3.1 assess how information technology could assist integration of different parts of the supply chain of an organization 3.2 evaluate how information technology has contributed to the management of the supply chain of an organization 3.3 assess the effectiveness of information technology in managing the supply chain of an organization 4.1 explain the role of logistics in supply chain management in an organization 4.2 evaluate procurement practices in an organization 4.3 discuss the factors that must be considered when improving logistics and procurement practices in an organization 5.1 plan a strategy to improve an organisation’s supply chain 5.2 assess how a supply chain improvement strategy will benefit overall business performance in an organization 5.3 explain how barriers will be overcome in an organization when implementing a supply chain improvement strategy

1. Strategic Supply Chain Management and Logistics
Organization: Videocon
Objectives and goals: The company's corporate governance philosophy enshrined in
various fields to achieve their business and goals at the highest level of transparency,
accountability and equity for all of its dealings with all the shareholders and employees and
the government including all the other parties. The company believes in the company
philosophy of governance, which provides rights and different ingredients, such as
responsibility, employees and shareholders are carved out of the board structure of the code.
In carrying out this, ensure that the company's goal is clearly defined and adequately measure
and monitor performance against these objectives.
Corporate governance is considered to be an important tool for the protection of shareholders
and maximize the value of its long-term -term. Cardinal owners, such as the accountability,
responsibility and the transparency of the company as fair disclosure which acts as a means to
achieve this goal.
Videocon Industries Limited are basically engaged with the manufacture, sale and
distribution of the consumer electronics and home appliances, as well as oil and gas
exploration and production.
Introduction:
VIDEOCON Industries Limited manufacture is the subgroup of VIDEOCON producing
Television, Washing Machine, mobile and other high end technology products. VIDEOCON
was founded over 25 years ago in 1979. VIDEOCON adopted Business-to-Business
Integration (B2Bi) protocol to interconnect with its direct suppliers, ASP/Hub, direct

2. customers, LSP and overseas sites and banks through the Internet (i.e. system-to-system
connection), and the interconnection between VIDEOCON and its direct suppliers has
already been established in 2002. The role of B2Bi platform here means the process of
transforming legacy data into B2B protocol standard (in this case VIDEOCON uses Rosetta
Net PIPs/Standard). The forwarders used Web based technology to interconnect with
VIDEOCON through the Internet (i.e. system-to-Web connection). Basically, all the
interconnections used in this company are based on the types of interconnection for e-
purchasing . In doing so, standard information exchange mechanism and common platform is
formed and the flow of information and goods for shipping is integrated. As a result, an
intelligent commercial vehicle operation (CVO) environment is established and an
intelligent enterprise-to-shipping-operator environment is developed. Hence, result in
increased logistics efficiency. In addition, VIDEOCON also installed a FXML gateway to
interconnect with its cooperated banks through the Internet for payment automation (i.e. e-
payment). The main difference between the e-payment interconnection from others is the
security issue. Therefore, encryption was used for payment transaction. By integrating the
payment system with banks can save transaction times and reduce labour power. Hence,
increase operation efficiency and achieve real-time payment. The e-financing model is
shown in Figure 1.
Fig. 1 Efinancing model of VIDEOCON

3. Task 3.1: assess how information technology could assist integration of
different parts of the supply chain of an organization
For the intra-organisational integration, VIDEOCON adopted Enterprise Resource Planning
(ERP) integrated software solution and EAI technology. ERP is used here to manage the
company’s resources and to integrate all business functions such as planning,
inventory/materials management, and more. EAI technology is adopted here for data
transformation, data integration, transport and messaging. EAI is achieved at three
integration layers namely transportation layer, transformation layer and process automation
layer. Source and target applications are integrated by exchanging their application elements,
which include data, objects and processes when EAI is used. Videocon uses EAI to transfer
the data elements from source application to the integration infrastructure and from the latter
to the target application. So the flow is data elements are transferred from source application
to the target through the integration infrastructure using the transportation layer. Meanwhile,
data elements are translated from source application structure to target application format
using the translation layer as translation is needed to transform data into compatible format
for target application. Then, data elements that are used for the integration of processes or the
integrity of information are transferred to process automation layer. The supply chain
integration system architecture is shown in Figure 2

4. Fig. 2: VIDEOCON’s supply chain integration architecture.
Recent developments in technology can help organizations to benefit from the information
easily in their yard. These technologies will help to coordinate activities to manage the supply
chain. The cost of information decreased because of the increasing rate of technology.
Integrated supply chain model bi-directional arrow shows the accommodation of reverse
materials and information feedback flowing. Manager must understand that information
technology is more than computers. Aside from computer data to identify equipment,
communication technologies, factory automation and other hardware and services included.
Before 1980 the flow of information between different functional areas within an
organization and among partners of supply chain was paper-based. The paper-based
communication was slow.In the meantime, information is often overlooked important
competitive resource, because the value of the supply chain members is unclear.IT

5. infrastructure capabilities provide the competitive positioning of the business plans like the
reduction of cycle time, implementation, delivery and redesigned processes of cross-
functional.
Sharing of information among buisness partner is crucial and these integration attempts are
accomplished by IT initiatives.Some of them are:-
 Use the barcode in the logistics system
 Use communication EDI, among different departments
 Use Material Requirements Planning
 Use of ERP business solutions
 Internet and web services to communication among partners
Information Technology has given supply chain management a great opportunity to change
the industry structure and competition from the creation of a strategic advantage. It is
supported by centralized corporate strategic planning and daily operations of the day focused
on creating a key strategic advantage. Infact supply chain to become more market-oriented,
because the use of IT.
There are number of companies those have integrated IT with there supply chain
management.Here we will discuss some of the strategy regarding SCM in Sony.
(a) Allocation network strategies:
Issues like the warehouse location and their ability to relate to other aspects of the network
policy assignments. Configure the network policy to maintain facilities, how will the
information flow between management and supply chain members, namely warehouses and
retailers. It helps to provide a total holding cost and logistics costs. Configure network policy
relates specifically to reduce the cost of ownership as well as logistical and his organization.

6. (b) Manufacture source strategy:
This strategy is an integrated logistics and production costs. It also has a fixed mass
production to reduce the cost of production. But the production volume may increase, but the
balance between the costs and impacts of transport and logistics costs associated with the
production of small quantities of associated high fixed that they can be maintained by making
the source strategy of the organization.
(c) Revenue managing strategy:
In the revenue management strategy, the price elasticity of demand is based on the market, in
order to maximize sales revenue.
(d) Technology& choice support system:
Technologies take care of each and every fraction of the organization whether it is related to
the production, income or inventory etc. So we can say that the technology is a choice
support system of the organization.
Task 3.2: Evaluate how information technology has contributed to the
managementof the supply chain of an organization
Organisationused: Tesco
Introduction to company: The company was founded in 1919 in London, Tesco is a
British international food and general merchandise retail chains. With income 60 one billion
€ (2009 years), it is composed of two global sales and domestic market share of the largest
British retailer, realized profits of more than 3 £ one billion. There are nearly 500,000

7. employees (in 2009) and more than 4000 stores Tesco is currently the world's third largest
retailer. Initially specializing in food and beverages, it has been extended to such as clothing,
consumer electronics, financial services, telecommunications; home, health and car
insurance, Internet services and software. Tesco stores in the UK is divided into six formats,
differentiated scale and scope of product sales: Tesco stores are larger, mainly outside of
town, almost all of the stock of hypermarkets Tesco product range; Tesco supermarket is a
standard large supermarkets, stocking groceries and a smaller range of non-food goods than
super stores; Tesco Tesco Metro stores the size of supermarkets and Tesco Express store.
They are mainly distributed in the main streets of urban centers and small towns; Tesco
Express store nearby convenience store, stocking mainly food;-stop shop is the only one class
does not include the word Tesco in its name. These are the very smallest shops. In addition,
Tesco has a banking arm called Tesco Personal Finance; used as an ISP, mobile phone, home
phone and VoIP services; sale of petrol and diesel at their stations; and offer membership
cards, programs to customers. Customers can store them in Tesco, Tesco petrol or Tesco.com
for each £ 1 spent collecting a membership card points. Tesco is running on the Internet since
1994, is the world's first retailer in 1996 to provide a powerful Tesco.com home shopping
service, officially launched in 2000.
Tesco has IT valid user in its history. A few years ago, its chief information officer, was
elected the year (2007) at the best CIO CNET Networks UK Business Technology Awards
ceremony. One can not know the information provided in the success of Tesco's competitive
advantage in the end what it is.
For retailers at the global level, I would see it two advantages: helps to know what to sell; and
help in providing products sold. Tesco first great work has been made, it seems to do very
well the second as well. The first point is the creation and use of customer databases. Tesco
did in the early 1990s a good move to introduce their membership card which gives

8. customers a discount on their loyalty. They have a history of an enterprise, as the Green
Shield stamps they use early, it certainly helps them in achieving membership card in the UK
first move. They collected data on the customer, such as name and address. They can collect
more, however, with the dietary requirements, birthdays, family (optional); and through
analysis, purchase frequency; basket customization; procurement, etc. All of this data is
archived in a database and processed in order to improve marketing , size of the sales and
procurement. While this represents significant percentage of the cost of the initial sale, which
makes Tesco win market share to break even quickly. 2001, Tesco club card has 8 million
users 200 million production, the store every day to buy!
IT now find themselves with any world-class enterprise in any field, technical or sector
indispensable activities. It is now used as a means of jurisdiction competitors. It has been
used by organizational restructuring and re-assign settings to achieve a higher standard of
service, accurate production planning and demand forecasting, in order to achieve
profitability, lower supply chain costs and high supply chain. Recently, advances in
information technology enables companies to have a supply chain, thereby eliminating any
chance of mismanagement of information and real-time tracking of the bullwhip effect each
level inventory management and inventory. IT infrastructure is now available by reducing
cycle time, execution and competitive position of the company free flow of information
across departments. [Smith, W B (2000)]
The company has now entered a maximum vertical and horizontal integration of the supply
chain stage by UPS to participate in the strategic cooperation between suppliers, wholesalers,
distributors and retailers. This inter-organizational supply chain development has been
enabled robust IT infrastructure, which provides three distinct advantages
 Reduce costs

9.  Higher productivity
 New product / market strategies
Under typical conditions in the supply chain Tesco can be divided into two sub-chain. The
first movement may be referred to the supply chain. This includes everything from raw
material suppliers to the company workshop exercise, the final movement of the work
progress and finished goods flow across departments, and from the warehouse to the retail
store. Another part of the supply chain are the forward and backward flow of information.
Behind the sub chain information flow is not the product of the forward movement of the
assembly line, because the final retail stage of the integration of the parties involved in the
entire supply chain is more complex. The key issue is that in the supply chain, resulting in the
event of failure at each stage of the supply chain is a cascade of error messages at every level
of the channel at the right time to provide the correct information. [King, J. (2000)]
While leveraging powerful IT infrastructure and advanced software services to end customers
have been identified using the model to help Tesco has funded the development of a strong
loyal customer base. This helps to accurately forecast demand, low inventory levels and high
efficiency production scheduling.
Some occur in the development of advanced technologies in different industries can be listed
in the following
E-commerce: With provides increased customer convenience, the Internet savvy
customers and continuous focus, organization resorted to business conducted in a paperless
environment. This includes electronically on the Internet, e-mail, electronic funds transfer
and the purchase and sale of goods and services. It also involves inter-departmental files
quickly and paperless flow.

10. Bar codes and scanners: This is one of the most common technical progress the retail
industry, you can see the cashier in retail stores. For more information and a complete
product information, suppliers of bar code carries detailed information on the entire product
life cycle.
Data Warehouse: Data Warehouse is a unified database management company's entire
production system database. This is used in making the company's senior management
similar demand forecasting, production planning and forecasting analysis and strategic
decision making.
Enterprise resource planning tool: The form SAP, almost all of the Fortune 500
companies IT infrastructure backbone of Oracle ERP system. These systems provide a
complete end to end supply chain process highly optimized processes to reduce information
throughout the supply chain to achieve process automation of manual activities and help.
And well-equipped IT infrastructure, Tesco has developed a competitive advantage for
competitors. And suppliers of information sharing in Tesco began in 1997, founded an
Internet-based business secure data exchange system to facilitate the suppliers current
inventory holdings information. This helps the suppliers have the necessary inventory in
production facilities in real-time tracking and Tesco warehouses, such a low inventory
holding costs, Tesco and better demand is estimated at Tesco and suppliers.
With the application of information technology, Tesco has become the market leader in the
UK, but with globalization and geographic expansion, surveillance and location management
supply chain activities Tesco faced overseas, as well as a challenge. In order to effectively
monitor and effectively control it is imperative for Tesco to develop for mobile local and
international remote monitoring system to track and locate goods. These remote monitoring

11. applications must be with the existing policies and Tesco, the UK's supply chain activities are
consistent. Real-time monitoring by satellite monitoring and implementation of RFID
technology to track the flow of goods to complete, ERP systems to monitor procurement,
order processing and foreign supplier management, warehouse management, fleet
management systems.
International Warehouse Management System will help to provide a buffer between supply
and demand, taking into account Tesco source in the fact that international and global
products and commodities. It can develop an international stock holding device, can be
effectively and economically delivered to remotely located outlets through which the retail
items. This will also help to maintain good Tesco scheduling facilities and warehouse
business activities.
Development of international fleet management systems, the need for long-term reliability of
the vehicle. This will help to maintain scheduling, and tracking vehicle maintenance. This
will help across borders efficiently and economically in the international movement of goods,
Electronic Data Systems need to be deployed to capture the customer, such as customer data,
usage patterns, order size and order details, such as product and quantity of basic data. This
can be selected by using the customer database system delivery, past shopping details in
different countries, customers patronize, resulting in reported figures are special
requirements, if a customer to complete.
For the case ofVideocon:
Before the implementation of supply chain integration with IT, the delivery process was more
complicated and time consuming as many of these processes were done manually. For
example, when Videocon need to deliver goods to their customers by List Source Package

12. (LSP) that they need to fill in purchase orders first, then the LSP will come and pick up the
goods. After receiving the goods from the ordering companies that usually LSP will put
labels on the goods to facilitate the process as ordering companies will constantly check
with LSP to see whether the goods have arrived on time. After this, LSP will key in the goods
information into their database for suppliers’ enquiries. Meanwhile, if companies want to
trace the goods that they need either to contact LSP by telephone or in person. Then LSP will
check with the drivers to see where the goods are. As a result, the information obtained might
not be 100% accurate all the times and information can not be obtained in real-time. This
might affect the collaboration relationship between LSP and their customers. This situation
has now improved ever since the Videocon start integrating its supply chain. Videocon has
performed a preliminary efficiency analysis to examine the performance of integrating its
supply chain. In doing so, some improvements are being specified by the Videocon as
follows:
• The period of stock stored in the warehouse has reduced approximately from 60 days
to 45 days.
• The management of distribution has shortened approximately from 24 hours to 3
minutes.
• The ratio of finalising production on time has improved approximately from 75% to
90%.
• The average time on payment operation has cut approximately from 2 hours to 10
minutes.
Other benefits included:
• Reduced errors occurrence and operation time.
• The capital costs have significantly reduced by automating process.

13. • Since the period of stock stored in the warehouse has reduced, this has also lowered
the risk.
• The case company is able to obtain and exchange real-time information now.
• Strengthen the ability of revolving the capital.
• Increased collaboration among customers, LSP, banks and suppliers. Hence, building
a closer relationship.
• Increased competitive advantage.
Apart from the improvements mentioned above, there are also problems and difficulties
during the development of supply chain integration such as:
• Some LSP claimed that since the pricing standard of ASP is unclear, this might
increase their capital costs on integration.
• The lack of IT application ability and the knowledge on RosettaNet standard of
LSP, Videocon has spent a significant time on helping them in building B2B e-
commerce platform.
• Many LSP need to change their backend systems as well as to enhance the B2B
system functionalities upon the implementation of integration.
• There are also concerns over security on e-payment and the Internet. Videocon is
addressing this issue by using the security measures like encryption to protect its data
so that members of the supply chain can only see information that is relevant to them.
Task 3.3: Assess the effectiveness of information technology in managing
the supply chain of an organization
From the above discussion, it shows that SMEs are moving to the adoption of integrated
systems as a way to improve efficiency by interconnecting their systems with their suppliers,

14. LSP, customers and banks to fully automate the supply chain process. Hence, increase
competitive advantages. In doing so, many types of interconnections have been established
such as Web based interconnection, XML based interconnection and e-commerce turnkey
based technology. These types of interconnections were then used to integrate/interconnect
the cash flow and logistic flow of the supply chain, among these adopted interconnection
methods that there were only approximately 10% of manufacturers supplier and LSP that
were able to achieve system-to-system interconnection/integration. The majority of
companies were only able to achieve system-to-Web connection. This is partly due to the
differences in IT application ability between the manufacturers, the suppliers and LSP, and
partly due to SMEs’ characteristics weaknesses e.g. lack of know-how and finance. SMEs in
general have the characteristics of shortage in finance and weak financial structure. They
can not raise capital in the same way as large companies do. In a situation where business
slows down and inability to do financial planning, SMEs will face insufficient working
capital and it is hard for SMEs to obtain loans from financial institutions As a result, these
might have an influence on the overall supply chain integration performance. However,
since VIDEOCON and its suppliers were supported by Indian government financially and
technologically to integrate their supply chains. It is expected that the situation might be
worse for SMEs without any financial or technical supports. Therefore, it was found that
the government played an important role in assisting SMEs to achieve supply chain
integration. Another point needs to be addressed is, since VIDEOCON and its suppliers are
from IT sector, their IT application abilities are expected to be more advanced than SMEs
from other sectors. The authors expect that the development of supply chain integration by
SMEs from other sectors might face even more problems and difficulties. Therefore, IT
sophistication is found to be one of the crucial factors affecting the adoption of supply chain
integration in SMEs.

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