Ch 10 CIS 3700

ClM has three basic goals: (

(1) to simplify all manufacturing technologies and techniques, 2) to automate as many of the manufacturing processes as possible, and (3) to integrate and coordinate all aspects of design, manufacturing, and related functions via computer systems.

Explain the types of support information systems can provide for each functional area of the organization.

. The major business functional areas are production/operations management, marketing, accounting/finance, and human resources management. Table 10.1 provides an overview of the many activities in each functional area supported by FAIS.

ERP systems do have drawbacks. The major limitations of ERP implementations include:

As a result, companies may need to change their existing business processes to fit the predefined business processes incorporated into the ERP software. ERP systems can be extremely complex, expensive, and time-consuming to implement. (

Identify advantages and drawbacks to businesses of implementing an ERP system.

Enterprise resource planning systems integrate the planning, management, and use of all of the organization's resonrces. The major objective of EBP sys tem is to tightly integrate the functional areas of the organization. This integration enables information to flow seamlessly across the various functional areas. The major benefits of ERP systems include the following: • Because ERP systems integrate organizational resources, they make organizations more flexible, agile, and adaptive. The organizations can therefore react quickly to changing business conditions and capitalize on new business opportunities. • ERP systems provide essential information on business performance across functional areas. This information significantly improves managers' ability to make better, more timely decisions. • ERP systems integrate organizational resources, resulting in significant improvements in the quality of customer service, production, and distribution

major benefits of ERP fall into the following categories:

Organizational flexibility and agility Decision support. Quality and efficiency

Discuss the three major types of reports generated by the functional area information systems and enterprise resource planning systems, providing examples of each type.

Routine reports are produced at scheduled intervals. They range from hourly quality control reports to daily reports on absenteeism rates. Out-of-the routine reports are called ad-hoc (on-demand) reports. For example, a chief financial officer might want to monitor cash flow and cash on hand. Exception reports include only information that falls outside certain threshold standards. An exception report might identify only those cases where sales fell outside an established threshold-for example, more than 20 percent short of the quota.

Explain the purpose of transaction processing systems.

TPSs monitor, store, collect, and process data generated from all business transactions. These data provide the inputs into the organization's database

The POM function

The POM function in an organization is responsible for the processes that transform inputs into useful outputs as well as for the overall operation of the business. Because of the breadth and variety of POM functions, you see only four here: in-house logistics and materials management, planning production and operation, computer-integrated manufacturing (CIM), and product life cycle management (PLM).

Describe the three main business processes supported by ERP systems.

The procurement process, which originates in the warehouse department (need to buy) and ends in the accounting department (send payment). The fulfillment process that originates in the sales department (customer request to buy) and ends in the accounting department (receive payment). The {Production process that originates and ends in the warehouse department (need to produce and reception of finished goods), but involves the production department as well. We leave the details of the steps in each of these processes to you.

ERP systems a

adopt a business process view of the overall organization to integrate the planning, management, and use of all of an organization's resources, employing a common software platform and database.

the order fulfillment process

also known as the order to- cash process, the company sells goods to a customer. Fulfillment originates when the company receives a customer order, and it concludes when it receives a payment from the customer.

Initial human resource information system (HRIS)

applications dealt primarily with transaction processing systems, such as managing benefits and keeping records of vacation days

ERP II systems

are interorganizational ERP systems that provide Web-enabled links among a company's key business systems-such as inventory and production-and its customers, suppliers, distributors, and other relevant parties.

Routine reports

are produced at scheduled intervals

online transaction processing (OLTP)

business transactions are processed online as soon as they occur.

federated model

combines the essential features of centralization and decentralization. The underlying philosophy is to obtain the best of both worlds by creating shared best-of-breed services

production process

does not occur in all companies because not all companies produce physical goods

Exception reports

include only information that falls outside certain threshold standards. To implement management by exception, management first creates performance standards.

Product life cycle management

is a business strategy that enables manufacturers to share product-related data that support product design and development and supply chain operations

Computer-integrated manufacturing (CIM; also called digital manufacturing)

is an approach that integrates various automated factory system

transaction

is any business event that generates data worthy of being captured and stored in a database.

cross-departmental process

is one that (1) originates in one department and ends in a different department or (2) originates and ends in the same department but involves other departments

The production process can follow two different strategies:

make-to-stock and make-to-order

The procurement process

originates when a company needs to acquire goods or services from external sources, and it concludes when the company receives and pays for them. Le

functional area information systems (FAISs)

supports a particular functional area in the organization by increasing each area's internal efficiency and effectiveness.

transaction processing system (TPS)

supports the monitoring, collection, storage, andprocessing of data from the organization's basic business transactions, each of which generates data. The TPS collects data continuously, typically in real time-that is, as soon as the data are generated-and it provides the input data for the corporate databases. The TPSs are critical to the success of any enterprise because they support core operations.

enterprise application integration (EAI)

system integrates existing systems by providing software, called middleware, that connects multiple applicat

batch processing

the firm collects data from transactions as they occur, placing them in groups or batches. The system then prepares and processes the batches periodically (say, every night)

Companies can implement ERP systems in two ways,

using on-premise software or using software-as-a-service (SaaS

Such out-of-the routine reports are called ad-hoc (on-demand) reports. Ad-hoc reports also can include requests for the following types of information: •

• Drill-down reports display a greater level of detail. For example, a manager might examine sales by region and decide to "drill down" to more detail by focusing specifically on sales by store and then by salesperson. • Key-indicator reports summarize the performance of critical activities. For example, a chief financial officer might want to monitor cash flow and cash on hand. • Comparative reports compare, for example, the performances of different business units or of a single unit during different times.

The major drawbacks of ERP systems include the following:

• The business processes in ERP software are often predefined by the best practices that the ERP vendor has developed. As a result, companies may need to change existing business processes to fit the predefined business processes of the software. For companies with well-established procedures, this requirement can be a huge problem. • ERP systems can be extremely complex, expensive, and time-consuming to implement. In fact, the costs and risks of failure in implementing a new ERP system are substantial.

Three prominent examples of cross-departmental processes are:

• The procurement process, which originates in the warehouse department (need to buy) and ends in the accounting department (send payment). • The fulfillment process, which originates in the sales department (customer request to buy) and ends in the accounting department (receive payment). • The production process, which originates and ends in the warehouse department (need to produce and reception of finished goods) but involves the production department as well