Virtual Logistics

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WORKING PAPER 176

Integrated Virtual Logistics Network for Quick Responses By Diatha Krishna Sundar

October 2001

Please address all correspondence to: Professor Diatha Krishna Sundar Associate Professor & Chairperson - ERP Centre Indian Institute of Management Bangalore Bannerghatta Road Bangalore 560 076 Phone : 080 - 6993276 Fax : 080-6584050 E-mail : diatha@iimb.ernet.in

Electronic copy available at: http://ssrn.com/abstract=2160390

Working Paper on Integrated Virtual Logistics Network for Quick Responses

Diatha Krishna Sundar Associate Professor & Chairperson - ERP Center Indian Institute of Management Bangalore, India

E-maiI:diatha(a)iimb.ernet.in

Electronic copy available at: http://ssrn.com/abstract=2160390

Integrated Virtual Logistics Network for Quick Responses D.Krishna Sundar1 Abstract Trucking is a vital segment of the transportation system that supports Indian Manufacturing. Trucking companies are attempting at providing such non-traditional trucking services as warehousing, distribution, inventory management, picking and packing - assembly operations and return goods management as part of their value added services thus making manufacturing (brick and mortar) activity competitive in the information (click) age. The major stakeholders in this exercise are (i) manufacturing industries (particularly Small and Medium scale enterprises - SMEs), (ii) logistics service providers (transportation, warehousing, clearing and forwarding agencies), and (iii) government and financial agencies (Central Excise and Customs, Regional Transport Organizations, Surface Transport Agencies and Banks etc). The present scenario warrants an integrated quick response mechanism to extend complete logistics solutions in a seamlessly integrated manner to reduce costs rather than extending the services in a disjointed way. In this context, this paper attempts at 1. Study of the present IT architecture, business processes of different agencies, involved in providing and using logistics industry's services in India, like Transportation sector (Trucking agencies, trucking brokers and 3PL service providers), Customs & Central Excise of India internal processes and their external interactions with EDI partners (like Airports Authority of India, Port Trusts, Banks etc.,), Manufacturing Companies' IT infrastructures [Small and Medium scale industries enterprise resource planning (ERP) and supply chain management (SCM) platforms), and 2. Developing a framework for "Integrated virtual logistics network for Quick Responses" which would factor in the existing processes, systems and organizations' roles and the government's proposed investments in the e-commerce and e-governance infrastructure, and designing a technology transformation road map.

Dr. D. Krishna Sundar, Associate Professor A Chairperson-ERP Center, Indian Institute of Management Bangalore, India 560 076. E-mail: diatha@iimb.emet.in

1

Electronic copy available at: http://ssrn.com/abstract=2160390

1.1 Introduction In the information age, with information symmetry, customers compare prices, delivery schedules, and product information with an ease that was never possible with traditional storefronts. These capabilities impacting not only all the customer touch points of an organization, but also, send shock waves through the entire value (supply) chain. Organizations are forced to cut inefficiencies in every aspect of procurement, distribution, manufacturing, sales, service, and marketing. Time to market pressures and responsiveness to customer demands have never been so great. Established brick and mortar companies are reinventing themselves and leveraging the new technologies. These organizations are becoming more competitive through improved information sharing,

manufacturing on demand, and using real-time collaboration throughout their supply chain. Their goals are increased efficiencies, reduced fulfillment costs, and enhanced time to market....
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