Business Functions and Supply Chain

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17 févr. 2014 (il y a 3 années et 10 mois)

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Management Information Systems,
Sixth Edition

Chapter 3:

Business Functions and Supply Chains

Management Information Systems, Sixth Edition

2

Objectives


Identify various business functions and the role
of ISs in these functions


Explain how ISs in the basic business functions
relate to each other


Articulate what supply chains are and how
information technology supports management of
supply chains


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Objectives (continued)


Enumerate the purposes of customer
relationship management systems


Explain enterprise resource planning systems

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Mini Project 1


Make a simple POS for COM Bookstore in the
programming language of your choice (e.g. C++,
VB.Net)


The Bookstore Manager can add items to his
bookstore


The Cashier could select items bought by the
students.


The Cashier could enter tendered amount by the
student. But it could also charge to his/her
account.


Deadline is Feb 19, 2014 (Wednesday)


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Effectiveness and Efficiency


Information technology makes work more
effective, more efficient, or both


Effectiveness
: the degree to which a goal is
achieved


Efficiency
: the relationship between resources
expended and benefits gained in achieving a
goal


Efficiency = Benefit / Costs


One system is more efficient if its operating costs
are lower for the same or better quality product

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Effectiveness and Efficiency (continued)


Productivity
: efficiency of
human

resources


Productivity improves when fewer workers are
required to achieve the same goal


Productivity tools
: software applications that
improve productivity


ISs contribute to both effectiveness and
efficiency of businesses

Effectiveness and Efficiency (continued)


Customer relationship management

(
CRM
)
system: system that serves customers better
and faster


Service continues after delivery of goods as
customer service and more marketing


Often combined with supply chain management
(SCM) systems to create an enterprise resource
planning (ERP) system


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Effectiveness and Efficiency (continued)

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Effectiveness and Efficiency (continued)

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Accounting


Accounting’s purpose is to track every financial
transaction


Accounting systems are required by law and for
proper management


Needed to ensure company is making a profit


Accounts payable and accounts receivable track
who owes who what


Balance sheet
: picture of financial situation


Includes profit
-
and
-
loss report


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Accounting (continued)


Accounting information system
: receives
information from transaction processing systems
(TPSs)


Automatically routes purchases to accounts
payable


Automatically routes sales to accounts receivable


Generates reports on demand or on schedule


Work order
: an authorization to perform work
for a specific purpose

Accounting (continued)


Cost
-
accounting systems
: accumulate data
about costs involved in producing specific
products


Accounting ISs are used for managerial
purposes for budgeting and cost control


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Accounting (continued)

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Finance


Firm’s health is measured by its finances


Information systems can improve financial
management


Financial managers’ goal is to manage money
as efficiently as possible by:


Collecting payables as soon as possible


Making payments at the latest time allowed


Ensuring funds are available for daily operations


Investing funds not used for current activities

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Finance (continued)

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Cash Management


Financial information systems help managers
track company finances


Cash management systems
: systems that deal
specifically with cash


Electronic funds transfer
: electronic transfer of
cash from one bank account to another

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Investment Analysis and Service


Investor’s goal is to buy an asset and sell it for a
higher value


When investing in securities, you must know
current prices in real time


Nearly instantaneous information systems can
provide investors and clients with financial news,
stock prices, commodity prices, and currency
exchange rates

Investment Analysis and Service
(continued)


Some important factors to consider in investing:


Variability of the security’s past yield


Expected return


Liquidity (how fast an investment can be turned
into cash)


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Engineering


Time to market
: time between generating an
idea for a product and completing a prototype


Brainstorming
: process of a group of
colleagues meeting and collaborating to
generate creative solutions and new ideas


Minimizing time to market is key to maintaining
competitive edge


Information systems can contribute significantly
to minimizing time to market

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Engineering (continued)


Computer
-
aided design (CAD)
: tools to create,
modify, and store designs and drawings
electronically


Rapid prototyping
: creating one
-
of
-
a
-
kind
products to test design in three dimensions


Allows a model to be produced in hours rather
than days or weeks


Computer
-
aided manufacturing (CAM)
:
systems that instruct machines how to
manufacture parts and assemble products

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Engineering (continued)

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Supply Chain Management


Supply chain
: consists of procurement of raw
materials, processing materials into goods, and
delivering goods


Processing raw materials into goods is also
known as manufacturing


Supply chain management
: monitoring,
controlling, and facilitating supply chains


Instrumental in reducing manufacturing cost


In retail the manufacturing phase does not exist and in service
industries the term “manufacturing” is not applicable or
meaningless.


CAD systems often transfer data automatically
to CAM systems

Supply Chain Management (continued)


IT helps in manufacturing activities:


Scheduling plant activities to optimize the use of
resources


Planning material requirements based on current
and forecasted demand


Reallocating materials and resources from one
order to another


Managing inventories


Grouping similar work orders for efficiency


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Supply Chain Management (continued)

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Material Requirements Planning

and Purchasing


Material requirements planning (MRP)
:
inventory control


Inventory based on
future need

not on past use


Determines when inventory needs to be
restocked


Can predict future need based on demand
forecasts


Takes customer demand as input, then works
back to calculate resources needed to produce
goods

Material Requirements Planning

and Purchasing (continued)


Bill of materials (BOM)
: list of all raw materials
and subcomponent demands to produce a
product


Economic order quantity (EOQ)
: optimal
quantity of a raw material that minimizes
overstocking and saves cost, without missing
production deadlines


Considers cost, discounts for large quantities,
cost of warehousing material, cost of alternative
uses of money, etc.

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Manufacturing Resource Planning


Manufacturing resource planning (MRP II)
:
combines MRP with other related activities to
plan the entire manufacturing process


Can quickly modify schedules to accommodate orders, track production
in real time & fix quality slippage


Uses master production schedule


Master production schedule
: specifies how
production capacity is to be used to meet
customer demands and maintain inventory


It helps balance production economies, customer demands,
manufacturing capacity, inventory levels over a planning horizon of
several months.


Just
-
in
-
time manufacturing
: suppliers ship
parts directly to assembly lines as needed


Avoids warehousing costs (e.g. Cisco)

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Monitoring and Control


Information systems are designed to control
manufacturing processes as well as monitor
them


Controlling processes helps ensure quality


Example:
Ford Motor Company’s Project
Execution.

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Shipping


Performed by manufacturer or shipping
company


Many variables affect cost and speed of shipping,
including:


Length of routes


Sequence of loading and unloading


Type of shipped materials (e.g., perishable,
hazardous, fragile)


Fuel prices


Road tolls

Shipping (continued)


Sophisticated software that optimizes shipping
efficiency helps a company stay competitive


Need to optimize:


Shipping time


Cost of labor


Use of equipment


Maintenance


Vehicles equipped with computers, global
positioning systems (GPS), and satellite
communication have increased efficiency


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Shipping (continued)

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RFID in SCM


Radio frequency identification (RFID)
: a
technology containing circuitry that allows
recording of information about a product


Electronic product code (EPC)
: a code on
an RIFD tag that provides more information
than the universal product code (UPC)


Information may include date of manufacturing,
plant location, expiration date, destination


Ensures genuineness of products

RFID in SCM (continued)

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RFID in SCM (continued)

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Customer Relationship Management


Customer relationship management (CRM)
systems
: designed to support any and all
relationships with customers


Supports three areas


Marketing


Sales


Customer service


CRM systems capture the entire customer
experience with an organization


All company employees who deal with the
customer have access to this information

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Customer Relationship Management
(continued)

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Market Research


To promote products successfully, organizations
must perform market research


Market research
: helps discover populations
and regions that are most likely to purchase
product


Activities may include:


Conducting interviews with consumers and
retailers


Building statistical models to predict sales
volumes of different products

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Targeted marketing
: promotes to people most
likely to purchase products


Database technology allows all companies to
use targeted marketing, even small companies


Can direct promotional dollars to customers
most likely to buy


Spam
: cheap method of advertising involving
sending mass e
-
mail communications

Targeted Marketing

Targeted Marketing (continued)

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Targeted Marketing (continued)


Database management systems sort consumers
based on demographic information


Telemarketing
: marketing over the telephone


Caller has large database of consumer data


Computer telephony integration
: allows
computer to use telephone line as input


Caller ID can be used to locate customer data


Data mining
: uses large data warehouses to
find trends and shopping habits of various
demographic groups

Targeted Marketing (continued)


Targeted marketing and Web technologies
enable retailers to personalize online shopping


Software can track Web page click streams to
determine customer preferences

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Customer Service


Web
-
based customer service provides
automated customer service 24/7


Saves labor costs


Saves paper costs


Includes FAQs, tracking systems, maintenance
of customer profiles


Artificial intelligence may be used to emulate a
real
-
life customer service representative

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Salesforce Automation


Equips traveling salespeople with information
technology to improve productivity


Laptops and personal digital assistants (PDAs)


Makes sales presentations more efficient


Allows salespeople to present different options
for products and services at the customer
location


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Human Resource Management


Human resource management (HRM) can be
classified into five main activities:


Employee record management


Promotion and recruitment


Training


Evaluation


Compensation and benefits management


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Human Resource Management

(continued)

F

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Employee Record Management


HR departments must keep personnel records


To satisfy laws


For payroll and tax calculation and deposit


For promotion consideration


For periodic reporting


Human resource ISs are now digitized


Saves space to store records, time to retrieve
them, and costs of both


Employee Record Management
(continued)

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Promotion and Recruitment


HR can select best
-
qualified person for position
by searching database of applicants and existing
employees for specific criteria


Automating the selection process significantly
minimizes time and money for recruitment


Intranet
: inter
-
organizational network that
supports Web applications


Allows HR manager to post position vacancy
announcements that get wide exposure

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Training


One important HR function is improving
employee skills


Multimedia software training is replacing
classrooms and teachers


May include 3D virtual reality simulated
environments in which the employee must act


Information technology reduces training costs
dramatically



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Evaluation


Employee ability must be periodically evaluated
by supervisors


May include evaluation of technical ability,
communication skills, professional conduct, and
general behavior


Often a subjective process, which is a problem


Evaluation software tries to solve this problem
by standardizing evaluation process


Provides tools to aid in evaluating every
employee fairly and objectively

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Compensation and Benefits
Management


Compensation includes salary, hourly pay,
commissions, and bonuses


Programs calculate pay and taxes


Automatically generate paychecks and perform
direct deposits


Software can help manage benefits


Benefits database accessible through intranet or
Internet

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Supply Chain Management Systems


Overall inventory in the U.S. is decreasing while
U.S. gross domestic product (GDP) is increasing


Money saved from reduced inventory can be
spent elsewhere


Reduction in inventory attributed to the use of
ISs, especially supply chain management
systems


Streamline operations throughout chain


ERP systems can also serve as SCM systems,
connecting multiple organizations

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Supply Chain Management Systems

(continued)

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The Importance of Trust


Supply chain systems work best when all
businesses in the chain are sharing information


Trust between allied companies facilitates
collaboration


Risk of disclosing important information to
competitors is present


Risk of taking advantage of demand figures by
charging higher prices is present

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The Musical Chairs of Inventory


Small enterprises do not use SCM systems


Affect more powerful organization to which small
enterprise is linked


Inventory turns
: the number of times the
business sells its inventory per year


When SCMs of companies are not linked,
demand requirements are unknown, so supply
companies must overstock inventory


One company “sits” with lean inventory while
other stands with “overstock,” hence musical
chairs

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Collaborative Logistics


Web allows organizations from different
industries to collaborate


Businesses combine freight and share trucks


Can optimize logistics by connecting SCM
systems


SCM systems can allow collaborative
warehousing to share warehouse space

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Enterprise Resource Planning


Many companies replace old, disparate
information systems with enterprise applications


Enterprise resource planning (ERP) system
:
manages daily operations and facilitates
planning


Current ERP market includes four vendors:


SAP


Oracle


Microsoft


Sage Software

Challenges and Disadvantages

of ERP Systems


ERP systems pose many challenges:


They are complex


They often require special tailoring for specific
organizations


They may not support a company’s unique sets of
business processes


They are expensive


A process that becomes a weak link in one area
may negatively affect other integrated processes


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Providing the Missing Reengineering


Although most reengineering projects of the
1990s failed, ERP systems helped realize many
of those ideas


ERP systems forced changes in processes


ERP systems allow better planning and
managing of processes at the organizational
level instead of at the organizational unit level

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Summary


Effectiveness is the degree to which a task is
accomplished


Efficiency is the ratio of output to input


Productivity is the measure of people’s efficiency


Information systems have been integrated into
accounting services


Financial information systems help managers
track cash


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Summary (continued)


Computer
-
aided design (CAD) systems help
engineers design new projects


Computer
-
aided manufacturing (CAM) systems
direct machines that assemble parts


Supply chain management (SCM) systems
optimize workload, speed, and cost in supply
chains


Customer relationship management (CRM)
includes the entire cycle of relationships with
customers

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Summary (continued)


Human resource management systems facilitate
staff selection and record keeping


Multiple companies’ SCM systems can be linked,
facilitating cooperation, which requires trust


An enterprise resource planning (ERP) system
can encompass all business processes, but is
expensive and challenging