Logistics Information System: An Indispensable Tool for Future Sustainability by Adelina Sirbu, Grigorita Banaru and Anzhelika Bolatchieva
Logistics Information System: An Indispensable Tool for Future Sustainability
In the nowadays challenging business environments, using information in an efficient way is of a crucial importance for gaining competitive advantage. In logistics, information movement is a major factor for enhancing a business’ performance. The information system is an interacting structure of people, equipment, method and control, designed to create an information flow in the required format for the user in order to facilitate a better decision- making process by reducing the risk element. The primary activities of a logistic information system are: 1) keep track of the data flow from the internal and external sources; 2) process and storage the information within a firm; 3) prepare reports for the decision maker based on the gathered data; 4) sustain a good communication of the decisions to customers and get their feedback.
The key benefits of a strong information system are:
- Rapid detection of the existing problems that allows addressing them on time and analyze their origin.
- Monitoring all the functional operations of a business and obtaining the highest customer satisfaction at the lowest cost.
- Continually control a business’ targets and being able to react quickly to external shocks (for example, an unexpected high demand increase), which allows to implement just in time systems.
- Providing the customer with information regarding product availability, order status, and delivery schedules, leading to a better customer service.
- Communicating and collaborating more effectively with the suppliers.
- Maximizing warehouse profits by using advanced costing, billing, and invoicing capabilities.
- Obtaining the entire picture of the supply chain which allows to make educative decisions about the best use of a business’ assets.
Types and examples of LIS
Due to the fact that logistics deal with a high flow of information and operations, the logistics information technology combines a lot of systems connected to different departments, such as:
- sales information system
- purchasing information system
- inventory controlling IS
- shop floor information system
- quality management information
- plant maintenance information system
- retail information (RIS)
- transport information system (TIS)
To achieve the optimization and create an integrated database between all departments there are innovated a lot of application, software and systems. One of the leaders providing IS software are SAP and Oracle. Usually company uses a lot of software for different purpose: ERP to have more accurate visibility into all operation – for CRM for focusing on customers behavior and attitude.
As an example, we can consider the SAP Open Information Warehouse System, which is an application for the LIS. As any information system, this application aims to gather whole data from various information sources in one database, so that every department could have an access and share the data between each other.
In addition, the leading companies cannot operate without powerful IT infrastructure allowing to share data with suppliers, departments, customers in real time. As for example such company as Dell, Walmart, P&G have large base of suppliers, customers, centres – all provided with some particular information and they succeed in meeting customers’ needs in time, processing orders within deadlines. Especially, in the age of E-commerce and internet-of-things, when during one minute the hundreds of orders are made.
What benefits the Dell company received by using the Oracle Modern Supply Chain?
Once when company faced with the situation that Net Promoter Score reduced, the company decided to focus on on-time delivery and higher number of finished orders. When they decided to implement the end-to-end process more effective way, they understood that calculation of lead time is a problem for company so that use of Oracle IS software was necessary – like Oracle Transportation, Oracle Real-Time Scheduler which helped the company improve the level of on-time delivery by 10 %
What does the future of LMIS look like?
Given the current trends of globalization, integration, and increase in collaborative logistics there are a few rising challenges for the information systems to deal with:
- How to treat the excessive supply of data? How to improve data quality?
- Is it possible to lower costs even further?
- More integration or decentralization?
- The trade-off of web based and cloud based systems: speed vs. security.
- How to account for environmental issues and other externalities?
We can not know exactly what the future will bring, but we can assume with a high level of confidence that it will imply a more technologically savvy workforce, more switching towards e-commerce, and improvements in supply chain social responsibility. Some interesting forecasts also predict virtual logistics teams and more remote working, increasing popularity of shared logistics platforms and cutting costs via autonomous road transportation.
References
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