Chapter 6 - Logistics Information System

Transportation
Management
(BML 3113)

CHAPTER 6: LOGISTICS INFORMATION SYSTEM (LIS)

WHAT IS LOGISTICS INFORMATION SYSTEMS?

What is Logistics Management?
US council of Management (CLM) define

Logistics Management is part of the supply chain
processes that plans, implements and controls the
efficient, effective flow and storage of goods,
services and related information from the point of origin
to the point of consumption in order to meet customers'
requirements".

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LIS - Decision Support Systems in Logistics

▪ To assist logistics executives in their
decision process.

▪ To support, but not replace, managerial
judgment.

▪ To improve the effectiveness of logistics
decision.

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This definition includes the flow of goods, services and

information in both the manufacturing and service sectors.

The major logistics activities include

➢customer services,
➢demand forecasting,
➢inventory management,
➢logistics communications,
➢material handling,
➢order processing,
➢packaging,
➢parts and service support,
➢plant and warehouse site selection,
➢procurement,
➢reverse logistics,
➢traffic and transportation,
➢warehousing and storage .

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Logistics Information System

Definition:
An interacting structure of people, equipment, and
procedures which together make relevant
information available to the logistics manager for the
purposes of planning, implementing and control.

Information flow makes a logistical system dynamic.
Quality and timeliness of information are key factors
in logistical operations.

Bowersox and Closs

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Logistics Information Systems (LIS)

LIS is made up of the following information

systems:
▪Sales Information System
▪Purchasing Information System
▪Inventory Controlling
▪Shop Floor Information System
▪Plant Maintenance Information System
▪Quality Management Information System
▪Retail Information System (RIS)
▪Transport Information System (TIS)

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Information

▪ Data that has been processed or
reorganized into a more meaningful form
for someone.

▪ Information is formed from combinations
of data that hopefully have meaning to
the recipient.

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How Information Systems 8
Facilitate Logistics Management

• Decide when, what to produce, store, move
• Rapidly communicate orders
• Communicate orders, track order status
• Check inventory availability, monitor levels
• Track shipments
• Plan production based on actual demand
• Rapidly communicate product design change
• Provide product specifications
• Share information about defect rates, returns

Logistics Information System

LIS combine hardware and software to
manage, control, and measure logistics activities.

Computers System and application
Servers programs
Internet technologies
Input and output devices
Communication channels
Barcode, RF, storage media

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Logistics Information System

▪ LIS perform three vital roles in business firms.

– Logistics processes and operations,
– Logistics decision making; and
– Strategic competitive advantage

▪ Major application categories of information
systems include:

– Operations Support Systems; and
– Management Support Systems

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Logistics Information System

▪ LIS Benefits

▪ Increased product visibility and control
▪ Improved knowledge of key logistics network

component capabilities and capacity
▪ Enhanced economic value

▪ Cost reductions
▪ Sales increases

▪ Creation of competitive advantage

▪ Direct linkages to customers

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LIS & Modular Structure
LIS is made of following modular structure:

✓Planning / forecasting
✓Early warning systems
✓Logistics information Library

Planning / Forecasting
The Logistics Information System allows you not only to evaluate
actual data, but also to create planning data. The information
systems provide an easy-to-use planning functions that are also
supported by a forecasting function. The planning functionality of
the information systems and the component Sales & Operations
Planning (SOP) were combined and enhanced to make one central
planning and forecasting tool.

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LIS & Modular Structure

Early Warning Systems
An integrated in all of the information systems and is based on the
key figures of the information system. The Early Warning System
supports the decision-making process by allowing you to target and
monitor weak areas in logistics. It searches for exceptional
situations and helps in the early detection and correction of
undesirable situations.

Logistic Information Library
The Logistics Information Library is a further component of the
Logistics Information System. The Logistics Information Library
makes it possible to access key figures in LIS by using simple
search strategies. In addition, the Logistics Information Library
allows you to catalogue the key figures.

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Importance of information

✓Key element to develop logistical competence
✓Integrates various activities of logistics
✓Important to customer service / sales / marketing
✓Facilitate managers decision making
✓Information eliminates/reduces uncertainties
✓Triggering the flow of materials
✓ Performance measurement
✓Logistical decision making
✓Logistical strategy development

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Logistical Information Functionality

Logistical information functionality is enabling
appropriate decision-making at different levels of
hierarchy.

Four levels of Information Functionality

➢Transaction Level
➢Management Control Level
➢Decision Level
➢Strategic / Planning Level

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Four levels of Information Functionality

Transactional
level

Strategic Information Management
level Functionality Control level

Decision
level

FOUR LEVEL INFORMATION SYSTEMS

Strategic Planning •Strategic Alliance Formulation
•Development & Refinement

Capabilities & Opportunities
•Focused/Profit Based Customer

Service Analysis

Decision Analysis •Financial Measurement
Management Control •Customer service Measurement
•Productivity Measurement
Transaction Level •Quality Measurement

•Vehicle routing & scheduling
•Inventory level & Mgmt
•Network/facility location/configuration
•Vertical Integration vs 3PL / out sourcing

•Order entry •Shipping
•Inventory •Pricing
•Invoicing

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Introduction

▪ Information and Communication Technology (ICT)

ICT is a technology required for information processing, in particular, the it use
electronics computers, communication devices and application software to convert,
store, protect, process, transmit and retrieve information from anywhere, anytime.
This is the techniques used in the processing of transmission information, mainly
computers, internet and telecommunications.

1990 : Birth of the Internet

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▪ E- What ??? E-commerce, e-business, e-logistics…

It means the exchange of goods and services between two entities
on the networks, including Internet.
It represents a market of over billion in sales in worldwide
transactions on the Internet.
Results of electronic commerce

New business model for e-commerce

Lazada, EBay, Shopee B2B
Zalora, Alibaba.com B2C
Amazon, Mudah.com.my C2C
C2B
G2C

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Ict impact on logistics

▪ Finally

Evolution of ICT + Evolution of society + Evolution of the
players in the
supply chain

=
New kind of Supply chain
New way to manage and use the supply chain

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Technologies in LIS

▪ ERP ( WMS, TMS)
▪ EDI
▪ Bar code
▪ RFID
▪ QR Code
▪ Cloud

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Enterprise Resource Planning

▪ Enterprise resource planning (ERP) is business-
management software—typically a suite of
integrated applications—that an organization can use to
collect, store, manage and interpret data from
many business activities, including:

▪ product planning, cost
▪ manufacturing or service delivery
▪ marketing and sales
▪ inventory management
▪ shipping and payment

ICT overview

▪ WMS : Warehouse Management System

WMS, means a category of software designed to manage the operations of a
warehouse. The primary purpose of the WMS is not to take orders but to take
them into account and to optimize the preparation.

Perimeter : Limited and does not cover the entire supply chain. In general
only the Warehouse.

Advantages :

* Decrease of labor costs
* Increase the storage capacity
* Increase customer service

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ICT overview

▪ TMS : Transportation Management System

Software solution for planning and execution of external

flows, and thus the transport of goods (transport optimization),
while taking into account the multimodal transport, reloading
and international trade.
Main features :
1) Short-term plan and decide : Analysis / aid to decision
2) Monitoring & Follow the transport
3) Measuring

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TRANSPORT MANAGEMENT SYSTEM

Transport Management
System/Software (TMS) is a logistics
platform that allows users to manage and
optimize the daily operations of their
transportation fleets. It comes under the
subset of Supply Chain Management. Its
primary function is to plan and execute the
physical movement of goods.

TRANSPORT MANAGEMENT SYSTEM

The ability to track drivers, inventory and other
processes will allow your business to increase
productivity. This can improve the supply chain
and reduce inefficiencies. A transportation
management system provides increased
efficiencies in the supply chain and provides
savings to users.

Why need a Transport Management System?

1. Improved Cash Flow

A good transportation management software will help a
business immensely in reducing shipping costs. The
right system will analyze the financial aspects of each
logistical route. It will generate user-oriented
suggestions for reducing expenses in specific areas such
as fuel consumption or driver overtime. This system is
able to provide savings by analytics and optimization. A
transportation management system provides
suggestions of how to reduce expenses and uses data
that provides valuable information.

Why do you need a Tms?

2. Track deliveries in real time

A TMS provides the ability to view where drivers and
shipments are located in real-time. This provides information
as to the amount of time a route takes, and this can then
create an efficient route schedule. Also, this provides
information as to which drivers and routes are most efficient.

3) Increase customer service

A TMS provides improved customer service levels with the
ability to monitor on-time performance. Also, with the ability
to locate where shipments are and the distance from the
destination. The TMS provides an online portal where
customers are able to see exactly where their shipments are
and inform their customers. This provides increased customer
service as customers have the ability to access shipment and
freight information when needed.

Why do you need a Transport Management System?

4) Improve warehouse efficiency and productivity
With the constant flow of incoming and outgoing inventory, a
well-organized warehouse is an important part of the logistics
process. Pairing a TMS with a WMS can create a record of
orders and track where they are located in the warehouse, in
transit and when they arrive. This will allow users to review
processes and ensure they are efficient.

5) Increase supply chain efficiency
The ability to track drivers, inventory and other processes will
allow your business to increase productivity. This can improve
the supply chain and reduce in-efficiencies. A transportation
management system provides increased efficiencies in the
supply chain and provides savings to users.

BENEFITS OF TMS

1. Reduced costs for the business and the end customer
2. Simplification of supply chain processes across geographies, modes,

and carriers
3. Automation of business operations for faster and more accurate billing

and documentation
4. Improvement in visibility and security, especially in transit
5. Time savings—fewer manual steps result in fewer delays and faster

delivery times
6. The ability to track freight, both locally and globally, on a single

platform
7. Better import and export compliance minimizing penalties and

shipment delays
8. New business insights as better reporting leads to faster action and

process improvement
9. Improvements in customer service and customer satisfaction with real-

time updates and fewer shipment delays
10. The ability to scale the business by meeting and exceeding customer

demands for fast, on-time shipments





















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