a management information system integrating gis gps and erp

4th International Logistics and Supply Chain Management Congress

A MANAGEMENT INFORMATION SYSTEM:

INTEGRATING GIS, GPS AND ERP1

Ali Orhan Aydin2 and Sedat Sarman3

Abstract

Emerging market conditions causes manufacturing and service systems to utilize better managerial approaches

in increasing efficiency of their systems in order to survive. With this respect, Management Information Systems that

are providing framework of Supply Chain Management are being used to get competition advantage. By this study a

Management Information System to provide a framework for modelling business processes is introduced. While

proposing such a system newly emerging technologies are tried to be utilized. Therefore, proposed system provides

integration with Geographic Information Systems, Global Positioning Systems and Enterprise Resource Planning

System. Besides this integration system that is introduced is designed to track all goods movements from one place

to another by using Radio Frequency Identification technology. In this manner, system is going to provide

traceability to not only fleets but also goods. In this frame, context diagram and 0 level data flow diagram is

proposed to realize such an information system.

Keywords: Supply Chain Management, Management Information System

1. Introduction Today logistic firms need to provide information to their vendors and customers. Resources for processing

complex information and communication are required in the business world to assist global logistics. It is very important to plan a framework to manage materials, services, information and also capital flows of business. To increase the productivity of providing goods and/or services to the clients in Supply Chain Management (SCM) system, planning, organizing and managing activities become a vital issue (Majchrzak & Wang, 1996; Womack & Jones, 1996).

New approaches in multi modal transportation management are possible through the development of Information and Communication Technology (ICT). Using the modern ICT it is now possible to combine the programming techniques with the advanced techniques in object oriented graphics, use of relational databases, electronics maps, based on information provided by a Geographic Information Systems (GIS).

Because of existing new business processes related with ICT, business management systems in the logistic sector must be planned like a dynamic system with an objective function. The objective function must include the minimization of the total cost related to logistics activities. Management Information Systems (MIS) aid in managing the flow of information from the point of origin to the final consumer throughout the chain of suppliers which must adopt the modern logistics techniques (EURO-CASE, 2000).

In the frame of these references, proposed study aims to provide a framework for business model on such MIS application. With this respect, subsequently emerging technologies that can be utilized in Supply Chain Management activities are explained. In the third section of the study details of the proposed business process model are elaborated. Finally, study ends with conclusion.

2. Supply Chain Management through New Technologies Today if the logistics and SCM firms need to access the world trading system, they must have a goal to integrate

into the international economy and they have to increase their quality of the transportation and communication infrastructure.

It is fact that the logistics firms require shorter order cycles and more reliable deliveries in the global challenging world. Today most important factors for the logistic and transportation companies are “faster transit times” and “day-definite delivery” that is more efficient than air load transportation for example.

Because of the product shelf life, product customisation, production/retailing strategy, and the reliability of short term forecasting, there are more varied delivery patterns in the logistic sector. As Aydin et. al. states that “The business managers recognise that they have to meet today’s consumer expectations for increased product value, variety and availability in all markets. (Aydin, Onwuka, & Sarman, 2006).

1 This study is performed within the frame of the project titled as “Çok Türlü Taşımacılık için GPS Sistemine Uygun Filo Yönetimi Programı” which is supported by TUBİTAK - TİDEB with project number 3050267. 2 Yasar University, Turkey, +90 232 4614111, [email protected] 3 Yasar University, Turkey, +90 232 4614111, [email protected]


Also most of the logistic managers prefer closer relationships with fewer suppliers. Because of the rapid developments in the Information and Communication Technology, requirements for a greater use of ICT become an important issue for global logistic firms.

Logistic firms also need to keep transport costs under control. Therefore, they need affordable but also comprehensive software to optimise their vehicle fleet planning, programming and control activities using and benefiting new communication and information transmitting tools.

There are various bottlenecks in the SCM. For example some bottlenecks of the point-to-point services at scheduled times and also more important bottlenecks for the guaranteed delivery times. As inter-modal transportation increase, the needs for the conveniently located and easily accessible inter-modal terminals also increase in this global environment.

Also it is vital for the logistic providers, to remove the logistics barriers which affect global trade. This is a real situation and a fact for European states too. Today there is a tendency for SCM strategies that there are some specific changes including worldwide reduction of trade barriers and development of regional, multi-country economic zones (Aydin et al., 2006).

Aydin and his colleagues states that “The inefficiencies and delays occur at the interchange points at border crossings and along the national transport network. These delays result from inadequate infrastructure, inappropriate cargo handling equipment and transport fleets, cumbersome trade procedures, inappropriate management procedures and lack of know-how.” (Aydin et al., 2006).

As it can be seen the maritime sector has been accepted as the principal facilitator of trade flows in the world. It is also important to integrate land and sea transport to provide the potential to open hinterlands further. There are great potential for the developments of hinterlands in Turkey as the country on the way of international goods movements routes. Also Turkish Logistic sector begins to take a role for the partnership into the international trading system on a fair and equitable basis.

Turkey also needs to facilitate legislation related with the recognizing and encouraging freight forwarders, multimodal transport operators, the use of e-commerce through the use of IT, and encouraging the development of logistic services and supply chain management for the benefit of trade. As Aydin et. al. says “Global integration and regional initiatives have paced the way for successful global Supply Chain Management through reduction in trade barriers).” (Aydin et al., 2006). “Removing or minimizing the problems will reduce the costs and delays and thus improve the Supply Chain Management productivity. Therefore it is necessary for the logistic providers to prepare for the usage of applications of Information Technology such as Management Information Systems and Geographic Information Systems (GIS)” (Aydin et al., 2006).

Moreover, European Global Navigation Satellite System (GNSS) or Global Positioning System technologies can be beneficial in tracking goods not only at borders but also in all of the countries. (Aydin et al., 2006). Logistics managers are always on the lookout for software that can help them work smarter, faster, and cheaper. Because they always want to increase efficiency, save money, and maximize resource usage.

If the SCM and Logistic firms continue to work with their poor warehouse management and continue to use their current systems incapable of tracking their fleets, they are not able to handle the explosion of Radio Frequency Identification (RFID) data volume as the RFID revolution arrived and promise the high- resolution supply chain of the future (Angeles, 2005).

The electronics supply chain is playing tag with an inventory tracking system that could replace bar-code scanning in coming years. The ability of Radio Frequency Identification (RFID) tags to send data to RF readers up to 10 feet away could also eliminate warehouse or manufacturing floor personnel who manually swipe each item with a bar-code reader and in some cases reduce theft and counterfeiting.

Demand for the technology is real along all stops of the supply chain. Wal-Mart, for example, is indicated it wants pallet- and case-level RFID tagging available in January 2005, which is prompting its vendors upstream to investigate RFID-enabled goods as part of their external shipping procedures (Sullivan, 2003 #973; Angeles, 2005).

Carrier service provider DHL, for example, starts to equip its logistics centres with RFID to replace bar-code scanning at the end of 2004. The network will track packages from pickup to delivery at a cost of approximately $50 million for the first three years.

“We’re also starting to look at how RFID can help us in the actual manufacturing process”, says Robertson from HP and continues “This is to ensure you're using the correct components in manufacturing”. Under its current system, an HP employee scans in-process products on the production line and then scans the component to make sure it's a match. The use of RFID tags would automatically ensure that the right part is being selected by verifying the component's serial number (Hartswick, 2006).

The logistic providers, logistic companies, fleet managements and all related sector firms must be ready to support these new RFID technology implementations. RFID tags are quite common in the toll collection gates since mid 90’s.

Radio Frequency Identification continues to evolve as an adjunct to bar code solutions for supply chain management. One of the advantages of RFID is the ability to scan an entire pallet without having direct line of sight to each case. Major retailers, including Sears, Costco, Home Depot, Lowe's, Albertsons, Target and Wal-Mart, and the Department of Defence and U.S. Department of Agriculture have mandated RFID. More than 50 percent of the mandates involve case and pallet tagging.


There may be some differences for the national regulations about the rule of radio frequency usage. For example if you have tags for your goods and trucks, readable only for Global Positioning System (GPS) in a country, they can not readable in another region. Therefore it is useful to prepare necessary regulations to implement RFID strategy.

For the international supply chains, firstly, there are basic transformation processes in other words activities related with the conversion of raw materials into finished goods available for consumption. These activities are raw material extraction, component part production, finished goods assembly and location specific activities such as distribution.

Secondly, there are transportation processes which integrate these transformation processes into an international supply chain. These activities include the storage, access and routing of goods. Therefore there are specific interdependencies between these activities that operate under the global logistics network (Hamilton, 2005). Because international SCM requires the development of a frame work for both the transformation of raw materials into finished goods and the transportation of these materials across borders.

The use of Information and Communication Technology (ICT) speeds up the exchange of information and allows for more efficient customs operations including risk management techniques. It also provides management with advanced information for planning; gives shippers greater choice and improves the quality of service. The use of ICT especially integrated applications of MIS, GIS and GPS/GNSS are necessary to be introduced in multimodal transport and Supply Chain Management. (Aydin et al., 2006)

Therefore, in this paper it is tried to develop a new business process model which will benefit from the European Geostationary Overlay Service (EGNOS) - first venture into satellite navigation after the US GPS –Global Positioning System- and Russian GLONASS –Global Orbiting Navigation Satellite System- systems. It will be available for users in Europe and beyond to determine their position to within 2 metres (Feijoo, Ramos, & Perez, 1993).

The deployment of the European Geostationary Navigation Overlay Service (EGNOS) covers a large area and involves various countries and partner organisations. By correcting global positioning system signals, EGNOS gives an accuracy of down to 2 metres, compared to the less accurate 15 to 20 m provided by GPS. EGNOS achieves this through a network of ground elements. These are currently being installed all over Europe and architecture of EGNOS is shown in Figure 1.

Figure 1. EGNOS Architecture (ESA, 2005a).

The elements that make up the EGNOS system include: Ranging and Integrity Monitoring Stations (RIMS)

which pick up GPS signals, Master Control Centres (MCCs) to process the data delivered by the RIMS and uplink stations which send the signal to three geostationary satellites to then relay it back to users on the ground. Deployments so far include all MCCs, all Navigation Land Earth Stations (NLESs) and 31 of the 34 RIMS (ESA, 2005b).

A third European based satellite system called GALILEO has been approved in principle but is not expected to be fully operational before 2008. Designed with interoperability in mind, GALILEO in addition to the others could result in GPS users having access to almost 75 satellites for highly accurate navigation and positioning. These developments have many potential advantages for not only the data collection aspects for GPS users.

On the other hand, SISNeT is a new technology that combines the powerful capabilities of satellite navigation and the Internet. The highly accurate navigation information that comes from the EGNOS (European Geostationary Navigation Overlay Service) Signal-In-Space (SIS) is now available over the Internet and in real time via SISNeT


(ESA, 2005c). Specifically, SISNeT gives access to the wide-area differential corrections and the integrity information of EGNOS.

Since February 2002, the system has been pre-operational, broadcasting an EGNOS-like signal through the Internet, as generated by the EGNOS System Test Bed (ESTB). Any user with access to the Internet (usually through wireless networks - GSM or GPRS) can access EGNOS through SISNeT, irrespective of the GEO visibility conditions. No EGNOS receiver is needed.

The scientific and engineering communities can benefit hugely from SISNeT because they can exploit the ESTB (EGNOS System Test Bed) information simply via the Internet. The system will work shortly like that: There is a PC computer connected to an EGNOS receiver through a serial port.-Base Station-. Several software components are installed on the computer, allowing acquiring the EGNOS messages and sending it to a remote computer (data server) in real time. There is a Data server-a high performance computer, optimized for running server applications with a large amount of connected users. The data server functionality is implemented through a Software application called SDS. This software receives the EGNOS messages from the base station. Afterwards, transfers them to the remote SISNeT users in real time. There is a user application software in the system. It obtains the EGNOS messages in real time (1 message per second or 250 bps) from the data server.

3. Proposing a New Information and Communication System By utilizing newly emerging technologies in this section of the study framework for business process model is

proposed. While developing such a system activities are inspired form the proposal of Stet (Stet, 2006). These logistics activities using the new technologies are shown in Figure 2.

Goods Flow -------------------------------------------------------------------------------------------------------- Information Flow Order Collection

Figure 2. Logistic activities using the new technologies (Stet, 2006).

In the frame of this reference proposed information system integrates GIS, GPS/GNSS and RFID technologies. Proposed information system is denominated as Integrated-Supply Chain Manager (I-SCM). I-SCM covers six different entities: customers, RFID, GPRS, transportation service providers, storehouse providers and material providers. Customers and suppliers are third party entities but RFID and GPRS are tools that provide information to the system. In the frame of this reference, information flow between these entities is shown in Figure 3.

Fleet management dynamic software

Process automation, RFID

Stock management software

Selection of loading/unloading, tools, package and

handling

Management of

distribution activities

Selection transport mode, vehicle route,

determination of number

and vehicle types

Telecommunication via internet

Freight handling Freight warehousing Freight transport


Figure 3. Context diagram of proposed MIS.

In this proposed system it is necessary to automate common warehouse tasks, such as sending advance shipping

notices, or receiving of goods based on RFID data. Therefore entire MIS can be set up to alert a manager when warehouse inventory needs to be replenished based on how many products have been shipped.

Vehicle position and speed data comes from G module which depends on vehicle tracking system. Technologically advanced method of remote vehicle tracking and monitoring is based on GPS or GNSS systems. Each vehicle in any logistic fleet is equipped with GPS module that receives signals from series of satellites, calculates its current geographical location and, transmits to a central Server where it is displayed on a high resolution geographical map. The data is transmitted instantaneously after capturing (Real Time Tracking).

Figure 4. 0-level data flow diagram of proposed MIS.

I-SCM obtains the required data from those entities and lets managers and operators to process those data.

Mainly there are six different processes: sales management, freight management, transportation management, fleet


management, delivery tracking and billing and pricing. Data flow among these processes is shown in Figure 4. Proposed system, like the other applications of MIS, utilizes one database and tables of the database are also shown in the figure.

In SCM in any production facility, when an item is produced, each item is tagged with a RFID, packed in a batch and then it is stored at a warehouse location. For the transportation purpose, it is loaded on trucks to deliver the products to the dealers. Before loading each item, it is possible to register in data base of the system assuming each item passed through RFID interrogator.

The truck loading the product is equipped with GPS which helps to track its location during transit and all the location data of the truck is being transmitted to central server (Communication channel may be GPRS or RF). When trucks arrive to the warehouse of dealer, again all products are passed through RFID Interrogator passage and automatic entry/receiving of product is made in central database server.

One another requirement is that the software should be used to translate data from one format to another. Therefore, companies own ERP software systems must be integrated to the proposed system. The movement of assets from raw material warehouse to production unit and then to dealers can be easily monitored from any logistics integrated ERP software.

4. Conclusion There are new approaches in logistic and Supply Chain Management through the development of Information

and Communication Technologies. Now it is quite easy to process data provided by a Geographic Information System. It is possible to combine the programming techniques such as the object oriented graphics, use of relational databases, electronic maps, and Radio Frequency Identification.

The need for the optimization efforts is always necessary for the logistic operations. In consequence, logistics managers should constantly be in search of finding opportunities to minimize costs. The logistic service providers have to involve better communication and increase use of information technology if they wish to operate efficient and keep supply chain costs to minimum level.

For the optimization of goods movements in supply chains, it is necessary to develop, implement and adopt new business processes, based on the new Information Technologies and Communications such as Radio Frequency Identification, Geographic Information System, and European Geostationary Overlay Service like it is proposed in this paper.

5. References

Angeles, R. RFID Technologies: Supply Chain Applications and Implementation Issues. Information Systems Management, 22(1): 51-65. Aydin, A. O., Onwuka, K. O., & Sarman, S. 2006. Supply Chain Management: The Role of

Trading Systems. Paper presented at the 2nd International Conference on Business, Economics and Management, Izmir, TURKEY. ESA. 2005a. EGNOS key element inaugurated in Toulouse, European Space Agency. ESA. 2005b. EGNOS deployment - Hosting entities, European Space Agency. ESA. 2005c. Announcing the SISNeT Migration from ESTB to EGNOS European Space Agency. EURO-CASE. 2000. Freight Logistics and Transport Systems in Europe. Paris: European Council of Applied Science and Engineering. Feijoo, C., Ramos, J., & Perez, F. 1993. A System for Fleet Management using Differential

GPS and VHF Data Transmission Mobile Networks. Paper presented at the Vehicle Navigation and Information Systems Conference, Proceedings of the IEEE-IEE. Hamilton, M. K. 2005. A Strategic Framework For Managing Global Supply Chains:

Exploring the Interdependencies Between Global Transportation Networks and International Supply Chains. Paper presented at the Global U8 Fifth International Conference, International Trade and Logistics, Corporate Strategies, and the Global Economy, University of Le Havre, France.


Hartswick, P. 2006. The wonders of RFID, Electronics Supply & Manufacturing. Majchrzak, A. & Wang, Q. 1996. Breaking the functional Mind set in process organisations: Harvard Business Review. Stet, M. 2006. Freights Distribution System in Urban Spaces and GIS: New Tool in

Deliveries Optimization. Paper presented at the Map India. Sullivan, L. 2003. RFID Tags Catch On As Supply Chain Tool. EBN. Manhasset. Womack, J. P. & Jones, D. T. 1996. Beyond Toyota: How to root out waste and pursue perfection. Harvard Business Review, September-October: 4-16.

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