BUS606: Operations and Supply Chain Management

The main objectives of this chapter were to define the requirements to information systems in agile supply chains and to develop strategies for implementation of agile information systems.

The chapter has first introduced a typology of supply chain strategies and the role of information systems in these strategies.The type of supply chain determines the required flexibility of front- and back-office systems. Efficient supply chains require stable, straight-forward planning systems for both front-office and back-office. Risk-hedging supply chains require the same type of stable front-office systems as efficient supply chains do. However, they require flexible back-office systems, integrated with production control systems and supplier's systems. Responsive supply chains place high demands on the ability to combine fluctuations in demand and available supplies with respect to product specifications and lead times. Agile supply chains require flexibility in both front-office and back-office systems. They demand flexible ERP in the back-office and sophisticated configurator and customer communications systems in the front-office.

Next, the chapter has focused on information systems in the quadrant of agile supply chains. It is argued that these supply chains information systems should support an ICT mass customisation approach. ICT mass customisation combines the seemingly contradictory notions of efficient standard software and flexible customised software. It enables customer-specific assembly of information systems from a repository of standard components. Five requirements for the enhancement of ICT mass customisation have been defined:

a) generic information model, b) modular software, c) information integration platform, d) configuration support, and e) component availability.

In the next section the role of ERP systems, configurators and SOA to enable ICT mass customisation is defined. None of these technologies completely satisfy the defined requirements, but together they could enable ICT mass customisation. ERP can ensure availability of the software modules in a repository of building blocks that form the heart of mass customizable information systems. However, the development towards modularized and service-oriented ERP is a crucial prerequisite to achieve this. Furthermore, configurators can provide the configuration support as required in mass-customisable information systems. It helps to elicit the required functionality of specific instantiations of information systems building upon a generic information model. Last, Service-Oriented Architecture (SOA) can help to meet, in particular, the requirements concerning software modularity and it provides an information integration platform.

The chapter concludes with the introduction of three basic strategies for the implementation of agile information systems. The strategies involve different divisions of product configuration, process configuration and management of the order fulfilment among ERP systems, dedicated configurator software and SOA platforms. All of the strategies entail order-specific configuration of the process model. The strategies differ in the technology to be used for that purpose and the location of the knowledge required for process configuration. The first strategy is to implement intelligent process configuration in the middleware that mediates between front-office systems (sales and product configurators) and back-office (ERP) systems. This approach would require a considerable advancement of the state-of-the-art in service composition. The second strategy is to include process configuration in the product configurator, thus enabling simultaneous configuration of product and process. This second approach would require the extension of current product configurators. Since process configuration depends on current and expected state of the back-office, it would also entail extensive and frequent information exchange between front-office and back-office systems. The third strategy is to implement order specific process configuration in the back-office ERP system. The latter strategy would avoid redundancy of process knowledge, but many current ERP systems do not support the modular process modelling approach and the dynamic configuration support required to realise this strategy. The first or the second strategy might be preferred depending on (among other factors) the extent of supply uncertainty in a particular branch of industry.