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Unit 6: Information Technology Framework

shipping customer orders. For today’s enterprises to remain competitive, the role of information Notes
infrastructure must be extended to include requirements planning, management control, decision
analysis, and integration with other members of the supply chain.
The key processes initiate, monitor, and measure activities required to fulfil customer and
replenishment orders. These processes take two forms. The first are the planning and coordination
processes to produce and deploy inventory. The second are the operating processes to receive,
process, ship, and invoice customer orders.

Planning and coordination include the processes necessary to schedule and coordinate
procurement, production, and logistics resource allocation throughout the enterprise. Specific
components include definition of strategic objectives, rationalization of capacity constraints,
and determination of market/distribution, manufacturing, and procurement requirements.
Operations include the processes necessary to manage customer order fulfilment, including
order processing, inventory assignment, distribution operations, transportation operations,
and procurement coordination. These processes are completed for both customer and
replenishment orders. Customer orders reflect demands placed by enterprise customers.
Replenishment orders initiate finished goods movement between manufacturing and distribution
facilities.
Inventory deployment and management is the interface between planning/coordination and
operations that controls the cycle and safety inventory stock whenever a Make-to-Order (MTO)
or Assemble-to-Order (ATO) strategy is not possible. When an enterprise is able to utilize an
MTO manufacturing strategy, the planning/coordination and operations processes essentially
mirror each other.

Example: When an MTO strategy is possible, it may not be necessary to schedule
anticipatory raw materials and production or maintain buffer inventory.

Planning/Coordination

Supply chain system planning/coordination components form the information system foundation
for manufacturers and merchandisers. These components define core activities that guide
enterprise resource allocation and performance from procurement to product delivery planning/
coordination includes materials planning processes both within the enterprise and between
supply chain partners. The specific components are (1) strategic objectives; (2) capacity constraints;
(3) logistics requirements; (4) manufacturing requirements; and (5) procurement requirements.

Strategic Objectives

Primary information drivers for many enterprises are strategic objectives that define marketing
and financial goals. These strategic objectives are typically developed for a multiyear planning
horizon that often includes quarterly updates. Marketing’s strategic objectives define target
markets, product development, marketing mix plans, and the role of logistics value-added
activities such as service levels or capabilities. The objectives include customer scope, breadth of
products and services, planned promotions, and desired performance levels. Marketing goals
are the customer service policies and objectives that define logistics and supply chain activity
and performance targets. The performance targets include service availability, capability, and
quality elements. Financial strategic objectives define revenue, financial and activity levels and
corresponding expenses, as well as capital and human resource constraints.

The combination of marketing and financial objectives defines the scope of markets, products,
services, and activity levels that logistics and supply chain managers must accommodate during

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