IT and Supply Chain Management

ACCA P5 Advance Performance Management

IT plays critical role in supply chain management.

Upward Supply Chain (USC): Upward Supply Chain represents for parties associated with supplying resources to organisation. Management of USC involves activities and information flow necessary for transfer of resources from its origin to production site. The control of activities and information using information technology is vital in operational positioning of the business. Using intranet, extranet and internet is common practice in managing upward supply chain. E-procurement is practice in USC management which includes e-sourcing (method of finding existing/new suppliers), e-purchase (filing electronic requisition and dispatching electronic order) and e-payment (electronic invoicing and fund transfer). IT has transformed execution of logistic planning at executive level and management and implementation at operational level. It made the use of different software in supply chain management is common in practice.

Downward Supply Chain (DSC): Downward Supply Chain represents for parties associated with supplying products and services produced by organisation. Management of DSC involves activities and information flow necessary for transfer of product from its production site to point of sale. Along with this it concentrates on customer relation management.

IT and Supply chain management an example: This is the snapshot from the article “The Business of Growing” published on oracle.com website about Land O’Lakes who introduces Oracle’s Demantra demand planning applications and Oracle Transport Management, which the company promptly integrated with its existing JD Edwards EnterpriseOne system to improve shipping and delivery operations and another company WinField who sells seed and crop protection products and services to local co-op members who, in turn, sell to farmers. To support the operation, WinField has grafted an array of Oracle technologies together with existing proprietary systems. This includes the R7 Tool—an interactive web-based, mobile platform that aids agronomic decision-making—and the company’s web-based seed ordering system, Connect3.

What makes seed sales unique and challenging is that they are directly tied to seasonal purchasing. “There’s somewhat of a Black Friday in the seed business,” explains Tony Taylor, director of technology services at Land O’Lakes. “WinField is a US$5 billion company that sells all of its seed during about a six-week period of time.” With such a hugely compressed sales cycle, speed and efficiency in the online ordering experience are essential. Add to that heightened customers’ expectations, and if transactions are running in minutes rather than seconds, customers aren’t going to use that system.
To support its co-op members, WinField uses Oracle Endeca Information Discovery technology in its Emerald Extras Equinox program, which helps co-op members better understand behaviors and patterns in the farming market. “We can glean information that tells us, for instance, who has bought 1,000 acres of seed but maybe has bought only 500 acres’ worth of protection products such as herbicides, granular micronutrients, adjuvants, and seed treatments,” explains Macrie.