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CHAPTER 1

CHAPTER 1. SCM 624 IT for Supply Chain Management Dr. Huei Lee Fall 2003. Chapter Two. Information Systems and Supply Chain Management. Information Revolution. Second Industrial Revolution

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CHAPTER 1

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  1. CHAPTER 1 SCM 624 IT for Supply Chain Management Dr. Huei Lee Fall 2003 Chapter Two Information Systems and Supply Chain Management

  2. Information Revolution • Second Industrial Revolution • Information has become increasingly vital for creating and delivering products and services in most nations.

  3. Figure 1-1 WHY INFORMATION SYSTEMS? Labor Force Composition 1900-1997

  4. INFORMATION TECHNOLOGY • COMPUTER TECHNOLOGY (HARDWARE & SOFTWARE) • PROCESSING & STORING INFORMATION • COMMUNICATION TECHNOLOGY • TRANSMITTING INFORMATION • Network *

  5. The Importance of IT • By 1996, IT, including computing and telecommunication, become the largest U.S. industry • It generating revenues of $866 billion and creating 0.2 percent of the nation’s goods and services. • By 2000, one out of 3 capital expenditure dollars was being spent on IT purchases.

  6. Information Resource Management • Is different from: • Information technology • Computer technology • Refers to the activities of • Investing in and managing people • Managing technology and data • Establishing policy regarding these assets’ use.

  7. TECHNOLOGY ORGANIZATIONS (People) INFORMATION SYSTEMS MANAGEMENT Information Resource Management

  8. Why Information Resource Management? • I. Systems Development Problems • II. Changing Business Environment: • E-World • III. Using IT as a competitive weapon

  9. I. Systems Development Problems • Two out of every eight large software systems under development are ultimately canceled. • Most exceed their schedules. • Most large systems do not function as intended or are never used

  10. Department of Motor Vehicles in California (DMV) • The schedule expanded and costs were more than six times the original estimate. • The DMV canceled the seven-year project after spending more than $44 million.

  11. Allstate Insurance • Project began in 1982 and scheduled for completion in 1987. • Projected cost : 8 millions • Project finished in 1993. • Final cost: 14 times the original costs (about 112 millions).

  12. II. Changing Business Environment: Competing In An E-World • What is the E-WORLD? • USE OF WORLD WIDE WEB • CHANGED RULES FOR SUCCESSFUL BUSINESS • KEY INDICATOR OF BUSINESS’ HEALTH *

  13. INFORMATION TECHNOLOGY TRENDS IN AN E-WORLD • COMPUTER TECHNOLOGY: Portable technology (laptop and handheld computers, wireless communications) • COMPUTER SOFTWARE: Software packages (Office 2000, ERP packages, Web-related packages, etc.) • TELECOMMUNICATIONS/NETWORKING: Global, mobile reach, cable modem, and digital subscriber lines (DSL) *

  14. COMPETING IN AN E-WORLD • TRADITIONAL WAYS: • COST: Low cost producer of good or service • DIFFERENTIATION: Enhancing perception of product or service • STRATEGIC INFORMATION SYSTEM (SIS): Sales information, just-in-time materials, better cash management *

  15. SABRE Reservation System of American Airlines • An inter-organizational system for airline flight reservation for AA and its competitors, accessible to large and small travel agencies. • By 2000, SABRE had evolved into a self-service reservation system via the Internet.

  16. COMPETING IN AN E-WORLD • NEW WAYS: USING IT CAPABILITIES OF INTERNET • COST EFFICIENCIES • MASS CUSTOMIZATION • Enabled a company to efficiently manufacture not just the same products in large quantities but customized products. • GLOBAL REACH *

  17. Example: Dell Computer • Mass customization • Developed software to electronically capture a customer request, translated the order data into a design with these components, and then electronically “summon the right resources” to fulfill the order. • Choiceboard: a type of interactive online computer systems

  18. WORKING IN AN E-WORLD • KNOWLEDGE WORKERS: Information & knowledge are raw materials, as well as product of their work. • TELECOMMUTER:Workers located outside regular offices, “commute” via telecommunications lines. *

  19. WORKING IN AN E-WORLD • TEAMWORK:Empowered groups able to solve problems, make operational decisions using computer tools such as e-mail, groupware • ANYTIME, ANYWHERE • ACROSS ORGANIZATIONAL BOUNDARIES • VIRTUAL ORGANIZATIONS & FREE AGENTS: • Temporary alliances between organizations & individuals. • Free agent has special IT skills, works as independent contractor free from organizational politics *

  20. WORKING IN AN E-WORLD SOCIAL IMPACTS: • JOBS: Computers cost-efficient, superior at analyzing data, add to manager’s abilities to make decisions • INDIVIDUAL PRIVACY: Need to maintain privacy of employees, customers; requires education about policies and monitoring practices *

  21. WORKING IN AN E-WORLD SOCIAL IMPACTS: • POTENTIAL IMPACTS ON SOCIETY: • Low unemployment rates • Increased government tax surpluses • Increasing gap between “haves” & “have nots” • Internet has brought access to information & services to many • Better healthcare *

  22. ROLE OF INFORMATION SYSTEMS ORGANIZATION FIVE ERAS: • ACCOUNTING ERA (1950-1960s) • OPERATIONAL ERA (mid 1960s) • INFORMATION ERA (late 1970s-mid 1980s) • NETWORK ERA (mid 1980s on) • INTERNET ERA (mid 1990s on) *

  23. ROLE OF INFORMATION SYSTEMS ORGANIZATION • MANAGING ITASSETS: • Technology, relationship (between IS and business), human assets. • Assets capture, process, store, make available data to knowledge workers • ITMANAGEMENT ROLES: • IT leaders (chief information officer). • Other IS managers (for IS activities such as data centers, new applications, planning, implementing IT solutions). *

  24. Chief Information Officer (CIO) • The leader of the IS department • Duties: • Strategic Planning • Competitive advantage • Organizational learning • Other technological and policy issues

  25. IT MANAGEMENT ROLES: • Other IS professionals • Programmers • Software engineers • Systems analysts • Database developers • Web developers • Local area network administrators • Technical support providers *

  26. THE ROLE OF BUSINESS MANAGERS: • User of IT to run business better. May serve as: • Member of ITsteering committee • Sponsor or “owner” of new project • Process or functional expert on project team • Participant in planning, executing rollout of new application *

  27. END-USER • BOTH ISAND NON-IS SPECIALISTS • MUST BECOME IT-KNOWLEDGEABLE • CAN BE MEMBERS OF ITPROJECT TEAMS • EVALUATE APPLICATIONS FROM END-USER PERSPECTIVE *

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