Module 3 - Business Functions and Supply Chains
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Module 3 - Business Functions and Supply Chains. 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
Module 3 - Business Functions and Supply Chains
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Presentation Transcript
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
Objectives (continued) • Enumerate the purposes of customer relationship management systems • Explain the notion of enterprise resource planning systems
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 • Productivity: efficiency of human resources
Effectiveness and Efficiency (continued) • Productivity increased with software applications • Customer relationship management system: serves customers better and faster • Service continues after delivery of goods as customer service • Often combined with supply management systems to make enterprise resource planning system
Accounting • Purpose is to track every financial transaction • Make sure company is pulling a profit • Accounts payable and receivable track who owes who what • Balance sheet: picture of financial situation • Includes profit-and loss report
Accounting (continued) • Accounting information system pulls information from transaction processing system • Automatically routes purchases to accounts payable • Generates reports on demand or on schedule • Cost-accounting systems accumulate data about costs involved in producing specific products
Finance • Firm’s health is measured by its finances • Information systems improve financial management • Financial managers try to manage money as efficiently as possible
Finance (continued) • Financial managers have any goals • Collect payables as soon as possible • Making payments at the latest time allowed by contract or law • Ensuring that sufficient funds are available for day-to-day operations • Taking advantage of opportunities to accrue highest yield on funds possible
Cash Management • Financial information systems help managers track company finances • Cash management systems: deal specifically with cash • Electronic funds transfer: huge cash transactions • From one bank to another
Investment Analysis and Service • Investor’s goal is buy asset and sell higher • Must know current prices of securities in real time • Information systems provide investors and clients with financial news, stock prices, and exchange rates • Factors to consider in investing are variability, expected return, and liquidity
Engineering • Time to market: time between generating an idea for product and completing a prototype • Engineering includes designing and building the prototype • Brainstorming: group meeting and collaborating to generate ideas • Minimizing time to market is key to maintain competitive edge • Information systems contribute significantly to minimizing time to market
Engineering (continued) • Computer-aided design: tools to create, modify and store designs and drawings • Rapid prototyping: creating one-of-a-kind products to test design in three dimensions • Takes hours rather than days or weeks to produce product • Computer-aided manufacturing: systems that instruct machines to manufacture parts and assemble product
Supply Chain Management • Supply Chain: procurement of raw materials, processing materials, and delivering goods • Processing goods also known as manufacturing • Supply Chain Management: monitoring, controlling, facilitating supply chains • CAD systems often automatically transfer data to CAM systems • IT helps scheduling, planning, allocating, analysing manufacturing operations
Material Requirements and Purchasing • Material requirements planning (MRP): Inventory control • Determines when inventory needs to be restocked • Can predict future need based on demand forecasts • Bill of materials: raw material and subcomponent demands • Economic order quantity: optimal quantity to be bought
Manufacturing Resource Planning • Manufacturing resource planning: plans entire manufacturing process • Uses master production schedule • Master production schedule: specifies how production capacity is used to meet customer demands • Just-in-time manufacturing: suppliers ship parts directly to assembly lines • Saves storage costs
Monitoring and Control • Information systems help control manufacturing processes • Controlling processes ensures quality
Shipping • Performed by manufacturer or shipping company • Many variables that affect cost and speed of shipping • Sophisticated software to optimize shipping efficiency necessary to stay competitive • Vehicles equipped with computers and satellite communication
RFID in SCM • Radio frequency identification: allows recording of information about product • Electronic product code: replaces universal product code with much more information • Info includes date of manufacturing, plant location, expiration date, destination • Ensures genuineness of products
Customer Relationship Management • Customer Relationship Management: supporting relationships with customers • Supports three areas • Marketing • Sales • Customer service
Market Research • To promote products successfully, organisations must perform market research • Market research: discover populations and regions that are most likely to purchase product • Conduct interviews with consumers and retailers • Statistical models predict sales volumes of different products
Targeted Marketing • Targeted Marketing: promote to people most likely to purchase products • Database technology allows smaller companies to use targeted marketing • Can direct promotions to customers most likely to buy • Spam: cheap method of advertising involving sending mass e-mail communications
Targeted Marketing (continued) • Database management systems sort consumers • Telemarketing: marketing over the telephone • PC connected to large database • Computer telephony integration: allows computer to use telephone line as input • Data mining: using large data warehouses to find trends on consumer habits
Customer Service • Web-based customer service provides automated customer service 24/7 • Saves labour costs • Saves paper costs • Consists of FAQs, tracking systems, maintaining customer profiles • Artificial intelligence used to emulate a real-life customer service representative
Salesforce Automation • Equips traveling salespeople with information technology • Makes sales presentations more efficient • Let salespeople present different options for products and services on net
Human Resource Management • Employee record management • Promotion and recruitment • Training • Evaluation • Compensation and benefits management
Employee Record Management • Keep personnel records to satisfy laws • Payroll and tax calculation • Human Resource information systems are now digitised • Saves space, time and costs
Promotion and Recruitment • Select best-qualified person for position • Selection process automated with IS • Intranet: interorganisational network that supports Web applications • Helps HR manager post position vacancy announcements • Automated recruiting and selection software saves costs of publishing help wanted ads
Training • Improving employee skills • Multimedia software training replacing classrooms and teachers • Training software emulates situations where employee must act • Information technology reduces training costs dramatically
Evaluation • Employee ability must be periodically evaluated by supervisors • Often is a subjective process, which is a problem • Evaluation software tries to solve this problem by standardising evaluation process • Provide tools to aid in fairly evaluating every employee
Compensation and Benefits Management • Compensation includes salary, hourly pay, and bonus • Programs calculate pay and taxes • Automatically generates payslips and performs direct deposits • Programs help manage benefits • Benefits database accessible through intranet
Interorganisational Supply Chain Management Systems • Inventory is decreasing while gross domestic product is increasing • Money saved from inventory can be spent elsewhere • Reduction in inventory attributed to supply chain management systems • Streamline operations throughout chain • Newer SCM systems connect multiple organisations
Interorganisational Supply Chain Management Systems (continued)
The Importance of Trust • Supply chain systems work best when all businesses are sharing information • Trust between allied companies facilitates collaboration • Risk of disclosing important figures is present • Risk of taking advantage of demand figures is present
The Musical Chairs of Inventory • Small enterprises do not use SCM systems • Affects more powerful organisation that small enterprise is linked to • Inventory turns: the number of times the business sells its inventory • When SCM of companies are not linked, supplier requirements unknown so companies must overstock inventory • One company sits with lean inventory while other stands, hence musical chairs
Collaborative Logistics • Web allows organisations from different industries to collaborate • Businesses combine freight, sharing trucks • Optimize logistics by connecting SCM systems • SCM systems help collaborative warehousing • Share warehouse space
Enterprise Resource Planning • Replace old, disparate information systems with enterprise applications • Enterprise resource planning: • Manages daily operations • Complex • Require special tailoring for specific organisations • Relatively expensive
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
Summary (continued) • Computer-aided design systems help engineers design new projects • Computer-aided manufacturing systems direct machines that assemble parts • Supply chain management systems optimize workload, speed, and cost in supply chains • Customer relationship management includes the entire cycle of relationships with customers
Summary (continued) • Human resource management systems facilitate staff selection and record keeping • Multiple companies’ SCM systems can be linked, facilitating cooperation, which requires trust • Installing an enterprise resource planning system can encompass all business processes
