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376 Part Three Key System Applications for the Digital Age

SUPPLY CHAIN MANAGEMENT SOFTWARE

Supply chain software is classified as either software to help businesses plan
their supply chains (supply chain planning) or software to help them execute
the supply chain steps (supply chain execution). Supply chain planning
systems enable the firm to model its existing supply chain, generate demand
forecasts for products, and develop optimal sourcing and manufacturing plans.
Such systems help companies make better decisions such as determining how
much of a specific product to manufacture in a given time period; establishing
inventory levels for raw materials, intermediate products, and finished goods;
determining where to store finished goods; and identifying the transportation
mode to use for product delivery.
For example, if a large customer places a larger order than usual or changes
that order on short notice, it can have a widespread impact throughout the
supply chain. Additional raw materials or a different mix of raw materials
may need to be ordered from suppliers. Manufacturing may have to change
job scheduling. A transportation carrier may have to reschedule deliveries.
Supply chain planning software makes the necessary adjustments to produc-
tion and distribution plans. Information about changes is shared among the
relevant supply chain members so that their work can be coordinated. One
of the most important—and complex—supply chain planning functions is
demand planning, which determines how much product a business needs to
make to satisfy all of its customers’ demands. JDA Software, SAP, and Oracle
all offer supply chain management solutions.
Supply chain execution systems manage the flow of products through
distribution centers and warehouses to ensure that products are delivered to
the right locations in the most efficient manner. They track the physical status
of goods, the management of materials, warehouse and transportation opera-
tions, and financial information involving all parties. The Oracle Transportation
Management system used by Land O'Lakes is an example, as is the Warehouse
Management System (WMS) used by Haworth Incorporated. Haworth is a world-
leading manufacturer and designer of office furniture, with distribution centers
in four different states. The WMS tracks and controls the flow of finished goods
from Haworth’s distribution centers to its customers. Acting on shipping plans
for customer orders, the WMS directs the movement of goods based on immedi-
ate conditions for space, equipment, inventory, and personnel.
The Interactive Session on organizations describes how DP World is using
RFID technology to increase the efficiency of its customers’ supply chains.
Through the use of RFID-enabled scanning and tracking technology, DP World
is enhancing customer satisfaction through optimized supply chain flow,
which is enabling smoother, faster, and more effective delivery of customers’
containers.

GLOBAL SUPPLY CHAINS AND THE INTERNET

Before the Internet, supply chain coordination was hampered by the difficulties
of making information flow smoothly among disparate internal supply chain
systems for purchasing, materials management, manufacturing, and distri-
bution. It was also difficult to share information with external supply chain
partners because the systems of suppliers, distributors, or logistics providers
were based on incompatible technology platforms and standards. Enterprise
and supply chain management systems enhanced with Internet technology
supply some of this integration.

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