Page 124 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 6: Information Technology Framework

management decisions. This is critical since customers frequently need quick access to inventory Notes
and order status information. Another aspect of availability is the ability to access required
information, such as order status, regardless of managerial, customer, or product order location.

Accuracy

Second, logistics information must accurately reflect both current status and periodic activity
for measures such as customer orders and inventory levels. Accuracy is defined as the degree to
which LIS reports match actual physical counts or status.

Timeliness

Third, logistics information must be timely to provide quick management feedback. Timeliness
refers to the delay between when an activity occurs and when the activity is visible in the
information system.

Example: In some situations, it takes hours or days for the system to recognize a new
order as actual demand, since the order is not always directly entered into an active demand
database.
Information system timeliness refers to system status, such as inventory levels, as well as
management controls, such as daily or weekly performance reports. Timely management controls
provide information when there is still time to take corrective action or to minimize the loss. In
summary, timely information reduces uncertainty and identifies problems, thus reducing
inventory requirements and increasing decision accuracy.

Exception

Based LIS Fourth, LIS must be exception-based to highlight problems and opportunities. Logistics
operations typically contend with a large number of customers, products, suppliers, and service
companies.

Example: The inventory status for each product-location combination must be reviewed
regularly to schedule replenishment orders.
Another repetitive activity is the status review of outstanding replenishment orders. In both
cases, a large number of products or replenishment orders typically require review. Often
times, the review process requires asking two questions. The first question concerns whether
any action should be taken for product or replenishment orders. If the first answer is yes, the
second question concerns the type of action that should be taken. Many LIS require that reviews
be completed manually, although they are increasingly being automated. The rationale for still
using manual procedures is that many of the decisions are unstructured and require judgment
on the part of the user. State-of-the-art LIS incorporate decision rules to identify these exception
situations that require management attention and/or decision making.

Flexibility

Fifth, logistics information systems must contain the capability to be flexible in order to meet
the needs of both system users and customers. Information systems must be able to provide data
tailored to specific customer requirements.

Example: Some customers may want order invoices aggregated across certain geographic
or divisional boundaries. A flexible LIS must be able to accommodate both types of requirements.

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