Role f Logistics in Shipping.

8/3/2019 Role f Logistics in Shipping.

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TO WHOM IT MAY CONCERN

This is to certify that the Assignment titled role of logistics and business

intelligence softwares in shipping industry carried out by Bilal Baseerat and

sushant makhnotra, accomplished under my guidance & supervisionas a duly

registered MBA student of the business school(Jammu University). This

project is being submitted by them in the partial fulfillment of the

requirements for submission of assignment of mid semester terms

.


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DECLARATION:

We hereby declare that theAssignment on the topic ROLE OF LOGISTICS IN SHIPPING

INDUSTRY is completed and submitted under the guidance and supervision of Prof. varsha

mehta

The preparation of the project report is based on our personal findings, several visits to various

websites.Further, the study was also assisted by published & unpublished material and other

secondary sources.

NAME OF THE STUDENT

BILAL BASEERAT

Sushant makhnotra


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PRFACE


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SHIPPING INDUSTRY AN INTRODUCTION.

Ship transport is watercraft carrying people (passengers) or goods (cargo). Sea transport has been the largest carrier of freight throughout

recorded history. Although the importance of sea travel for passengers has decreased due to aviation, it is effective for short trips and pleasure

cruises. Transport by water is cheaper than transport by air. Ship transport can be over any distance by boat, ship, sailboat or barge, over oceans

and lakes, through canals or along rivers. Shipping may be for commerce, recreation or the military. Virtually any material that can be moved,

can be moved by water, however water transport becomes impractical when material delivery is highly time-critical. "General cargo" is goods

packaged in boxes, cases, pallets, and barrels. Containerization revolutionized ship transport in the 1960s. When a cargo is carried in more than

one mode, it is intermodal or co-modal.

HISTORICAL BACKGROUND

From time immemorial man has had the need to transport men and materials, perishables as well as non perishables over long distances and

since the ancient man lived almost always near water he ultimately used this immense resource for this very purpose and as such shipping came

into being. During the times of the Syrian civilization and the Indus valley civilization it was common practice to transport goods by ships to

Egypt and Mesopotamia as is evident by the presence of dockyard at Lothal and the findings of coins and other materials from ancient

excavation sites, this all was in 2500 BC . With the advent of time shipping started playing a pivotal role in world economies and politics and

exploration works. They played the role of expeditionary forces throughout the world as is evident by the formation of companies like the British

East India Company, Dutch East India Company almost simultaneously and all to singularly one particular purpose to benefit from untapped

markets. At one time it was sad that one who controls the sea controls the world and it was true. Great many wars were actual ly fought over

possession of key islands and strategic holds over key sea lanes, Gibraltar gained its immense importance primarily because of this fact. In fact

these conflicts carried over into the modern age with the conflict over Suez canal being a sublime example of this trend.

Now coming to the modern times according to the 2005 CIA World Fact book, the world total number of merchant ships of 1,000 Gross Register

Tons or over was 30,936.Still over 90% of the world cargo transport is done by waterways primarily because the economics of aviation industry

do not allow non emergency and non perishable goods to be transported by air and so the sea lanes still play an extremely vital role in the modern

industrial and economic scenario, one which cannot be ignored by managers the world over and the on which firms and their planners have to

work so as to achieve even higher margins and provide higher customer satisfaction levels by streamlining and networking their widespread

resources and their gods carriers and provide an efficient as well as effective means of mass cargo transit for industries which spurns further

growth and improvement in this sector. This is where Information technology comes in.

1760 - Shipping customers met at Edward Lloyd's coffee House in London, UK, formed Registry Society, first ship

classification society, to develop system for independent inspection (by retired sea captains) of hulls, equipment of

ships seeking insurance coverage; 1764 - Edward Lloyd published first edition of Lloyd's Register of Ships; 1834 -

renamed Lloyd's Register of British and Foreign Shipping"; employed surveyors, established rules for ship

construction, maintenance.

February 1, 1788 - State of Georgia issued a patent for a steamboat to Isaac Briggs and William Longstreet; only

one ever to be issued by Georgia, first in U.S. for steamboat.


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1805 - London docks opened.

February 11, 1809 - Robert Fulton, of New York, NY, received a patent for "Steam Boats"; defended patent against

lawsuits of competitors for years.

December 13, 1816 - John Adamson of Boston, MA, received a patent for a "Floating Dry Dock"; dry docking and

repair of canal boats.

October 23, 1819 - Chief Engineer of Rome made first trial trip, excursion through Erie canal, from Utica to Rome

and return with Governor DeWitt Clinton, state officials, with ladies and gentlemen (about seventy persons on

board); boat named for Benjamin Wright, then chief engineer of Erie canal.

1845 - John Pilkington, Henry Wilson founded White Star Line to focus on Australian gold mine trade; October

1867 - faced forced bankruptcy (liability of 527,000 pounds); acquired by Thomas Henry Ismay (30) for 1,000

pounds; formed Oceanic Steam Navigation Company (400,000 pounds capital); 1899 - Joseph Bruce Ismay (son,

38) took over; early 1900s - J. P. Morgan formed International Mercantile Marine (IMM) to end fierce rate war

among shipping competitors, acquired all shipping rivals of White Star Line, placed into controlling trust, shipping

rates fixed; 1902 - acquired White Star; 1912 - Titanic disaster, Ismay exonerated

1947 - Cunard acquired remaining White Star shares, liqn technology beuidated most of its holdings, ships; lMay

1988 - Cunard acquired by Carnival Corporation and PLC; January 1, 2005 - Cunard Line Ltd. assets, liabilities

transferred to Carnival plc; Cunard name disappeared as business entitY

LOGISTICS AN INTRODUCTION

Over the last few decades the role of logistics management has undergone a paradigm shift.

It is widely recognized as an extremely important aspect of the overall business strategy. At

the same time, a number of factors have increased the complexity of logistics management.

This has led many companies to outsource their logistics activities to Third Party Logistics

(3PL) providers. Today, 3PLs play a critical role in the supply chains of their customers. They

are increasingly viewed as strategic partners who can play a pivotal role in optimizing the

supply chain and thereby providing sustained competitive advantage.

To effectively manage the supply chains of their customers, 3PLs need to constantly analyze

data collected from various sources and convert it into actionable information. Business


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Intelligence (BI) tools like data warehousing and OLAP can significantly help 3PLs in

achieving this objective. By providing a unified view of the entire supply chain, these tools can

help improve the functioning of basic 3PL services like transportation management,

warehousing, and inventory management. 3PLs can leverage BI tools to provide their clients

with information specific to their supply chain, thereby increasing their market

responsiveness. BI tools can also help 3PLs improve their own internal organizational

functions like human resources and financial management

Evolution of logistics as a strategic function

Logistics came to be recognized as a distinct function with the rise of mass

production systems. Production and distribution were viewed as a sequential chain

of extremely specialized activities; the role of logistics was to ensure availability ofall the requisite materials before each step in this chain. Obviously inventory of raw

materials, semi-finished and finished goods was a must across this chain to

ensure its smooth functioning. Business environment was relatively stable and the

mass production system ensured huge economies of scale for the manufacturers.

So far so good.

Enter the Japanese. The whole paradigm of mass production system came

crumbling down! Suddenly companies scrambled to adopt Japanese philosophy in

manufacturing and distributionLean manufacturing, Just-in-Time, Kaizen, and

Quality Circles became the key techniques. Simultaneously the role of logistics

underwent a paradigm shift. It became the cornerstone of business strategya

key enabler for the new techniques. Lean manufacturing called for drastic reduction

in inventory costs across the supply chain. This required on-time delivery of raw

materials, semi-finished and finished goods at different points in the chain; often

the window of on-time delivery was as low as 10 minutes. Hence logistics became

an extremely complicated process and firms hired experts to do this job.

Logistics management has, if anything, grown much more complex ever since.

Product lifecycles have shortened, customer behavior has become very fickle and

business environment as a whole is extremely volatile. Manufacturers can no

longer push their products down the supply chain; it is the consumer who pulls the


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Some of these services are:

n Supply Chain Visibility: Typically the order data and shipment data are available

in different operational systems. To provide complete supply chain visibility to

the customers order and shipment data needs to be collected in a real

time data warehouse or an operational data store (ODS), from where seam

less online tracing and tracking can be provided.

n Forecasting: Sophisticated demand and supply forecasting models can be

created using the available inventory movement data. These forecasts can

significantly help customers optimize their distribution and logistics network by

significantly reducing the inventory costs.

n Customized Reports and Analyses: To become critical business partners,

3PLs should provide customers with knowledge pertaining to the customers

supply chains. The knowledge can be delivered in the form of reports and

analysis created from the data captured by 3PLs

Now with respect to these changing times the application of the modern technology becomes an

imperative for modern industries dealing in the shipping industry to adapt to these technologies

and actually adopt and integrate these technologies in to their framework.We all know the

example of FEDEX which has actually revolutionized this industry with the introduction of their

product tracker technology under which the customer or the client can actually track down his

product while it is being shipped over international waters .Its warehouses and the port of call all

are integrated under revolutionary information technology tools.Now various new technologies

and info system have been developed in order to deal with these modern logistical and

management night mares

A management information system (MIS) is asystemthat provides information needed to

manage organizations efficiently and effectively.[1]

Management information systems involve

three primary resources: technology, information, and people. It's important to recognize that

while all three resources are key components when studying management information systems,
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the most important resource is people[according to whom?]

. Management information systems are

regarded as a subset of the overallinternal controlsprocedures in a business, which cover the

application of people, documents, technologies, and procedures used bymanagement

accountantsto solve business problems such as costing a product, service or a business-wide

strategy. Management information systems are distinct from regular information systems in that

they are used to analyze otherinformation systemsapplied in operational activities in the

organization.[2]Academically, the term is commonly used to refer to the group of information

management methods tied to the automation or support of human decision making, e.g. decision

support systems,expert systems, andexecutive information systems.[2]

[edit] Overview

Initially in businesses and other organizations, internal reporting was made manually and only

periodically, as a by-product of the accounting system and with some additional statistic(s), and

gave limited and delayed information on management performance. Previously, data had to be

separated individually by the people as per the requirement and necessity of the organization.

Later, data was distinguished from information, and so instead of the collection of mass of data,

important and to the point data that is needed by the organization was stored.

Earlier, business computers were mostly used for relatively simple operations such as tracking

sales or payroll data, often without much detail. Over time, these applications became more

complex and began to store increasing amount of information while also interlinking with

previouslyseparateinformation systems. As more and more data was stored and linked man

began to analyze this information into further detail, creating entire management reports from the

raw, stored data. The term "MIS" arose to describe these kinds of applications, which were

developed to provide managers with information about sales, inventories, and other data that

would help in managing the enterprise. Today, the term is used broadly in a number of contexts

and includes (but is not limited to):decision support systems,resourceandpeople management

applications,enterprise resource planning(ERP),enterprise performance management(EPM),
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supply chain management(SCM),customer relationship management(CRM),project

managementand database retrieval applications.

"The five eras are general-purpose mainframe and minicomputer computing, personal

computers, client/server networks, enterprise computing, and cloud computing."(Management

Information Systems: Managing the Digital Firm, 11th Edition. Prentice Hall/CourseSmart,

12/30/2008. p. 164). The first era was ruled by IBM and their mainframe computers, these

computers would often take up whole rooms and require teams to run them, IBM supplied the

hardware and the software. As technology advanced these computers were able to handle greater

capacities and therefore reduce their cost. By 1965 microprocessors began to take the market

away from mainframe computers. This technology allowed small desktop computers to do the

same work that it previously would have taken a room full of computers. This also decentralizedcomputing power from large data centers to smaller offices. In the late 1970s minicomputer

technology gave way to personal computers. Now for a relatively low cost anyone could have a

computer in his own home. This allowed for businesses to give their employees access to

computing power that 10 years before would have cost tens of thousands of dollars. This

proliferation of computers also helped create a need to connect these computers together on a

network giving birth to the Internet. As technology has increased and cheapened the need to

share information across a large company had also grown, this gave way to the client/server era.

With this era computers on a common network were able to access shared information on a

server. This allows for large amounts of data to be accessed by thousands and even millions of

people simultaneously. The latest evolution of Information Systems is cloud computing a recent

development, cloud computing lets users access data stored on a server, where they can not only

see the data but also edit, save, download or upload. This along with high speed networks has led

to a much more mobile view of MIS. In cloud computing the manager does not have to be at a

desk to see what their employees are working on but instead can be on a laptop, tablet pc, or

even smartphone.

An 'MIS' is a planned system of the collection, processing, storage and dissemination of data in

the form of information needed to carry out the management functions. In a way, it is a

documented report of the activities that were planned and executed. According toPhilip Kotler

"A marketing information system consists of people, equipment, and procedures to gather, sort,
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analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision

makers."[3]

The termsMIS andinformation systemare often confused. Information systems include systems

that are not intended for decision making. The area of study called MIS is sometimes referred to,

in a restrictive sense, asinformation technology management. That area of study should not be

confused withcomputer science.IT service managementis a practitioner-focused discipline.

MIS has also some differences with ERP which incorporates elements that are not necessarily

focused on decision support.

The successful MIS must support a business's Five Year Plan or its equivalent. It must provide

for reports based upon performance analysis in areas critical to that plan, with feedback loops

that allow for titivation of every aspect of the business, including recruitment and training

regimens. In effect, MIS must not only indicate how things are going, but why they are not going

as well as planned where that is the case. These reports would include performance relative to

cost centers and projects that drive profit or loss, and do so in such a way that identifies

individual accountability, and in virtual real-time.

Any time a business is looking at implementing a new business system it is very important to use

a system development method such as system development life cycle. The life cycle includesanalysis, requirements, design, development, testing and implementation.

Types of information management systems

There are many types of information management systems in the market that provide a wide

range of benefits for companies.

Transaction processing systems (TPS) collect and record the routine transactions of anorganization. Examples of such systems are sales order entry, hotel reservations, payroll,

employee record keeping, and shipping.

Management information systems (MIS) produce fixed, regularly scheduled reports basedon data extracted and summarized from the firms underlying transaction processing
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systems (TPS) to middle and operational level managers to provide answers to structured

and semi-structured decision problems.

Decision-support systems (DSS) are computer program applications used by middlemanagement to compile information from a wide range of sources to solve problems and

make decisions.

Executive support systems (ESS) is a reporting tool that provides quick access tosummarized reports coming from all company levels and departments such as accounting,

human resources and operations.

Advantages of information management systems

The following are some of the benefits that can be attained for different types of information

management systems.[4]

The company is able to highlight their strength and weaknesses due to the presence ofrevenue reports, employee performance records etc. The identification of these aspects

can help the company to improve their business processes and operations.

Giving an overall picture of the company and acting as a communication and planningtool.

The availability of the customer data and feedback can help the company to align theirbusiness processes according to the needs of the customers. The effective management of

customer data can help the company to perform direct marketing and promotion

activities.

Information is considered to be an important asset for any company in the moderncompetitive world. The consumer buying trends and behaviors can be predicted by the

analysis of sales and revenue reports from each operating region of the company.

Enterprise applications
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Enterprise systems, also known as enterprise resource planning (ERP) systems providean organization with integrated software modules and a unified database which enable

efficient planning, managing, and controlling of all core business processes across

multiple locations. Modules of ERP systems may include finance, accounting, marketing,

human resources, production, inventory management and distribution.

Supply chain management (SCM) systems enable more efficient management of thesupply chain by integrating the links in a supply chain. This may include suppliers,

manufacturer, wholesalers, retailers and final customers.

Customer relationship management (CRM) systems help businesses manage relationshipswith potential and current customers and business partners across marketing, sales, and

service.

Knowledge Management System (KMS) helps organizations facilitate the collection,recording, organization, retrieval, and dissemination of knowledge. This may include

documents, accounting records, and unrecorded procedures, practices and skills.

Developing Information Systems

"The actions that are taken to create an information system that solves an organizational problem

are called system development (Laudon & Laudon, 2010)". These include system analysis,

system design, programming, testing, conversion, production and finally maintenance. These

actions usually take place in that specified order but some may need to repeat or be accomplished

concurrently.

System analysis is accomplished on the problem the company is facing and is trying to solve

with the information system. Whoever accomplishes this step will identify the problem areas and

outlines a solution through achievable objectives. This analysis will include a feasibility study,

which determines the solutions feasibility based on money, time and technology. Essentially the


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feasibility study determines whether this solution is a good investment. This process also lays out

what the information requirement will be for the new system.

System design shows how the system will fulfill the requirements and objectives laid out in the

system analysis phase. The designer will address all the managerial, organizational and

technological components the system will address and need. It is important to note that user

information requirements drive the building effort. The user of the system must be involved in

the design process to ensure the system meets the users need and operations.

Programming entails taking the design stage and translating that into software code. This is

usually out sourced to another company to write the required software or companys buy existing

software that meets the systems needs. The key is to make sure the software is user friendly and

compatible with current systems.

Testing can take on many different forms but is essential to the successful implementation of the

new system. You can conduct unit testing, which tests each program in the system separately or

system testing which tests the system as a whole. Either way there should also be acceptance

testing, which provides a certification that the system is ready to use. Also, regardless of the test

a comprehensive test plan should be developed that identifies what is to be tested and what the

expected outcome should be.

Conversion is the process of changing or converting the old system into the new. This can be

done in four ways:

Parallel strategyBoth old and new systems are run together until the new one functions

correctly (this is the safest approach since you do not lose the old system until the new one is

bug free).

Direct cutoverThe new system replaces the old at an appointed time.

Pilot studyIntroducing the new system to a small portion of the operation to see how it fares. If

good then the new system expands to the rest of the company.

Phased approachNew system is introduced in stages.


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Anyway you implement the conversion you must document the good and bad during the process

to identify benchmarks and fix problems. Conversion also includes the training of all personnel

that are required to use the system to perform their job.

Production is when the new system is officially the system of record for the operation and

maintenance is just that. Maintain the system as it performs the function it was intended to meet.

But however enterprise resource planning is the most commonly used tool of info system that is

being presently utilized by most of the shipping firms so as such we need to explain what all

entails in ERP

Enterprise resource planning

(ERP) integrates internal and externalmanagement informationacross an entire organization,

embracingfinance/accounting,manufacturing, sales and service,customer relationship

management, etc. ERP systems automate this activity with an integratedsoftwareapplication. Its

purpose is to facilitate the flow of information between all business functions inside the

boundaries of the organization and manage the connections to outside stakeholders.[1]

ERP systems can run on a variety ofhardwareandnetworkconfigurations, typically employing a

databaseas a repository for information.[2]

Characteristics

ERP systems typically include the following characteristics:
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An integrated system that operates in real time (or next to real time), without relying onperiodic updates.

[citation needed]

A common database, which supports all applications. A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the

Information Technology (IT) department.[3]

Finance/Accounting

General ledger,payables,cash management,fixed assets,receivables,budgeting,

consolidation

Human resources

payroll,training,benefits,401K,recruiting,diversity management

Manufacturing

Engineering,bill of materials, work orders, scheduling, capacity,workflow management,

quality control, cost management, manufacturing process, manufacturing projects,

manufacturing flow,activity based costing,product lifecycle management

Supply chain management

Order to cash,inventory, order entry,purchasing,product configurator, supply chain

planning, supplier scheduling, inspection of goods, claim processing, commissions

Project management

Costing,billing, time and expense, performance units, activity management

Customer relationship management

Sales and marketing, commissions, service, customer contact,call centersupport

Data services

Various "selfservice" interfaces for customers, suppliers and/or employees
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Access control

Management of user privileges for various processes

History

Origin of "ERP"

In 1990Gartner Groupfirst employed theacronymERP[4]

as an extension ofmaterial

requirements planning(MRP), latermanufacturing resource planning[5][6]andcomputer-

integrated manufacturing. Without supplanting these terms, ERP came to represent a larger

whole, reflecting the evolution of application integration beyond manufacturing.[7]Not all ERP

packages were developed from a manufacturing core. Vendors variously began with accounting,maintenance and human resources. By the mid1990s ERP systems addressed all core functions

of an enterprise. Beyond corporations, governments and nonprofit organizations also began to

employ ERP systems.[8]

Expansion

ERP systems experienced rapid growth in the 1990s because theyear 2000 problemand

introduction of theEurodisrupted legacy systems. Many companies took this opportunity toreplace such systems with ERP. This rapid growth in sales was followed by a slump in 1999 after

these issues had been addressed.[9]

ERP systems initially focused on automatingback officefunctions that did not directly affect

customersand the general public.Front officefunctions such as customer relationship

management (CRM) dealt directly with customers, orebusinesssystems such as ecommerce,

egovernment, etelecom, and efinance, orsupplier relationship management(SRM) became

integrated later, when the Internet simplified communicating with external parties.[citation needed]

"ERP II" was coined in the early 2000s. It describes webbased software that allows both

employees and partners (such as suppliers and customers) realtime access to the systems.

"Enterprise application suite" is an alternate name for such systems.[citation needed]
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Components

Transactional database

(VirtualWork ERP)

Management portal/dashboard Business intelligencesystem Customizable reporting External access via technology such asweb services Search Document management Messaging/chat/wiki Workflow management

Best practices

Best practicesare incorporated into most ERP systems. This means that the software reflects the

vendor's interpretation of the most effective way to perform each business process. Systems vary

in the convenience with which the customer can modify these practices.[10]Companies that

implemented industry best practices reduced timeconsuming project tasks such as

configuration, documentation, testing and training. In addition, best practices reduced risk by

71% when compared to other software implementations.[11]

The use of best practices eases compliance with requirements such asIFRS,Sarbanes-Oxley, or

Basel II. They can also help comply with de facto industry standards, such aselectronic funds

transfer. This is because the procedure can be readily codified within the ERP software and

replicated with confidence across multiple businesses who share that business requirement. [citation

needed]

Modularity
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Most systems are modular to permit automating some functions but not others. Some common

modules, such as finance and accounting, are adopted by nearly all users; others such as human

resource management are not. For example, a service company probably has no need for a

manufacturing module. Other companies already have a system that they believe to be adequate.

Generally speaking, the greater the number of modules selected, the greater the integration

benefits, but also the greater the costs, risks and changes involved.[citation needed]

Connectivity to plant floor information

ERP systems connect to realtime data and transaction data in a variety of ways. These systems

are typically configured bysystems integrators, who bring unique knowledge on process,

equipment, and vendor solutions.

Direct integrationERP systems connectivity (communications to plant floor equipment) as

part of their product offering. This requires the vendors to offer specific support for the plant

floor equipment that their customers operate. ERP vendors must be expert in their own products,

and connectivity to other vendor products, including competitors.

DatabaseintegrationERP systems connect to plant floor data sources through staging tables

in a database. Plant floor systems deposit the necessary information into the database. The ERP

system reads the information in the table. The benefit of staging is that ERP vendors do not need

to master the complexities of equipment integration. Connectivity becomes the responsibility of

thesystems integrator.

Enterprise appliance transaction modules(EATM)These devices communicate directly

with plant floor equipment and with the ERP system via methods supported by the ERP system.

EATM can employ a staging table, Web Services, or systemspecific program interfaces (APIs).

The benefit of an EATM is that it offers an offtheshelf solution.

Customintegration solutionsMany system integrators offer custom solutions. These systems

tend to have the highest level of initial integration cost, and can have a higher long term

maintenance and reliability costs. Long term costs can be minimized through careful system
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testing and thorough documentation. Customintegrated solutions typically run on workstation

or server class computers.

Standard protocolsCommunications driversare available for plant floor equipment and

separate products have the ability to log data to staging tables. Standards exist within the industry

to support interoperability between software products, the most widely known being OPC [12]

Implementation

ERP's scope usually implies significant changes to staff work processes and practices.Generally,

three types of services are available to help implement such changesconsulting, customization,

and support. Implementation time depends on business size, number of modules, customization,

the scope of process changes, and the readiness of the customer to take ownership for the project.

Modular ERP systems can be implemented in stages. The typical project for a large enterprise

consumes about 14 months and requires around 150 consultant. Small projects can require

months; multinational and other large implementations can Customization can substantially

increase implementation times.

Process preparation

Implementing ERP typically requires changing existing business processes. Poor understanding

of needed process changes prior to starting implementation is a main reason for project failure. It

is therefore crucial that organizations thoroughly analyze business processes before

implementation. This analysis can identify opportunities for process modernization. It also

enables an assessment of the alignment of current processes with those provided by the ERP

system. Research indicates that the risk of business process mismatch is decreased by:

linking current processes to the organization's strategy; analyzing the effectiveness of each process; understanding existing automated solutions
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ERP implementation is considerably more difficult (and politically charged) in decentralized

organizations, because they often have different processes, business rules, data semantics,

authorization hierarchies and decision centers. This may require migrating some business units

before others, delaying implementation to work through the necessary changes for each unit,

possibly reducing integration (e.g. linking viaMaster data management) or customizing the

system to meet specific needs.

A potential disadvantage is that adopting "standard" processes can lead to a loss of competitive

advantage. While this has happened, losses in one area often offset by gains in other areas,

increasing overall competitive advantage

Configuration

Configuring an ERP system is largely a matter of balancing the way the customer wants the

system to work with the way it was designed to work. ERP systems typically build many

changeable parameters that modify system operation. For example, an organization can select the

type of inventory accountingFIFO or LIFOto employ, whether to recognize revenue by

geographical unit, product line, or distribution channel and whether to pay for shipping costs

when a customer returns a purchase.

Customization

ERP systems are theoretically based on industry best practices and are intended to be deployed

"as is. ERP vendors do offer customers configuration options that allow organizations to

incorporate their own business rules but there are often functionality gaps remaining even after

the configuration is complete. ERP customers have several options to reconcile functionality

gaps, each with their own pros/cons. Technical solutions include rewriting part of the delivered

functionality, writing a homegrown bolt-on/add-on module within the ERP system, or interfacing

to an external system. All three of these options are varying degrees of system customization,

with the first being the most invasive and costly to maintain]. Alternatively, there are non-

technical options such as changing business practices and/or organizational policies to better

match the delivered ERP functionality.
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Key differences between customization and configuration include:

Customization is always optional, whereas the software must always be configuredbefore use (e.g., setting up cost/profit center structures, organisational trees, purchase

approval rules, etc.)

The software was designed to handle various configurations, and behaves predictably inany allowed configuration.

The effect of configuration changes on system behavior and performance is predictableand is the responsibility of the ERP vendor. The effect of customization is less

predictable, is the customer's responsibility and increases testing activities.

Configuration changes survive upgrades to new software versions. Some customizations(e.g. code that uses predefined "hooks" that are called before/after displaying datascreens) survive upgrades, though they require retesting. Other customizations (e.g. those

involving changes to fundamental data structures) are overwritten during upgrades and

must be reimplemented

Customization Advantages:

Improves user acceptance.

Offers the potential to obtain competitive advantage vis--vis companies using onlystandard features.

Customization Disadvantages:

Increases time and resources required to both implement and maintain Inhibits seamless communication between suppliers and customers who use the same

ERP system uncustomized.

Extensions

ERP systems can be extended with thirdparty software. ERP vendors typically provide access to

data and functionality through published interfaces. Extensions offer features such as:

archiving, reporting and republishing;


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ERP systems centralize business data, bringing the following benefits:

They eliminate the need to synchronize changes between multiple systemsconsolidation of finance, marketing and sales, human resource, and manufacturing

applications

They enable standardproduct naming/coding. They provide a comprehensive enterprise view (no "islands of information"). They make

realtime information available to management anywhere, any time to make proper

decisions.

They protect sensitive data by consolidating multiple security systems into a singlestructure.

Disadvantages

Customization is problematic. Reengineering business processes to fit the ERP system may damage competitiveness

and/or divert focus from other critical activities

ERP can cost more than less integrated and/or less comprehensive solutions. High switching costs increase vendor negotiating power vis a vis support, maintenance

and upgrade expenses.

Overcoming resistance to sharing sensitive information between departments can divertmanagement attention.

Integration of truly independent businesses can create unnecessary dependencies. Extensive training requirements take resources from daily operations.

The limitations of ERP have been recognized sparking new trends in ERP applicationdevelopment, the four significant developments being made in ERP are, creating a more flexible

ERP, Web-Enable ERP, Interenterprise ERP and e-Business Suites, each of which will potential

address the fallbacks of the current ERP.
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SOFTWATRES OF ERP BEING PRESENTLY USED IN THIS INDUSTRY

JAGUAR TMS SOFTWARE

Immediately reduce your freight costs and streamline your shipping operations with the most

robust and cost-effective Transportation Management System in the industry.

Jaguar TMS-Shipper allows shippers to manage and automate all aspects of the logistics

lifecycle, from the most effective carrier selection and execution to freight audit. With Jaguar

TMS-Shipper, shippers can rate shop for their least cost carrier including transit times (mode

independent). Track shipments with real-time visibility and proactively notify your customer

upon delivery or change in status.

Do you manage multiple locations or distribution centers? Are you interested in controlling your

inbound freight? Jaguar TMS-Shipper excels at providing easy to use tools to your stores,

warehouses and vendors that allow them to choose the least cost mode and carrier for every

shipment, guaranteed!

Jaguar TMS-ShipperEasy to use

Jaguar TMS-Shipper ties everyone in your supply chain under one system (i.e. carrier contracts,

carrier pricing, distribution centers, customers, suppliers, electronic communications, multiple

locations, etc,). It automatically sends and receives EDI with your carriers with little to no work

involved on the shippers side. You can consolidate all carriers in one place and no longer have

to log onto multiple carrier systems.

You will reduce the phone calls, and eliminate duplicate entries of data. Jaguar TMS-Shipper ties

together pieces that were handled separately into an integrated process.


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Shipment Optimization

With Jaguar TMS-Shipper, companies can easily integrate the transportation process with their

internal systems. This includes ERP, order management, warehousing, and other transportation

systems. This includes automated mode and carrier selection, least cost rating, financial

reporting, and tracking information. You can read more about our ERP integration capabilities

here.

Jaguar TMS-Shipper has made it possible for shippers to easily afford and immediately cost

justify a transportation solution without the large capital expenses, lengthy implementations, or

major changes to internal processes.

Jaguar TMS-Shipper Features

Universal management of all shipment information through your own secure web site, or highlyintegrated to your own internal applications. Logistics, Customer Service, Finance, and

Management can view shipment information at any time, from anywhere.

Integration of Jaguar TMS-Shipper into existing legacy systems providing customer service forleast cost pricing and order time while accepting all Bills of Lading and any other pertinent

shipment information, i.e., customer name, General Ledger account codes, special payment

codes, etc.

Completely accurate least cost rating between LTL, TL, and Parcel instead of using arudimentary routing guide

Online creation and processing of BOLs No-cost automated freight bill auditing including all types of rating such as class rate bases,

accessorials, complex fuel surcharges, mileage, point-to-point, U.S., Canada, Mexico, etc.

Electronic shipment status and freight invoices Automated status and delivery e-mails by shipment level and customer Online reporting options for financial, audit, compliance, and general transportation analysis Custom report writer for unlimited set of data using complex and nested Boolean functions


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Inbound compliance with remote BOL delivery and printing to ensure suppliers utilize preferredcarrier

Electronic Bill of Lading automatically to your carriers via EDI, fax, and email.

Transites Jaguar Transportation Development Platform (TDP) is an industry-unique

transportation management platform for carriers, 3PLs and shippers. JaguarTDP delivers the core

functionality of rating and pricing managementincluding rating (small package, LTL, TL, air,

multimodal), database management and user securitywhile offering the customer the

flexibility to build their own transportation management applications within the platform or

outside the platform.

A TMS Development Platform Create Your Own Transportation Applications

For 3PLs, Carriers and Shippers Industry Unique

Jaguar-TDP: A Strategic Investment that Evolves with Your Business


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CASE STUDY OF :

Role f Logistics in Shipping.

Documents

Transcript of Role f Logistics in Shipping.