mis-chapter 07 electronic business system

8/2/2019 MIS-Chapter 07 Electronic Business System

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Electronic Business

Systems

Chapter

7 & 8

By: Mr. Rashid Ali


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What is Inventory ?

The word inventory simply means the goods

and services that businesses hold in stock


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Types of inventory

Raw material

Work-in-progress

Finished goods

Stores and Spares


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Types of inventory

Raw material

o Such as gears for a bicycle, microchips for acomputer, or screens and tubes for a television

set.


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Types of inventory

Work-in-progress

The second type of inventory is called WIP, orwork in progress inventory .

o This refers to items that are partially

completed, but are not the entire finished

product


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Types of inventory

The third and most common form of

inventory is called finished goods .

These are the final products that are ready to

be purchased by customers and consumers.

Finished goods


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T h e I n v e n t o r y F l o w

C y c l e


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C y c l e

1 Run time: Job is at machine and being workedon

2 Setup time: Job is at the work station, and thework station is being "setup."

3 Queue time: Job is where it should be, but isnot being processed because other workprecedes it.


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C y c l e4 Move time: The time a job spends in transit

5 Wait time: When one process is finished, but the jobis waiting to be moved to the next work area.

6 Other: "Just-in-case" inventory.


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I n v e n t o r y C o s t s

Holding costs- associated with holding

or carrying inventory over time

Ordering costs- associated with costs

of placing order and receiving goods

Setup costs - cost to prepare a machine

or process for manufacturing an order


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H o l d i n g ( C a r r y i n g ) C o s t s

Interest

Damage

Warehousing

Etc.


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O r d e r i n g C o s t s

Supplies

Forms Order processing

Clerical support

Etc.


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S e t u p C o s t s

Clean-up costs

Re-tooling costs Adjustment costs

Etc


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C a r r y i n g C o s t O f

I n v e n t o r y

The cost of maintaining inventory in a

company's warehouse.

ORThis includes things like rent, utilities, insurance,

taxes, employee costs and the opportunity cost

of having your capital tied up in


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Definitions

Inventory-A physical resource that a firm holds in

stock with the intent of selling it or transforming it

into a more valuable state.

Inventory System- A set of policies and controls that

monitors levels of inventory and determines what

levels should be maintained.


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Zero Inventory?

Reducing amounts ofraw materials and purchasedparts and subassemblies by having suppliers deliverthem directly.

Reducing the amount ofworks-in process by usingjust-in-time production.

Reducing the amount offinished goods by shippingto markets as soon as possible.


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Inventory Positions in the Supply

Chain

Raw

MaterialsWorks

in

Process

Finished

Goods

Finished

Goods

in Field


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Reasons for Inventories

Improve customer service

Economies of purchasing

Economies of production

Transportation savings

Unplanned shocks (labor strikes, natural disasters,

surges in demand, etc.)


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Enterprise Business Systems

E-business means using the Internet, other

networks, and IT to support

Electronic commerce

Enterprise communications and collaboration

Web-enabled business processes

E-commerce is the buying, selling, andmarketing of products, services, and

information over the Internet and other

networks


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Essentials of the Supply Chains

Supply Chain

The flow of material, information, and

services from raw material suppliersthrough factories and warehouses to theend customers

Supply Chain Management (SCM)

to plan, organize, and coordinate all thesupply chains activities


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What is Supply Chain

Management?A management concept that integrates the

management of supply chain processes with an

objective to:

Develop value-added services

Improve performance Cut costs

Increase profits


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Basic Business Objectives

Get the right product to the right place at the

least cost.

Keep inventory as low as possible and still

offer superior customer service.

Reduce cycle times.


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Supply-Chain Management

Focus Suppliers

Procurement

Manufacturing

Warehousing

Customer Order Fulfillment

Distribution


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Benefits

reduce uncertainty and

risks in the supply chain

positively affecting inventory

levels, cycle time, business

processes, and customer service

increase profitability

and competitiveness


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The Components of Supply Chain Upstream supply chain

includes the organizations suppliers andtheir suppliers

Internal supply chain

includes all the processes used by anorganization in transforming the inputs of

the suppliers to outputs Downstream supply chain

includes all the processes involved indelivering the products to final customers


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Some Solutions to

the Supply Chain Problems

Coordination of all different activities

Use outsourcing rather than do-it-yourself

during demand peaks Buy rather than make production inputs

whenever appropriate

Configure optimal shipping plans

Create strategic partnerships with suppliers Use just-in-time approach to purchasing

Use fewer suppliers

Use IT to support the above


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Why Integration?

Tangible benefits

Inventory reduction, personnel reduction,

productivity improvement, order

management improvement, financial-close

cycle improvements, IT cost reduction,

procurement cost reduction, cash

management improvements, revenue/profit

increases, transportation logistics cost

reduction maintenance reduction, and on-

time delivery improvement


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Integrating the Supply Chain

After the introduction of computer-based

information, companies started to

integrate the links of the supply chain New forms of organizational

relationships and the information

revolution, especially the Internet andelectronic commerce, have brought SCM

to the forefront of management attention


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Enterprise Resources Planning

(ERP)

Objective

to integrate all departments and

functions across a company onto asingle computer system that canserve all of the enterprises needs

Results

productivity improvement

increases customer satisfaction


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Why Integration?

Tangible benefits

Inventory reduction, personnel reduction,

productivity improvement, order

management improvement, financial-closecycle improvements, IT cost reduction,

procurement cost reduction, cash

management improvements, revenue/profit

increases, transportation logistics costreduction maintenance reduction, and on-

time delivery improvement


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Enterprise Resources Planning

(ERP)

Objective

to integrate all departments and

functions across a company onto asingle computer system that canserve all of the enterprises needs

Results

productivity improvement

increases customer satisfaction


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Enterprise Resource Planning (ERP)

Systems

ERP systemsare software packages that can be

used for the core systems necessary to support

enterprise systems


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Major ERP Modules

Sales and Distribution

Based on SAP (best selling ERP)

Materials Management

Financial Accounting

Controlling and Profitability Analysis

Human Resources


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ERP Brings Integration

Purchasing

Fin. & Acct.

Inventory

Mkt. & Sales

Manf.

H/R

Shareddata

Shared

System & Data


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Business Process Reengineering

(BPR)

Fundamentally rethinking and

radically redesigning businessprocesses, in order to achieve

dramatic improvements in

quality, cost, speed and service


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The Need for BPR

Three Cs

Customers today know what they want, what they

are willing to pay, and how to get products and

services on their own terms. Competition is continuously increasing with

respect to price, quality, selection, service, and

promptness of delivery.

Change continues to occur. Markets, products,services, technology, the business environment,

and people keep changing, frequently in an

unpredictable and significant manner.


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Cycle Time Reduction

IT allows the combination or elimination

of steps, and the expedition of various

activities in the process

Telecommunications and especially the

Internet and intranets cut communications

time through the use of e-mail and EDIand allows collaboration in design and

operations of products and services


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Reengineering Organizations

An Example - Bank

Customer deals with a single point of contact, the

account manager

Account manager is responsible for all bankservices, and provides all services to the customer,

who receives a single statement for all accounts

IT provides account manager with expert advice on

specialized topics, such as loans

By allowing easy access to the different databases,

the account manager can answer queries, plan, and

organize the work with customers


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Intranet Communications

& Collaboration

Groupware

ElectronicMail

VoiceMail

PagingFaxes

IntranetCommunication

and Collaborationwithin an Enterprise


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Enterprise Collaboration

ToolsData

Conferencing

Videoconferencing

DiscussionForums

Electronic

Meeting

Systems

VoiceConferencing

Chat Systems

GroupwareEnterprise

CollaborationTools

i


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Electronic

Communications Tools

Voice Mail

E-Mail

Web

Publishing

BulletinBoard

SystemsFaxing

GroupwareElectronic

CommunicationsTools


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Customer Relationship

Management

Customer Relationship Management (CRM)

software is geared to address the consolidationand integration of all forms of communication

with a customer to enable a company to better

serve its key customers.


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Extranet

Extranet = Business to Business

Commerce using Internet technology.

The successor of Electronic Data Interchange

(EDI) which was and in some cases still is

based on private networks or leasedcommunications lines.

mis-chapter 07 electronic business system

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