Chapter 9 ITC

Typical features or modules in a BMS include the following:

-Definition of Organizational Mission -Identification of Strengths, Weaknesses, Opportunities, and Threats (SWOT analysis) -Establishing Goals and Measurable Objectives -Defining Strategies and Key Performance Indicators (KPIs) -Articulation of Tactical or Action Plans___ Assigning Responsibilities and Time Tables -Monitoring and Reporting Progress and Performance

Delivery Systems

-EDI -Demand Forecasting -Inventory Management -Order Entry and Fulfillment -Invoicing -Sourcing -Time-to-Market Reduction -RFID

Strategic Level

-Market, Customer, Products, Services -What do we do? What is our direction? What markets and customers should we be targeting and how do we prepare for them?

Channel Systems

-Dealer Systems -Delivery Systems -Customer Support Systems -Sales Systems -Target Market Systems -Market Intelligence Systems

Operational Level

-Policies, Processes, and Technology -How well do we do it? How can we be more efficient?

Supply Chain Management

-Supplier relationships -Procurement -Manufacturing -Product Lifecycle Management -Inventory Management -Logistics -Demand Management -Order Fulfillment

Customer Support Systems

-customer communications -customer satisfaction -service and support -training/user education -usage enhancement -customer portals -social networking

Market Intelligence Systems

-customer profiling and segmentation -market tracking -competitor surveillance -new product development -decision support, BI predictive analysis -Trend Monitoring -Cross-selling -ADS for pricing

ACID test: Durability

Backups by themselves do not provide this. This is achieved through separate transaction logs that can be used to recreate all transactions from a known checkpoint. Recovery manager programs.

Just-in-Time (JIT) inventory management

attempts to minimize holding costs by not taking possession. of inventory until it is needed in the production process; used in auto industry extensively -the trade-off is higher ordering costs because of more frequent orders. -this method requires accurate and timely monitoring of materials' usage in production -everything is interdependent -inventory and material quality is critical because of poor quality delays

Accounting manages

assets and meets compliance mandates

9.1 Questions: The _________ requirement of the ACID test dictates that if all steps in a transaction are not completed, then the entire transaction is canceled

atomicity

BAE Systems

global company headquartered in London, England, engaged in development, delivery, and support of advanced defense, security, and aerospace systems -They employed a CIM system to help with throughput of titainium miliary aircraft parts cost-effectively that ensured the titanium parts could be manufactured using a JIT basis

safety stock (buffer stock)

extra inventory used as a buffer to reduce the risk of stockouts. -needed in case of upexpected events, such as spikes in demand or longer delivery times.

data-driven, fact-based decision making

relies on data that are hot- impacting the business or potential customer right now or in real time

finance function of business

responsible for acquiring capital needed for research and development and other investment processes

9.2 Questions: Which of the following is not one of the inventory costs discussed in the text?

selling costs

google customer surveys

service that publishers can use to generate revenues from their online content. -alternative to having a paywall for online news content

transaction processing systems TPS

software and/or hardware technologies that collect, monitor, store, process, and distribute transactional data according to certain criteria referred to as the ACID test, short for atomicity, consistency, isolation, durability

Just-in-time (JIT) and lean manufacturing

two models or methods used to minimize waste and deal with the complexity of inventory management

Benefits of CIM

1. It simplifies manufacturing technologies and technqiues 2. automates as many of the manufacturing processes as possible 3. integrates and coordinates all aspects of design, manufacuring, and related functions -it is comprehensive, flexible, and helpful

Inventory control systems minimize the following three cost categories:

1. inventory carrying costs 2. inventory ordering costs 3. cost of shortages -to minimize the sum of these three, the company must decide when to order and how much to order -the economic order quantity model (EOQ) helps to answer those questions and takes all costs into consideration

ACID test: Atomicity

If all steps in a transaction are not completed, the entire transaction is canceled Ex. If you transfer funds from your savings account to your checking account, a debit is made to savings, while a credit is made to checking account. If one of these fails, the other one is not allowed

9.1.4 Explain the differences between batch and real-time processing

In online transaction processing (OLTP), events or transactions are processed as soon as they occur. Data are accessed at that time directly from the database, including updates. With batch processing, like transactions are grouped together and the entire group is processed at a later time. This type of processing is more efficient and less costly, but results, including updates to the database, have to wait until the group is processed.

Factor for growth of TMS: Outdated transportation systems need to be upgraded or replaced

The old systems were outdated but could now be replaced with new ones that include advanced technology

Ducati's high-performance global DCS (Ducati Communication System)

device used in dealerships to help integrate a lot of information, increase and make rich a customers experience, and also train staff on new product updates, run all parts of the business, respond quicker to customer demands

strategic plans

documents used to communicate the company's goals and the actions needed to achieve them -visionary and future-oriented

9.1.1 Explain the purpose of BMSs

information systems designed to support planning and the implementation process across the entire organization. Functional Business Systems are information systems designed to improve the efficiency and performance of a specific functional area within the organization.

9.1 Questions: Business Management Systems are designed to help companies with ______

strategic planning

Managerial/Administrative Level

-Business Model and Organization -How do we do it? How do we generate revenues & profits to sustain ourselves and build our brand?

Sales System

-Communications with the Field -Sales Process/Account Management -Selling Aids/SalesForce Support -Selling Aids/Point of Purchase -Prospecting -Wireless Sales Force Automation -Internet Marketing

Target Marketing System

-Database Marketing -Telemarketing -Nicke/Regional Marketing and Microsegmentation -customer profitability analysis -internet marketing

sales and marketing systems support the following

-digital advertising -social media monitoring and promotions -sales and customer support -automated ad placement and media buying -market research -intelligence gathering -distributing products and services to customers -order tracking -online and mobile order processing -online and mobile payment methods

Dealer Systems

-marketing and sales support and services -value-added partnerships -dealers' communications -business management support functions

9.2.4 What are the three categories of inventory costs

1. Inventory holding costs: warehousing costs (see Figure 9.10), security costs, insurance, losses due to theft or obsolescence, and inventory financing costs based on the interest rate. 2. Ordering and shipping costs: employees' time spent ordering, receiving, or processing deliveries; and shipping fees. 3. Cost of shortages: production delays and missed sales revenues because of stockouts.

Four trend factors contributing to the growth of TMS are:

1. Outdated transportation systems that need to be upgraded or replaced 2. Growth of intermodal transport 3. TMS vendors add capabilities 4. TMSs handle big data

problem solving, decision making, compliance

A wide range of specialized technologies, such as Salesforce.com and eXtensible Business Reporting Language (XBRL) for financial reporting support ________________, __________________, ___________________

9.1 Questions: Originally, information systems were designed to support the _______________ function

Accounting

competitive global

Companies recognize that careful management of supply chain processes is critical for success in the highly _________ _____________ economy

9.2.8 What is CIM

Computer integrated manufacturing (CIM) systems control day-to-day shop floor activities. In the early 1980s, companies invested greatly in CIM solutions even though they were complex, difficult to implement, and costly to maintain. They had required the integration of many products and vendors. Today's CIM systems provide scheduling and real-time production monitoring and reporting. CIM data-driven automation affects all systems or subsystems within the manufacturing environment; design and development, production, marketing and sales, and field support and service. CIM systems can perform production monitoring, scheduling and planning, statistical process monitoring, quality analysis, personnel monitoring, order status reporting, and production lot tracking.

9.1 Questions: Which of the following terms is used to describe when information is be trapped in one functional area of the business and unavailable to support cross-functional business processes?

Data silos

Traditional functional business areas include the following:

Finance and Accounting Production/Operations & SCM Marketing and Sales HR Management

plans and goals

For the organization to be fully effective, operational, tactical, and strategic _________ and ______ must be aligned -consistent, mutually supportive, and focused on achieving the enterprise's mission

external interests

In regards to business success, _______________ such as customers, competitors, and partners are a part of the solution.

coordinate

In today's fast-paced, competitive business environment, departments or functions must be able to _____________ in the development of strategic plans and the performance of operations-level actions. -there needs to be cross-functional coordination -also becomes easier to identify problems or barriers to achieving objectives and develop solutions to those problems

Functional Business Systems (FBSs)

Information Systems designed to improve the efficiency and performance of a specific functional area within the organization

Business Management Systems (BMSs)

Information systems designed to support planning and the implementation process across the entire organization -aid leadership teams by using technology to improve cross-functional collaboration collaboration, clarify relationships between steps, assign responsibilities, monitor progress -employ visual aids to communicate alignment of strategies, goals, objectives, and tactics as well as metrics selected to measure performance and progress

This is when JIT will fail

It will fail with these: -uncooperative supply chain partners, vendors, workers, or management -custom or non-repetitive production

9.2 Questions: ____________ management systems enable real time monitoring and tracking of supply chain shipments, schedules, and orders

Logistics

Differences between CIM and MES

MES: -refers to a broader infrastructure compared to CIM -based more on standard resuable application software, instead of custom-designed software programs on a contract-by-contract basis -tries to eliminate the time and info gap of early years on shop floor by providing plant. with real-time CIM: -provide scheduling and real-time production monitoring and reporting -affects all systems or subsystems within the manufacturing environment: design and development, production, marketing and sales, and field support service -these perform production monitoring, scheduling, planning, statistical process monitoring, quality analysis, personnel monitoring, order status reporting, production lot tracking

Factor for growth of TMS: TMS vendors add capabilities

Newer features were ideal because they were able to access information services to help the shipper identify optimal routes, given all current conditions -monitor in real-time, get rid of errors, and cut costs

9.2.7 What is the goal of lean management?

One objective of lean manufacturing is to eliminate waste of any kind; that is, to eliminate anything that does not add value to the final product. A second objective of lean manufacturing is to empower workers so that production decisions can be made by those who are closest to the production processes.

9.2.1 What is the function of SCM in an organization?

Supply chain management coordinates all of the factors that contribute to customer value, including supplier relationships, logistics, inventory management across the supply chain, leading to order fulfillment.

9.2.5. What are the objectives of JIT

The main objective of JIT inventory management is to minimize holding costs by not taking possession of inventory until it is needed in the production process. With JIT, costs associated with carrying large inventories at any given point in time are eliminated. However, the tradeoff is higher ordering costs because of more frequent orders.

Factor for growth of TMS: TMSs handle big data

There is a high volume of data generated from transportation. New systems are able to take info and create value from it; this can lead to better decisions

internal interests

These also determine the success of a business, examples includeeffiency and effectiveness of managers, employees, core business processes and functions

Good BMS systems

These anticipate the need to change plans, goals, and outcomes and possess functionality that allows organizations to make these changes without undue difficulty

delays

These in regards to JIT are costly and. occur such as: -labor strikes -interrupted supply lines -bad weather -market demand fluctuations -stockouts -lack of communication upstream and downstream in the supply chain -unforseen production interruptions

lean management may fail

This will fail when -bad weather -labor strikes

9.2.6 Explain the different between EOQ and JIT inventory models

To minimize the sum of the three categories of inventory costs, the POM department has to decide when to order and how much to order. One inventory model that is used to answer both questions is the economic order quantity (EOQ) model. The EOQ model takes all costs into consideration. JIT inventory management attempts to minimize holding costs by not taking possession of inventory until it is needed in the production process. With JIT, costs associated with carrying large inventories at any given point in time are eliminated. However, the tradeoff is higher ordering costs because of more frequent orders. Because of the higher risk of stockouts, JIT requires accurate and timely monitoring of materials' usage in production.

9.1.5 Explain the relationship between TPS and FBS

Transaction processing is information processing that is divided into distinct, undividable operations called transactions. While transaction processing certainly applies to the financial transactions that take place in a business (i.e. the data generated by a store cash register), transaction processing is used in the functional business systems of all areas. For example: Production/Operations: The tracking of materials or component parts as they enter and exit a warehouse or manufacturing facility.

ACID test: Isolation

Transactions must be isolated from each other. Ex. bank deposits must be isolated from a concurrent transaction involving a withdrawal from the same account

SCM

_____ was adopted as a way to coordinate all of the factors that contribute to customer value, including supplier relationships, logistics, inventory management across the supply chain, order fulfillment, etc.

Information systems

_________ have been developed to support organizations with traditional production and operations management (POM) as well as SCM processes

9.1.3 Explain each component of the ACID test

criteria for transactional data atomicity- is all steps are not completed the transaction is canceled consistency- unique check numbers only isolation- each bank transaction is its own durability- a backup is not enough, a recovery system

logistics management

deals with the coordination of several complex processes, namely ordering, purchasing or procurement, inbound logistics, and outbound logistics activities. These systems: -optimize transportation operations -coordinate with all suppliers -integrate supply chain technologies -synchronize inbound and outbound flows of materials or goods -manage distribution or transport networks -These enable real-time monitoring and tracking of supply chain shipments, schedules, and orders

mission

defines the organization's purpose and what ie hopes to achieve

key element of CIM strategy

deployment of two flexible manufacturing systems (FMSs) that can accommodate the manufacture of different parts at different volumes

transaction processing

information processing that is divided into distinct individual operations called transactions: is used in Production/Operations (tracking of materials or component parts as they enter and exit a warehouse or manufacturing facility Marketing/Sales: Management of sales orders and order fulfillment Human resources: Processing of payroll and employee records Finance/Accounting: Processing of credits and debits to a customer's checking account at a bank

Factor for growth of TMS: Growth of intermodal transport

intermodal transportation (using two or more transport modes- ship and plane) is being used more and more; old TMS systems do not have the capacity to work with this; when selling online became common-place, this need was found

stockouts

inventory shortage arising from unexpected demand, delays in scheduled delivery, production delays, or poor inventory management

batch processing

involves the collection of transactional data over some period of time, and then all of the transactions are processed as a batch at one time

Manufacturing execution systems (MESs)

manage operations on the shop floors of factories functions include: -compiling a bill of materials -resource management -scheduling -preparing and dispatching production orders -preparing work in progress reports -tracking production lots

Strategic plan: operations level

managers and supervisors work closely with the workforce and customers; they are on the front lines, ensuring that employees have the resources necessary to carry out their roles and ensuring that customers are well-served and satisfied with their experience

Strategic plan: tactical level

mid-level managers design business processes, procedures, and policies to implement strategic plans

9.2.2 What trends are contributing to the growing use of TMS?

my answer: 1. Outdated transportation systems that need to be upgraded or replaced 2. Growth of intermodal transport 3. TMS vendors add capabilities 4. TMSs handle big data

9.1.2 Define what an SOP is and give an example

my answer: Standard Operating Process- a set of written instructions on how to perform a function or activity. SOPs provide the framework for complex processes to be managed more efficiently -SOPs are written, for example, for handling purchase orders, order fulfillment, customer complaints, recruitment and hiring, emergency response, and disaster recovery.

9.2.3 Define logistics management

my answer: deals with the coordination of several complex processes, namely ordering, purchasing or procurement, inbound logistics, and outbound logistics activities. These systems: -optimize transportation operations -coordinate with all suppliers -integrate supply chain technologies -synchronize inbound and outbound flows of materials or goods -manage distribution or transport networks -These enable real-time monitoring and tracking of supply chain shipments, schedules, and orders

ACID test: Consistency

only operations that meet data validity standards are allowed. Network failures also cause data consistency problems Ex. Only unique check numbers are allowed

strategic, managerial, operational

planning occurs at three stages ________________ -managers at each level operate with a different time frame, which transitions from long term (a few years) at the strategic level to "in the moment" (daily) at the operations level

operations function of business

plans and coordinates all the resources needed to design, manufacture, and transport products

marketing function of business

product promotion and pricing, identifying target customers, and improving the customer experience (CX)

human resources

recruits, trains, and develops a talented workforce

9.2 Questions: Stockouts of materials and parts can slow down production while stockouts of final products results in __________

reduced sales

inbound logistics

refers to receiving inventory

outbound logistics

refers to shipping inventory

inventory control systems

stock control or inventory management systems -important because they minimize the total cost of inventory while maintaining optimal inventory levels -inventory levels are maintained by reordering the quantity needed at the right times in order to meet demand -must weigh the cost of inventory against the cost of stockouts

9.2 Questions: The production and operations management area is most related to which of the following?

supply chain management

IT functions of business

technology infrastructure, data management, social/mobile/cloud services

Transportation Management Systems

these are relied on to handle transportation planning, which includes shipping consolidation, load and trip planning, route planning, fleet and driver planning, and carrier selection, vehicle management and accounting transactions

standard operating procedures (SOPs)

these are what operational level functions are made up of -a set of written instructions on how to perform a function or activity. SOPs provide the framework for complex processes to be managed more efficiently

manufacturing quality control (QC) systems

these can be stand-alone systems or part of an enterprise-wide total quality management effort -provide data about the quality of incoming materials and parts, as well as the quality of in-process semifinished and finished products -record the results of all inspections and compare actual results to expected results -this data is collected by sensors or radio frequency identification systems -either interpreted in real time or stored in database for future analysis -reports on percentage of defects or percentage of rework needed can keep managers informed of performance among departments

computer-integrated manufacturing (CIM)

these systems control day to day shop floor activities. This also help production managers better use information to execute manufacturing. plans

lean manufacturing system

this is where suppliers deliver smaller lots on a daily or frequent basis, and production machines are not necessarily run at full capacity -one objective is to eliminate waste of any kind or that does not add value to the final product -second objective of lean management is to empower workers so that production decisions can be made by those who are closest to the production processes

strategic planning

top management activity that establishes goals and objectives, identifies strategies, allocates resources, and aligns operational activity for achieving desired outcomes

9.1 Questions: _____________ processing is information processing that is divided into distinct, undividable operations called transactions

transaction

Online Transaction Processing Systems (OTPS)

transaction processing systems that employ client server systems that allow transactions to run on multiple computers on a network, processing transactions in real time.

real time processing

transactions are processed as they occur, which means that account balances and other related counts are kept up to date

batch processing and real time

transactions can be processed in two ways

9.2 Questions: ___________ management systems are relied on to handle transportation planning, which includes shipping consolidation, load and trip planning, fleet and driver planning, and carrier selection.

transportation