Computer Systems Aided Management in Logistics

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International Journalon Marine Navigationand Safety of Sea Transportation

Volume 6Number 3

September 2012

413

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INTRODUCTION

Taking into account the development of computertechnologies, we can classify todays production

processes as follows:

1 independent, computer controlled machining andassembly stations (CM Computer Module),

2

FMS Flexible Manufacturing Systems,3 CAM Computer Aided Manufacturing Systems,4 CIM Computer Integrated Manufacturing Sys-

tems.

Typical operations in todays production systemsinclude technological (machining and assembly),control, transport, storage operations and their com-

binations. Besides, there are processes of componentand raw material supply, co-operation, distributionof finished products and after sale services.

Logistics come to assistance in managing theproduction system understood in such broad terms.There are clearly distinguished areas of logistics:

material supply,

co-operation, production, distribution.

Processes taking place in these four areas of lo-gistics require efficient management. To improve the

system of logistic management of production wehave to design and implement a computer system.

This paper presents the idea of a wide range com-puter system which aids the management of produc-tion system logistics.

2 THE CONCEPT OF COMPREHENSIVECOMPUTER SYSTEM OF MANAGEMENT INLOGISTICS

The production system consists of four subsystems:

1

materials supply, handled by materials supply lo-gistics,2 co-operation, handled by co-operation logistics,3

manufacturing, handled by manufacturing logis-tics,

4 finished goods distribution, handled by distribu-tion logistics.

Figure 1 graphically illustrates a logistic chain ofmaterials supply for the manufacturing process in a

production company. Participants of this chain are asfollows:

original suppliers,

suppliers of components and subassemblies, supply centers (see Fig. 1).

Computer Systems Aided Management inLogistics

K. ChwesiukMaritime University of Szczecin, Szczecin, Poland

ABSTRACT: This paper aims at presenting a concept of an integrated computer system of management inlogistics, particularly in supply and distribution chains. Consequently, the paper includes the basic idea of theconcept of computer-based management in logistics and components of the system, such as CAM and CIMsystems in production processes, and management systems for storage, materials flow, and for managingtransport, forwarding and logistics companies. The platform which integrates computer-aided managementsystems is that of electronic data interchange.


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Figure 2 shows a logistic chain of co-operation inthe manufacturing process in a production company.There are two types of business entities in this chain:

suppliers to co-operators, co-operators (see Figure 2).

Figure 3, in turn, presents graphically a logisticchain of distribution of finished goods from one par-

ticular manufacturer. This chain comprises suchbusiness entities as:

distribution centers, wholesale and retail stores, end recipients (see Figure 3).

Figure 4 illustrates graphically the concept of afull-range computer-based management system inthe production process logistics. Its component sys-tems are as follows:

computer-aided manufacturing CAM,

computer integrated manufacturing CIM, material requirement planning (MRPI) and manu-

facturing resource planning (MRPII), management of finished goods distribution SD

(see Figure 4).

Figure 1. Logistic chain of materials supply. DP originalsupplier, DKiP supplier of components and subassemblies,CZ distribution centre, P producer. Source: authors study

based on.1

Figure 2. Logistic chain of manufacturing process co-operation. D supplier to a co-operator, K co-operator inmanufacturing process, P - producer. Source: authors study

based on.2

1 See liwczyski B.: Planowanie logistyczne. Podrcznik doksztacenia w zawodzie technik logistyk. Biblioteka Logisty-ka, Pozna 2007

2 See. liwczyski B.,: Planowanie logistyczne .

Figure 3. Logistic chain of finished goods distribution. CD distribution centre, SSH wholesale and retail network, OKend recipient, P - producer. Source: authors study based on.

3

Figure 4. Concept of computer integrated management systemin production logistics. MRPI computer system for materialrequirement planning, MRPII manufacturing resource plan-ning system, CAM computer-aided manufacturing system,CIM computer integrated manufacturing system, SD com-

puter-aided goods distribution management system. Source:authors study

The chart of a computer integrated managementsystem in production logistics shown in Fig. 4 indi-cates with arrows the direction of material flow, orto be exact, the flow of all production factors in-volved in the process of manufacturing a finished

product and its distribution to end users. However,electronic flows of data between the main compo-nents of the comprehensive computer system run inthe opposite direction. It is in the first step of the lo-gistic distribution chain that information on the de-mand for given makers products is recognized and

processed. This is done in the computer system ofdistribution by collecting and aggregating ordersfrom end recipients for given product models andtypes of a given manufacturer. Besides, in projectingthe product demand the amounts in stock of eachmember of the logistic distribution chain are takeninto account. Data from the computer-based distribu-

tion system are transferred to production manage-

3See liwczyski B.: Planowanie logistyczne.


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ment systems, i.e. CAM and/or CIM, which are op-erated in the production company.

After information is processed in CAM and/orCIM systems, the latter in particular, the resultant in-formation is obtained in the form of, e.g. a plan andschedule of manufacturing. This information and thedata from current monitoring of the materials instock and the state of materials flows in production

lines are directed to MRPI and/or MRPII systems.

Based on the computer-aided systems of produc-tion resources control the material flow is managedin the logistic chain of materials supply and the lo-gistic chain of production co-operation, from origi-nal suppliers and co-operators to producers.

The computer integrated management in produc-tion logistics comprises several computer systems,used in such areas as:

forwarding,

transport services,

transport terminal services, customs offices, banks, insurance companies standardization offices, others.

The key condition for successful design and oper-ation of a computer integrated management in pro-duction logistics is that the co-operating computersystems share the relevant information. This objec-

tive is obtained by access to a common integrateddata base (data warehouse) and by the use of com-mon standards of electronic data interchange EDI.

3 BRIEF CHARACTERISTICS OF BASICCOMPONENTS OF THE COMPUTERINTEGRATED SYSTEM OF MANAGEMENTIN LOGISTICS

3.1 Computer Integrated Manufacturing CIM

The basic aim of CIM is a comprehensive computer-aided system for integrated implementation of pro-duction orders. One can say it is an integrated sys-tem of production order execution.

All data that appear in manufacturing processesfrom material supply, through work engineering tomanufacturing and assembly, should always be uti-lized in planning tasks. While planning productionoperations the planner should send all data to the

production area through strictly defined informationchannels. All data connected with manufacturing

and executed orders are stored in the central database. Production data are created mainly during thedesign of a product, then data from orders are addedin the planning phase. These data are crucial formanufacturing and assembly. Data that appear in the

above areas, i.e. dates/times of completing eachmanufacturing operation or operational loads ofeach machine, device and work station are includedin the central data base and can be used by the plan-ning system provided that data from the actual man-ufacturing and assembly units are sent back via acompanys data base system or DCN Direct Nu-merical Control system.4

As computer technologies develop, better tech-nical conditions are being created for the construc-tion of more advanced production facilities that mayrun automatically, with limited participation of peo-

ple. The role of the human in such systems focuseson issues such as the programming of computers andcomputer-controlled production equipment.5

The growing presence of computer systems in allspheres of manufacturing company operations andintegration of these systems into one all-encompassing computer system brings about many

changes in technological processes. Some of thesechanges lead to:

shortened time of preparing and executing pro-duction orders,

reduction of operating costs, improved internal and external communication, more effective design, planning and preparation

of production.6

One aspect worth emphasizing is increased utili-zation of companys production capacity by using

the companys data base, which allows to eliminatedoing the same work twice. Besides, errors due toinsufficient communication are avoided. The inte-gration of computer systems enhances the flexibilityof production processes, particularly manufacturing

processes, thus the manufacturer is able to respondfaster to customers requests, which often refer todetails of one particular order.7

The CIM system consists of two interconnectedsubsystems:

1

CAD Computer Aided Design, which is com-

posed of the mutually co-operating subsystems: CAE Computer Aided Engineering; its task is

to design and engineer new products or tomodernize products already made,

CAP Computer Aided Planning and CAPP Computer Aided Process Planning; these are

4See Durlik I.: Inynieria Zarzdzania, Strategia i projektowa-nie systemw produkcyjnych, Cz. I. Agencja WydawniczaPLACET, Warszawa 1998

5

See Durlik I.: Inynieria Zarzdzania .6See Durlik I.: Inynieria Zarzdzania .

7See Durlik I.: Inynieria Zarzdzania .


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supposed to prepare the production process interms of technology, i.e. product construction,technology of manufacturing product parts,subassemblies and the finished product, prepar-ing technical drawings, lists of components andthe organization of the machining and assem-

bly process, CAD Computer Aided Design, whose task is

to plan the operation of the manufacturing sys-tem comprising the manufacturing of parts, as-sembly of components and the whole product,including measurements, packaging and dis-

patch of finished products, data base (DB) and expert systems (ES), which

enable the functioning of all the areas of com-puter-aided production together with a expertknowledge base (KB) co-operating with thesesystems;

2 A subsystem of Computer Aided Manufacturing

(CAM), which will be described in the next chap-ter.

3.2 The system of Computer Aided Manufacturing CAM

The Computer Aided Manufacturing (CAM) is de-fined as a system for preparing programs for the

process of manufacturing, control and recording da-ta on the manufacturing output. This system also en-compasses such organization functions as production

planning, setting the dates of materials and subas-

sembly supply from co-operators or the delivery offinished products.

CAM can be described as:

a flexible manufacturing system, which is capableof manufacturing at the same time sets of various

products of different series size, where quantitiesand assortments are changed by a computer,

hierarchically controlled system; computer-supervised and handled by a small team, makingup less than 10 percent of the company personnel

that would be necessary to perform the sametasks in conventional conditions.8

The system which generates software for the ma-chining and paths along which parts and subassem-

blies will pass through work modules and stations,while these programs and paths are optimized rela-tive to work load and the degree of utilization ofmachines and assembly devices, production cycles,

productivity, energy consumption, environment pol-lution and work security.9

8 See Durlik I.: Inynieria Zarzdzania .


In industrial practice CAM systems, apart fromthe manufacturing in flexible production systems, al-so include:

development of software, or operating plans ofmachining and assembly, that as a rule are varia-

ble depending on the current production situation, planning of component paths and schedules of the

production,

optimal manufacturing control,

optimal product quality control, production management.10

The computer-aided manufacturing CAM isregarded as a development of the designed and func-tioning flexible manufacturing systems with somefunctions connected with control at a level of a spe-cific production system. The CAM system is oftentreated as a transitory stage leading to the computerintegrated manufacturing (CIM).

The CAM system consists of the following sub-systems:

1 CAMC Computer Aided Manufacturing Con-trol; its basic function is programming and com-

puter-aided control of numerically-controlledmanufacturing equipment,

2 CAQ/CAQC Computer Aided Quali-ty/Computer Aided Quality Control; this subsys-tem is designed to provide the highest standard of

product quality,3 CAT Computer Aided Testing, for examining

the technical condition of machines and tools.A production company using computer-aided

manufacturing should have the following technolog-ical machines and facilities:

numerically controlled (NC) machines tools, machine tools with CNC (Computer Numerical

Control), machine tools with DNC (Direct Numerical Con-

trol), IR Industrial Robots, IM Industrial Manipulators,

AS Automated Storage,

AGV Automated Guided Vehicles.

The use of CIM and CAM systems requires spe-cific input data, such as production execution ordersand data on future demand for the products offered.These data are acquired from the computer systemhandling distribution logistics. Output data, on theother hand, after processing in the CIM and CAMsystems, are production schedules, which themselvesconstitute input data for computer systems of mate-rials supply and co-operation.



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3.3 Enterprise Resource Planning - ERP

The computer system of an ERP class can be definedas a set of integrated functional modules, optimizinginternal and external business processes, thoseoccurring in the immediate environment of theenterprise. Such optimization is possible through theoffering of ready tools enabling automation of dataexchange with co-operators within the entire logistic

chain. The main features of the ERP computersystem can be set forth as follows:

functional complexity includes all spheres oftechnical and economic activities of an enterprise;it is implemented within the company functionalstructure,

integration of data and processes refers to dataexchange inside an object (between the modules)and with the environment (e.g. through an EDI Electronic Data Interchange); this feature isimplemented within the information structure,

structural and functional flexibility ensuresmaximum adjustment of hardware-softwaresolutions (implemented within the technical andfunctional structures) to suit the needs of anobject at the moment the system is installed andstarted up; it also enables its dynamic adjustmentwhen the environment generates variablerequirements and needs,

openess assures the ability to extend the systemwith new modules, scalable architecture (usuallycustomer -server) and creation of links with

external systems, e.g. systems of market partners, substantial advancement ensures full computer

aided support of information-decision processes,using mechanisms of free data extraction andaggregation, seeking variants, optimization,

projecting etc., as well as, in practice, basing thesystem on, inter alia, such concepts of logisticmanagement as delivery Just in Time (JiT),

production control according to MRP II standards(Manufacturing Resource Planning), MRP II Plus(MRP - Money Resource Planning - MRP IIdeveloped with financial procedures, e.g. cashflow), the ABC method (ABC - Activity BasedCosting), Total Quality Management and ISO9000 standards,

technological advancement guarantees thecompliance with present standards of softwareand hardware, making it possible for the systemto migrate to new platforms of computerequipment, operating systems, communicationmedia and protocols; it offers a graphicalinterface and use of, generally, relational data

base (due to easy way of creating inquiries), with

application of fourth generation programmingtools etc.,

conformity with Polish legislation, e.g. with theAct on accounting, in particular the regulationson book-keeping with the use of information

technology, principles of reporting the financialperformance of a business facility, principles ofpreparing financial statements etc.11

These systems cover all areas of companyoperation (finance, logistics, production, humanresources), optimize internal processes as well asexternal processes taking place in the nearenvironment of the company, by offering ready tools

and allowing to automate data exchange with co-operators in the whole logistic chain. They also havea capability of dynamic configuration, which enablesthe adjustment of their functionality to the specificoperations of an enterprise or other organization.12

The ERP system comprises the following areas oflogistic activities:

customer service customer data base, order pro-cessing, handling individual orders (products onrequest: assembly-to-order, make-to-order), elec-tronic data interchange (EDI),

production handling of resources, product costestimation, purchase of raw materials and com-

ponents, production scheduling, management ofproduct change (introduction of improvements),projection of production capability, determinationof critical level of stocks/resources, production

process control (e.g. tracking of a product in amanufacturing plant) etc.,

finance accounting, control of accounting doc-uments flow, financial settlements, preparationof financial statements as required by the recipi-

ent groups (e.g. for the head office and branches), integration of the logistic chain feature that is

likely to determine future directions ERP sys-tems will follow, extending their coverage outsidethe enterprise.13

3.4 Computer-aided Supply Chain Management -SCM

SCM class solutions offered on the market are tech-nologically advanced systems. As a rule, they con-sist of a group of integrated applications serving var-ious areas of logistic chain management. The basicSCM element is material flow planning at eachstage, from material extraction to the delivery ofready product to the consumer, through joint productdesign, demand and supply planning, monitoringstocks level, shipment dispatch organization, jointinformation management.14

11 See Adamczewski P.: Zintegrowane systemy zarzdzaniaERP/ERPII, Difin, Warszawa, 2003

12

See Majewski J.; Informatyka dla logistyki, Biblioteka Logistyka,Pozna 2002

13 See Majewski J.: Informatyka dla logistyki

14 See Dugosz J.: Nowoczesne technologie w logistyce, PWE, War-szawa 2009


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The integrating functionof SCM systems is alsotheir important feature. It is understood as multi-functional integration enabling integration and op-timization of the main enterprise functions at the

planning and execution level,

integration of many enterprises using Internetcapabilities of communications between enter-

prises and their business partners and customers,

integration with other systems within the enter-

prise enabling convergence of data with trans-action systems (including ERP systems, spread-sheets, data bases, text files).15

Complex supply chain management is strictlyconnected with the occurrence of eight mutuallysupplementing business processes. These are:

CRM Customer Relationship Management.This process enables creating a model supportingoptimal building, development and maintenance

of contacts with customers. Basically, it identifiesmarket segments, allows to generate criteria forcustomer grouping, and estimate their profitabil-ity. All data generated by a CRM system must bemeasurable, so that an appropriate cost, sales andinvestment strategy is developed.

Customer Service Management. Within this ap-plication the customer is able to have a constantaccess to check product availability, deliverydates or delivery status. Access to current infor-mation is guaranteed by an interface connectedwith manufacturers production and logistic

plans. This module supplements data generatedby the CRM with planning procedures which de-fine the method of delivery and product supervi-sion for the customer.

Demand Management. The main function of de-mand management is to maintain an optimal bal-ance between customer expectations and produc-tion capabilities of the manufacturer. Demandmanagement has advanced projection methods,where projected results are synchronized with the

production, purchase and distribution. Besides,

this process makes it possible to respond immedi-ately to any internal and external disturbances inthe process by generating substitute plans.

Order Execution. Effective order execution callsfor the integration of production, logistic andmarketing plans of the manufacturer. The manu-facturer should attempt to maintain good relationswith suppliers within the supply chain, in order to

provide added value to customers and reduceproduct delivery costs resulting from their geo-graphical location, characteristics of raw materi-als offered and the selection of transport modes.

Manufacturing Flow Management. The process isdirectly related with flexible manufacturing of

15 See Dugosz J.: Nowoczesne technologie w logistyce

products, their quality control, analysis of devia-tions and continuous control of stocks in ware-houses. There is a close collaboration of manu-facturing flow management module with CRMaimed at building an optimal production infra-structure.

Supplier Relationship Management (SRM). In asense, SRM reflects the capabilities of CRM. The

difference is, however, that SRM influencesproduct and service suppliers. SRM is supposedto identify and build close business relations withKey Suppliers (classification of suppliers by their

profitability, development opportunities andmethods of servicing sold products).

Product Development and Sales. The key im-portance is attributed to how fast a new productor improved product can be launched on the mar-ket; in this way SCM integrates customers andsuppliers in the process of product development.

Claim Management. Effective claim management

is a major component of SCM. Many companiesneglect this aspect, while it turns out to be an es-sential factor for the company to gain competitiveadvantage. The process requires good knowledgeof environment protection issues and some legalaspects related with product use procedures.16

4 CONCLUSION

The presented concept of integrated computer sys-

tem of management in logistics makes use of com-puter-aided systems already employed in manage-ment and control of manufacturing processes (CAMand CIM), those used in the logistics of materialssupply and co-operation (MRPI, MRPII and ERP)and in distribution logistics (WMS and CMR). Theintegrated computer system also incorporates com-

puter systems supporting management in forward-ing, transport, banking, insurance, customs etc.

The electronic data interchange (EDI) is the plat-form used for the integration all the above men-

tioned systems.

REFERENCES

1. Adamczewski P., Zintegrowane systemy informatyczne wpraktyce, Wydawnictwo MIKOM, Warszawa 2004

2. Dugosz J.: Nowoczesne technologie w logistyce, PWE,Warszawa 2009

3. Douglas M. Lambert [et al.] ; t Micha Lipa Zarzdzanieacuchem dostaw, (Tyt.oryg.:Harvard Business Review onSupply Chain Management)HELION, Gliwice 2007

16See Douglas M., Lambert [et al.]; t Lipa M.: Zarzdzanie acu-chem dostaw,. HELION, Gliwice 2007


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4. Durlik I.: InynieriaZarzdzania, Strategia i projektowaniesystemw produkcyjnych, Cz. I. Agencja WydawniczaPLACET, Warszawa 1998

5. Lech P., Zintegrowane systemy zarzdzania ERP/ERP II,Difin, Warszawa, 2003

6. Majewski J.:Informatyka dla logistyki, Biblioteka Logisty-ka, Pozna 2002

7. liwczyski B.: Planowanie logistyczne. Podrcznik doksztacenia w zawodzie technik logistyk. BibliotekaLogistyka, Pozna 2007

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Computer Systems Aided Management in Logistics