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APPLICATION OF A INFORMATION SYSTEMS IN LOGISTICS INDUSTRY AND E-LOGISTICS Ahmet Alper SAYIN Karamanoglu Mehmetbey University
[email protected] Murat ARSLANDERE Selcuk University
[email protected]
ABSTRACT: In the logistics sector where the competition is too much, traditional logistics is moving towards to e-logistics applicationsi because of the changing needs and rapid change technologies. . distribution, transport and logistics activities in business had been raised by e-logistics. In the first part of the study, logistics , logistics management and e-logistics concepts were examined. In the second part, the effects of the use of information were stated for systems in the logistics business activities. In the last part of the study, we were determined advantages and challenges in using an e-logistics technologies and practices. Keywords: E-Logistics, Logistics, Logistics Information Systems
INTRODUCTION As a result of the globalization and deregulation of trade of goods and services, countries have become more engaged with the international economy in order to increase their market share in foreign trade. Therefore the international market has begun to experience more competition. In this highly competitive environment, one of the most important objectives of the companies is acting in accordance with the customer's needs and desires. In order to achieve this particular objective, the companies have to succeed in all their operations in terms of cost, quality, timing and readiness. Logistics serves the companies in realization of these criteria and plays a crucial role in setting a communication channel between the business and the market. With the developments in technology, a rapid transition to a knowledge-based economy and management is being experienced. The utilization of information systems is important in order that the logistics companies to adapt the competition order as their dependency to knowledge have increased. Existing information relating to logistics is transmitted via internet, becomes input in the systems of the company’s branches or other departments, and plays an effective role in the decision making process. Used in all aspects of the logistics activities from procurement to end customer, information systems technologies facilitates auditing, flexibility and decision making by increasing the efficiency and productivity of logistics management. All the operations of the companies should be effective and productive in the e-commerce environment in which competition is intense. It is now possible to buy a watch for two dollars from China with free shipping. Therefore, the redesigning of the activities such as distribution and warehousing relating directly to the end customer has become essential as well as of the production, cost and quality. One of such designs and innovations is e-logistics.
1. Logistics, Logistics Management and Definitions of E-Logistics Terms 1.1. Logistics As a noun, logistics has emerged with the unification of the words logic and statistics, and was first used in the military. In military terms, logistics involves “all the activities realized for the provision of the necessary supplies in complaint the strategy and tactic and service support to the combat elements”. As for the civil terms, logistics is the delivery of the goods, information, person and services between the point of production and point of delivery (Yıldıztekin, 2002).
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Logistics is the effective and productive management of the movement of all sorts of products, services, and information flow encompassing the production point and consumption point of the source within the supply chain that is conducted to meet the needs of customers. The logistics management process involves the planning, application, transportation, warehousing, and controlling of all activities relating to the logistics (Tekin, 2013). Logistics as in the “seven Rs of logistics” means that the right product in right quantity is delivered to the right customer with the right price at right condition, right place and right time. Such definition fails to involve the spatial and temporal dimensions (Shapiro and Heskett, 1985). Logistics activities consist of as the following: (Stock and others, 2001) • Customer service • Demand Forecast • Product management • Information communication • Material management • Ordering • Packaging • Parts and service support • Storage • Transportation 1.2. Logistics Management It is applied to increase the effectiveness and productivity of the logistics activities conducted in order to meet the needs of customers relating to the two way flow of materials, services and information between the production and customer (Tanyaş, 2006). Logistics Inputs: Facility, Hardware, Human Resources, Information Resources, Financial Resources. Logistics Outputs: Damage Free Delivery Of Right Product, At Right Place, On Right Time, With Right Quantity, Right Cost And Highest Flexibility. Logistics Management: Planning, Application, Control. Objectives of the logistics management can be summarized as follows: (Aksoy, 2009) • Quick Response, • Minimum Stock, • Cargo Load Consolidation, • Quality (Claims Bonus and Performance), • Traceability (Cargo Load and Vehicle Tracking), • Life Cycle Support (Spare Parts and Packaging Materials Recalls) Below are some of the causes for the increased importance that the logistics management has in business management: (Orhan, 2003) • Increased transportation distance and cost, • Focus on the logistics operations to reduce operating costs while giving a quick response to the changes occurring in the production technology, • Need to ensure the diversity of products and services to meet consumer needs, • Increased efficiency of the developing computer use and communication systems, • Increase in the number of businesses in a competitive environment, • Need to provide services which are outside the main activities of the company but within the supply and demand chains such as transportation, warehousing, inventory management and distribution, • Increased importance of knowledge management due to knowledge economy. 1.3. E-Logistics It defines the process of transferring the information relating to the logistics activities successfully within the shortest time possible to the customer by utilizing electronic and information technologies via any logistics mode (Export Promotion Center, 2002). According to another definition, providing more information and services, elogistics is an advanced form of the traditional logistics. More clearly, it is a system in which traditional logistics
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processes (such as procurement, warehousing, and customer services) are based on internet technologies (Gülenç and Karagöz, 2008). Below are the services in the e-logistics process: • Receiving the goods, • Packaging and labeling the products, • Execution of handling process, • Carrying out the entire loading process electronically by benefitting from automation software, • Preparing the route after planning the load, • Tracing the vehicles by means of satellite and communication system, • Automatically unloading the cargo to the port, warehouse or entrepot by implementing a computerized integrated automation systems, • Provision of Web-based online electronic customs consultancy services, • Provision of electronic insurance services, • Transporting the load from the port or warehouse for the provision of on-site delivery; and for that matter setting the load up and delivering to the customer in working condition (Export Promotion Center:2002). 2. Impact of the Use of Information Systems in Logistics Business Operations In logistics, information systems ensure that data is provided, stored, processed, correlated and transferred among all logistics activities simultaneously with computers, bar code readers, communication mediums, software and control tools (Adıgüzel, 2005). Such systems enables control over the provision of coordination among all work flow which helps both internal and foreign customers to save information relating to orders and inventory, gives access the users to the information, conducts inventory planning for both the customer and the supplier, and reports demand forecasting and strategy planning, and also over customer service level, porters and system performance during and after all these activities (Christopher, 1998). Below is a list of ways in which information systems can be utilized in logistics: • Observing: ensures access to simultaneous and real-time information on logistics activities and traceability of the activities such as inventory levels, open orders, such as manufacturing, • Reporting: enables passing information to the members of the channel and efficient decision making against changing circumstances, • Approximating: facilitates that due action is taken in similar situations. • Supervising: supports channel members in changing a previous decision or situation easily and quickly. For example speeding up production, or selecting less costly transport type. • Measuring: provides realistic predictions about future performance by identifying required units of measures and performance objectives for evaluating the performance of existing channel members. (Ünlü, 2007). 3. Pros and Cons of using and applying E-Logistics Technologies 3.1. Cons In case of the companies in Turkey, unqualified employees with inadequate education seem to be the one of the most important issues. Moreover, as a result of that the companies are reluctant to invest on technological infrastructure along with the insufficiency of the infrastructure of the transportation modes, problems tend to arise. It is observed that so-called logistics companies lack work ethics since committing merely to transportation with insufficient institutionalism. There are adverse conditions against the logistics sector such as that most of the facilities are off-grade and the issues relating to the infrastructure of harbors, airports and border check-points. Primarily such problems should be overcome and the sector should be supported. After these problems are diminished and standardization is achieved, the use of information systems in the sector shall become more efficient. Below are the difficulties that can be encountered: (Yılmaz, 2009) • E- Logistics system is expensive and the installation takes time,
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• • • •
System maintenance is expensive, Requires a fundamental change throughout the whole company, Requires trained and qualified employees, Requires technological infrastructure.
3.2. Pros Significant levels of increase in value seem to be achieved in businesses benefiting from e- logistics activities. Thanks to e-logistics, the companies tend to gain crucial competitive advantages. Information technologies enable companies to gain other important advantages since all the information is transferred to the users quickly, accurately and safely. Under recent conditions in which technology changes and develops at an unprecedented pace, the efficient use of logistics information systems grant the companies not only with competitive advantages in the market but also help the employees to execute and manage their responsibilities more simply (Ertek and Aba, 2013). The facilities enabled by means of E-logistics are as follows: (Erdal, 2008) • Conducting all logistics activities effectively and efficiently, • Reducing the bureaucratic processes and hierarchical structure among the company, • Ensuring effective services to customers in the supply and distribution chains, • Increasing the efficiency of employees and the system of the company, • Effective and efficient use of time, • Reducing the costs in all activities of the company. CONCLUSION Technology is one of the main issues that companies give emphasis to. By simply observing the competitive businesses in the market, the impact of their technologic infrastructure can be distinguished. An efficient technology management is necessary in order to keep pace with change. The decisive concern here is not about owning the technology. Rather it should be that which technology is applied at what time with which workforce and what cost. The technology sought to be adapted to the business may cause to loss of sources instead of gaining advantages. The companies which disregard technology on the other hand tend to miss many opportunities. Therefore, information systems and investments relating to e-logistics should become a strategic policy for the companies in the ever-growing logistics sector in order to actively compete. REFERENCES Adıgüzel, B., (2005), Effective Use of Logistics Management Information Systems and an Application on own, İstanbul University, Social Sciences Institute, Master Thesis. Aksoy Ö., (2009), Use of Information Technology in Supply Chain and Logistics Management, Impact on Organizational Performance, İstanbul Technical University, Institute of Science and Technology, Master Thesis. Christopher, M., (1998), Logistics and Supply Chain Management, Second Edition, Prentice Hall. ERDAL,M., (2008), Integrated Logistics Management, İstanbul. Ertek, G., Aba, B., (2013), A classification for the Logistics Information Systems (Taxonomy), Logistics, (25), 27-31. Gülenç, İ. F., Karagöz, B., (2008), E-Logistics and E-Logistics Applications in Turkey. Export Promotion Center, (2002), Logistics Electronic Book. Orhan, O.,(2003), Development of Logistics Industry in the World and Turkey. İstanbul: İTO Publications. Shapiro, R., ve Heskett, J., (1985), Cases and Concepts, St. Paul, Minnesota, USA. Stock, J., Lambert, R., Douglas M., (2001), Strategic Logistics Management, McGraw Hill, Irwin, Fourth Edition, New York. Tanyaş , M., (2006), Strategies and Solutions for Turkey Logistics Sector, Ankara Atılım University. Tekin, M., (2013), Logistics, Konya: Günay Offset Printing. Ünlü, Z., (2007), Information Technology and Applications in Supply Chain Management, Logistics and Transport, İstanbul Teknical University, Institute of Science and Technology, Master Thesis. Yıldıztekin, A.,(2002), Past To Present Logistics, Utikad Logistics Congress, Year:8, Number:9, Ankara. Yılmaz, D., (2009), An Analysis on the Role of Turkey Logistics Sector Information System, Dokuz Eylül University, Social Sciences Institute, Master Thesis.
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