How To Use An It System For Logistics

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2 ERP System as the key support for logistics operations Agnieszka Tubis (PhD) Dean of the International University of Logistics and Transport

3 The expected benefits from implementation of IT solutions Improvement of the exchange of relevant information concerning the logistics process, Acceleration of logistics operations, Shortened time of conducting logistics analyses, Relieve operational staff, Simplification of logistics procedures. 3

4 Is it possible that a good IT system will make our day-today functioning more difficult? Is it possible that a IT system supporting logistics processes can constitute a bottleneck of the process? UNFORTUNATELY YES IT solution can help us solve our old problems, but at the same time can create new ones. 4

5 Two case studies presenting the sad truth Case 1 A manufacturer of products on the order, Purchase of materials is made to the warehouse, 3 real warehouses, 8 virtual. Case 2 Company providing services, Purchases made through auctions or requests for proposals, Comprehensive procedures for purchasing, Two non-integrated systems to support procurement processes. 5

6 Case 1 6

7 When ERP system is installed only for book keeping Internal dispatch note from the warehouse is issued for the entire production set, Lack of one element from the list suspends the possibility of registering the dispatch of materials from the warehouse, Production must be carried out release of other materials is recorded in a notebook, When the missing material arrives and is immediately released for the production, complete set for the production is recorded in the system, according to an internal dispatch note. 7

8 Effects for logistics operations Warehousemen record warehouse material movements at any time - "in your free time", Lack of systematic records of dispatches means lack of actual data about the stock, Lack of trust to information stored in ERP system limited functionalities supporting decision-making process, Inventory control system based on purchasers intuition. The occurrence of shortages of materials, with concurrent excess of inventory. 8

9 When ERP system is not coordinated with logistics processes Goods received note generated by IT system, requires manual input of quantity and value of accepted materials, Issue of the goods received note requires invoice. Delivery note is attached to delivered materials, but the invoice is delivered separately, The invoice arrives to the company usually 2-4 days after the delivery of the materials, Materials are held in the reception area until goods received note is issued, which can take up to a week. 9

10 Effects for logistics operations Increased demand for space in reception area limits the availability of space in the storage area, In case of supply of materials needed immediately for production, the dispatch is recorded in a notebook, Completion of registration data after certain period of time causes limited trust to the information stored in the system. 10

11 Case 2 11

12 When the system requires manual input of individual data The role of the system is the integration of information flows between particular cells and levels of the organization. Purchasing procedures require the introduction of the system large amount of data is entered manually by the employees. Each entry for each supplier has to be introduced and accepted separately. Simple case input of 5 offers from suppliers of 10 products takes 100 minutes of time for a single employee. 12

13 Effects for logistics operations Logistics staff is primarily engaged in data input to the system and preparation of the documents 90% of time. Employees do not have time for analytic activity or searching for the possibilities of improving logistics processes. The role of logistics staff is limited to fulfil the function of purchasers. 13

14 When used IT systems are not integrated The service of supply process is supported by two not integrated IT systems. The demand of departments, generation and acceptance of the order and suppliers offers are entered to IT system "A". Registration of sent orders, received invoices and internal documents associated with material flows is made in system "B". 14

15 Effects for logistics operations There is no IT platform linking both systems there is manual data input and logistics staff do it separately to each system. The work associated with input order data is doubled. Preparation of order in each system takes about 20 minutes on average. The possibility of data transfer between the systems will allow to limit the time of logistics operations by the average time mentioned above. 15

16 75% of disturbances in the realisation of logistics processes are connected with information flows in the company and functionalities of IT system used. 16

17 IT system will be really useful and effective in the area of logistics when it is well coordinated with logistics processes, employees/ users trust the data stored in the system, it is not only used for book-keeping, but also supports employees decision-making processes, the main effort of the employees is aimed at data analysis and not manual data input. 17

18 Implementation of the IT system Concentrated attention on: Technical aspects, Business aspects, Logistics aspects, Integration with information system in the company and process coordination. Implementation team: IT specialists supporting implementation, Employees/ delegates of the client implementing IT system, Logistics consultant. 18

19 The role of logistics consultant in the process of IT system implementation Analysis and evaluation of the current realization of logistics processes, Reengineering of processes improving realization of logistics operations and including implementation of IT solution, Defining current and potential information needs of logistics staff based on the possessed knowledge and consulting experience, Advise in the area of operational and analytic usefulness of implemented IT tools. 19

20 Thank you for your attention 20