The use of information technology (IT) in managing the supply chain process improves agility in supply chain process, achieve higher efficiency, reduce cycle time and boosts supply chain performance (SCP). To investigate the relationship among IT implementation, supply chain integration and its performance. The Scope of this report is to estimate the impact of Information Technology on supply chain performance when implemented in integrating supply chain operations. To estimate this, an in-depth analysis would be made by gathering necessary information from various firms with logistics operations across UK.
Objectives
The main objective of this project is to explore the relationship of IT implementation, its impact on supply chain integration and overall supply chain performance.
To develop a conceptual model for the relationship that is explored.
To explore impact of IT implementation and supply chain integration.
To study the impact of supply chain integration on supply chain performance.
This project also studies the impact of IT on organisational performance.
About Information Technology
History
'Information technology' describes the entire industry that implements computer hardware and software applications to manage data and organise the flow of information. It portrays the modern science of digital information, its recording, use, and transmission through networks of computers and servers. Departments in an organisation, such as Management Information Services (MIS), handle the responsibility for the storage, protection, processing, transmission and retrieval of the information when and as required.
IT mainly deals with computer applications and the present common work environment is totally dependent on computers. Today, Information Technology departments use computers, data centres, servers, database management system, specialized software applications and more, managed by system and database administrators, an Information Technology Manager and other department heads, including a Chief Information Officer (CIO). Even though information technology has a long reach into history, only in the recent years has it been associated with the use of computers.
Information Technology is very important as all our work related applications are now completely automated due to the enormous growth in the IT sector. This advancement paved way to the administration of whole systems improving communications and cultural development and access to production and manipulation of sensitive information.
Advantages and Disadvantages
Advantages of IT:
Application of Information Technology has its advantages and disadvantages that have to be dealt with. Information technology (IT) benefits the business world by entailing work efficiency and maximising productivity of the organisations.
Automation of processes
Storage of information
Protection of information and data
Remote access to electronic network
Resources for faster communication
Disadvantages of IT:
With all the advancements in technology and information processing, IT has some drawbacks.
Cost of implementation as in expenses
Job elimination of human resources
Breach in security of the protected information
Information Technology plays a vital role in giving a competitive edge to firms over its competitors. In this project the impact of IT and the ease of faster information flow in the supply chain are intensely analysed.
Supply Chain Management
Definition
Supply chain management is the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole (Mentzer et al., 2001). The five basic components of Supply Chain Management are the following
Plan: Planning to create a strategy for managing all resources that are needed to meet customers' demand for their products or services.
Source: A choice of suppliers to deliver the goods and services, managing inventory, authorizing shipments and payments and controlling operations are put together by SCM managers.
Produce: In this step the manufacturing of the product takes place. The activities essential for production, testing, packing and delivery are scheduled by supply chain managers. This is the important phase of a supply chain.
Deliver: This phase is referred to as logistics, where companies deliver the product or service to customers by developing a warehouses network, transportation facilities for the goods and invoice structure to receive payments.
Returns: This is an element of supply chain management where an effective, flexible and responsive network is managed for receiving excessive stock and faulty products that are returned by end users.
Functions / Activities
Supply chain management includes managing the movement of raw materials from source to manufacturer and the movement of finished goods toward the end-consumer. The purpose of supply chain management is to improve collaboration and trust among supply chain entities and thus improving agility of the inventory. The activities of the supply chain process can be grouped into three levels.
Strategic level
Network optimisation where strategic decisions are taken in deciding the size and number of warehouses and distribution centres.
Developing strategies determining a product's life cycle management so that the supply chain management activities seamlessly integrate new and existing products.
Creating communication channels with end-consumers, retailers, distributors and suppliers for information and operational management. Such strategic partnerships direct toward improved third party logistics.
Strategic decisions related to location of source, manufacturing and selling of the products.
Operations on information technology chain, channelling the accurate flow of information.
Linking the organisational strategy with the supply chain strategy for optimisation.
Tactical level
At tactical level decisions associated with sourcing, out-sourcing and purchasing are taken.
Production decisions, including sourcing contracts, scheduling, and planning of operational processes.
Strategy related to transportation which involves decisions taken for frequency of delivery, route planning, and contracting options.
Inventory decisions are taken at this level which includes decisions pertaining to quantity despatched, location of warehouses and distribution centres, and quality of inventory.
Focussing on supplier's requirements and customer demands.
Managing transactions and defining payment options.
Developing strategies to improve operations in the organisation.
Operational level
Production planning and distribution planning for day-to-day activities in the integrated supply chain.
Scheduling the operations for manufacturing and transportation routines.
Demand forecasting is carried out to know the customer's demand for a product or service and this information is shared with other nodes of supply chain like suppliers and manufacturers.
Collaborating resource planning with suppliers and inventory management with manufacturers and warehouses.
Planning and scheduling inbound operations with respect to inventory.
Setting up operations for production with proper utilisation of raw materials and timely and constant flow of end products.
Carrying out outbound operations such as warehousing and transit to end users.
Managing loss or transportation damages through insurance, from the supplier and production level to the consumer level.
Supply Chain Integration
Definition
Integration is defined as "the quality of the state of collaboration that exists among departments that are required to achieve unity of effort by the demands of the environment" ('Lee. H' and 'Whang. S'). The integration emphasizes connecting each enterprise with logistics and information communications. The intense global competition and demand for new products and better customer service over the years has led to an increased need for integration between companies. The academic literature and research has improved the integration practices considerably. Supply chain integration (SCI) is an imperative determinant to sustain a competitive advantage over competitors. The supply chain operations are co-ordinated seamlessly by SCI which is subsequently aimed at process synchronisation.
Supply chain integration involves the collaboration and co-ordination of all stages of a supply chain involved in fulfilling a customer's request. It includes manufacturers, suppliers, transportation, warehouses and distribution centres, third party service providers and customers. SCI is essential to maximize the supply chain value. According to Lambert and Cooper (2000), operating an integrated supply chain requires a continuous information flow. Information technology enables the flow of information among the nodes of a supply chain and its effective application in the integration of supply chain activities has the effect of reducing levels of complexity. Implementation of IT helps organise the supply chain processes and improves performance of a company.
The main emphasis in this project is laid on the flow of information through various nodes of supply chain by the use of information technology and assessing the impact it has when implemented.
Supply chain performance
Definition
Supply chain performance of a company is measured with the help of performance metrics that are designed to assess how well a company is performing. Companies are always concerned with their competition in a particular industry. Present market is shifting from measuring individual company performance to supply chain performance where the entire chain's capability to meet customer needs through product availability and quick to respond, prompt delivery is measured. Supply chain performance is measured across strategic, tactical and operational levels which crosses both functional lines and company boundaries. Supply chain performance of a company resides in its ability to fill customer requirements more rapidly and more efficiently than the competitors. Performance measures include service metrics, speed, assets, inventory and financial metrics that deal with customer service and business handling capabilities.
This project emphasizes on how the implementation of Information Technology in integrating the supply chain activities impacts the performance of the supply chain of a particular firm. Previous research in this field shows that supply chain performance depends on the ability of the firm in organising efficient and quick flow of information through the nodes of integrated supply chain.
Chapter 2: Literature Review
2.1 Evolution of Information Technology
Information Technology dates back to 3000 B.C. when man first began to communicate through speaking and picture drawings which are a process of passing information. IT origination and evolution can be classified into four periods where in a new era has begun depending on the technology used.
2.1.1 Pre-Mechanical age
Early humans communicated through paintings and pictures. Earliest known approach to communication was 'Cuneiform' script which emerged in 'Sumer' of 'Mesopotamia' in 30th century B.C. which began as a system of pictographs. Symbols were created by 'Phoenicians' around 20th century B.C. Greeks added vowels to the Phoenician alphabet and Romans gave Latin names to the letters to create alphabets that we use today. Egyptians used papyrus plant leaves to write at about 2600 B.C. By 600 B.C. Greeks used papyrus rolls to record information and Egyptians documented them on scrolls. Paper was invented by the Chinese around 100 A.D. which allowed documenting of information. The first numbering system was invented by Indians in between 100 to 200 A.D. and zero was invented by 'Aryabhatta', an Indian scientist. Persians first used the abacus, which are known to be the very first known information processors.
2.1.2 Mechanical age
In the mechanical age, information for record keeping was written in books which had page numbers and were indexed. Then came the first general purpose computers, which were mechanical in nature. Later in the 16th century A.D., Blaise Pascal invented 'Pascaline', which was one of the first mechanical computing machines. In the late 16th century, a German mathematician, 'Gottfried Wilhelm von Leibniz' invented the Leibniz's calculating machine called the 'Step Reckoner' that extended Pascal's ideas and performed multiplication by repeated addition and shifting. Charles Babbage, father of modern computers, invented the difference engine in 1822. Newton's method of divided differences is the principle behind this to calculate the nearby values of a given polynomial, known as the method of finite differences. 'Joseph Marie Jacquard' invented the 'programmable loom' in the 18th century which used punch cards to automate the process. 'Augusta Ada Byron', also known as Lady Lovelace, was the first programmer who designed an algorithm for the analytical engine to compute Bernoulli's numbers.
2.1.3 Electro-mechanical age
This is the age of telecommunication that transformed information processing. Telegraph was invented in the early 18th century followed by Morse code developed by Samuel Morse in 1835. The invention of telephone by Alexander Graham Bell in 1876 and the discovery of electrical waves led to the invention of radio by Guglielmo Marconi in 1894. Inception of IBM (International Business Machines) in 1880 and gaining patents to 'computing scale' and 'electric tabulating machine' and the invention of 'dial recorder', 'census machine' has made a major leap into the contemporary age of information technology. Punch cards were used to store data and later paper tape was used to store program instructions. The invention of 'Mark I', developed by IBM in 1944 was used by U.S. Navy to do computations. With this beginning of the era of modern computer age dawned.
2.1.4 Electronic age
The first computer invented in 1946 used vacuum tubes to do calculations instead of mechanical devices. 'Mark I' was the first computer capable of storing programs and it went into operation in 1948. First commercial computer, a machine called LEO (Lyons Electronic Office) and then UNIVAC (Universal Automatic Computer).
There are four generations of digital computing of which the first generation computers had vacuum tubes for computing, punch cards to store data externally and magnetic drums to store programs and data internally. The programming was written in machine level language and assembly language which was compiled with the help of a compiler.
The second generation of computers used transistors in the place of vacuum tubes, magnetic tapes for external storage and magnetic core for internal storage. The programs were written in high level languages like FORTRAN (Formula Translator), COBOL (Common Business Oriented Language), etc.
In the third generation of digital computing, integrated circuits replaced transistors and flip-flops. Magnetic disks and improved magnetic tapes were used for external storage of data. Operating system was developed for a better user interface. Programming languages like BASIC (Beginners All purpose Symbolic Instruction Code) have been developed which were more advanced.
The fourth generation computers used LSI's (Large Scale Integrated circuits) and VLSI's (Very Large Scale Integrated circuits) and a CPU (Central Processing Unit) on a single chip was developed. This allowed computers to be used in homes and offices called PC's (Personal Computer). Apple II was released to public in 1977 followed by IBM PC in 1981. MS-DOS (Microsoft Disk Operating System) was developed and fourth generation programming languages and softwares like Dbase, Lotus 1-2-3, Microsoft word and many more surfaced. MS Windows, a GUI (Graphical User Interface) debuted in 1983 and Apple's GUI for Mac PC's in 1984.
All this led to the present stage of the modern day computing which has made the flow of information effortless. Information technology plays a vital role in how information is transferred, transmitted, saved and utilised, and is used in everyday activities in all walks of life. Each product or service that a consumer buys has a supply chain that leads all the way to its inception. Information Technology enables the supply chain to be faster and efficient.
2.2 Critical analysis of investment on IT in SCM
Today's economy has undergone fundamental changes. This altered the organisations' relationship with suppliers, manufacturers, customers and business partners. Implementing IT developments in the organisations or companies have given them a competitive advantage over its competitors. So, investment in IT has become a matter of sustenance to firms in the industry.
The flexible flow of information and products among the nodes of a supply chain is the main concern of supply chain management. Technology advancements in the recent times have enabled the organisations to harness information and use this expertise to organise and co-ordinate the activities of a supply chain. This reduces cycle time, better understanding of consumer demands, and agility among suppliers, manufacturers, inventories, transit and retailers. Information Technology consists of not only computers that process information but also equipment and communication technologies that recognise computer data like RFIDs (Radio Frequency Identification) technology, ERP (Enterprise resource Planning) software application, automation of factory settings and other hardware tools and services. The figure below shows the flow of information in a supply chain based on the key SCM concepts.
Fig ( ) Source: http://courseware.finntrack.eu/learners/operations_and_supplychain.html
In the above figure, the key nodes of a supply chain are shown where the forward direction of arrows indicate flow of goods and information from supplier to consumer and reverse direction of arrows indicate product returns, payments and information flow.
In the late 20th century the flow of information between the organisational functional areas and the supply chain nodes within the organisation was mostly paper based. The transactions and communications through paper based conventional methods were slow and time consuming. Information has been a critical competitive basis for the value adding supply chain with misunderstood utilisation. Investment in technologically advanced IT infrastructure gives the capability to an organisation in attaining a competitive position in the industry by reducing product cycle time, giving agility to the supply chain and better information processing methods. IT in supply chain management must be viewed as cross functional rather than just functional applications.
There are certain factors that influenced the proper utilisation of IT services and infrastructure. Few factors are pointed out below.
Increasing customer demand
Need for effective and efficient customer service
Hassle free transit with tracking system
Better inventory management
Need for shorter lead time
Reduced product cycle time
Simple resource management
Call for storage requirements of massive data
Flexible payments, transactions and information flow
Accuracy in the products reaching its destination
When taking Information Technology into account, both software and hardware is considered. Hardware includes the equipment that simplifies a task or information processing and storage media and software includes the application programming used for planning, decision making, inventory control, management control and transaction processing.
2.2.1 IT relationship with SCM
Organisations employ IT in planning and collaboration, order and delivery tracking and processing transactions for supply chain management purposes.
Planning and collaboration:
Supply chain planning and collaboration is essential in SCM in order to achieve organisational stability and overall success. It is used for the following purposes.
To share information related to planning
Information on demand and demand forecasting
To know the present level of inventories and plan accordingly
To share information related to production capacity to meet the demand
Order and delivery tracking:
Tracking orders and deliveries and its co-ordination is of utmost importance to ensure the products reach their target destination within a stipulated time. Coordination of deliveries is simplified by IT application. Shipments consisting of raw materials or finished goods are tracked and monitored to coordinate their delivery time and to have an update on the location of the consignment.
Transaction Processing:
Repetitive information exchange takes place in everyday activities of a supply chain and use of IT to exchange this information is indispensable.
Information related to order processing
Exchange of payment information such as billing
To verify deliveries
In generating invoices
Despatching orders
2.2.2 Drivers for use of IT in SCM
The necessity of an organisation to perform well and have a competitive advantage over its competitors and rivals has driven the excessive use of IT in the supply chain management.
Reduced operational costs
Reduced manual labour
Accurate quality of information eliminating human errors
Faster access to information between supply chain nodes and organisations
High volumes of transactions such as orders and deliveries
Business environments that have highly volatile and demanding supply chain
Errors in transit deliveries is one of the driver to implement IT in SCM
2.2.3 Investment in IT applications
Recent technological advancements have led the organisations to invest in the following areas of Information Technology that can be implemented in a supply chain management.
Application Software:
Software is the most frequently updated component of Information Technology. The most recent advancements and developments in supply chain software is as follows
New software programming called Supply Chain Planning, by Ross Systems Inc. is used for forecasting demand, replenishment tools and manufacturing tools for scheduling and planning accuracy
Transportation Network Optimisation by P&G distributing company in collaboration with Saber Decision Technologies is used for re-organising orders and deliveries
To manage the entire supply chain, Logitility Planning Solution was introduced recently
Base Rate, Carrier select & match pay to compare the various transportation rates was developed by Distribution Sciences Inc. which computes freight costs, transit costs and effectiveness of service.
E-Commerce:
E-commerce is used to conduct a business in paperless environment. The various tools and techniques that are used include EDI (Electronic Data Interchange), electronic fund transfers, electronic mail, bulletin boards, shared information and databases. E-commerce enables the companies to automate and computerise the process of information exchange between customers and suppliers electronically.
Enterprise Resource Planning:
ERP forms the core of IT infrastructure of present companies. ERP application software like SAP, People Soft, Baan, etc. have become the tools for transaction processing on an enterprise wide scale which reduce manual activity by capturing data associated with financial, customer relations, inventory and sales and distribution. ERP gives high level of supply chain integration as it has modules for various supply chain activities. It acts as a common platform for all the logistics operations that are carried out on a daily basis. Though the investment in ERP implementation is high and also a time consuming process, the companies with successful ERP implementation and utilisation have a competitive edge.
Electronic Data Interchange:
Exchange of business documents electronically from one computer to another with the help of inter-connected networks refers to Electronic Data Interchange. It describes the ability of technology in information communication between two or more organisations, or, two or more departments within an organisation electronically rather than age old practices of postal mail, courier, etc. EDI helps to achieve better customer service, less paper work, faster information processing, increased productivity, cost efficiency, improved information tracing and billing. It gives stability to the supply and demand information by allowing real time sharing of information. Demand forecasting, inventory levels and production capacity can be well organised. Overall, it gives a competitive advantage in the market.
Radio Frequency Identification:
Radio Frequency Identification (RFID) is the technology that communicates through radio waves to transmit/receive data/information between a RFID reader and RFID tags. This technology is used to track consignment of products on trucks to determine location and expected time of delivery. RFID reader reads the tags that hold information encrypted on them about the consignment number, warehouse and delivery details. This technology transformed the delivery and tracking methods.
Barcode scanners:
Barcodes on the products hold the information of the product description and its manufacturer. In a transit barcodes help in checking the contents of delivery and accuracy. Barcodes have other applications like tracking the components in an automobile or computer assembly operations.
Data mining and data warehousing:
A database that holds all the data other than the organisation's production database is a data warehouse and the process of extracting required information from a data warehouse is called data mining. Redundant data is stored in a data warehouse which is removed upon completion of that particular task. It connects multiple databases via integrated electronic network.
2.3 Implementation of IT in SCI
Supply Chain Integration is the result of dynamic market environments that are ever changing influenced by a threat of competition among the organisations. Managing effective supply chain mechanism has become essential to organisations so as to reduce supply chain operational costs, improve information, material and product flow and improve organisational performance to achieve a competitive advantage.
The fundamental concept behind supply chain integration is to integrate the production operations and organise the flow of information across various processes in a supply chain. Integration is a valuable system where the activities of customers, supply chain and logistics partners, vendors and suppliers are integrated within the organisations system. An effective supply chain is the one which coordinates the activities from the start of the supply chain like procurement of raw materials, production and manufacturing, transportation, timely delivery of goods to end users which is the final stage of a supply chain. Supply chain integration can be in two forms, forward integration and backward integration. The integration of information and materials from suppliers'ïƒ manufacturers'ïƒ vendors'ïƒ customers in forward direction is called forward integration. Backward integration is vice versa of forward integration where flow of information/data is from the customers end to suppliers' end.
IT adoption and SCI in SCM are emerging areas of research since every point of the supply chain is permeated by IT evolution. Information Technology has the capability to provide integration and co-ordination among supply chain members through facilitating demand forecasting, information sharing and scheduling the supply chain operations by transforming exchange related activities and the links between them. A supply chain is basically divided in primary and support activities of which some are internal to the organisation while some are external. The primary activities consist of inbound logistics, operations, outbound logistics, marketing and sales and after sales service. The support activities sustain the primary activities which is essential to create value to the end user. Firm infrastructure, Human Resource Management, technology development and procurement are the support activities.
Fig ( ) Source: http://www.learndatamodeling.com/tm_erp_case_study.htm
Use of IT in SCI results in reduced operational costs due to elimination of resource waste and operational duplication. This is achieved through integration of activities between linked organisations and integration that is both internal and external to the organisation. Previous researches have indicated that supply chain integration is required to be achieved across organisational limits, by involving external suppliers, logistics partners, and end-customers. Superior levels of integration are categorised by improved logistics associated communication, better co-ordination of the companies' logistics operations with those of its suppliers and customers, and to have proper organisational distinction between the logistics activities of its suppliers and customers and those of the organization. IT has the ability to exchange accurate flow of information among the organisation's supply chain partners enabling successful integration. Information flow management is a critical factor to present day leading organisations and this IT's potential to manage the flow of information and supply links to support supply chain collaboration and communication helps to achieve this. Implementation of IT in supply chain management can coordinate and integrate the flow of resources, information and funds (payments and billing) among suppliers, manufacturers, wholesalers, retailers and consumers. Here, IT serves as a key enabler of SCI through the storage, organisation, and contribution of critical information concerned with essential business processes, both internal and external to an organization's confines (Clemons et al., 1993; Frohlich and Westbrook, 2001; Sanders and Premus, 2002; Vickery et al., 2003; Kelle and Akbulut, 2005).
Transaction cost economics supports the argument that Information Technology improves supply chain integration. Transaction cost economists hold that cooperation and coordination among firms is limited by the transaction cost of managing the interaction (Coase, 1937; Williamson, 1975; Stoeken, 2000). It is said that an increase in transaction costs has a direct impact on the transaction efficiency of the market which decreases and may result in higher market prices for the products. Transaction costs are determined by factors such as frequency and volume of transactions, assets specified, bounded rationality, opportunistic behaviour and uncertainty in pricing conditions.
Implementation of IT in SCI is vital since IT has the capability to provide appropriate, precise, and consistent information. It provides supply chain managers with a suitable, low cost substitute to traditional in person communication or postal mail, which decreases information certainty and frequency of transactions. IT has also proved to be an effective means for decreasing both coordination costs, including the direct cost of integrated decisions (Nooteboom, 1992), and transaction risk, which is the risk of being exploited in the relationship (Clemons et al., 1993).
2.4 Organisational structure
2.5 IT driven benefits
2.6 Adaptability and advancement of IT
Chapter 3: Research Methods
3.1 Introduction
Research is an organised and systematic process of finding answers to questions. It is the key for any project to gather essential information to carry out research. The methods that are applied to extract significant facts from the intended focus material are considered as research methods.
3.2 Types of research methods
3.2.1 Qualitative Research
A qualitative research may be defined as a study where the researcher collects data, gathers information, analyses extensively and expresses in a convincing language. "Qualitative research is an inquiry process of understanding based on distinct methodological traditions of inquiry that explore a social or human problem. The researcher builds a complex, holistic picture, analyzes words, report detailed views of informants, and conducts the study in a natural setting." Creswell(1998). The nature of qualitative research is exploratory and open ended, and is more about theory and subjective than objective like quantitative research methods.
3.2.1.1 Characteristics
There are certain standards for assessing the quality of qualitative studies and the following is a list of characteristics of a good qualitative research
Various forms of data are collected by the researcher and the collected data is adequately summarised.
The study is framed within the assumptions and characteristics of the qualitative approach to research.
Identifying and implementing different qualitative research methods.
Detailed methods, precise approach to data collection, analysis and report writing.
Clear report writing and accurate reflection of existing situation.
3.2.2 Quantitative Research
Quantitative research involves use of structured questions where a large number of respondents answer pre-determined questions. Quantitative research is more objective than subjective compared with qualitative research. A quantitative survey is determined by the size of the sample size and the margin of error that is incurred. The accuracy of the survey depends on the sample size and the surveys are generally designed to give smaller margin of error.
3.2.3 Differences in Qualitative and Quantitative research methods
Quantitative
Qualitative
It is objective in nature
It is subjective and theoretical in nature
Research involves questioning of a large sample size
Research involves a small sample size and consist questions like what and why
The values are measured
The values are interpreted
Responses may be unbiased
Responses are biased
Surveys, observations, structured interviews and reviews are conducted for information
Focus groups, in depth interviews, and reviews are conducted for gathering data/information
Validity depends on instrument used by the researcher
Validity depends on skill of the researcher
Response options are fixed
Response options are un-structured or semi-structured
3.3 Data collection
3.4 Research process
Conclusion:
World is shrinking day by day with advancement of technology. Customers' expectations are also increasing and companies are prone to more and more uncertain environment. Companies will find that their conventional supply chain integration will have to be expanded beyond their peripheries. The strategic and technological innovations in supply chain will impact on how organizations buy and sell in the future. However clear vision, strong planning and technical insight into the Internet's capabilities would be necessary to ensure that companies maximize the Internet's potential for better supply chain management and ultimately improved competitiveness. Internet technology, World Wide Web, electronic commerce etc. will change the way a company is required to do business. These companies must realize that they must harness the power of technology to collaborate with their business partners. That means using a new breed of SCM application, the Internet and other networking links to observe past performance and historical trends to determine how much product should be made as well as the best and cost effective method for warehousing it or shipping it to retailer.
