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Information Systems

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Information System (CS507)
LESSON 42
Supply Chain Management
Introduction
The business in the globalization age is more about enhanced efficiencies, increased productivity
resulting in lower costs of production, quick and effective decision making increased outreach
and customer/client satisfaction and sharing knowledge across institutions. This enables a
business to become a more effective player in the free and extremely competitive global market.
Globalization encompasses the concept of moving beyond the geographical boundaries of a
country and using technological advances to maximum advantage for the business. The internet
and Web technologies have brought new dimensions to doing and managing business. E-
Commerce we have talked about. Obviously every business has some inherent risks. So does E-
Commerce. For example, privacy, legality, taxation are issues that pose a challenge for a good E-
business environment although measures both legislative and operational have been taken and
continue to be devised.  As far as Management Information Systems for businesses are
concerned these too have undergone a major change particularly with the availability of
Internet. Gone are the days of the stand alone systems which looked at each aspect of the
business separately. Today we are talking of end to end solutions for businesses. In other words
business imperatives have driven us to re-define the scope of the coverage/ extant of
management information systems. The Buzzword for some time now is " ENTERPRISE
RESOURCE PLANNING." (ERP).
The stand alone systems scope required a singular approach to each aspect of the business.
Why? Perhaps at that time the security issues could not be handled in any other way. Perhaps it
was much cheaper to employ people to consolidate and produce MIS for all aspects, time taken
being of little or no consequence. Perhaps this is what technology allowed us. Packaged or
customized software was now available. We move on and find ourselves with an enhanced
scope which requires all aspects of the business to be integrated. This meant that
issues/transactions of each department which had always impacted other departments had to be
integrated in such fashion that the resulting MIS was complete in all respects. Thus was laid the
foundation of the Customized Integrated software development and packages. The use of the
web and internet expanded the scope further requiring on line transfer of data and real time
functionalities.
This lead to a further increase in the scope where we started demanding an analysis of the data
as an integral part of the software used by a business regardless of its size. It also created a new
demand for bringing the entire supply chain into the perspective as well as the Consumer. The
result of the enhancement of scope lead to the Customized integrated software approach
becoming an Enterprise Resource Management Software of which MIS was an integral part.
Since then we have re-defined the scope to include Planning, Supply Chain and Customers
resulting in what is today referred to as the ERP. Certain software developers around the world
then decided to produce generic versions of ERP for various industries which could be installed
straight off without having to spend time on the development process of a customized
integrated software. Obviously the generic versions required that your business systems and
processes must be aligned exactly in accordance with its design. This gave rise to the concept of
BPR. The versions were too expensive to be modified and it was deemed that it would be
cheaper to re-align the business processes.
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BPR was not simply of redesigning certain input forms but involved changed practices of
working. It involved change in human thought and approaches to their routine, mundane tasks.
This raised issues of Change Management. Since the ERP generic models need to be
implemented this work is also required to be undertaken and involves training of the staff and
transfer/conversion of data in the legacy system. Thus it is not a simple straight forward
proposition but involves detailed and phased approach towards successful implementation at
considerable cost. The ERP approach, essentially meant for a highly computerized Society,
assumes that for it to be used from one end of the business to the other everyone is connected
and uses computers. Therein lies a major challenge to make such a system a success in a
developing country, like Pakistan, and raises questions in terms of financial viability and
suitability. Perhaps it is time to go back and look at the integrated approach.
42.1  Integrating systems
Let's take a look what an integrated information system looks like.
Users
Financial
Marketing
Information
Information
System
System
Integrated
Information
Suppliers
Customers
system
Information
Resource
Human Resource
Information System
Information System
Manufacturing
Information
System
As seen in the above picture all systems are interfaced with one another, the input in one system
automatically updating the data in the other relevant system. We thus observe simultaneous
Data sharing between various systems and simultaneous execution of different business
processes. For Example, a confirmed sales order received by the sales department from the
customer will once entered into the sales system automatically provide data input to
stores/packing/ shipping and possibly the production systems. Thus ensuring that all relevant
departments are notified of ready for necessary action simultaneously.
42.2  Methods of integration
Information systems can be integrated in the following ways.
 Connect Existing modules/system
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Information System (CS507)
Use Supply Chain Management (SCM) Software
Use ERP Software
Connect Existing Modules/system
The basic concept is to maximize the use of existing systems and minimize the changes in them.
Good integration allows the addition of new applications to existing ones and the connection of
systems to intranets and the internet. This approach extends the life of applications and saves
tremendous amounts of money. However, connecting existing system may be difficult and
expensive in many cases. Old systems were built and developed over a number of years
encompassing technologies and platforms of various specifications.
42.3
Using SCM Software
Supply chain management (SCM) is the process of planning, implementing, and controlling the
operations of the supply chain with the purpose to satisfy customer requirements as efficiently
as possible. Supply chain management spans all movement and storage of raw materials, work-
in-process inventory, and finished goods from point-of-origin to point-of-consumption. In
literal terms, supply chain refers to the flow of materials from their sources (suppliers) to the
company and then inside the company for processing. Today the concept is much broader,
including flow of materials, information, payments, and services from suppliers to factories and
warehouses to end customers. This reduces uncertainty and risks in the supply chain thereby
positively affecting inventory levels, cycle time, business processes.
42.4
Components of Supply Chain
The concept of supply chain can be divided into three major parts.
Upstream supply chain segment ­ includes the organization's first-tier suppliers
(manufacturers and assemblers). The major activities are purchasing and shipping.
Internal supply chain segment ­ includes all the processes to transform inputs to outputs.
Downstream supply chain segment ­ includes distributing, delivering to customer and final
consumption of the product.
Example
For a car manufacturer industry the above three segments can be shown as follows.
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Upstream
Vendors to the manufacturers.
Segment
Sub- Vendors or Suppliers to the
Vendors or Suppliers to the
manufacturer.
Internal
Manufacturing plants, Assembly
Segment
plants, Packaging, warehouses,
dealers.
Downstream Banks, transportation companies,
Segment
distributors, wholesalers, retailers.
42.5
Types of Supply Chains
Supply chain may exist in various forms depending on the need of the business:
1. Made to Store ­ Focuses on tracking customer demand in real time, so that the production
process can restock the finished goods inventory.
2. Continuous Replenishment ­ focuses on constant replacement of inventory by working
closely with suppliers. Applicable to environments with stable demand patterns.
3. Built to order ­ Focuses on careful management of component inventories and delivery of
needed supplies along the supply chain. A solution to this potential inventory problem is to
utilize many common components across several production lines and in several locations.
Challenges to supply chains
There are usually two major sources of challenges to supply chains.
1. The uncertainties faced
a. Demand forecast
b. Competition
c. Weather conditions
d. Technological development
2. The need to coordinate several activities
a. Business partners are misunderstood
b. Departments are not well connected
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Table of Contents:
  1. Need for information, Sources of Information: Primary, Secondary, Tertiary Sources
  2. Data vs. Information, Information Quality Checklist
  3. Size of the Organization and Information Requirements
  4. Hierarchical organization, Organizational Structure, Culture of the Organization
  5. Elements of Environment: Legal, Economic, Social, Technological, Corporate social responsibility, Ethics
  6. Manual Vs Computerised Information Systems, Emerging Digital Firms
  7. Open-Loop System, Closed Loop System, Open Systems, Closed Systems, Level of Planning
  8. Components of a system, Types of Systems, Attributes of an IS/CBIS
  9. Infrastructure: Transaction Processing System, Management Information System
  10. Support Systems: Office Automation Systems, Decision Support Systems, Types of DSS
  11. Data Mart: Online Analytical Processing (OLAP), Types of Models Used in DSS
  12. Organizational Information Systems, Marketing Information Systems, Key CRM Tasks
  13. Manufacturing Information System, Inventory Sub System, Production Sub System, Quality Sub system
  14. Accounting & Financial Information Systems, Human Resource Information Systems
  15. Decision Making: Types of Problems, Type of Decisions
  16. Phases of decision-making: Intelligence Phase, Design Phase, Choice Phase, Implementation Phase
  17. Planning for System Development: Models Used for and Types of System Development Life-Cycle
  18. Project lifecycle vs. SDLC, Costs of Proposed System, Classic lifecycle Model
  19. Entity Relationship Diagram (ERD), Design of the information flow, data base, User Interface
  20. Incremental Model: Evaluation, Incremental vs. Iterative
  21. Spiral Model: Determine Objectives, Alternatives and Constraints, Prototyping
  22. System Analysis: Systems Analyst, System Design, Designing user interface
  23. System Analysis & Design Methods, Structured Analysis and Design, Flow Chart
  24. Symbols used for flow charts: Good Practices, Data Flow Diagram
  25. Rules for DFDs: Entity Relationship Diagram
  26. Symbols: Object-Orientation, Object Oriented Analysis
  27. Object Oriented Analysis and Design: Object, Classes, Inheritance, Encapsulation, Polymorphism
  28. Critical Success Factors (CSF): CSF vs. Key Performance Indicator, Centralized vs. Distributed Processing
  29. Security of Information System: Security Issues, Objective, Scope, Policy, Program
  30. Threat Identification: Types of Threats, Control Analysis, Impact analysis, Occurrence of threat
  31. Control Adjustment: cost effective Security, Roles & Responsibility, Report Preparation
  32. Physical vs. Logical access, Viruses, Sources of Transmissions, Technical controls
  33. Antivirus software: Scanners, Active monitors, Behavior blockers, Logical intrusion, Best Password practices, Firewall
  34. Types of Controls: Access Controls, Cryptography, Biometrics
  35. Audit trails and logs: Audit trails and types of errors, IS audit, Parameters of IS audit
  36. Risk Management: Phases, focal Point, System Characterization, Vulnerability Assessment
  37. Control Analysis: Likelihood Determination, Impact Analysis, Risk Determination, Results Documentation
  38. Risk Management: Business Continuity Planning, Components, Phases of BCP, Business Impact Analysis (BIA)
  39. Web Security: Passive attacks, Active Attacks, Methods to avoid internet attacks
  40. Internet Security Controls, Firewall Security SystemsIntrusion Detection Systems, Components of IDS, Digital Certificates
  41. Commerce vs. E-Business, Business to Consumer (B2C), Electronic Data Interchange (EDI), E-Government
  42. Supply Chain Management: Integrating systems, Methods, Using SCM Software
  43. Using ERP Software, Evolution of ERP, Business Objectives and IT
  44. ERP & E-commerce, ERP & CRM, ERP Ownership and sponsor ship
  45. Ethics in IS: Threats to Privacy, Electronic Surveillance, Data Profiling, TRIPS, Workplace Monitoring