PRACTICAL EXAMPLES OF SUPPLY CHAIN APPLICATIONS USING A DISTRIBUTION SIMULATION LABORATORY ABSTRACT

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1 PRACTICAL EXAMPLES OF SUPPLY CHAIN APPLICATIONS USING A DISTRIBUTION SIMULATION LABORATORY Samir Khoury khourys@ecu.edu Leslie Pagliari pagliaril@ecu.edu Mark Angolia angoliam@ecu.edu ABSTRACT Teaching supply chain applications can be very challenging for students to understand if real world examples are not used. At, a Distribution Simulation Laboratory has been designed in order to teach students the concepts in supply chain with real world experiences. This paper will provide detailed examples of some of the practices and software packages used within this program. INTRODUCTION There are several benefits to ensuring students receive real world experience in business processes, current technology, and supervision, while pursuing a degree in their chosen field of study. One benefit of gaining real world experience is they are more prepared to handle business problems and opportunities [1]. Another benefit realized from real world experience is that students become more marketable. Employers are looking for students that can adapt quickly to their work environment. As Fedorowicz, Gelinas, Usoff, and Hachey [3, p.235] point out, it is especially difficult for a newly minted graduate to grasp even more complex inter-organizational supply chains and information flows, if the graduate was not exposed to actual business processes. To ensure students are gaining real world experience in business processes, current technology, and supervision techniques, the undergraduate degree in Distribution and Logistics at East Carolina University created a distribution simulation laboratory. This laboratory environment replicates an actual distribution warehouse with approximately 200 different stock keeping units on hand. Students utilize a variety of material handling equipment to manipulate stock, while performing structured and detailed labs. This laboratory is used currently in 2 classes, and will be expanded in the near future. LABORATORY EXAMPLES In the Warehousing and Materials Handling course, students are required to complete a total of thirteen (13) labs. In each of these labs students perform real world tasks. Each lab assignment includes a discussion of the concepts, required deliverables, objectives, safety procedures, and step-by-step procedures to complete. In order to ensure success of each lab, students are divided into groups and assigned different roles for each of the thirteen (13) labs. These labs were

2 created by the course owner, Mr. Mark Angolia, a faculty member at in the Distribution and Logistics program. Students are rotated through the following roles throughout the labs to expose them to all facets of their role and the tasks involved in each role. warehouse manager warehouse supervisor order picker auditor A fundamental purpose of the labs is to expose the students to various order picking scenarios and Key Performance Indicators (KPIs) to provide a basis for operational improvement outside of academia. Students do hands on work in labs titled Single Order Picking, Batch Order Picking and Zone Order Picking. In each lab, a warehouse manager is utilized to control operations, while other students prepare shipments of each item picked. Students pick the same sequence of simulated orders, collecting statistics on time, order fill rate and order accuracy. The labs were developed so students begin to examine differences between high and low volume distribution centers, customer order profiles, order picking statistics, labor management, warehouse layout, and to develop ways to improve the process. Data analysis using excel is required for each lab. The Enterprise Resource Planning (ERP) software chosen to upgrade the labs in the coming year is SAP. This was chosen since it is one of the most widely used ERP software packages in the world [4]. The introduction of SAP into the simulation lab is intended to integrate the SAP Sales and Distribution and Materials Management modules with lab. A development plan has been designed and introduction of SAP will be piloted in the spring of The goals are to allow integration with the 3 previously mentioned order picking labs, and to upgrade the existing labs on Physical Inventory and Cycle Counting. Full testing of SAP will not occur until fall SAP is currently being implemented within the Distribution and Logistics degree program through a phased-in approach. Currently there are two courses implementing the SAP system. They are the Warehousing and Material Handling and Special Topics in Distribution and Logistics courses. The SAP graphical user interface was acquired after the degree program joined the SAP University Alliance (UA) program in the summer of COURSES USING SAP Currently, the Special Topics in Distribution and Logistics course is serving as a pilot for the ERP for Distributors course that will run in the spring of This course is being utilized to help develop a plan for implementation into the ERP course as well as other courses within the degree program that will utilize SAP. The ERP for Distributors course will expose students to a variety of ERP processes while enabling students to manage a well-known ERP software package. The course is currently being

3 modified to allow students to manage a variety of ERP and business processes using a fictitious organization developed by the SAP UA program, called Global Bike. Every lab developed for Global Bike allows students to complete practical exercises through a step-by-step approach. As Hayen and Cappel [4] point out, the SAP UA program has been successful in similar degree program integrations. Furthermore, in a survey conducted by Rosemann and Maurizio [8] of 714 university students from eight (8) different countries resulted in positive feedback, where the majority of students indicated they were pleased with their program of study. The majority of these students felt the SAP training made them more appealing to hiring managers. Plans are currently underway to incorporate the SAP UA program into several more courses within the Distribution and Logistics degree program. In order to further strengthen the SAP UA program within the Distribution and Logistics program and to expose more students to real world applications that are currently in use in today s industry, students and faculty from other degree programs have been invited to participate in the program. This integration will begin in the spring of 2010 once the Distribution and Logistics program faculty are well-trained and student migration can begin. Since ERP systems span all facets of the organization such as sales, accounting, human resources, and logistics, integration of an ERP system in a variety of courses will expose students to an ERP system they may have to use after graduation [8]. Integrating SAP, the Global Bike exercises, as well as the warehouse simulation lab will provide students many of the benefits Léger [7] identified in a similar implementation and subsequent study. ADDITIONAL IMPLEMENTATIONS IN THE SIMULATION LAB Other labs expose students to hardware and technology used in the distribution industry. Examples of these are bar coding and Radio Frequency Identification (RFID). Students generate bar codes in different symbologies and test multiple X dimensions and mil size to get an understanding of readability and read range. The software BarTender 9.0 is used to create common industry bar codes such as Code 39, Code 128 and Interleaved 2 of 5. Students design their own label and then use the lab SKUs to create actual bar codes using the Zebra bar code printer. PowerScan bar code scanners are used for testing and comparison which helps students understand the practicalities and limitation of long range scanning from material handling equipment such as fork lifts. Another important technology students are exposed to in the warehousing simulation lab is Radio Frequency Identification (RFID). As Bottani [2] points out, RFID is still in its infancy stage, but is expected to become a popular method of product identification. RFID has been embraced by retail chains, such as Wal-Mart, and government agencies, such as the Department of Defense [10]. Passive RFID tags and hardware from Alien Technologies are also demonstrated. Labs are used to explain and demonstrate the basic technology of RFID. In addition, students conduct practical

4 experiments to test read range, interference, reliability and repeatability of this emerging technology. A portion of the lab SKUs are tagged with RFID and experiments run using various packaging materials, tag orientation, tag density, and conveyor speed to study the effectiveness of the RFID reader and antennas location/configuration. It is imperative that students are exposed to RFID technology, since RFID adds additional benefits to product identification beyond those available in standard barcode technology. RFID tags are able to store much more detailed information such as product descriptions, units of issue, manufacture dates, and even diagrams [5]. Another significant benefit of RFID is that RFID readers do not require line-of-sight to read tags [6]. Since line-of-sight is not required, tags can be read as products enter or leave a warehouse. Tags can also be read as they pass RFID readers along major highways. RFID technology allows the tracking of product movement, well beyond what is possible with standard barcode. In fact, an RFID tagged product can be easily tracked from beginning to end of a supply chain [9, p.61]. To further students exposure to real world experiences, the warehouse simulation lab was equipped with material handling equipment such as hand trucks, a flexible skate wheel conveyor, and a Yale narrow aisle reach truck. Since safety requirements prevent students from operating the forklift within the lab, students observe several forklift demonstrations provided by trained and certified instructors. Since many of the labs students perform mimic actual warehousing and distribution functions, students learn first-hand how to complete warehouse tasks within various roles. In addition, they learn how to use some of the most popular software packages used in industry. This learning goes beyond physical movement of products, since labs incorporate supervisory skill development, decision making, and data analysis. These learning components are not only encouraged. They are required in nearly every lab exercise. This approach student learning is critical, since studies have shown that active learning, where students perform actual tasks they can apply in a business environment, results in effective learning and future application of knowledge [1]. CONCLUSION The Distribution Simulation Laboratory at is an integral part of the learning process in the Distribution and Logistics degree program. By using software packages such as SAP and BarTender, and by utilizing technologies such as RFID, PowerScan Barcode readers, and incorporating hands-on application lab exercises, students graduating from this degree program gain real world knowledge and are prepared to begin work upon graduation. This approach benefits future employers, as well as students, since graduates require less initial training. Furthermore, graduates from this program are expected to have a better understanding of the integration of technology within logistics and distribution field. As more SAP modules are developed and implemented into more courses within the program, such as Purchasing Logistics,

5 Global Logistics, Strategic Pricing, Supply Chain Logistics, and Introduction to Logistics, students will begin to see the entire process of ERP development and the need within a company for a similar type of integrated system. The integration of emerging technology, current software applications, management and supervisory training, and standard logistics and distribution practices into a degree program is an ongoing endeavor. Although significant changes were made to several courses within the degree program, many more changes are planned. To ensure effectiveness throughout these changes, student learning will be tracked and evaluated with a capstone course currently under revision that will allow students to demonstrate their mastery of logistics and distribution functions, leadership skills, and most of all, their readiness for a rewarding career in their chosen field. Although this hands-on and comprehensive approach to logistics and distribution training is expected to produce effective graduates, more research is needed to determine the long-term effects of this approach. Future research is needed to determine if graduates of this approach remain successful beyond initial employment or if they are even successful during initial employment. Future research is also needed to determine what logistics and distribution organizations value the most from graduates, beyond what can be gathered from advisory boards and graduate surveys. More comprehensive studies that reach a wider range of organizations are needed, since virtually every organization employs logistics and distribution specialists. REFERENCES [1] Auster, E. R. & Wylie, K. K. (2006). Creating active learning in the classroom: A systematic approach. Journal of Management Education, 30(2), [2] Bottani, E. (2008). Reengineering, simulation and data analysis of an RFID system. Journal of Theoretical and Applied Electronic Commerce Research 3(1), [3] Fedorowicz, J., Gelinas, U. J., Usoff, C., & Hachey, G. (2004). Twelve tips for successfully integrating enterprise systems across the curriculum. Journal of Information Systems Education, 5(3), [4] Hayen, R. L. & Cappel, J. J. (2003). Enterprise software certification academy: A longitudinal study. The Journal of Computer Information Systems, 43(3), [5] Jones, P., Clarke-Hill, C., Shears, P., Comfort, D., & Hillier, D. (2004). Radio frequency identification in the UK: Opportunities and challenges. International Journal of Retail and Distribution Management, 32(3), [6] Karkkainen, M. (2003). Increasing efficiency in the supply chain for short shelf life goods using RFID tagging. International Journal of Retail and Distribution Management, 31(3), [7] Léger, P. (2006). Using a simulation game approach to teach enterprise resource planning concepts. Journal of Information Systems Education, 17(4), [8] Rosemann, M. & Maurizio, A. A. (2005). SAP-related education: Status quo and experiences. Journal of Information Systems Education 16(4), [9] Tu, Y. & Piramuthu, S. (2008) Reducing false reads in RFID-embedded supply chains. Journal of Theoretical and Applied Electronic Commerce Research, 3(2), [10] Whitaker, J., Mithas, J., & Krishnan M. S. (2007). A field study of RFID deployment and return expectations. Production and Operations Management, 16(5),