1 Chapter 3a: Business Functions and Supply Chains Business Functions Role of ISs in Bus. Functions Supply Chains ERP
Jan 03, 2016
1
Chapter 3a: Business Functions and Supply Chains
Business Functions
Role of ISs in Bus. Functions
Supply Chains
ERP
Background: (page 64)
TheTrainline Co.– Sell rail tickets over the phone (1997)– 1999: see the opportunity created by Internet– Launched TheTrainline Website
Success!– Enhance services to customers by providing
Timetable Information Information on ticket prices Special deals
2
TheTrainline: cont.
The company form alliances with three other rail companies
This expansion of services lead to incremental growth in the IT system: it was in response to short-term business needs rather than long term planning
In 2002 they decided to migrate to a newer more appropriate technology:– To support growth & reduce maintenance costs.
3
Problems:
Even having the web site services, customers preferred to use the telephone!
They were receiving 120 000 calls per week 40% of the calls received an engaged tone Average call length was 6 minutes 65% of calls did not convert into a sale
4
Solution: It’s all about ‘efficiency’
Calls are answered by an automated system, collecting information from the customer
Speech recognition sw records the detail and feeds it into data format within the IT system
The ‘data’ demand then trigger automatic and instantly retrieve all ‘supply side’ information from the database
Data are sent to the screen of a sales agent, and at the same time the customer call is patched through to the same agent5
Benefits:
Operating costs have been reduced by 10% that translates into million pounds
Conversation rates have increased by 4 000 extra calls per week
Customer satisfaction has improved Resources usage has improved “The TrainLine” company has been able to
grow its business in a very competitive market place 6
7
Introduction:
Our economy produces/consumes Information– You as professionals must know how to use ISs in
every business activity Managers must have an overall
understanding of all elements of a system to control Quality, Costs and Resources
8
Outcomes:
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
Explain the notion of enterprise resource planning systems (ERP systems)
Effectiveness/Efficiency (Intro.):
The better a person performs a job, the more effective he/she is.
Efficiency is measured as the ratio of OUTPUT to INPUT or Output/Input. It will increase when– More output with the same input or– Less input with the same output
IS’s can help companies attain more effective and efficient business processes
9
10
Effectiveness and Efficiency:
It all relates to ‘Productivity’, because introducing IS in any business function, productivity increases!
Example: Productivity Tools? Effectiveness: the degree to which a goal is
achieved– How much of a goal is achieved?– The degree to which it achieves better outcomes
11
Efficiency:
Efficiency: the relationship between resources expended and benefits gained in achieving a goal
Efficiency = Benefits/Costs
= Output/Input
Example: Operating costs are lower for a better quality product
Productivity: efficiency of human resources
12
Productivity Tools:
Productivity increased with software applications Workers produce more in less time.
13
Business Functions:
Accounting Finance Engineering HR Marketing
– Let’s look at these functions (supporting systems) in terms of a typical business cycle:
– Beginning with marketing and sales Customer placing an Order Supply Chain
16
CRM, SCM
Customer relationship management system: serves customers better and faster– Service continues after delivery of goods as
customer service Supply Chain: The activities performed from
the purchase of raw material to the shipping of goods
Supply Chain Management: The coordination of the above activities
17
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
18
Accounting IS:
Accounting information system pulls information from transaction processing system– Automatically routes purchases to accounts
payable (cheques/fund transfer) and– Sales to accounts receivable (invoices).
Generates reports on demand or on schedule Cost-accounting systems accumulate data
about costs involved in producing specific products
20
Finance:
Firm’s health is measured by its finances Financial managers try to manage money as
efficiently as possible Information systems improve financial
management
21
Finance (continued):
Financial managers have many 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
23
Cash Management:
Financial information systems help managers track company finances– Record every payment/cash receipt cash movement
Cash management systems: deal specifically with cash– IS reduces interest and fees/increases the yield
Electronic funds transfer: huge cash transactions– From one bank to another
24
Investment Analysis and Service
Investor’s goal is to 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– Real time analysis, therefor using online system
Factors to consider in investing are variability, expected return, and liquidity– IS will calculate these factors
25
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. See next slide
26
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
28
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,
analyzing manufacturing operations ERP
29
Material Requirements and Purchasing
Material requirements planning: 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
30
Manufacturing Resource Planning
MRP II: plans entire manufacturing process Uses master production schedule Master production schedule: specifies how
production capacity must be used to meet customer demands AND maintain inventory– Balances production economics, demand,
manufacturing capacity and inventory levels– Just-in-time manufacturing: suppliers ship parts
directly to assembly lines
31
Monitoring and Control
Information systems help control manufacturing processes
Controlling processes ensures quality
32
Shipping
IS help speed up delivery and cutting costs– Many variables that affect cost and speed of
shipping. See page 99– Sophisticated software to optimize shipping
efficiency necessary to stay competitive Examples:
– Vehicles equipped with computers and satellite communication
– See Fig 3.8
33
RFID in SCM: Self study!!
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, expiring date, destination
Ensures genuineness of products Read page 100 – 101, especially Fig 3.9