INFORMATION SYSTEMS IN MANAGEMENT IV

Information flow can be defined as the stream of data in different directions withvariable contents between various databases (departments) within a company. Datafor a logistics management information system can come from many sources andthe most important sources of data is common database as presented at the figure 1.SUPPLY CHAINA supply chain consists of all parties involved, directly or indirectly, in fulfilling acustomer request. The supply chain not only includes the manufacturer and suppliers,but also transporters, warehouses, retailers, and customers themselves. Withineach organization, such as manufacturer, the supply chain includes all functionsinvolved in receiving and filling a customer request. These functions include, butare not limited to, new product development, marketing, operations, distribution,finance, and customer service [4].Lets consider a customer walking into a ABC store to purchase a product. Thesupply chain begins with the customer and their need for detergent. The next stageof this supply chain is the ABC retail store that the customer visits. ABC stocks itsshelves using inventory that may have been supplied from a finished-goods warehousethat this store manages or from a distributor using trucks supplied by a thirdparty. The distributor in turn is stocked by the manufacturer that receives raw materialfrom a variety of suppliers.A supply chain is dynamic and involves the constant flow of information, product,and funds between different stages. In our example, ABC store provides the product,as well as pricing and availability information to the customer. The customertransfers funds to ABC store. ABC conveys point-of-sales data as well as replenishmentorder via trucks back to the store. ABC transfers funds to the distributorafter the replenishment. The distributor also provides pricing information and sendsdelivery schedules to ABC. Similar information, material, and fund flows takeplace across the entire supply chain.This example illustrates that the customer is an integral part of the supply chain andthat the primary purpose from the existence of any supply chain is to satisfy customerneeds. As it was described in previous example, supply chain activities beginwith a customer order and end when a satisfied customer has paid for his or herpurchase. Presented example involves only one player at each stage, but in reality,a manufacturer may receive material from several suppliers and then supply severaldistributors.The objective of every supply chain is to maximize the overall value generated.The value a supply chain generates is the difference between what the final productis worth to the customer and the effort the supply chain expends in filling the customer’srequest. For example, a customer purchasing a product from ABC storepays $1,000, which represents the revenue the supply chain receives. ABC andother stages of the supply chain incur costs to convey information, produce com-33