SCM TECHNOLOGIES AND THEIR APPLICABILITY IN THE SC OPERATIONS

Anand Venugopal School of Management Studies, CUSAT, Kochi- 22. E-mail:anandvmp@gmail.com

Abstract: Supply chain management (SCM) refers to the management of activities that procure raw materials, transform those materials into intermediate goods and final products, and deliver the products through a distribution system to the end-user. As we move on in the 21st century, like all other functions supply chain management is in a state of metamorphic flux. Several new technologies are creeping into SCM which are reshaping this crucial business function. Some of these forces and technologies include collaboration technologies, internet based procurement, web technologies, EDI, ERP, RFID for inventory management, E-Commerce, and Cloud Computing. Keywords: collaboration technologies, internet based procurement, EDI, ERP, RFID, E-Commerce, and Cloud Computing.

0.0 INTRODUCTION
Supply Chain Management can be defined as the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally. The emergence of the Internet has allowed firms to compete effectively and efficiently in both domestic and international markets. It is a well-known fact that Internet-based computing and communication has emerged as a key enabler to help organisations achieve greater coordination and collaboration among supply chain partners and automate the supply chain process (Akkeren and Cavaye, 1999). This has created competitive pressures as manufacturers and distributors are forced to become more responsive to the retailers and consumers. These pressures are forcing manufacturers/buying organisations to reduce costs, decrease order cycle times, and improve their operating efficiencies. Nowadays, the use of technologies help the organisations to better manage their supply chains, as supply chain management applications built on technology platforms have enhanced the ability of organisations to integrate their processes through collaborative information sharing and planning.

1.0 SC TECHNOLOGIES AND ITS APPLICABILITY

1.1 Collaboration technologies One of the biggest benefits technology has given to the supply chain concept is the ability for companies to collaborate. These collaborations are designed for the mutual benefit of all parties. For example, a supplier of consumer goods may be linked up via the Internet to one of its distributors so that when the supply gets too low an order for more of those goods can be placed automatically. In this way, the distributor never has to worry about running out of a product and disappointing customers and the supplier doesn't have to worry about maintaining a large inventory in expectation of demand. Similar systems have also been constructed to send out multiple requests to vendors when an order is placed. Collaborating this way makes better use of existing resources and paves the way for a larger profit margin on all sides of the equation. Internet based Supply Chain Management is the solution that supports collaboration in the Supply Chain as the foundation for gaining competitive advantage and maintain market share. There are many Web technologies necessary for the design and implementation of a Web based SCM application, their employment being determined by the SC partners information systems and applications and the level of integration needed. The combination of SCM concepts and the Internet tools resulted in a Web based application called e-SCM. E-SCM model uses Supply Chain competencies and resources and exploit them in a more efficient manner into an extended virtual organization. E-SCM applications support companies to win competitive advantage because they create more value for the customer and have the goal to satisfy the client requirements in the best possible way and in real time. E-SCM applications allow the creation of extra value for the customer and have the goal to satisfy the client requirements in the best possible way and in real time. Migration to a web based approach for SCM applications is required for streamlining Supply Chain activities, maintaining a consistent quality of service and controlled distribution of the data which otherwise cannot be achieved. E-SCM enables the integration and synchronization of all SC information and processes. Web based applications allow the reduction of transactional costs with 80% compared to private network cost. E-commerce standards (e.g. XML, Java) enable low cost integration of customer, supplier, product information and competencies from SC partners, the transmission of documents and data in real time at every level in the Supply Chain. E-SCM generates more value for customers through the agile, flexible, collaborative intelligent systems built on dynamic networks of Web enabled partners. Using e-SCM applications, the value added for each product can be increased. The Internet enables the connection of Supply Chain partners through Web technologies and allows SCM networks achieve new capabilities: real time information sharing for collaborative planning, forecasting and replenishment, visibility and management of SC event in real time, SC integration, and collaborative relationships on all levels of the network. Collaboration allows inventory optimization, provides more value for the customer and satisfies their needs. Synchronization of processes and information from all network nodes to quickly respond to the customer needs. 1.2 Internet based procurement Business-to-business sales on the Web are starting to gain popularity. Companies around the world are getting serious about Internet-based procurement (IBP) because the return on a

relatively modest investment is high and the risk is very low, at least for many items, companies buy routinely. There are two distinct parts of the IBP market: Direct-Material Procurement, which involves the acquisition of products directly required for production. These include the components and materials from key upstream supply chain partners. Indirect-Material Procurement, which is the purchase of products that are indirectly used in the production process. They include office supplies; maintenance, repair and operating supplies (MRO). E-procurement is the business-to-business or business-to-consumer or Business-togovernment purchase and sale of supplies, Work and services through the Internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning. E-procurement is done with a software application that includes features for supplier management and complex auctions. The new generation of E-Procurement is now on-demand or a software-as-a-service. There are seven main types of e-procurement: Web-based ERP (Enterprise Resource Planning): Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology. e-MRO (Maintenance, Repair and Overhaul): The same as web-based ERP except that the goods and services ordered are non-product related MRO supplies. e-sourcing: Identifying new suppliers for a specific category of purchasing requirements using Internet technology. e-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology. e-reverse auctioning: Using Internet technology to buy goods and services from a number of known or unknown suppliers. e-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology. e-marketsites: Expands on Web-based ERP to open up value chains. Buying communities can access preferred suppliers' products and services, add to shopping carts, create requisition, seek approval, receipt purchase orders and process electronic invoices with integration to suppliers' supply chains and buyers' financial systems. The e-procurement value chain consists of Indent Management, eTendering, eAuctioning, Vendor Management, Catalogue Management, and Contract Management. Indent Management is the workflow involved in the preparation of tenders. This part of the value chain is optional, with individual procuring departments defining their indenting process. In works procurement, administrative approval and technical sanction are obtained in electronic format. In goods procurement, indent generation activity is done online.

2.3 Cloud Computing Cloud computing supplies computational resources on demand via a computer network. Traditional computing models require both data and software to be fully contained on the user's computer. In cloud computing, the user's computer may contain almost no software or data (only an operating system and a web browser). The provider's cloud computing services form the cloud. These services are provided via an Internet connection within one or more of the next layers: application, platform and infrastructure. Application services (SaaS- Software as a Service) deliver software as a service over the Internet to the client who doesnt need to install and run the application on his own computers. All the software management, update, maintenance and support are executed centralized, only on the providers computers. The software allows collaboration through the network with business partners due to its model single instance, multi-tenant architecture. Platform as a Service provides a computing platform comprise hardware architecture and software framework to support the software. Infrastructure as a Service (IaaS) provides computer infrastructure as a service: servers with multi-core processors, software, data-center space or network equipment. Companies can use one or combinations of these services and they pay according to the pay forwhat-you-use model, achieving significant cost reductions. The service provider will deal with investment in licenses, infrastructure maintenance and upgrades. Software implementation is simple, with minimal technical requirements and easy management. Cloud computing is an innovative business model which ensures an efficient outsourcing for Supply Chain collaboration software and infrastructure. SCM business processes are parallel and data are managed by each companys integrated information system. In order to extend these internal systems to SC level, companies have to connect them through networks. Cloud computing enables the networking of multiple and interdependent end-to-end processes (order fulfilment, collaborative forecasting and replenishment, market analysis). It supplies a collaborative framework allowing an effective process management through standardized processes. SaaS provides a high level of security, so that companies are able to share information without trust limitations. This creates visibility for each Supply Chain member for the entire network o that to support the decisional process. 2.4 EDI Electronic Data Interchange is an inter-organisation computer to computer exchange of standard business documents in a structured and machine-processable format with the objective to eliminate duplicate data entry and to improve the speed and accuracy of the information flow. EDI based system has a significant advantage over the manual paper based system in terms of built-in delay due to several processing points during transit, data in accuracy or error due to repeated data entry at several steps, labour intensive uncertainty about delivery of information along with high costs of transmission.

Advantages of EDI are:

Improved operational efficiencies of manually intensive business processes by automating business document input, validation and auditing. The sophisticated audit provides a simple view of business information across different systems, and its proactive alerts help you manage exceptions so you can respond immediately to unplanned events. Improved Customer Service by providing internal and external business partners with status information on business information flows inside and outside an organization. Improved business responsiveness through greater visibility and adaptability to changing business requirements. New business partners, platforms, document formats, technologies and business processes can be added quickly and efficiently while maintaining centralize control. Improved reaction time to supply chain issues. As 80% of a businesses document information flow now relies on electronic transfer of information, any loss of information flow is unacceptable for clients, suppliers, or trading partners (both internal and external). To maximize ROI, proactive and intelligent surveillance of business document transfer is critical. Receiving an alert at the end of a day is not longer acceptable as receiving information when problems occur along with how to solve the problem is required. Notified of a problem, a user can rapidly identify the root cause and correct it by operations such as: correcting incorrect information, retrying the transfer, canceling the transfer, executing an alert to the appropriate person(s) by e-mail for example of the risk of client-impact from a problem in the supply chain. Compliance to regulatory requirements. For reporting companies, regulatory requirements such as Sarbanes-Oxley and HIPAA are a fact of life. EDIs sophisticated audit and document management features allows an organization to comply with regulatory requirements in one central solution.

In summary, EDI provides management, automation, format transformation, information routing and business process management with the purpose of streamlining business to meet the needs of an organization. EDI manages the flow of business information from end to end, ensuring higher processing speeds, improved reactivity, and higher quality of service.

2.5 RFID Technology Automatic identification, or auto ID for short, is the broad term given to a host of technologies that are used to help machines identify objects. Auto identification is often coupled with automatic data capture. That is, companies want to identify items, capture information about them and somehow get the data into a computer without having employees type it in. The aim of most auto-ID systems is to increase efficiency, reduce data entry errors, and free up staff to perform more value-added functions, such as providing customer service. There are a host of technologies that fall under the auto-ID umbrella. These include bar codes, smart cards, voice recognition, some biometric technologies (retinal scans, for instance), optical character recognition, and radio frequency identification (RFID).

The Radio Frequency Identification (RFID) Evaluation Center covers criteria for tags and storage devices, readers, wireless hubs and servers, and the middleware necessary for evaluating an RFID system deployment. RFID systems are used in different situations that require the tracking of unique items. RFID tags, in the context of enterprise resource planning and supply chain management, make items visible from manufacturing through distribution. RFID tags may be used to carry basic information such as an address, to more complex information used at different stages of an assembly line. In general terms, Radio Frequency IDentification (RFID) is a means of identifying a person or object using a radio frequency transmission, typically 125 kHz, 13.56 MHz or 800-900MHz. There are several methods of identification, but the most common is to store a serial number that identifies a person or object, and perhaps other information, on a microchip that is attached to an antenna (the chip and the antenna together are called an RFID transponder or an RFID tag). The antenna enables the chip to transmit the identification information to a reader. The reader converts the radio waves reflected back from the RFID tag into digital information that can then be passed on to computers that can make use of it.

Fig 1. RFID system An RFID tag consists of a microchip attached to an antenna. RFID tags are developed using a frequency according to the needs of the system including read range and the environment in which the tag will be read. Tags are either active (integrating a battery) or passive (having no battery). Passive tags derive the power to operate from the field generated by the reader. An RFID reader, usually connected to a Personal Computer, serves the same purpose as a barcode scanner. It can also be battery-powered to allow mobile transactions with RFID tags. The RFID reader handles the communication between the Information System and the RFID tag. An RFID antenna connected to the RFID reader can be of various sizes and structures, depending on the communication distance required for a given system's performance. The antenna activates the RFID tag and transfers data by emitting wireless pulses.

Advantages of using RFID

Reduces Clerical Errors, Increase Data Quality. RFID gets the human out of the loop where clerical errors are about eliminated in terms of inventory levels and asset visibility. Improves Asset Visibility and Utilization. RFID can give you complete situational awareness. If you know where an asset is, you can use it. Increase Efficiency. No more point and scan labor-intensive tasks that are associated with bar codes. Also, people no longer need to be always looking for stuff, nor do they have to do inventories by hand. This frees them up to do their real job. Reduce Theft. Theft can be a significant cost to businesses. RFID can provide nearreal-time and historical information to reduce and prevent theft of products. By having near-real-time visibility of product, businesses can pin-point and eliminate theft that occurs along the supply chain as well as in retail stores. Improve Customer Experience. RFID items enables businesses to further integrate service offerings, automate customer tasks, and anticipate customer needs. RFID technology can be integrated with smart shopping carts, kiosks, and Point-Of-Sale terminals to improve the customers shopping experience. RFID tags enable businesses to up-sell and cross-sell other products and accessories in real-time. Improves Decision-Making. RFID technology gives real-time information that enable better decision-making as well as reduces the decision-making cycle. Improved decision-making results in: Reduce Inventory. RFID technology improves inventory accuracy. This enables businesses to eliminate excess and missing inventory as well as reduce losses and write downs. RFID technology enables physical inventory in stores and warehouses to match what is in the system. Improve Forecasting and Planning. RFID enable businesses to gain visibility of the entire supply chain to include supplier visibility, in transit visibility, and customer visibility. With better and expanded current and historical information, businesses can improve forecasting capabilities. Reduce Out-Of-Stock Conditions. Out of stock items cause missed sales, and will eventually lead to lost customers. RFID tags enable businesses to prevent out-of-stock conditions in warehouses and in retail stores. Businesses can get near-real-time and better historical information to eliminate conditions that cause out-of-stock conditions.

RFID technology proved to be the silent supervisor, monitoring and recording details of product movement and alerting shipping personnel of errors. RFID tags are now placed on pallets at the stretch wrap machine. In the outbound loading area, each forklift is equipped with an RFID reader and a screen, which signals the operator whether pallets for a particular order are included on the accompanying Bill of Lading. During loading, the operator is immediately given several warnings, including a flashing red screen and an audio alert if a pallet is about to be placed on the wrong truck or if the number of pallets in the shipment is incorrect. 2.6 Enterprise Resource planning (ERP) tools

ERP is a computerized integrated business process of the organization used by firms to derive competitive advantages in the production, distribution and financial areas. In other words, it is an integrated set of application software modules providing operational, managerial and strategic information to improve the productivity, quality and competitive advantage. 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. Benefits of ERP: Improving productivity and enhancing a competitive edge by optimizing the use of all its resources. Bringing about a trade off between demand and supply. Bringing together people who work on shared tasks within the same firm or in their dealings with suppliers, customers and third party logistics service providers. Ensuring a smoother flow of inventory and information at all levels and between all parties, coupled with ready access of up-to-date information. Reducing the replenishment cycle time and hence capital lock up. Ensuring high level of customer service with flexibility. Overall organizational look-ahead capability and control. Supply chain management (SCM) software uses the information in ERP systems to provide analytical decision support in addition to the visibility of information. ERP systems show a company what is going on, while SCM systems help a company decide what it should do.

2.7 GIS, GPS and their application

Based on geography spatial data, Geographical Information System (GIS), provide timely various spatial and dynamic geography spatial data with the help of geography model analysis. GIS is utilized in logistics analysis mainly because GISs powerful function on geography data can process data information on suppliers, storehouses, customers and retailers by the chart stratification way, and can display the processing results by the graph with the help of the arithmetic of delivery receiving model. The application models based on GIS logistics analysis are the vehicles route model, the most short-path model, the network flows model, and the assignment set model and the installation localization model and so on. Global Positioning System (GPS) developed by means of satellite communication technology possess Omni bearing, real- time 3D navigation and localization capacities in the air, the land and the sea. GPS is finding its way into automobile self location, follow & dispatch, railway transportation management and military logistics management.

2.8 Electronic Commerce and SCM Based on Internet/Intranet

Electronic commerce and the Internet are fundamentally changing the nature of supply chains, and redefining how consumers learn about, select, purchase, and use products and services. The result has been the emergence of new business-to business supply chains that are consumer-focused rather than product-focused. They also provide customized products and services. E-commerce impacts supply chain management in a variety of keyways. These include: Cost efficiency: E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the Internet. E-commerce enables shippers, freight forwarders and trucking firms to streamline document handling without the monetary and time investment required by the traditional document delivery systems. By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service. Ocean carriers and their trading partners can exchange bill of lading instructions, freight invoices, container status messages, motor carrier shipment instructions, and other documents with increased accuracy and efficiency by eliminating the need to re-key or reformat documents. The only tools needed to take advantage of this solution are a personal computer and an Internet browser. Changes in the distribution system: E-commerce will give businesses more flexibility in managing the increasingly complex movement of products and information between businesses, their suppliers and customers. E-commerce will close the link between customers and distribution centres. Customers can manage the increasingly complex movement of products and information through the supply chain. Customer orientation: E-commerce is a vital link in the support of logistics and transportation services for both internal and external customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-commerce initiatives that are critical to their business, and lower their operating costs. Using the Internet for e-commerce will allow customers to access rate information, place delivery orders, track shipments and pay freight bills. E-commerce makes it easier for customers to do business with companies: Anything that simplifies the process of arranging transportation services will help build companies' business and enhance shareholder value. By making more information available about the commercial side of companies, businesses will make their web site a place where customers will not only get detailed information about the services the company offers, but also where they can actually conduct business with the company.

Ultimately, web sites can provide a universal, self-service system for customers. Shippers can order any service and access the information they need to conduct business with transportation companies exclusively online. E-commerce functions are taking companies a substantial step forward by providing customers with a faster and easier way to do business with them. Shipment tracking: E-commerce will allow users to establish an account and obtain real-time information about cargo shipments. They may also create and submit bills of lading, place a cargo order, analyze charges, submit a freight claim, and carry out many other functions. In addition, e-commerce allows customers to track shipments down to the individual product and perform other supply chain management and decision support functions. The application uses encryption technology to secure business transactions. Shipping notice: E-commerce can help automate the receiving process by electronically transmitting a packing list ahead of the shipment. It also allows companies to record the relevant details of each pallet, parcel, and item being shipped. Freight auditing: This will ensure that each freight bill is efficiently reviewed for accuracy. The result is a greatly reduced risk of overpayment, and the elimination of countless hours of paperwork, or the need for a third-party auditing firm. By intercepting duplicate billings and incorrect charges, a significant percent of shipping costs will be recovered. In addition, carrier comparison and assignment allows for instant access to a database containing the latest rates, discounts, and allowances for most major carriers, thus eliminating the need for unwieldy charts and tables. Shipping Documentation and Labeling: There will be less need for manual intervention because standard bills of lading, shipping labels, and carrier manifests will be automatically produced; this includes even the specialized export documentation required for overseas shipments. Paperwork is significantly reduced and the shipping department will therefore be more efficient. Online Shipping Inquiry: This gives instant shipping information access to anyone in the company, from any location. Parcel shipments can be tracked and proof of delivery quickly confirmed. A customer's transportation costs and performance can be analyzed, thus helping the customer negotiate rates and improve service.

3.0 CONCLUSION
The adoptions of integration technologies to support the supply chain management can be seen either as a way to provide efficiency savings, or as a strategic response either driven by

necessity or due to competitive pressure. It provides benefits like standardised production, simplified supply chain process, and automated process, upon the implementation of supply chain integration by the case companies involved in the study. The Internet has had an enormous impact on the personal and professional lives of businesspersons. On the business side, the Internet has brought new life to existing technologies and offered businesses the opportunity to engage in the world marketplace. The harnessing of the Internet by business has enabled greater cooperation and information exchange up and down the supply-chain. The Internet has enabled businesses to improve the supply-chain by the way they manage inventory, place orders, and communicate critical information with each other.

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