Information enabled supply chains

The main message is that revenue-sharing agreements need an effective information system to guarantee compliance. But, as we shall see later in this chapter, they enable supply chain coordination and can thus generate Pare to-improving outcomes for participating companies. 

White, A., Daniel, E.M., Mohdzain, M. (2005). The role of emergent information technologies and systems in enabling supply chain agility. International Journal of Information Management, 25(5), 396-410. 

Kakkainen, M. and Holmstrom, J. Wireless product identification enabler for handling efficiency, customization, and information sharing. Supply Chain Manag., 7, 242-252 (2002). 

Readers tell us what the product is and where it is located in the supply chain. The management system compiles this information and allows us to know how many products are present at that location for each time bucket. This translates into dynamic data that allows us to know rates of consumption, and stock data at a given point in time - together with what needs to be done. One can already envision that such data will enable supply chain planning and control to be transformed. 

It has been reported that supply chain collaboration is difihcult to implement because there has been an over reliance on technology and fundamentally a lack of tmst between trading partners (Moberg and Speh 2003 Barratt 2004 Sheu et al. 2006). Trust is an important element for lOS enabled supply chain collaboration because trust can provide a foundation between collaborative partners for sharing critical information (Lejeune and Yakova 2005). However, trust between partners must be earned and trust comes only after the other party proves its abilities to offer solutions and also demonstrates loyalty (Min et al. 2005). Trust is achieved by behaving consistently over an extended period, e.g., maintaining quality standards without constant monitoring (Handfield and Nichols 1999 Lejeune and Yakova 2005). 

Often an effective way of reducing risk is by substituting hazardous chemicals with more harmless ones. To enable substitution, the users of chemicals and products further down the supply chain need to have appropriate and sufficient information on the technical and hazardous properties associated with the chemicals they purchase. Such information is necessary in order to assess potential risks at the point of intended use and to compare different alternatives from a risk reducing perspective. Therefore, suppliers of chemicals, especially manufacturers and importers, need to identify and assess all of the hazardous properties and foreseeable risks - to human health, to the environment and to property due to fire or explosion - in order to be able ... 

A collaborative study on the Human and Environmental Risk Assessment (HERA) of cleaning products between Cefic and the International Soap, Detergent and Maintenance Products Association (AISE) resulted in the risk assessment of several substances through the relevant supply chains. The project enabled downstream users to develop a better understanding of the final use and environmental endpoints of these products. A major result of the initiative has been the creation of a website where customers and consumers can be informed on the risks associated with specific substances. 

The data held within marketing and supply applications are key inputs into the efficiency of the supply chain and provide the vital link that connects Information Technology to the physical world of raw materials, intermediate stock, finished inventory, business processes, and people. What is done with that data — how data are collected, processed, communicated, stored, or otherwise manipulated, determines their true value to any organization as Information Technology takes its place as an enabler for efficient enterprise coordination. 

Today s typical pharmaceutical business has many people working with paper-based information throughout its supply chain. The operations of the future may involve fewer people, but, on the other hand, a more streamlined and dynamic operation, for which the paperless operation concept can be an important enabler, will probably be a necessary condition for business survival. 

MRP 11/ERP systems enable paperless operation within a facility and with supply chain partners (suppliers and customers). System integration standards such as EDI bring the possibility of transferring business information automatically between systems in a very secure manner, which not only replaces paper but also makes many manual operations obsolete. In combination with Web interfaces on the Internet to enable customers and suppliers to enter data directly into the business systems, the whole issue of electronic commerce with its huge implication on business processes within a company becomes an area with many important implications for paperless operation. 

Moreover, an increasing number of manufacturers have direct access to demand information from their customers and resource information from their suppliers. In many cases, the customer s demand information and the supplier s resource information originate in their respective ERP systems. Just as these data are more accurate for the customer/manufacturer/supplier enterprise, so too is the resulting information flowing up and down the supply chain. For the manufacturer between them, this information enables decision makers to base decisions on accurate external information, as well as accurate internal information. The following remarks by Federal Reserve Chairman Alan Greenspan perhaps best capture the essence of this phenomenon (Greenspan 1999) ... 

In this chapter we have provided a quick review of four possible approaches to forecast demand and its use in planning. The constant demand model allows for a quick analysis of the effect of ordering costs in a system. The models of demand as a distribution permit details of lead time and demand uncertainty to be included. The modeling of demands as a mixture of distributions enables us to consider the role of information acquired over time. Finally, the exponential smoothing model shows how demand forecast updating can create large swings upstream in a supply chain. 

New technologies incorporated into products enable even more information to be leveraged by the supply chain. Radio frequency identification tags (RFID) represent one approach that could, theoretically, enable even a single unit of a product to be tracked. An RFID system transmits the identity (in the form of a unique serial number) of an object or person wirelessly, using radio waves ([2]). 

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