CHAPTER 9

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SUPPLY CHAIN TECHNOLOGIES

 Learning objectives
 Explain the importance of technology to supply
chain management
 Explain the revolution of supply chain technology
 Recognize the technological innovations that are
influencing supply chain management
 Discuss the critical issues in technology
selection and implementation
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 Chapter outline:
 The importance of supply chain technology
 Revolution of supply chain technology
 Industry 4.0
 Contemporary technology in supply chain management:
 Artificial Intelligence (AI)

 Blockchain

 RFID

 Barcode

 Microwave
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 Supply Chain Technology

 Technology remains a strategic imperative for supply

chain organizations – through survey, 61% of respondents
say technology is a source of competitive advantage.

 The reality of the digital age is the connectivity among

collaborating business organizations, which will continue
to drive supply chain management advancement.
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 Supply Chain Technology

 Facing globalization, increased product complexity, and

heightened customer demands, companies are taking up
advanced technologies to transform their supply chain
from a pure operations hub into the epicentre of business
innovation.

 Using sensors and ever-improving internet connectivity,

forward-thinking companies are collecting data at every
checkpoint, from the status of raw materials flow to the
condition and location of finished goods.
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 Supply Chain Technology
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 The importance of technology in SCM:
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 Improved access to information

 Supply chain technology connects isolated

data. When functions and departments
inside a corporation do not communicate
information, silos can form.

 Information is gathered and made

available to all supply chain
participants through supply chain
technology.

 With comprehensive and clear supply chain

information, your company will be able to
respond rapidly to unanticipated,
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potentially disruptive events.

 Improved insight

 The foundation for essential decision-

making is insight.

 Makes it easier to evaluate data, gain

insights (on things like customer demand,
transportation/warehouse restrictions,
and supplier lead times), and make
decisions that have direct and indirect
effects on overall supply chain
performance.

 Also includes decision support features

to help people make better decisions
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faster.
 Improved agility

 Technology in the supply chain enhances

agility make easier for management to
address problems or generate new company
prospects much faster when they have
better insight, thanks to enhanced access
to information and simulations.

 Good supply chain technology will most

likely recommend “best” activities, which
can be adjusted if those actions become
available.
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 Better collaboration

 Collaboration is a process in which two

or more individuals or organizations work
cooperatively to accomplish a shared
goal.

 It allows embed systems and technology

that enable, monitor, and evaluate
collaboration between individuals,
departments, and organizations in order
to maintain a consistent flow of
information, analysis, and choices.

Able to save costs, service levels and

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
enhance greater inventory returns.
 Improved customer loyalty

 Supply chain technology is more crucial than ever to customer

happiness and loyalty, owing to the challenges faced by the
omnichannel consumer.

 As a result, consumer experience and loyalty are enhanced. This

would not be possible without supply chain technology’s visibility,
accuracy, and agility.
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 Revolution of Supply Chain Technology
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  Today, digital business is on everybody’s mind. Many people think
about marketing or information technology when they hear about
digital, but few are aware that digital technologies are also
about to fundamentally change the management and design of supply
chains.

 The objective of supply chain management is to have the products

and services available to the customer at the right time, in the
right quantity, and at the right cost.

 And the traditional way of making products and services available

to the customer is set to be profoundly affected by new
technologies.
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  There are three areas where
digital technologies
currently play a disruptive
role:
1. Business to Consumer
(B2C) delivery models
2. Omni-channel retailing,

3. Industrial manufacturing
(and logistics) or known
as Industry 4.0.
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 Business to Consumer (B2C)
delivery models

• Advance future delivery

service of customer orders by
drone, it attracted widespread
attention from the public.
• Drones are only one of many
innovations in the sphere of
B2C delivery
• Even more innovation is
expected from crowd delivery,
which concerns the delivery of
parcels by non-professionals.
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 Omni-channel retailing

• In omni-channel retailing, all channels through which a

retailer interacts with the consumer are integrated, be
it internet, smart phone, or a physical store.

• IKEA shows the inventory level of its products in each

store on its website. And the French sports retailer
Decathlon allows its customers to buy products online
that are available in a specific store.

• The order can be picked up by the customer or even be

delivered directly from the store - Products that were
bought online can be returned to any physical store and
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vice versa.
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 Industry 4.0

• Industry 4.0 describes the growing trend towards automation and

data exchange in technology and processes within the
manufacturing industry.

• This automation creates a manufacturing system whereby machines

in factories are augmented with wireless connectivity and
sensors to monitor and visualize an entire production process
and make autonomous decisions.

• Concerns manufacturing and logistics and regroups a whole set of

innovative technologies which are expected to propel traditional
manufacturing to the digital area, such as 3D printing, the
Internet of Things (IoT), industrial big data analytics,
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augmented reality, and robotics.

 Contemporary Technology in Supply
Chain Management (SCM)
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 ARTIFICIAL INTELLIGENCE (A.I)

• AI is the simulation of human intelligence processes by

machines, especially computer systems.

• Specific applications of AI include expert systems, natural

language processing, speech recognition and machine vision.

• AI also an information-based technology that facilitates the

structuring of decision logic so that it can be automated and
applied without consuming the time of a subject matter expert.

• With their ability to handle mass data, AI driven tools can

prove to be highly effective in inventory management.

• In SCM, AI applications could include forecasting, production

scheduling and formulation, inventory management, equipment
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repair, and vehicle and truck routing.

 • These intelligent systems can
analyze and interpret huge
datasets quickly, providing
timely guidance on forecasting
supply and demand.

• These AI systems with

intelligent algorithms can also
predict and discover new
consumer habits and forecast
seasonal demand.

• In SCM, this application of AI

helps anticipate future customer
demand trends while minimizing
the costs of overstocking
unwanted inventory.
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 Advantages
• Good at detail-oriented jobs;
• Reduced time for data-heavy tasks;
• Delivers consistent results;
• AI-powered virtual agents are always available.

Disadvantages
• Expensive;
• Requires deep technical expertise;
• Limited supply of qualified workers to build AI tools;
• Only knows what it's been shown;
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• Lack of ability to generalize from one task to another.

 BLOCKCHAIN

• A blockchain is a distributed database or ledger that is shared

among the nodes of a computer network. As a database, a
blockchain stores information electronically in digital format.

• The innovation with a blockchain is that it guarantees the

fidelity and security of a record of data and generates trust
without the need for a trusted third party.

• While exchange information through electronic data interchange

(EDI), there has been increased concern regarding data accuracy,
integrity, and security as information is exchanged between
supply chain partners - situations involving sources of
materials, tracking of production facilities, tracking of
products through the distribution system, and global tracking.
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 • Blockchain is a distributed database that maintains digital
contents regarding transactions or events that makes them
tamper-resistant (intentional malfunction / sabotage).

• While many institutions such as suppliers, manufacturers,

distributers, retailers, and logistics service providers may
access, inspect, or add to the data, they can’t change or delete
the data - the original information is maintained in a permanent
and public information trail, or chain of transactions.

• Blockchain technology allows firms to more securely and

transparently track all product movement from manufacture to
sale.

• Benefits: the results are reduced time delays, added costs, and
human error.
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 BARCODE

• A barcode is an image consisting of a series

of parallel black and white lines that, when
scanned, relays information about a product -
a means of quick identification.

• It is like a unique fingerprint for a product

and is often printed on the item itself or
its packaging.

• They are used in retail stores as part of the

purchase process, in warehouses to track
inventory, and on invoices to assist in
accounting, among many other uses.

• Manufacturers, distributors, retailers – use

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barcoding to track and keep stock of goods.

 • The barcode sequence provides
relevant data that scanners
can translate into important
information such as a
shipment’s origin, the
product type, the place of
manufacture, and the
product’s price.

• This improves data collection

speed, facilitates rapid
receiving and order
fulfillment, helps to
integrate data collection
with other areas and creates
stronger information flows
and inventory control.
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 RFID

• Radio-frequency identification (RFID) uses

electromagnetic fields to automatically identify and
track tags attached to objects.

• An RFID system consists of a tiny radio transponder,

a radio receiver and transmitter. When triggered by
an electromagnetic interrogation pulse from a nearby
RFID reader device, the tag transmits digital data,
usually an identifying inventory number, back to the
reader.

• This number can be used to track inventory goods.

E.g., an RFID tag attached to an automobile during
production can be used to track its progress through
the assembly line, RFID-tagged goods can be tracked
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through warehouses.
 • The use of RFID capabilities creates the opportunity for two-way
communication between specific products and lift truck operators
- the potential exists to identify the exact location in the
warehouse.

• RFID is viewed as an excellent tool for improving inventory

accuracy and visibility, which support store-based order
fulfillment methods.
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 MICROWAVE TECHNOLOGY

• Microwave technology is a modern technology used throughout the

world to generate heat using energy from the microwave range of
the electromagnetic spectrum - produces heat energy by the rapid
movement and rotation of polar molecules by rubbing against each
other.

• It is characterized by uniform energy transfer, low energy

consumption, and rapid heating which preserves much of the
nutritional value in food products.
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 • Microwave is one of Food & Innovation Technology (FIT). The
effectiveness of its process solution that uses microwaves for
the microbial stabilization of fruit and vegetables, in order to
extend the shelf life, as well as to improve hygiene and food
safety.

• Widely used to process food such as drying, also used to process

and extract parts of plants for medicinal purposes because food
and medicinal plants are the same organisms.

• The packaging provided under the FIT protocols allows the fresh
fruit to be stored for a long time, as the product is isolated
from possible external bacterial contamination

• Microwave technology is also used for telecommunications, the

microwave is easily focused into narrower beams than the radio
waves, its higher frequency allows the broad bandwidth and high
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data transmission rates.

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Thank you!
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