations
◦ Logistics (of something) the practical organization that is needed to make a
complicated plan successful when a lot of people and equipment are involved
What are Logistics?
According to Business Dictionary
◦ Planning, execution, and control of the procurement, movement, and
stationing of personnel, material, and other resources to achieve the
objectives of a campaign, plan, project, or strategy.
◦ It may be defined as the 'management of inventory in motion and at rest.'
Business logistics
"having the right item in the right quantity at the right time at the right place for
the right price in the right condition to the right customer“
evolved since the 1960s due to the increasing complexity of supplying
businesses with materials and shipping out products in an increasingly
globalized supply chain, leading to a call for professionals called "supply chain
The main functions of a qualified logistician include inventory management,
purchasing, transportation, warehousing, consultation, and the organizing and
planning of these activities.
What is IT?
Information technology (IT) is the application of computers and
telecommunications equipment to store, retrieve, transmit and manipulate data,
often in the context of a business or other enterprise.
The definition consists of three categories:
◦ techniques for processing
◦ the application of statistical and mathematical methods to decision-making
◦ the simulation of higher-order thinking through computer programs.
Several industries are associated with information technology, including
computer hardware, software, electronics, semiconductors, internet, telecom
equipment, e-commerce and computer services.
How IT involves in Logistics?
How IT involves in Logistics?
Source: ผศ. ดร. เผ่าภัค ศิริสขุ
Logistics & Information Systems
• Design and
Implementation of the
efficient flow and
storage of goods
• Design, Develop,
Installment and
application of
information systems
Logistics & Information Systems
An interacting structure of people, equipment, and procedures which together
make relevant information available to the logistics manager for the purposes of
planning, implementing and control.
Information flow makes a logistical system dynamic. Quality and timeliness of
information are key actors in logistical operations.
Bowersox and Closs
Significance of IT in logistics
Source: Burnson P. 2014
Is IT significance in logistics?
Technology is not a core value of business operations in logistics, but supports
and facilitates the smoothness.
Let’s technology helps you reduce the workload not the opposite!!!
Recent innovations in IT related to logistics have emphasized using information
to provide better visibility of physical goods. This approach emphasizes the use
of information as a supporting element of the value-added process, rather than
as a source of value itself. However, a new, parallel virtual value chain can
emerge from the physical value chain that currently defines logistics functions.
The traditional, physical value chain defines the "marketplace" while the virtual
chain defines the "marketspace"
Let’s make use of IT
The most effective and worthy results of using technology could
come only when
◦ Clearly define objective for introducing technology to the organization.
◦ It is consistence with the system, user, and environment.
• Control cost
• Effective management
for scheduling/
routing/ planning
• Increase forecasting
• Facilitate the
Pros and Cons
• Hardware failure
• Software failure
• An error with the
digital map used by
pilots in the cockpit.
• Lost connection
Example: IT in logistics
Source: jahskoya, 2011
Example: Information flow
Source: ผศ. ดร. เผ่าภัค ศิริสขุ
Role of IT in logistics
Source: ดร.ณัฐพล อารี รัชชกุล, 2009
Role of IT in Supply chain & Logistics
Late80s: the information flow between functional areas within an
organization and between supply chain member organizations were
paper based.
◦ Transaction and communication was slow
◦ Often over looked as a critical competitive resource because its value to
supply chain members was not clearly understood.
IT infrastructure capability provides a competitive positioning of
business initiatives
◦ cycle time reduction, implementation, implementing redesigned crossfunctional processes.
Role of IT in Supply chain & Logistics
Information is a key supply chain driver because it allows the other
supply chain drivers to work together with the goal of
◦ creating an integrated
◦ coordinated supply chain
◦ it provides the foundation on which supply chain processes execute
transactions and mangers make decisions
◦ a manger cannot know what customers want, how much inventory is in stock,
and when more product should be produced or shipped
◦ information technology consists of the tools used to gain awareness of
Benefits of IT application in Supply Chain
Streamlining—Communicate and collaborate more effectively with suppliers
Connecting—Make the connection between what your customers want and
what you produce.
Analyzing—Analyze your supply chain and manufacturing options and choose
the plan that makes best use of your assets.
Synchronizing—Synchronize the flow of your batch production by managing the
capacity of vessels, tanks, and lines-and the flow between them.
Communicating—Improve your communication and collaboration with suppliers
Benefits of IT application in Supply Chain
Designing—Create the optimal supply chain network and adapt the network to
keep pace with changes in your business.
Transforming—Transform processes inside the warehouse and across the supply
chain to meet demands for new efficiencies.
Understanding—Get a better understanding of your warehouse labor activities
and implement the changes you need to optimize worker performance.
Maximizing—Maximize warehouse profits by using advanced costing, billing,
and invoicing capabilities.
Optimizing—Optimize your day-to-day fleet performance to reduce costs and
improve customer satisfaction.
How IT can be applied in Supply Chain
Electronic Commerce: It is the term used to describe the wide range of tools
and techniques utilized to conduct business in a paperless environment.
Electronic commerce therefore includes electronic data interchange, e-mail,
electronic fund transfers, electronic publishing, image processing, electronic
bulletin boards, shared databases and magnetic/optical data capture.
Companies are able to automate the process of moving documents
electronically between suppliers and customers.
Data warehouse: Data warehouse is a consolidated database maintained
separately from an organization’s production system database. Many
organizations have multiple databases. A data warehouse is organized around
informational subjects rather than specific business processes. Data held in data
warehouses are time dependent, historical data may also be aggregated.
How IT can be applied in Supply Chain
Electronic Data Interchange: Electronic Data Interchange (EDI) refers to
computer-to-computer exchange of business documents in a standard format.
EDI describe both the capability and practice of communicating information
between two organizations electronically instead of traditional form of mail,
courier, & fax.
Though the use of EDI supply chain partners can overcome the distortions and
exaggeration in supply and demand information by improving technologies to
facilitate real time sharing of actual demand and supply information.
How IT can be applied in Supply Chain
Bar coding and Scanner: Bar code scanners are most visible in the check out
counter of super market. This code specifies name of product and its
manufacturer. Other applications are tracking the moving items such as
components in PC assembly operations, automobiles in assembly plants.
Enterprise Resource planning (ERP) tools: Many companies now view ERP
system (eg. Baan, SAP, People soft, etc.) as the core of their IT infrastructure. ERP
system have become enterprise wide transaction processing tools which capture
the data and reduce the manual activities and task associated with processing
financial, inventory and customer order information. ERP system achieve a high
level of integration by utilizing a single data model, developing a common
understanding of what the shared data represents and establishing a set of rules
for accessing data.
The strategic and technological innovations in supply chain will impact on how
organizations buy and sell in the future. However clear vision, strong planning
and technical insight into the technology’s capabilities would be necessary to
ensure that companies maximize the technology’s potential for better supply
chain management and ultimately improved competitiveness. Internet
technology, World Wide Web, electronic commerce etc. will change the way a
company is required to do business.
These companies must realize that they must harness the power of technology
to collaborate with their business partners. That means using a new breed of
SCM application, the Internet and other networking links to observe past
performance and historical trends to determine how much product should be
made as well as the best and cost effective method for warehousing it or
shipping it to retailers.
Burnson P. 2014, Four Reasons 2014 Will Be The “Year of The Global Distribution
ดร.ณัฐพล อารี รัชชกุล, 2009, การนาเทคโนโลยีทีเ่ หมาะสมมาใช้ในงานด้านโลจิ สติ กส์.
ผศ. ดร. เผ่าภัค ศิริสขุ , Logistics and IT ทาอย่างไรถึงจะคุ้มค่า?