{"id":442,"date":"2016-07-13T12:59:12","date_gmt":"2016-07-13T17:59:12","guid":{"rendered":"http:\/\/blogs.uww.edu\/prasad\/?page_id=442"},"modified":"2016-07-13T12:59:12","modified_gmt":"2016-07-13T17:59:12","slug":"information-investment-in-supply-chain-management","status":"publish","type":"page","link":"https:\/\/blogs.uww.edu\/prasad\/teaching\/independent-study\/information-investment-in-supply-chain-management\/","title":{"rendered":"Information investment in supply chain management"},"content":{"rendered":"

Sameer Prasad and Jasmine Tata<\/p>\n

Logistics Information Management<\/h2>\n

2000, Vol. 13, No. 1, p. 33-38<\/p>\n

 <\/p>\n

1)\u00a0\u00a0\u00a0\u00a0\u00a0 Introduction<\/p>\n

    \n
  1. a) Supply chain control depends requires investment in information technology<\/li>\n
  2. i) Types<\/li>\n<\/ol>\n

    (1)\u00a0\u00a0 Databases<\/p>\n

    (2)\u00a0\u00a0 Automated storage and retrieval systems<\/p>\n

    (3)\u00a0\u00a0 Materials Resource Planning MRP<\/p>\n

    (4)\u00a0\u00a0 MRP-II<\/p>\n

    (5)\u00a0\u00a0 Enterprise Resource Planning ERP<\/p>\n

      \n
    1. ii) IT now more attractive to smaller businesses<\/li>\n
    2. b) Model to determine level of investment necessary<\/li>\n
    3. i) Dynamic model<\/li>\n<\/ol>\n

      (1)\u00a0\u00a0 Identify appropriate level of investment<\/p>\n

      (2)\u00a0\u00a0 Response to competitor actions<\/p>\n

      (3)\u00a0\u00a0 Cost of necessary investment<\/p>\n

      2)\u00a0\u00a0\u00a0\u00a0\u00a0 Static Model<\/p>\n

        \n
      1. a) Traditional quality cost model (Juran, 1951)<\/li>\n
      2. i) Model altered to bring out relationships affecting cost<\/li>\n
      3. ii) Voluntary costs<\/li>\n<\/ol>\n

        (1)\u00a0\u00a0 Prevention<\/p>\n

        (a)\u00a0\u00a0\u00a0 Time\/effort spent on design of IT, training, recruiting, organizational development and acquisition of IT<\/p>\n

        (2)\u00a0\u00a0 Appraisal<\/p>\n

        (a)\u00a0\u00a0\u00a0 Running tests with suppliers and buyers<\/p>\n

        iii)\u00a0\u00a0\u00a0\u00a0 Involuntary Costs<\/p>\n

        (1)\u00a0\u00a0 Internal Failure<\/p>\n

        (a)\u00a0\u00a0\u00a0 Use of expediters, inventory, possible quality levels<\/p>\n

        (2)\u00a0\u00a0 External Failure<\/p>\n

        (a)\u00a0\u00a0\u00a0 Increased lead times, split orders, lost market share<\/p>\n

          \n
        1. b) Difficulties<\/li>\n
        2. i) Narrow definition of involuntary costs<\/li>\n
        3. ii) Indirect failure is concealed in other categories<\/li>\n<\/ol>\n

          iii)\u00a0\u00a0\u00a0\u00a0 Intangible and indirect failure costs far exceed out-of-pocket involuntary costs<\/p>\n

          3)\u00a0\u00a0\u00a0\u00a0\u00a0 Dynamic Model<\/p>\n

            \n
          1. a) Show voluntary and involuntary cost curves over time<\/li>\n
          2. i) Voluntary costs can be reduced over time through<\/li>\n<\/ol>\n

            (1)\u00a0\u00a0 Learning process<\/p>\n

            (a)\u00a0\u00a0\u00a0 Reduction in systems variability<\/p>\n

            (b)\u00a0\u00a0 Allows operation on JIT basis<\/p>\n

            (c)\u00a0\u00a0\u00a0 Reduces paperwork in the system<\/p>\n

              \n
            1. ii) Involuntary Costs can change over time due to<\/li>\n<\/ol>\n

              (1)\u00a0\u00a0 Adversely affected by competitors supply chain<\/p>\n

              (2)\u00a0\u00a0 Failure to maintain the same level of improvement<\/p>\n

                \n
              1. b) Influence of learning<\/li>\n
              2. i) Learning allows firms to become more automated among supply chain players at lower overall cost<\/li>\n
              3. c) Influence of competitors improvements<\/li>\n
              4. i) As rivals upgrade firms face reduced sales and\/or margins<\/li>\n
              5. d) Interaction of learning and competitor improvements<\/li>\n
              6. i) Cost savings due to learning are more than he loss to competitor improvements<\/li>\n
              7. ii) Competitor actions have an effect on optimum voluntary cost expenditures<\/li>\n<\/ol>\n

                4)\u00a0\u00a0\u00a0\u00a0\u00a0 Implications for logistics managers<\/p>\n

                  \n
                1. a) Static model<\/li>\n
                2. i) Suggests decisions to be made base on firms position on cost curve<\/li>\n
                3. ii) Fails to consider:<\/li>\n<\/ol>\n

                  (1)\u00a0\u00a0 Learning curve effect<\/p>\n

                  (2)\u00a0\u00a0 Competitor effects<\/p>\n

                  iii)\u00a0\u00a0\u00a0\u00a0 Suggests optimum level of IT expenditures should always lead to greater automation of management of materials<\/p>\n

                  (1)\u00a0\u00a0 Expenditure will depend on<\/p>\n

                  (a)\u00a0\u00a0\u00a0 Competitor<\/p>\n

                  (b)\u00a0\u00a0 Learning<\/p>\n

                    \n
                  1. b) Dynamic model<\/li>\n
                  2. i) Shows how an organization can gain a competitive advantage through learning and investing<\/li>\n
                  3. ii) Influence of competitors varies by industry<\/li>\n<\/ol>\n

                    iii)\u00a0\u00a0\u00a0\u00a0 Managers should depend on learning curve effect to achieve higher levels of automation at a lower cost within the supply chain .<\/p>\n

                     <\/p>\n

                     <\/p>\n

                     <\/p>\n","protected":false},"excerpt":{"rendered":"

                    Sameer Prasad and Jasmine Tata Logistics Information Management 2000, Vol. 13, No. 1, p. 33-38   1)\u00a0\u00a0\u00a0\u00a0\u00a0 Introduction a) Supply chain control depends requires investment in information technology i) Types (1)\u00a0\u00a0 Databases (2)\u00a0\u00a0 Automated storage and retrieval systems (3)\u00a0\u00a0 Materials Resource Planning MRP (4)\u00a0\u00a0 MRP-II (5)\u00a0\u00a0 Enterprise Resource Planning ERP ii) IT now more attractive […]<\/p>\n","protected":false},"author":3916,"featured_media":0,"parent":118,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"class_list":["post-442","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/users\/3916"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/comments?post=442"}],"version-history":[{"count":1,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/442\/revisions"}],"predecessor-version":[{"id":443,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/442\/revisions\/443"}],"up":[{"embeddable":true,"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/pages\/118"}],"wp:attachment":[{"href":"https:\/\/blogs.uww.edu\/prasad\/wp-json\/wp\/v2\/media?parent=442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}