ICT in Logistics Management - Doc

Running head: ICT IN LOGISTICS MANAGEMENT 1
ICT in Logistics Management
Name
Institution

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Distribution and Logistics Management
Logistics management is a component of the supply chain management that meets
demands from consumers by ensuring efficient planning and control in the movement of goods,
services, and information from the point of production to the respective destinations (Nilsson,
2006). This process is important for companies because its aids in the reduction of costs related
to movement of goods and services and it ensures that customer service is greatly enhanced. The
management of logistics commences with the accumulation of raw materials from the respective
suppliers to the delivery of products to the customers. Logistics managers adhere to the needs of
their consumers as well as the standards that have been set up for the entire industry by following
a provided process strategy, and implementing it according to the set plans.
Logistics management requires that all the activities take place in time. Failure of this
could lead to customer dissatisfaction. Incidentally, delayed deliveries may lead to loss of
buyers. Moreover, there is need for the products to be transported properly to avoid damages. If
there is poor logistics management, expenses may increase leading to losses being incurred. To
resolve these problems, it is paramount that organizations implement logistic management
practices that will save time, minimize costs, and ultimately increase customer satisfaction. This
is possible by the use of information and communication technology in logistics management
(Sai, 2016).
The information and communication technologies can be applied in transportation of
products, warehousing activities, the management of inventory, and in customer services. It
makes the processes more efficient, saves time, and increases the customers’ levels of
satisfaction. In the supply chain and logistics, different information and communication
technologies has been seen to play a great role. The different technologies used are listed below.

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There is the use of Automatic Identification Technology (Auto ID). This is a technology
that enables data to be entered directly into a computer without using a keyboard. It makes use of
devices that are microprocessor controlled and logic controllers that are programmable
(Majekodunmi, 2014). Technologies that employ Auto ID include; Radio Frequency
Identification (RFID), voice recognition and bar coding. This technology is mainly used in
tracking goods to ensure timely dispatch to the customers (Jones, & Chung, 2016). Auto ID aids
in providing accuracy in matters of package locations, saving time and costs, and it provides
efficient data analysis and storage (Zeibig, 2006).
Radio frequency identification aids in identification of the location of the products and
aids in the capturing of data. RFID systems are very important especially in hostile environments
where other technologies such as bar codes may be unable to survive. They communicate the
data in regards to the inventory through the use of radio waves wirelessly from the objects that
have been tagged to the reader.
There are various components that make up the RFID system. These include; radio
frequency tags (RFTs) which are made of an antenna and a chip that is a semiconductor, a single
or multiple read or write devices that are referred to as readers, the readers also have an antenna,
the host computer system, and an application software (Ahsan, 2011). RFIDs have been used by
different suppliers from India to export their merchandise to retailers such as Walmart. These
suppliers, by using the RFIDs are able to gain visibility in the movement of their products in the
supply chain. This makes them more competitive. They also assist the manufacturers to manage
their inventory better (Saleem, 2012).
Bar coding technology is in the form of parallel lines that have different thickness, that
are arranged in a sequence, containing spaces between them (Sellinger, 2012). The bars are

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information that has been presented in a coded form and is read using a scanner. The first time
bar codes were used was in an American supermarket in 1952 (Reynolds, n.d.). The bar code
contains information about; name of the manufacturer, manufacture date, details about the
product, and country code. Different industries that make use of bar codes include; electronics,
retail, pharmaceutical, automobiles, and consumer goods. Bar coding therefore aids during
distribution to track goods in transit to consumers (Hutton, Ding, & Wellman, 2017).
Proctor and Gamble Company initially used bar coding technology to track the
movement of goods as they were being shipped to retail outlets from their factories (Hunt,
Puglia, and Puglia, 2007). However, they were not able to be proactive in preventing shortages in
their stores. Hence, they shifted to the use of RFID to track their products. As a result, because
they were able to track even individual products, they were able to stock their stores on demand
and avoid shortages. Consequently, they predicted that this move would aid in reducing their
expenses by $400 million annually ("Technology Trends in Logistics and Supply Chain
Management", 2017).
Another company that has made use of RFID technology is Ford Motor Company.
Initially, the workers in the assembly line had to call and order for parts replenishments when
they ran out and then waited for long periods of time to receive them. The company, in a bid to
solve this problem, put RFID tags on every parts bin. This has in turn helped because workers in
the warehouses are aware when the parts are running low and they automatically deliver those
parts to the workers in the assembly lines ("Technology Trends in Logistics and Supply Chain
Management", 2017). This has aided in saving time and increasing the income earned by the
company.

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The voice interactive system is used mainly in warehousing operations. This technology
enables the workers to pass on information to the central computer without making use of a
keyboard. It is very efficient because it enables the operators to keep on working as they are
communicating data to the system. They are therefore able to perform various tasks in the
warehouse such as inspection of goods, picking up and packing the products while still
interacting with the system. As such the workers are able to feed data to the system such as the
item IDs while forklifting the products and driving the products away. The central computer, on
the other hand, will update the data in real time. It is therefore very efficient in that it saves time
while increasing productivity and reducing errors (Newsom, 2013).
Communication technology is extremely vital in the achievement of success in logistics
management. It enables organization to become highly competitive by increased accuracy and
speed in the process of communication.
Electronic data interchange (EDI) is a communication technology that assists to move
data and information between computers. It can be used in the electronic movement of
documents that are used in business processes such as cheques, invoices, and challans (Choe,
2008). This is a significant technology because it aids in elimination of errors that can be brought
about by the use of physical documents or loss of the documents. This technology is superior to
the use of emails in passing information because the EDI message is created by the use of one
software and another software is used in the interpretation while emails are composed manually
and the interpretation is also manual.
This technology is significant in the supply and logistics management because; it ensures
that transactions are faster and enables documents to be transferred in the supply chain in real
time. By use of this technology a company can achieve just in time inventory management.

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Because the transactions that occur are paperless, transaction costs are considerably reduced. It
also reduces the time taken in the order cycle. Finally, it improves the relationships that exist
between different corporate parties thus reducing competition levels. Therefore, this is a
technology that aids in the management of inventory.
Another technology that is used in logistics is called Very Small Aperture Terminal
(VAST). Today, the use of satellite channels of communication has become very significant in
providing data in real time. There is an antenna that is fixed on the vehicle to enable the carrier
of the goods to be tracked. Consequently, the consigner, driver, and consignee are able to
communicate (Raghav, Vaithianathan, & Murali, 2015). Because this communication occurs in
real time, all the stakeholders are able to have an update of where the goods carrier is located and
the location for the delivery. Walmart makes use of this technology to ensure control in the
movement of inventory. This technology aids both in the transportation process and leads to
improved customer service.
Another transportation technology is the use of Geographical Positioning Systems (GPS).
This system aids in the process of tracing the movement of inventory. It provides higher levels of
accuracy when put in use in the developed countries where with the assistance of Geo Stationary
Satellites, a truck can be traced in terms of longitude and latitude to the accuracy of one meter.
As soon as this location is identified feedback can be sent back to the consigner and the
consignee using different means.
Geographic Information Systems (GIS) is another communication technology that aids in
providing the exact location of the consignment in any location on earth as long as it is stored in
geography related databases. When integrated with GPS, GIS can track the inventory to a
specific street in any given town.

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Web based Tracking is another technology that aids in tracking inventory. It aids in
improvement of customer services because it allows clients to access the status reports about
their consignments. This report can be downloaded by the clients through internet connection.
The data provided by this technology enables the company to plan schedules for dispatch as well
to follow up with their clients on matters regarding payments. This is an important technology
because it brings trust between the customers and the companies and ensures that the customers
receive their consignments in good time. This technology has been highly used by Indian
companies such a Blue Dart and Fed-Ex.
Another communications technology that is used in warehouses is the Automated Guided
Vehicle System (AGVS). This is a system that incorporates the use of optical and magnetic
systems of guidance. An operator is not required when using this system. There is an energized
wire that is laid on the floor of the warehouse that guides the equipment carrying inventory. The
wire is used to direct the magnetic system. In the recent past, there have been Automated Guided
Vehicle Systems that work without the need for the energized wire and they therefore do not
follow one fixed route alone. These systems can be able to carry out all the activities of handling
inventory in the warehouse without the need for human control. They can also be used together
with robots. In such instances they are able to pick the exact requirements provided in an order
by a customer (Jaiganesh, Kumar & Girijadevi, 2010).
Another technology used in warehouses is the use of Information Directed System (IDS).
This system makes use of a centralized computer that controls the equipment that handles
inventory (Gattiker, 2006). The equipment and the computer make use of radio frequency to
communicate. An operator feeds the movements that need to be undertaken to the computer,
which in turn passes the tasks to the different equipment. This technology increases the

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productivity in the warehouse because the system can perform different jobs that involve the
handling of inventory using just one equipment. These jobs include; loading different vehicles
and picking orders.
An information technology that is used in supply chain and logistics management is the
use of Enterprise Resource Planning. This is an integrated software that aids to bring a difference
in the working of employees and it encompasses all the operations in the business (Babu &
Bezawada, 2012). It requires enough time to plan before using it because it is very expensive and
complex. The enterprise resource planning software can be adapted to suit a given business.
Ramco Systems in India is one company that has adapted ERP to suit the business environment
in which it operates. This software enables an organization to respond to customers quickly,
reduces costs related to inventory and logistics, and leads to improved service provision by the
company both internally to its employees and externally to other stakeholders such as customers
and suppliers. Other companies that have incorporated the use of ERP include; Colgate and
Nestle. These companies have been able to save costs related to inventory.
Another information technology tool used in logistics management is the use of
Distribution Requirement Planning (DRP). This technology incorporates sophisticated planning
methods and takes note of the characteristics of the distribution system with emphasis on the
different distribution stages in the process ("Distribution Requirement Planning (DRP)", 2014).
The requirement for the inventory of finished goods is determined by the distribution
requirement planning systems. The demands for consumers in different markets are put into
consideration and the different distribution centers. This system aids in the consolidation of the
different shipments to various places that are in different geographical locations. This in turn aids

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in the reduction of costs associated with the distribution of products. The use of this system helps
companies to reduce the levels of inventory in their warehouses and minimize distribution costs.
A technology that is very important in inventory management is the Automated Inventory
Tracking System (AITS). This is an information technology tool that provides information on the
levels of inventory in real time (Sople, 2007). It is used in feeder, retail stores, and major
warehouses. The data regarding the levels of inventory remaining are conveyed to the suppliers
directly once the level of stock in the major warehouses are checked. This is for the purpose of
replenishments before the stock runs out to prevent delays and losses being incurred. The process
of replenishment by the supplier takes different times based on the rate at which the particular
product is selling in the retail stores, the amount of inventory already in transit, and the amount
of safety stock. This tool is vital because it aids in the optimization of stock in the supply chain.
Walmart uses the Automated Inventory Tracking Systems throughout their supply chain to
control their inventory.
Another technology that is being used the transportation of inventory is the drone. This
technology has not yet began being used that much but it is continually growing. Drones have a
great potential for growth. This is because they can be much faster that vehicles. They have an
ability to access densely populated areas without having to pass through the congested urban
roads. Moreover, they can save costs because their operating budgets are much lower than when
using other means of transport.
Advanced machine learning and analytics is another very important technology in this
day and age. Today, there is so much data that is in existence. Companies are gaining a great
competitive edge by making use of this data. They are analyzing this data and identifying
patterns that exist then they are using this information to make business decisions. Currently,

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computers have been programmed to produce certain reports and dashboards that are already
pre-determined. However, there are other consumer trends and market insights that need to be
uncovered. This is where machine learning comes in and it is able to identify these patterns.
When combined with supply chain management, this technology will aid in converting the
existing data into actionable intelligence for the businesses. The company can therefore be able
to improve product demand through accurate forecasting, create a chain of supply for the orders
coming in, and be able to predict patterns, trends and performance.
Clearly, technological advances are being used to increase profit margins as well as
improve the logistics operations. The ability to share information in real time has become vital in
the achievement of efficiency. One of the biggest issues that logistics managers have is
information distribution. This happens because there are many levels in the logistics process that
have their own platforms for sharing the information instead of this information being shared all
through. The different levels in the supply chain include; distribution, procurement, and
manufacturing. It is therefore paramount that the supply chain adopts a policy of integration.
Today, many companies are looking to integrate all their internal operations from
management of inventory, warehousing, transportation and all other components of the supply
chain. Incidentally, there is a technology known as SaaS that enables companies to integrate their
different operations. In turn, they enjoy better management of their inventory, faster shipping,
and reduced costs associated with warehousing activities.
This report has shown the ways in which technology is used in logistics management in
the process of distribution, inventory management, warehousing and in customer services. All
the technological applications have been seen to reduce costs incurred, save on time, increase the
levels of productivity, and increase the levels of customer satisfaction. Companies should

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analyze the different information and communication technologies that are in existence in order
to incorporate them into their companies based on their different logistic activities. This will
increase the companies’ competitiveness and improve their efficiency levels

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