1. Management of
Transportation
Seventh Edition
Coyle, Novack, Gibson &
Bardi
© 2011 Cengage Learning
Chapter 12
Information
Management and
Technology
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

2. 2
Introduction
• IT use in supply chain explodes in ’90s
– IT use enables reduction of assets
– IT use enables better management of
• Information flows
• Product flows
• Cash flows
– Cost of IT declines significantly
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

3. 3
Information Systems
• Purpose
– Collect, organize, and portray meaningful data
to decision makers
• Challenge: vast volumes of information
– Serve multiple organizational levels
– Facilitate integrated decision making within
firms and across supply chain
• Core components
– Common databases, hardware, software
– Enterprise resource planning (ERP) systems
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

4. 4© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-
1

5. 5
Information Systems, cont’d
• Ex: info needed to manage transport transaction
– Pre-transaction phase: info needed to plan carrier
movement
• Shipper needs purchase order, forecasts, POS data,
equipment availability, possible pick-up times
– Input to carrier selection decisions
• Carrier needs bill of lading info., preferred pick-up and
delivery times
• Receiver needs advance shipment notice, scheduled
delivery times
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

6. 6
Information Systems, cont’d
• Info needs for transport transaction, cont’d
– Transaction phase
• All parties need shipment status info
– Carriers typically provide on exception basis
– Post-transaction phase
• Shipper and receiver needs depend upon terms of sale
– Proof of delivery and carrier performance
– Freight bill
– Claims, if necessary
• Carrier needs payment info, claims info
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or duplicated, or posted to a publicly accessible website, in whole or in part.

7. 7© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-1

8. 8
Information Sources
• Prime sources were paper documents
– Many transactions are now paperless
• Bill of Lading (BOL)
– The single most important document.
– Initiates shipment, typically generated by shipper
– Provide all the information the carrier needs to accomplish
the move
– Stipulates the transportation contract terms including the
scope of the carrier’s liability for loss and damage
– Acts as a receipt for the goods the shipper tenders to the
carrier
– Shows certificate of title to the goods
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

9. 9
Information Sources
• Bill of Lading (BOL)
– Serves five legal purposes
• Receipt for goods
• Description of shipment
• May be evidence of title to goods
• Operating document
• Defines terms of contract between carrier and shipper
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or duplicated, or posted to a publicly accessible website, in whole or in part.

10. 10
Information Sources, cont’d
Bill of Lading, cont’d
– Minimum information required:
1. Origin/destination of shipment
2. Carrier designation
3. Special operating instructions
4. Shipment description
5. Billing instructions
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

11. 11
Information Sources, cont’d
Bill of Lading, cont’d
– Minimum information required:
1. Origin/destination of shipment
– Carrier to identify freight lane that will be used for
shipment, availability of equipment and personnel to
provide transportation, to determine pick-up and
delivery times
1. Carrier designation
– Determine carrier-routing process
– Helps identify the initial contact with the pickup carrier
1. Special operating instructions
– Temperature control, loading/unloading requirements,
blocking/bracing, pickup or delivery requirements
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

12. 12
Information Sources, cont’d
Bill of Lading, cont’d
– Minimum information required:
4. Shipment description
– About the commodity, quantity, weight
– Hazardous material
4. Billing instructions
– Information on the identity of the party responsible for
paying the transportation services
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

13. 13
Information Sources, cont’d
Bill of Lading, cont’d
– Two types of bills of lading
• Straight or non-negotiable
– The carrier must deliver the goods only to specific
receiving organization and destination in return for freight
charge payment
• Order or negotiable
– The owner of the goods has the right to transfer title to the
goods to another party and reroute the shipment to a
location other than the one listed on BOL
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or duplicated, or posted to a publicly accessible website, in whole or in part.

14. 14© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-4

15. 15
Figure 12-5
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or duplicated, or posted to a publicly accessible website, in whole or in part.

16. 16
Information Sources, cont’d
• Waybill
– Operating document for railcar movement
• Assigns car to train, contains billing info
– Describes car’s contents
– Most are now electronic
• Manifest
– Trucking equivalent to waybill
– Documents weight loaded in each trailer quartile
– To address axle weight restrictions on the highway
system
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or duplicated, or posted to a publicly accessible website, in whole or in part.

17. 17
Figure 12-6
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or duplicated, or posted to a publicly accessible website, in whole or in part.

18. 18
Information Sources, cont’d
• Freight bill
– Purpose/function
• Carrier’s invoice for transport services and related
charges
• Notifies buyer of charges and means of assessment
• Can serve as proof of delivery
– Efforts to shorten freight bill payment cycle
• Many buyers require proof of delivery (signed freight
bill) before initiating payment process
– Delivery proof matched with BOL and packing list
– Carriers supply electronic delivery proof to speed process
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

19. 19© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-7

20. 20
Information Technology
• A leading and constant concern of logistics
and transport managers
• Areas of application
– Top application: connecting to supply chain
– Drivers
• Information can substitute for assets, services
– Ex: Satellites, inventory visibility, safety stocks
• Cost of IT continues to fall and capabilities rise
– Hardware, software, networking communication and data
exchange capabilities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

21. 21
Information Technology
• A leading and constant concern of logistics
and transport managers
• Areas of application
– Top application: connecting to supply chain
– Drivers
• Information can substitute for assets, services
– Ex: Satellites, inventory visibility, safety stocks
• Cost of IT continues to fall and capabilities rise
– Hardware, software, networking communication and data
exchange capabilities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

22. 22
Information Technology
• A leading and constant concern of logistics
and transport managers
• Areas of application
– Top application: connecting to supply chain
– Drivers
• Information can substitute for assets, services
– Ex: Satellites, inventory visibility, safety stocks
• Cost of IT continues to fall and capabilities rise
– Hardware, software, networking communication and data
exchange capabilities
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

23. 23
Table 12-2
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or duplicated, or posted to a publicly accessible website, in whole or in part.

24. 24
Table 12-3
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

25. 25
Information Technology, cont’d
• Areas of application, cont’d
– Drivers, cont’d
• Supply chain partners demand more info
– Ex: Collaborative planning, forecasting and replenishment
(CPFR) requires sharing/collaborating on demand forecasts
• Managing information flows well is critical to
meeting customer demands and to efficient operations
and profitability
– Info flow necessary for managing relationships and product
and cash flows
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

26. 26
Information Technology, cont’d
• Types of information technology
– The basics: comprehensive, quality electronic
data interchange (EDI)
• Definition: the application-to-application exchange
of standard format business transactions
– One of oldest IT forms, now nearly a standard
requirement
• Advantages
– Eliminates human intervention and errors
– Reduces transaction costs by reducing labor costs
– Improves customer service – auto. exception alerts
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

27. 27© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-4

28. 28
Information Technology, cont’d
– EDI, cont’d
• Requires protocols and standards to define data, its
order, field lengths, etc.
– Universal standards set by ANSI
– Industry-specific standards
– Proprietary standards
• Most popular uses – sending/receiving orders, ASN,
invoicing, and electronic funds transfer
• Institutional and technical barriers
– Capital investment, hardware/software compatibility
– Consistent formats, security, top mgmt. support
– Internal ownership
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or duplicated, or posted to a publicly accessible website, in whole or in part.

29. 29© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-8

30. 30© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-9

31. 31
Information Technology, cont’d
– EDI, cont’d
• Role of third-party value added networks (VANS)
– Translates proprietary and industry-specific EDI standards
– Enables EDI user to develop a single EDI transmission network
rather than multiple networks direct to customers
» User to VAN to customers
– Saves on capital and operating costs compared to multiple
networks
• Internet: possible substitute for VANS and dedicated EDI
networks
– Extensible mark-up language (XML) mitigates standards
requirements
– Capacity can be a concern
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

32. 32
Information Technology, cont’d
• Types of technology, cont’d
– The basics: automatic ID - bar coding
• Patterns of dark bars and spaces that when coupled
with other IT provides info on product movement
throughout supply chain
• Requires standard formats of bar/space patterns
– Code 39 and Code 128 are most popular formats
• Developments
– 2-D bar codes
– Matrix bar codes
– “License plates” for pallets
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33. 33
Figure 12-10
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or duplicated, or posted to a publicly accessible website, in whole or in part.

34. 34
Figure 12-11
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or duplicated, or posted to a publicly accessible website, in whole or in part.

35. 35
Figure 12-12
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or duplicated, or posted to a publicly accessible website, in whole or in part.

36. 36
Figure 12-13
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37. 37
Figure 12-14
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38. 38
Figure 12-15
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or duplicated, or posted to a publicly accessible website, in whole or in part.

39. 39
Figure 12-16
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or duplicated, or posted to a publicly accessible website, in whole or in part.

40. 40
Information Technology, cont’d
• Types of technology, cont’d
– The basics: track and trace
• Provides in-transit shipment visibility
• Greatly enhanced by satellite technologies coupled
with EDI and radio frequency (RF) technology
– Carriers can monitor vehicle positions, better manage
vehicle utilization, and be more customer responsive
• Classification of shippers by track/trace capability
– Lagging edge
– Mainstream
– Leading edge
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

41. 41© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-6

42. 42
Information Technology, cont’d
• Types of technology, cont’d
– Emerging: electronic product code (EPC) tags
• Bar code info: static and requires readers to capture
• EPC or “smart” tags
– Info can be updated, carrying more info than bar codes, and
can transmit info via RF technology
• Wal-Mart requirements for RFID
• Issues in universal adoption
– Cost
– Standards
– Compatibility with current software systems
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

43. 43
Information Technology, cont’d
• Types of technology, cont’d
– Emerging: the Internet
• Principal current uses
– Information resource: ex: track and trace
– Communications purposes
» Share demand, production forecasts
» CPFR, collaborative transportation mgmt. (CTM)
– To accomplish transactions
• Challenges
– Capacity
– Security
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

44. 44© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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45. 45© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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46. 46© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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47. 47© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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48. 48© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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49. 49© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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50. 50
Information Technology, cont’d
• Types of technology, cont’d
– Emerging: the Internet, cont’d
• Many future applications
– Sales interface
– Customer service utility
– Load-matching services – shipper/carrier without broker
• Trends in e-business capabilities to support
transport
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

51. 51
Information Technology, cont’d
• Types of technology, cont’d
– Emerging:Transportation Requirements Planning
• Sharing of info regarding movements
– Improves flow efficiency/effectiveness
– Using data inputs from shippers and carriers, develops optimal
shipment plans/schedules given shipper requirements and carrier
constraints
– Includes “what if” planning analysis capabilities
– Given shipment plan, provides status/performance reporting
• Penske LMS system as example
• TRP may be stand-alone or linked to ERP system
• Transportation management software development and
implementation
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.

52. 52© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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Figure 12-17

53. 53© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
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Figure 12-18

54. 54© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 12-19

55. 55© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.
Table 12-9

56. 56
Information Technology, cont’d
• Types of technology, cont’d
– The future: Internet-intelligent applications
• Heuristics designed to reduce degree of manual
interaction
– Ex: event management
– The future: Transparent EDI
– Reducing EDI cost via more flexible standards
– The future: Data warehousing
– Aggregation of a firm’s functional databases into
relational databases
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied
or duplicated, or posted to a publicly accessible website, in whole or in part.