Chapter #10

Product life-cycle management

- A business strategy that enables manufacturers to share product-related data that support product design and development and supply chain operations - Applies web-based collaborative technologies to product development

The custom approach

- A company implements a more customized ERP system by developing new ERP functions designed specifically for that firm - The organization must carefully analyze its existing business processes to develop a system that conforms to the organization's particular characteristics and processes - If the customization does not perfectly match the organization's needs, then the system can be very difficult to use

The vanilla approach

- A company implements a standard ERP package, using the package's built-in configuration options; it will deviate only minimally from the package's standadized settings - However, the extent to which the software is adapted to the organization's specific processes is limited - But it provides general functions that can support the firm's common business processes with relative ease, even if they are not a perfect fit for those processes

TPS process

- Collecting data (generally speaking, organizations try to automate the TPS data entry as much as possible because of the large volume involved, a process called source-data automation) - System processes data in one of 2 ways: Batch processing and online processing

The best of breed approach

- Combines the benefits of the vanilla and customized systems while avoiding the extensive costs and risks associated with complete customization - Companies that adopt this approach mix and match core ERP modules as well as other extended ERP modules from different software providers to best fit their unique internal processes and value chains

Limitations of ERP

- Companies may need to change their existing business processes to fit the predefined business processes incorporated into the ERP software - although the vendor's best practices, by definition, are appropriate for most organizations, they might not be the "best" one for your company if they change those processes that give you competitive advantage - ERP systems can be extremely complex, expensive, and time consuming to implement

Recruitment

- Involves finding potential employees, evaluating them, and deciding which ones to hire - Some companies are flooded with viable applicants; others have difficulty finding the right people - Online recruiting can reach more candidates, which may bring in better applicants - The costs of online recruitment are usually lower than traditional recruiting methods such as advertising in newspapers or in trade journals

Financial and economic forecasting

- Knowledge about the availability and cost of money is a key ingredient for successful financial planning. - Cash flow projections are particularly important because they inform organizations what funds they need, when they need them, and how they will acquire them

HR development

- Most employees are periodically evaluated by their immediate supervisors - Evaluations are typically digitized, and they are used to support many decisions, ranging from rewards to transfers to layoffs - IT also plays an important role in training and retraining

Intra-organizational processes

- Originate and conclude within the company - Ex) procurement and fulfillment process

Inter-organizational processes

- Originate in one company and conclude in another company - Ex) SCM and CRM

Production process

- Originates and ends in the warehouse department (need to produce and reception of finished goods), but involves the production department as well

Planning production and operations

- POM planning has evolved from material requirements planning (MRP) to manufacturing resource planning (MRP II) to enterprise resource planning (ERP)

3 common examples of cross-departmental processes

- Procurement process - Fulfillment process - Production process

Fulfillment process

- Sales, Warehouse, Accounting - After Sales receives the inquiry, it issues a quotation that indicates availability and price - Sales forwards the sales order to the Warehouse - The Warehouse prepares the shipment and produces two other internal documents: the picking document and the packing list - At the same time, Accounting issues an invoice for the customer.

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).

Role of the TPS

- They are inputs for the FAISs and BI systems, as well as CRM and e-commerce - Have to efficiently handle both high volumes of data and large variations in those volumes - Must avoid errors and downtime

Enterrpise resource planning (ERP) systems

- Tightly integrates the FAIS via a common database and enables information to flow seamlessly across them ** ERP systems are an evolution of FAIS; ERP systems simply integrate the functions of the individual FAIS

3 strategic approaches to implementing an on-premise ERP system

- Vanilla approach - Custom approach - Best of breed approach

Procurement process

- Warehouse, Purchasing, Accounting - Originates in the warehouse department (need to buy) - Warehouse forwards the requisition to the Purchasing department which creates a purchase order and forwards it to the supplier - After the company places the order with the supplier, it receives the goods in its Warehouse department - Ends in the accounting department (send payment)

Budgeting

An essential component of the accounting/finance function is the annual budget, which allocates the organization's financial resources among participants and activities

Online transaction processing (OLTP)

Business transactions are processed online as soon as they occur

Functional area information systems (FAISs)

ISs that support a particular functional area within the organization

HR resources planning and management

IT support is valuable in these 3 areas: - Payroll and employees records - Benefits administration - Employee relationship management

MRP II

Integrates a firm's production, inventory management, purchasing, financing, and labour activities ** More complex planning

ERP II systems

Inter organizational ERP systems that provide Web-enabled links between a company's key business systems (such as inventory and production) and its customers, suppliers, distributors, and others - Includes a variety of modules that are divided into core ERP modules (financial management, operations management, and human resources management) and extended ERP modules (customer relationship management, supply chain management, business intelligence, and e-business) - If a system does not have the core ERP modules, then it is not a legitimate ERP system

In-house logistics and materials management

Logistics management deals with ordering, purchasing, inbound logistics (receiving), and outbound logistics (shipping) activities. Related activities include inventory management and quality control.

Initial human resource information system (HRIS) applications

Many HRIS applications are delivered via an HR portal. For example, numerous organizations use their web portals to advertise job openings and to conduct online hiring and training. 3 main functions: - Recruitment - HR development - HR planning and management

Ad hoc (on-demand) reports

Nonroutine reports that often contain special information that is not included in routine reports

cross-departmental process

One that - originates in one department and ends in a different department or - originates and ends in the same department but involves other departments

Routine reports

Reports produced at scheduled intervals

Production/operations management (POM) function

Responsible for the processes that transform inputs into useful outputs as well as for the overall operation of the business. 4 are: - In-house logistics and materials management - Planning production and operations - Computer-integrated manufacturing (CIM) - Product life-cycle management (PLM)

Transaction processing system (TPS)

Supports the monitoring, collection, storage, and processing of data from the organization's basic business transactions, each of which generates data * Typically collects in real time

SAP

The leading ERP software vendor (Oracle is another)

MRP

The planning process that integrates production, purchasing, and inventory management of interdependent items

Computer-integrated manufacturing (CIM)

Three basic goals: - to simplify all manufacturing technologies and techniques - To automate as many of the manufacturing processes as possible - To integrate and coordinate all aspects of design, manufacturing, and related functions via computer systems

Exception reports

reports that include only information that exceeds certain threshold standards