CISM Management Information Systems Final, Exam 2 Study Guide

Cost/benefit analysis

-typically used to justify operational projects -considers project return for the resources that are invested in completing the project

Types of Business Processes

Management processes - processes used to govern business systems. These include: -Governance processes - such as those used by a Board of Directors to oversee the business -Strategic management processes - such as strategic planning processes used by senior executive -Tactical management processes -- translate strategic plans into shorter-term actions Operational processes - core business processes within primary value chain activities. -Such as procurement, production, and fulfillment processes. Support processes - support core processes. -Such as accounting, HR, and technical support processes.

Manufacturing

Manufacturing can be defined as the process of converting raw materials, components, or parts into finished goods that are valued by customers or meet customer expectations or specifications. Manufacturing is undertaken to produce goods that customers will buy. There are numerous types of manufacturing including assembly, discrete, process, and repetitive manufacturing.

Production Process Metrics

Manufacturing cycle time measures the time it takes for a product to make its way through all the production process work centers to become a finished good. Changeover time. Changeover is the process of converting a production line or manufacturing machine from producing one product to another. Throughput measures the average number of units being produced by a work center or manufacturing facility over a specified period of time (e.g., units per hour). Capacity utilization measures how much of the total manufacturing output capacity is utilized at a given point in time. It tracks the degree to which potential output levels are realized. Overall Equipment Effectiveness (OEE) is a globally recognized as a best practice measure and KPI of efficiency and productivity in many industries. OEE assesses quality, speed (performance) and downtime (availability) and is used to measure the overall effectiveness of a production line or piece of production equipment.

ERP Vendor Selection & Implementation

Many factors should be considered by an organization when choosing an ERP vendor. An appropriate level of due diligence is required because deploying an ERP system can be an expensive and time-consuming process. Implementing an ERP system often involves considerable organization change and adaptation, so the change management aspects of ERP implementation cannot be overlooked.

MapReduce

MapReduce is a programming model by which large datasets are broken into pieces and analyzed on multiple processors. Each processor produces keys and associated values for these keys. These multiple key results are then consolidated (reduced) into a single key/value combination. A master processor is responsible for controlling the entire process (Figure 12-9). The master processor identifies the number of processors available for mapping and reduction processing and then determines how many mapping processors are required and how many reduce processors are required. It then divides the dataset into pieces for each mapping processor and determines which reduce processor will process what intermediate data. By harnessing the power of multiple processors and having them work simultaneously, a Big Data dataset can be processed very rapidly.

summary

Materials requirements planning (MRP) systems were some of the first information systems used to support the production process. These evolved into materials resources planning (MRP II) and subsequently to ERP systems. Warehouse management systems (WMS) support the production process by enabling centralized management of warehouse tasks. Manufacturing/production processes have been automated by robotics and additive manufacturing (AM). Industry 4.0 is described as the next phase of the digitization of manufacturing; it represents the fourth major era of industrial automation and mechanization. Because SAP ERP can support discrete, process, and repetitive production, it is the most widely used ERP system in large corporations. The production process converts raw materials, components, or parts into finished goods that customers will buy. Two major categories of manufacturing can be identified: discrete and process. Repetitive manufacturing is a type of mass production that makes high numbers of identical units in a continuous flow. Make-to-stock (MTS), make-to-order (MTO), assemble-to-order (ATO) and engineer-to-order (ETO) are well-known manufacturing strategies. Manufacturing firms often have measures for production cost, production quality, and inventory management goals; they often have KPIs for throughput, capacity utilization, production yield, overhead costs, machine efficiency, and production plan adherence. Manufacturing facilities typically include two warehouses: raw materials and finished goods. Warehouse and manufacturing personnel are key production process actors. The production area of a manufacturing facility is organized into work centers -- a work center is a location where a specified set of operations needed to produce a product is carried out. When a product is produced, it is routed among work centers until it is completed. Key documents in the document flow include planned orders, production orders, bill of materials (BOM), materials withdrawal (goods issue) slips, and goods receipt documents. Key data in the production process data flow includes finished goods data, data about planned and production orders, and materials and resources used during production. Physical flows include the movement of materials/quantities from storage locations in the raw material warehouse to work centers, product routings, and the movement of finished goods to the finished goods warehouse. Instance-level information answers questions such as "Has production been scheduled?" Process-level information provides insights into opportunities to the production process.

Material Withdrawal Document

Materials/components needed to complete a production order are moved to work centers when the production order is released for production. The release of a production order generates the creation of one or more material withdrawal (aka goods issue) slips that specify the raw materials and/or sub-components in the raw materials warehouse(s) needed to create the quantity of finished goods specified in the production order. These formally commit specific quantities of stored raw materials and/or sub-components to the production order.

Collaboration Technologies for Co-located Teams

Meetings where the team can work face-to-face in the same room can go on as they have for millennia: with just voice and paper or shared whiteboard communications. Alternatively, they can use technology to assist. The group members can display an MS Office document on a screen while they discuss it. Google Docs provides the capability for users to simultaneously edit documents -- each team member can be at their own device working on the document and discussing the contents.

Industrial Robots

Millions of industrial robots are used in today's manufacturing facilities and they are reshaping how manufacturing is performed. An industrial robot is a programmable manipulator designed to move materials, parts and tools, and perform a variety of tasks in manufacturing and production settings. They are often used to perform tasks that are dangerous or unsuitable for human workers. Typical applications of robots include welding (see Figure 10-17), painting, assembly, product inspection and testing, packaging and labeling, and palletizing. They can complete their programmed tasks efficiently, rapidly and with precision.

Online Analytical Processing (OLAP)

OLAP tools are used to query the data and to provide a multidimensional picture of the data known as a cube. Data are viewed across a set of dimensions which categorize the data which is known as measures. An analyst can manipulate or pivot the cube to look at the data in different ways. He or she can also rollup to higher levels of summarization or drill-down to get more detail about data. A good example of an OLAP tool is the Excel pivot table functionality.

Deployment

Once the model has been verified to operate successfully, a CRISP-DM project moves into the deployment phase. In this phase, the model is provided to business units to provide guidance to operations. While it is deployed, it must be monitored to ensure that it continues to provide valid advice. Conditions may change which invalidate the model, so it should be continually revalidated. One way to do this is to regenerate the model periodically using new data which will refresh the model with more recent information.

Decision Rules

One of the outcomes of decision trees are the identification of decision rules derived from data used to create the trees that can be used to predict future behavior. For example, decision rules for donors to a charity, might be: -Donors who have given more than 2.5 times in the last 36 months and their gift amount is less than $7.5, will give approximately 64% of the time. -Donors who have given more than 2.5 times in the last 36 months and the gift amount is greater than or equal to $7.50 and the time since the last gift is less than 17.5 months, will give approximately 59% of the time. -All other donor classes will give less than 50% of the time.

Online Marketplaces

Online marketplaces are business websites that serve as intermediaries between buyers and sellers; they are sometimes called supply chain enablers. Many online marketplaces require both buyers and suppliers to purchase/lease specialized software that enables them to access and use online marketplaces services. Some online marketplaces levy entry fees to join the marketplace and all levy fees on buyer-seller transactions. In addition to establishing relationships and providing a venue for transacting business, online marketplaces typically provide inventory management, shipment tracking, financing, and process improvement services. Some e-procurement providers offer hosted applications that enable buyers to manage requests for quotations (RFQs), POs, invoices, and goods receipts. Online B2B auction sites also have e-procurement roles for some organizations.

Operational Procurement Goals

Operational procurement includes the creation of purchase orders, goods receipt, and accounting activities including supplier payments. Operational procurement and purchasing goals include: Providing an uninterrupted flow of needed materials, supplies, and services. Minimizing inventory investment and loss. Finding and retaining competent suppliers. Reducing procurement process cycle time. Improving vendor payment processing time. Minimizing the number/percentage of "emergency" procurement orders.

Drivers of ES Adoption

Organizations implement enterprise systems to improve business performance, replace legacy systems, integrate systems across multiple locations, position organizations for growth, and to remain competitive in their industries. Organizations are also attracted to enterprise systems' potential to reduce costs and increase process efficiencies. -Cost savings are often realized from more efficient supply chains, reduced inventory levels, process efficiency improvements, process automation, and process integration.

BPR Benefits

Organizations who embrace BPR often experience reduced costs and cycle times for their business processes. By eliminating unproductive activities and the employees that perform them in the business processes that are most important to customers, BPR helps reduce costs and cycle times. Reorganizing into cross-function teams decreases the need for management layers, improves information flows, and reduces errors and rework caused by multiple handoffs among functional areas. Reducing work fragmentation and establishing clear process ownership enables workers to improve of products and services.

Outsourcing

Outsourcing is the delegation of work (IT or otherwise) from one party to another for a specified period of time, fee, and level of service. When software development is outsourced, design, construction, and some testing is performed by the contracted vendor. Acceptance testing is performed by the organization doing the outsourcing. When outsourcing occurs across national boundaries, it is called offshoring. Outsourced relationships for an IS include: Outsourcing complete IS operation Outsourcing IS development Numerous questions must be addressed for any outsourcing relationship.

PCO Benefits

PCO structures are considered to be best practice in industries where information flows and lean, rapid material flows are critical for sustained competitiveness. The multidisciplinary teams that are created are typically empowered to be self-managing. When PCO structures work as intended, core business processes can be run by fewer layers of management. -This reduces administrative costs and can increase overall efficiency and profitability. PCO structures enable increased communication and information sharing across the organization.

____ _____________ _______________ validate the project management experience and knowledge

PMI certified programs

Payment Terms

Payment terms are typically specified when contracts are created between buyers and sellers. Negotiated payment terms may be included on POs sent by buyers and on invoices sent from suppliers to buyers. Some common types of business-to-business payment terms include: Net nn, where nn specifies the number of days before the full amount specified in the invoice is due. For example, if the invoice stipulates Net 10, payment is due 10 days after the invoice date. X% mm/Net nn where X is a discount expressed as a percent of the total invoice amount - the buyer receives the discount if payment is made within mm days. For example, if the invoice stipulates 1% 10 Net 30, the buyer will receive a 1% discount if payment is made is 10 days; otherwise the total invoice amount is due 30 days after the invoice date.

Physical Assets vs. Information Assets

Physical assets are those things you can see, feel and touch. They are tangible. You can see, feel or touch them. Information assets on the other hand are intangible. For example, you can touch a building, but you cannot touch your bank account balance which is held as magnetized areas on a disk drive somewhere. Both types of assets require significant effort to create. However, because it is intangible, you can copy an information asset many times. Each time its costs virtually nothing to copy.

Additional Fulfillment Measures

Pick rates (the volume of products picked per hours) and pack rates (the number of customer orders packed for shipment per hour) Picking errors and packing errors may be aspects of order accuracy. Order entry/keying measures may be used for sales order processing, pick/pack/ship accuracy measures for warehouse accuracy, and billing accuracy measures may be used for accounting tasks. Inventory precision (the amount of inventory in stock relative to the sales forecast or customer demand) may be used to measure the inventory management aspect of the fulfillment process.

Production Process Document Flow

Planned order production order -bill of materials Material Withdrawal Goods reciept

Implementation Approaches

Plunge (Big Bang) - old systems are shut down and new system is used. -Most risky; back out strategy may be needed Pilot - one part of the organization gets access to the new system -Allows for system to be fully checked out before implementing it in other parts of the organization. Phased - one part of the system is used organization-wide -Other parts of the system are rolled out later, often one at a time. Parallel - both old and new system are used for a period of time, then the old system is shut down. -Least risky, but most expensive implementation approach

Predictive Analytics

Predictive analytics includes tools and techniques that will allow us to predict what will occur under certain situations. Predictive analytics can be used in many different applications. In marketing, predictive analysis can be used to improve sales promotions and product loyalty, inform target marketing by finding segments of customers likely to respond to offers or appeals - it can also be used to find customers who are likely to switch brands (churn). In financial applications, credit scoring is an important application - here predictive analytics can be used to identify which customers are likely to default on loans. Fraud detection is another potential use for predictive analytics - here we may look at transactions such as insurance claims to anticipate fraudulent activity so that they can be investigated. This category includes such techniques as regression analysis, decision trees, and market basket analysis (MBA).

Order Picking

Preparing an order for shipment involves picking and packing. Picking involves retrieving ordered products/materials from storage locations in the warehouse. Warehouse personnel responsible for picking activities are called order pickers, or pickers. To facilitate their tasks, order pickers use documents called pick lists or picking lists that associate details from the customer order (products and quantities) with storage locations in the warehouse.

Prescriptive Analytics

Prescriptive analytics describes what should be done -- they provide solutions to questions about such things as product mix or the location of warehouses. Tools such as linear programming provide support for this type of analytics; linear programming (or linear optimization) is a technique for achieving optimal results under constraints - the objective is to maximize or minimize a value subject to various constraints on actions; a typical example is a product mix problem. For example, XYZ Corporation manufactures four products and it wants to know how much of each product should it make. They know how much time each product takes within each work center on the manufacturing plant floor, how much time is available in each work center and how much profit they derive from each product. They also have minimum production levels that must be maintained and they wish to maximize the amount of profit. This problem can be solved using the Solver add-in of Microsoft Excel, a free add-in that solves linear programming problems.

Strategic Projects

-implement a corporate strategy or create new capability -evaluated on their ability to contribute to the execution of company strategy

Operational Projects

-improve existing business operations -getting maximum concern for resources expended

Payback Period

-may be calculated - the amount of time it will take to get back the money invested in the project

Project Monitoring and Control/ Completion (closure) stage

-project deliverable are completed and turned over to project owners -all contractual obligations of the project are completed -the project is formally designed as complete

Project Execution/ Execute Phase

-work defined in the project management plan is completed -coordinating work activities -managing stakeholder expectations -issuing communication -updates may occur in response to: resource availability changes resource cost changes activity duration changes risk or opportunity changes

Business & the Web

21st century business people must acknowledge that the deconstruction of traditional methods of operation changes how business must be done. If you refuse to adapt, your competitor's will have an opportunity to gain competitive advantage. Staying the same is not a long-term strategy for success; almost any change to adapt is better than no change.

MRP

A Material Requirements Planning (MRP) system is a computer-based inventory management and production planning system. Historically, MRP systems first appeared the 1960s; in the 1970's they became some of the first business software applications to be widely adopted. MRP is essentially an approach for creating production schedules and material plans that are based on supply chain lead times. Manufacturers were attracted to MRP systems because of their potential to improve efficiency and accuracy in production scheduling and inventory management. MRP systems are designed to help managers address three fundamental production questions: What products should be produced? How many units should be produced? When are the products needed?

WMS Impacts

A WMS can also help reduce the likelihood of errors associated with shipping products handled by the warehouse. It can also help a company fulfill orders more rapidly by quickly pinpointing the locations of ordered products within the warehouse. Today, a high-end WMS system also supports RFID tracking. No matter how complex it is, WMS systems may be standalone applications (either on premise or cloud-based) or part of an Enterprise Resource Planning (ERP) system.

WMS & ERP

A WMS system can either be used as a standalone solution or it can be integrated with an ERP system to improve the overall business efficiency. Today's WMS systems are quite complex and data-intensive; they a massive volume of data each day. Most of today's ERP systems include integrated WMS to make the business operations fast, smooth and efficient. However, while WMS can be a part of ERP, there are have distinct differences. ERP modules support the entire business, whereas WMS only deals with warehouse related tasks. Examples of the data/information exchanged between WMS and ERP systems are illustrated in Figure 10-16.

Business Process Flowcharts

A business process flowchart provides a picture of the separate steps of a business process in sequential order. It illustrates the sequence of tasks/activities, decisions that must be made, process inputs and outputs (materials or services entering or leaving the process). It may also illustrate the people and/or time involved with each step in the process. High level business process flowcharts, such as that illustrated in Figure 6-18, typically visualize only the major steps for process and leave out details such as inputs and outputs, decisions made, and people or time involved.

Integration Points

A business process integration point is as a point/activity within one business process at which data/information moves to another process or system. This means that data/information in a document created by one process triggers changes to one or more other processes. A classic example of an integration point is a vendor's receipt of a customer order via an EDI (electronic data interchange) link and its entry into the vendor's ERP system for processing. There are numerous integration points among the businesses processes supported by an ERP system. For example, the creation of a delivery document in the fulfillment process results in finished goods inventory reductions that trigger changes in planned production orders (in the production process) to replenish finished goods inventory.

Business Processes

A business process is a set of linked tasks designed to deliver a service or product to a client (customer). A business process can also be defined as a set of activities and tasks that accomplish a specific organizational goal. When the process's sequence of tasks/activities are completed, the business objective is achieved.

Content Provider

A content provider is an organization that creates and provides content (information, products, services) in digital form through third parties. The typical customer for their services are portals/navigators who aggregates their data with others for form their pages. Content providers typically own the relationship with and are paid by the aggregators but not with the ultimate end users. Content providers do not own the transaction, the data or the customer relationship itself. Hence, they do not need to conform to the requirements of the end user customers, but do need to conform to the requirements of aggregators. The content provider provides domain specific data to the aggregator for which they are paid. The aggregator in turn adds it as the value proposition to its customers.

Data Flow Diagrams

A data flow diagram (DFD) graphically represents the "flow" of data through an information system A DFD visualizes the sequence of data processing tasks/activities involved in a business process including data inputs and outputs (where data comes from and where it goes) and where it is stored. It does not show information about people involved with data processing or time delays between data processing steps. -Hence, DFDs are often used in conjunction with business process flowcharts. Figure 6-19 depicts a DFD diagram that illustrates some of the data processing tasks/activities associated with the fulfillment process.

Model Visualization

A key aspect of the modeling phase is the presentation or visualization of the model. Visualization refers to how we display the results of the analysis to users. It can be as simple as a graph of the decision tree to answer the question described above or a simple application that allows the user to enter the characteristics of the customer and receive a number showing their propensity to buy. The visualization of the model is critical for the acceptance of the data model.

Relational Databases

A relational database can be defined as a self-describing collection of integrated records. It is a collection of tables and records about one or more entities. An entity is something about which we wish to retain data - examples of entities in business databases include inventory items, customers, suppliers, facilities, and transactions. Database tables store the information we want to know about entities. Each database table includes fields or columns, a series of bytes that contain specific information about entities. Each records or row in a database table includes a specific sequence of fields that describe one particular instance of an entity. A collection of records is called a file or table.

Metadata

A relational database is self-describing because it includes metadata, data about data. In Figure 12-5, we see that MS Access provides the ability to provide a description of each field. Access also allows the user to see the parameters of the data. In this figure, course ID is described as the "number of the course in the file," it is a "double" field size, is formatted as a general number and is required when a record is created. T These examples of metadata provide information about each field in the database table.

Supply Chain Management (SCM)

A supply chain consists of all the entities (organizations) directly or indirectly involved in the procurement of a raw material or product. Supply chain management (SCM) involves the management of information flows between and among supply chain entities to maximize supply chain profitability and effectiveness. An entity in a supply chain has links to its suppliers and customers. An entity's role in the supply chain is to transform materials received from suppliers into semi-finished or finished products and/or to distribute materials, semi-finished, or finished goods received from supplies to its customers. A simple supply chain is depicted in Figure 7-6.

Capital Goods & Services Procurement

A third type of procurement focuses on the acquisition of the facilities, equipment, tools, and services that the organization needs to produce the finished goods and services that its sells to customers. These types of materials are called capital goods and services. The procurement of capital goods and services is more strategic in nature than direct or indirect procurement.

Requirements documentation

A variety of models are used to describe objects that exist in the system and how the system functions. These include: Unified Modeling Language (UML) which records system functions in: Use case diagrams - these illustrate how users interact with the system when performing system functions Activity diagrams -- these show how use cases are accomplished Class diagrams - summarizes system entities, their attributes, and what they can do or have done to them Interaction diagrams -- show how classes work together to accomplish use cases Behavioral machine state diagrams - shows the conditions or states that an object can go through within the system

Virtual Community

A virtual community is an "aggregation of individuals or business partners who interact around a shared interest, where interaction is at least partially supported and/or mediated by technology and guided by some protocols or norms" (Porter 2004). In a virtual community, community members interact with each other around the topic of the company or its products and the community members' interests Virtual community owners receive revenue from advertising, clickthrough fees, commissions, direct sales to community members and membership fees. As shown in figure 11-10, a virtual community fosters interactions between content suppliers and community members. Some suppliers will pay for advertisement on the community site and for click throughs to their site as well as a commission on their products. Members interact with each other to discuss their shared interests. The community owner owns the customer relationship but does not own the customer data or transaction.

Well-Designed Business Processes

A well-designed business process is effective when its product or service is valued by the customer. -When this happens, the process is value-adding A well-designed business process is efficient when it does not include unnecessary tasks and when it does not consume more resources than needed to produce the product or service. -Since business processes consume resources (time, labor, energy, etc.) it is possible to assign costs to particular process tasks/activities and to the process as a whole.

Developing Work Systems

A work system is designed to: Produce a product or service for customers, and to operate in: A particular environment Within an infrastructure Under a particular strategy When a work system is developed, processes and activities are designed to be operated by specific participants (people and/or machines) using specific information and technology to produce a particular product or service. So, work system develop boils down to: Designing processes and activities Acquiring required technology Implementing the work system

What is a Value Chain?

According to Michael Porter, a value chain is the set of activities performed by an organization competing in a specific industry to deliver a valuable product or service to customers. An organization's costs and profits are affected by how well it executes its value chain activities. Porter's value chain concept is grounded in systems theory and the idea that business organizations are open systems that interact with elements in their environments in ways to remain viable across time. The business system and its subsystems acquire and consume resources, such as energy, money, labor, materials, and equipment, to create outputs (products or services) that are valued by the market.

Cost vs. Differentiation

According to Porter's Competitive Forces Model, organizations competing within an industry will typically strive to achieve a cost or differentiation advantage in the market. To achieve a cost advantage, the organization would first identify the cost drivers (such as labor-intensiveness, activity completion rates and wage rates) for its primary and support activities. It would then identify opportunities to reduce costs in its primary or secondary activity. Reducing the costs of its primary and support activities may help the organization achieve a cost advantage in its industry. Creating a differentiation advantage begins with identifying the activities that create the most value for customers. These may be specific primary activities, support activities, or some combination of both. Once the greatest value-adding activities are identified, the focus should shift to identifying ways to improve the value of each activity in ways that contribute to sustainable differentiation within the market.

Other Production Process Measures

Additional production process measures include: Scrap rates (percentages) Customer returns (of defective or out-of-spec products) Supplier quality (quality/usability of raw materials used to produce finished goods). Customer fill rates (percentage of orders shipped in full and on time to total orders shipped) Perfect order metric (POM)

Order Shipping

Additional warehouse personnel may be responsible for loading packed customer orders into delivery trucks or onto other delivery vehicles (see Figure 9-10).

Additive Manufacturing

Additive manufacturing (AM) is as the process of joining materials to make objects from 3D model data, usually layer upon layer. This process is also known as 3D printing, it involves the use of a computer and special CAD software communicates with the printer so that it "prints" in the desired shape. 3D printer cartridges loaded with different materials "prints" the object's shape in wafer thin layers. These layers are repeatedly printed on top of each other, and fused together until the shape is complete.

Center of Excellence (CoE)

Adopters of SAP enterprise applications are encouraged to establish a center of excellence. An ES center of excellence (CoE) is as a team, entity, or shared facility that provides ongoing leadership, research, best practices, support and/or training for the ES. A CoE is established to provide a support organization and governing body for the ES that will oversee the provision of resources, funding, and enterprise systems strategy and roadmaps.

ES Management & Governance

After implementing an ES, the adopter organization is faced with managing and governing the system. The primary reasons for adopting an ERP system are often strategic in nature. Many organizations desire a system that will be the backbone of its business computing platform and that will help it be more competitive in its industry. While an ERP system will change the technical platform, the main drivers of adoption are the desire to transform business processes, performance, and competitiveness. Hence, after implementing an ERP system (or any other ES), it is important to establish ES management and governance structures that are more business than technically focused.

Order Packing

After the products needed to fill a customer order have been picked and aggregated, they are packed and readied for shipment. These tasks are carried out by packing personnel in the warehouse. For small consumer orders, all the items need to fill an order may fit in a single box (see Figure 9-9). Large orders for business customers may require multiple pallets and lots of shrink wrap for order packing.

Web 2.0 and Two-Way Interactions

After the turn of the 21st century, the advent of web applications such as Facebook and YouTube that had much more functionality than Web 1.0 applications ushered in Web 2.0. The new web applications enabled two way conversations and provided an interactive user experience. The two-way conversation provides the ability for users to be co-creators of the site experience. Two-way interactions include reputational systems that enable users can rate their experience. Examples include the feedback systems employed by eBay and Amazon that allow buyers and sellers to rate their experience with others and serve as a guide to others about the quality of those being rated.

Procurement Process

Almost every organization has a procurement process to support its inbound logistics (value chain) activity. This is sometimes called the procure-to-pay or requisition-to-pay depending on whether the initial process tasks/activities include creating purchase requisitions. Procurement is a cross-functional business process; its tasks/activities are performed by multiple functional areas.

ERP Instances

An ERP instance is a distinct version of an ERP system within an organization. When ERP systems were first introduced, it was widely thought that an organization should have a single ERP system that ran on a single database to serve the entire organization. Many organizations have multiple ERP instances including companies with multiple product divisions, multinational companies, with divisions on several continents, and companies created through mergers and acquisitions. Single-instance ERP systems continue to be observed as ERP best practices.

ERP System Landscapes

An ERP instance provides support for integrated business processes for part of an organization or the entire organization. The system landscape an ERP instance includes a production platform (environment), the "live" system used to process ERP transactions and run the business. The system landscape also typically includes a development platform (environment) and a testing platform (environment). Ideally, each of these platforms (environments) is isolated from one another as much as possible. Organizations with mature ERP systems may add other platforms (environments) to its ERP instances such as training and database development platforms (environments).

ERP & Fulfillment

An ERP system can provide end-to-end support for the fulfillment process. The ability of ERP systems to provide automated support for most fulfillment process tasks/activities has historically been a driver of ERP system adoption and use.

ERP Software Architecture

An ERP system's software architecture has traditionally been depicted as consisting of three layers (see Figure 7-15). Users interact with the ERP system at the presentation layer, typically via a graphical user interface (GUI). Support for integrated processes is provided at the application layer. An organization-wide database is found at the data management layer.

Core Business Processes

An organization's core business processes is the set of processes that must exist for its proper functioning. These contribute directly to providing value to customers. . Core processes are typically operational processes rather than support or management processes. Because they are critical to the long-term success and survival, core processes are sometimes described as mission critical processes. Essentially, these are processes that the organization must do correctly and/or efficiently to be sustainably competitive.

Enterprise System Architecture (ESA)

An organization's enterprise systems architecture (ESA) includes the architectures of all the IT systems that support the organization's business functions. It provides a comprehensive summary of the organization's major IT systems and the relationships among them. The ESA plays a key role in managing and evolving an organization's IT systems and business operations. It captures both static and dynamic aspects of the organization's IT systems as they evolve in response to changes in the business environment.

Manufacturing Strategy

An organization's manufacturing strategy consists of the objectives and action plans implemented by its manufacturing function to ensure medium- to long-term sustainable advantage its competitors. Manufacturing strategy is a response to competitive forces in the external environment, especially the operating and industry components of the external environment. The production and fulfillment processes are closely coupled in producer organizations and their strategies share names. Four common production/manufacturing strategies are make-to-stock (MTS), make-to-order (MTO), assemble-to-order (ATO), and engineer-to-order (ETO).

Complicating Factors - SC Scope

An organization's procurement process be quite complicated when its supply chain is international in scope. When buyers and suppliers are in different countries, complexity may be increased by different currencies, tax systems, tariffs, and duties. Shipments from suppliers in other countries may be delayed by customs clearing processes. Number of supply chains that are international in scope is increasing in response to the globalization. e overlooked.

What is a Value Stream?

An organization's value chain is part of larger stream of activities called a value system or industry value chain. A value system includes the value chains of suppliers that provide inputs to the organization and the value chains of distributors through which the organization's products or services reach customers. An organization must understand each component in its value stream to acquire and sustain competitive advantage and to be positioned to support its advantage with information systems. Today, we usually use "supply chain" to describe an industry value chain or value system.

Chapter 12 Summary

Analytical tools improve decision-making in organizations. The CRISP-DM process describes the phases in BI data mining projects: business understanding, data understanding, data preparation, modeling, evaluation, and deployment. Data analysis has traditionally involved analyzing data stored in relational databases - self-describing collections of records about entities. Descriptive analytics tell us "what has happened" using techniques such as OLAP and RFM analyses. Predictive analytics, such as regression and decision trees, allow us to predict what will happen under various conditions. Prescriptive analytics such as linear programming enables use to make decisions as about what should happen. Modern IT and the internet create "Big Data," massive databases that change often and are composed of wide varieties of data. These huge datasets render traditional relational database inefficient and require special methods such as MapReduce and Hadoop to process them efficiently. BI and Big Data raise additional ethical issues that cannot be ignored. With BI and Big Data, we have unprecedented ability to intrude into people's lives. A customer "bill of rights" summarizes five principles for information ethics that organizations can use to properly handle data and perform analytical analysis in a manner that respects individual privacy.

MBA Analysis

Another example of cluster analysis is Market Basket Analysis (MBA). In MBA, different groups of purchases (market baskets) are analyzed to determine which products a likely to be purchased together. In 1992, Thomas Blischok, manager of a retail consulting group at Teradata, and his staff prepared an analysis of 1.2 million market baskets from 25 Osco Drug stores. The analysis discovered that between 5:00 and 7:00 p.m. consumers bought beer and diapers. Although Osco store managers did not exploit the opportunity to increase sales of beer and diapers by displaying them together near the front of the store, this would have been a logical action to take based on the results of the market basket analysis.

Dashboards

Another form of descriptive statistics is the use of a dashboard. A dashboard shows on a visual basis of the information needed for a function. Using tables, charts, graphs, speedometers, stoplights, and other indicators, it provides easily accessible data and information. Figure 12-6 shows an example dashboard for a social media application. This dashboard provides summary numbers for orders, earnings, and sales percent. Then it provides a number of icons to illustrate progress on maintenance, visitors, and type of device usage. On the bottom, it shows a graph of the activity on Twitter, Facebook, and Behance and the progress with activity.

ESA Benefits

Architecture-level analysis of IT systems by assisting ES planners and designers in performing system analysis at the architectural level. Enhanced business/system understanding by providing a vehicle for understanding an organization's business operations. Improved business/system planning by providing a vehicle for business and IT systems planning, both strategically and in enhancing IT system support for business functions. Easier restructuring and system integration in response to changes in business operations, and changes that result from mergers or diversification. Enhanced system evolution -- an ESA provides a means for evaluating the impacts of major IT systems transformations such as replacing legacy systems, decommissioning outdated systems, and adding new systems.

Industry 4.0 Has Many Names

As Figure 10-22 summarizes, Industry 4.0 represents the fourth major era of industrial automation and mechanization. Industry 4.0 would not be possible without the digitization of data, big data analytics, cloud computing, the Internet of things (IoT) and advances in industrial robots, additive manufacturing, and warehouse automation technologies. Other names for Industry 4.0 is include smart manufacturing, smart factory, and intelligent industry. It is closely related to the Industrial Internet of Things (IoT) which is sometimes called the Industrial Internet. The shop floor of the smart factory of the future is envisioned to include automated product routing among fully-automated work centers whose machines communicate and coordinate with one another using machine-to-machine (M2M) communications.

Operational & Analytical CRM

As illustrated in Figure 9-15, CRM software often includes collaboration systems that facilitate communication and coordination among the front-office and back-office systems.

EDI Connection Options

As shown in Figure 9-18, EDI documents may be transmitted between companies over point-to-point communication connections or via third-party EDI networks (value-added networks). Today, EDI documents may also be exchanged via the public Internet using VPN tunnels; VPN tunnels represent a logical equivalent to point-to-point leased circuits and are typically less expensive.

Assembly

Assembling involves putting components together to produce a finished product. Assembly lines have traditionally been common in automobile manufacturing (see Figure 10-1). The components used in assembling are often semi-finished goods produced and supplied by other organizations. A semi-finished good is an input used in the production of another good, including a finished good. Companies that make semi-finished goods may make them and then use them in their production process or they may make them and then sell them to other companies for use in their production processes. Some companies buy (procure) all the semi-finished goods used to produce their finished goods from other companies.

Assembly Robots

Assembly robots can assemble components that are too small for intricate for humans to assemble quickly and accurately. Assembly robots are ideal for: Manufacturing tasks that require both speed and precision, such as applying adhesives and sealants. Applications where cleanliness is essential, such as pharmaceuticals and medical device assembly. Unlike human assembly workers, assembly robots don't get tired, make mistakes, and they aren't prone to repetitive motion injuries, like carpal tunnel syndrome. Robotic assembly typically lowers manufacturing costs and increases efficiency, production capacity, and product quality. Today's industrial robots are mature technologies and represent low-risk, high-return investments.

Enterprise Data Management

Because ES are data-centric, ES adopters are challenged to develop data management and governance structures to ensure that data provides business value. Enterprise data management has emerged as a priority for many organizations. Its overall objective is to ensure that the organization has trust and confidence in the data that is essential to achieving its business strategy. Enterprise data management (EDM) is essentially an organization's ability to effectively create, integrate, disseminate and manage data for its ES, business processes, and entities that require accurate and timely data delivery. An overriding goal of EDM is the elimination of organizational conflicts and issues that result from the mismanagement of data and information.

Master Data Management

Because it can be shared across business processes and applications, it is important for an organization's master data to be accurate and up-to-date. This means that master data management is often a key aspect of its EDM processes. Master data management (MDM) includes operational and governance processes, policies, standards, and tools that an ES adopter deploys to ensure consistent data definitions and management of its critical data. MDM is a systematic approach for improving an organization's data quality that is operationalized through the policies and procedures established by data governance group. MDM strives to ensure that an organization does have competing and potentially inconsistent versions of the same master data. In many organizations, the overall goal of MDM initiatives is to provide ES users with "single version of the truth" that can be trusted and used to inform business decisions.

Fulfillment Process Automation

Because it is typically an organization's only revenue generating process, considerable time and attention has been devoted to developing software and technologies to support the fulfillment process. Some of the major solutions and technologies include: -CRM systems -EDI - Warehouse automation systems - ERP systems

Production Process Tasks & Activities

Because the production process can be very complex, such as the manufacturing of an automobile or airplane, each of the tasks/activities can be decomposed into sub-tasks/activities, especially the create product task/activity. 1. request production 2. authorize production 3. issue raw materials 4. create product 5. receiv finished goods

WMS

Because the production process includes more materials and goods movement than either the procurement or fulfillment process, standalone and ERP-integrated warehouse management software is widely used to support and automate manufacturing and production. WMS software programs enable centralized management of warehouse tasks such as tracking inventory levels and stock locations. In manufacturing environments, a WMS facilitates the optimization of raw materials, work-in-progress, and finished goods movements. Essentially a WMS is inventory tracking software which monitors the movement of materials stored in a warehouse. The WMS is notified if any new item is added or removed.

Procurement Process Automation

Before computers, purchasing and procurement processes were largely paper-based and purchase orders were sent by buyers to suppliers by mail or a courier service or via phone calls. The advent of fax machines meant that POs could be transmitted to vendors, and invoices could be transmitted to purchasing organizations as facsimile documents. Bank process automation, including Automated Clearing House (ACH), enabled buyer payments to be deposited in vendor bank accounts. Several specialized forms of procurement process automation have emerged. This includes e-procurement as well as vendor-managed inventory (VMI) systems and procurement support by ERP and SRM systems.

MRP II Benefits

Benefits of MRP II systems include: Accurate delivery predictions Accurate costing for every stage of production Improved control of every stage of production Improved manufacturing facility usage Rapid response to changing conditions.

Marketing & Social Media

Branding - using social media to create or maintain a brand and/or to influence the perception of your product or service, within the community. Viral Marketing -- using social media to create "buzz" around the company and its products and/or to create more visibility and awareness for products. Market research -- using the media to collect information about users' comments and actions; for example, Social Media Analytics such as Sentiment Analysis can help companies understand issues with their products and services and allow them to act to improve their operations.

BPMN Diagrams

Business Process Model and Notation (BPMN) is a standard for visually representing and modeling business processes in business process diagrams (BPDs) that can be easily understood by both business and IT managers. BPMN diagrams are similar to business process flowcharts but are arguably superior to flowcharts for representing cross-functional business processes. The symbols used in BPMN diagrams are grouped into four main categories: flow objects, connecting objects, swimlanes, and artifacts.

BI and Analytics

Business intelligence (BI) has been defined as a broad category of applications, technologies, and processes for gathering, storing, accessing, and analyzing data to help business users make better decisions (Watson, 2012). The term analytics refers to the data analysis part of BI. In an organization, BI activities should occur in an enabling environment.

Business Process Diagrams

Business process diagrams illustrate how business processes are implemented. They help managers and employees understand processes within the organizational context and help them envision potential exception scenarios for the process. Business process diagrams help identify process improvement opportunities, including process automation opportunities. The diagrams are visual aids that help ensure that everyone is on the same page.

Business Process Documentation

Business process documentation can range from narrative descriptions of the sequence of tasks/activities that make up a process to diagrams that visualize all or parts of the business process. Best practices in business process documentation includes starting with the big picture, and then drilling down. -The big picture identifies how the process fits into the organization's overall operations. -Drilling down involves identifying the details, technical specifics, and procedures associated with each step in the process's sequence of tasks/activities. Flowcharts, data flow diagrams, and business process diagrams are used to document the specifics associated with process steps.

Business Process Management

Business process management (BPM) is a systematic approach for making an organization's business processes more efficient, effective, and adaptive to changes in the business environment. BPM is sometimes described as the subset of business infrastructure management that focuses on optimizing and maintaining the equipment used in core operations. BPM strives to reduce miscommunication about business processes within organizations. -Within many businesses, it interconnects the IT function with the business units that produce the organizations goods and services. -Since BPMN was created to facilitate communication among IT and business unit managers, it is widely used by organizations with BPM programs. -Business Process Execution Language (BPEL) is also widely used in conjunction with BPM because like BPMN, it can be easily understood and interpreted by both technical and non-technical personnel.

Business Process Reengineering

Business process reengineering (BPR) shares many of the characteristics of BPM, but typically results is more extreme revisions to business processes than the incremental process improvements that occur in well-executed BPM programs. Business process reengineering can be described as radical redesign of business processes in order to achieve dramatic improvements in process cycle times, productivity, and the quality of the goods/services produced by business processes. BPR strives to help businesses restructure how they are organized by fundamentally redesigning their business processes. BPR is sometimes called business transformation because of its focus of making extreme changes to business process designs. .In BPR, managers and employees are essentially handed a blank sheet of paper and are tasked with rethinking, redesigning, or replacing existing processes in order to deliver more value to customers.

Business Processes and Work Systems

Business processes are best understood within the context of value chain activities and work systems needed to achieve strategic objectives.

E-Commerce Types

Business to Business (B2B) occurs when businesses deal with other businesses. The B2B segment is the largest segment of e-commerce gathering about 85% of all e-commerce volume. Consumer to Consumer (C2C). This connects consumers with other consumers. Examples include eBay.com which is a marketplace where consumers buy and sell by connecting with other consumers. The transaction may be an auction or a direct purchase transaction. Similar sites include craigslist.com, Uber and Alibris.com. The site coordinates payment and fulfillment of the purchase between the buyers and sellers. eGovernment: Government to Consumer (G2C) or Government to Business(G2B): governments create the ability for the public to interact with them for government services. Types of functions here can be information dissemination such as providing forms and instructions or paying fees and taxes.

E-Commerce Types

Business to Consumer (B2C). This category includes online retailers such as Walmart.com and Dell.com where firms offer goods and services to consumers in exchange for money. A subset of B2C is Business to Employee (B2E). Here, the business interacts with its employees such as transactions around payroll and benefits and other HR considerations. It can also include such things as discount programs, tickets, packages and other company perks. Consumer-to-Business (C2B) is where consumers sell provides or services to businesses. An example is priceline.com where consumers name their own prices to purchase airline tickets and hotel stays.

Establishing Relationships with Social Media

Business-oriented social media such as LinkedIn assists you with this identification process. LinkedIn allows you to make "connections" with other people who have LinkedIn accounts. By making these connections you will be able to see who they are connected to. You can then either connect with them yourself or you can ask your connection to provide you a contact. An Alternatives to LinkedIn include increasing your number of Twitter followers or Facebook book page likes.

Chapter 7 summary

Businesses adopt ES (CRM, SRM, SCM, ERP) for a variety of reasons. Due diligence should be conducted before adopting an ES. It is important to know the ES's capabilities, infrastructure requirements, potential benefits and risks, ongoing maintenance realities and costs, and ecosystem before making an adoption decision. ERP systems are the core, backbone, transactional systems in many businesses organizations. CRM, SCM, and SRM systems can be integrated with ERP systems, however, integration is optional rather than required. ERP system implementation involves considerable change and adaptation, and top management commitment is critical. Three ERP implementation strategies are used: Big Bang, phased, and parallel. ES and enterprise data management governance is important post-implementation.

Legal Issues

Buyers and suppliers often establish legally binding contracts before transacting business with one another. This means that a purchase order is often considered to be a legally binding document. When a buyer sends a PO to a supplier, the buyer is legally bound to pay the supplier for the goods/materials that are shipped in response to PO. Legal requirements require a buying organization to exercise discipline in its purchasing and procurement process to ensure that it does not violate its supplier contracts.

CRM & Fulfillment Automation

CRM Systems provide direct support sales personnel involved in fulfillment process activities. Some organization's also leverage CRM systems for sales order tracking and processing. Three major aspects of CRM are sales force automation, customer service management, and marketing automation.

CRM System Benefits

CRM is based on the premise that organizations that understand the needs of individual customers are best positioned for sustainable competitive advantage and to reap the benefits summarized in Figure 7-3.

Operational vs. Analytical CRM

CRM software support both operational and analytical processes. Operational CRM supports front-office operations that deal directly with customers; this often includes customer order transaction. Analytical CRM supports back-office operations, including data analysis (trend analysis, predictive analysis, sales forecasting, etc.). Analytical CRM relies on CRM data storage repositories (such as data warehouses) and business intelligence tools to gain insights into customer preferences and behaviors. The insights are used to personalize the organization's interactions with the customer, such as providing a personalized e-commerce experience at the organization's web site. CRM software often includes collaboration systems that facilitate communication and coordination among the front-office and back-office systems (see Figure 7-4).

CRM Evolution

CRM systems have their roots in sales force automation systems that were designed to support the various steps in sales process which are summarized in Figure 7-5.

MTS Fulfillment

Companies that use make-to-stock fulfillment sell products to customers from their finished goods inventories. Customers are limited to the purchasing products that are in stock; customized products cannot be ordered or requested. The target number for each product in finished goods is determined by a sales forecast. For this reason, the make-to-stock strategy is sometimes called build-to-forecast fulfillment. If the sales forecast is too high, the finished goods warehouse may have excess inventory; if the forecast is too low, the company may have stock-outs and missed sales. Hence, the success of MTS fulfillment depends on the accuracy of sales forecasts. Make-to-stock fulfillment is widely used in companies that sell directly to customers via retail outlets. It is popular among companies that seek high sales volumes and offer competitive prices to customers. It is especially common among retail, office supply, and grocery companies.

BI & Big Data Ethics

Companies, such as Target, and the government possess and collect large amounts of data on us. If Target can determine from something as obscure as a life condition such as pregnancy from buying patterns, what else is possible? Can government agencies use the information that they collect to identify individuals engaging in behaviors which they do not approve? Analytics and how they are used can have real impacts on people and their privacy. Just because we have the capability to use BI and Big Data to gain new insights into customers and citizens, we must be careful about doing so without infringing on their personal privacy.

Additional Fulfillment Process Documents

Considerable variation exists in how companies fulfill customer orders. While the sequence/order of the major documents is consistent across organizations, additional documents may also be included. Such as: Sales Scheduling Agreement. In a scheduling agreement, the customer orders specified quantities of specified items; price and conditions are agreed upon and delivery is arranged. The agreement schedules multiple deliveries over a specified time. Sales Contract. A sales contract is an agreement between a company and a customer for goods or services over a specified time. Some specify the quantity (total number) of items to be sold to the customer; others specify the total value of items to be sold to the customer over the time period. Credit memo specifies the adjustment (decrease) to the customer's accounts payable entry in the general ledger that is needed to account for returned items. Credit memos can also be processed if the customer has been charged a price that is above an agreed amount, if a discount has not been applied, or if they have been charged for shipping when the order included free shipping. A debit memo is the opposite of a credit memo. It specifies the increase in the customer's accounts payable entry in the general ledger if the customer has been undercharged.

Determination Process Information Sources

Consulting agencies - the "Big Four" and numerous other consultancies assist clients with software selection and implementation. Research firms - such as Gartner and Forrester research and publish white papers comparing the capabilities of business software packages. Trade publications such as CIO and ComputerWorld publish articles on business software packages and trends. Business periodicals such as Forbes and Fortune and HBR frequently publish articles on technology and software trends. Contacts within the industry - determining what software packages are used most widely in the organization's industry can also provide insights

FOB Points

Contractual agreements between buyers and suppliers often specify a FOB point. FOB is a shipping term stands for "free on board". When the specified FOB point is the supplier's location, the buyer takes ownership of the goods/materials being shipped as soon as the shipment leaves the supplier's location. When the specified FOB point is the buyer's location, the buyer does not take ownership of the goods/materials until the shipment arrives at its location and is inspected and accepted. It is in the supplier's best interest to have its location as the FOB point and it is in the buyer's best interest to have its location as the FOB point.

System Feasibility

Cost feasibility - is the system affordable? Key consideration: cost and benefit comparison Schedule feasibility - is there sufficient time to build the system? Key consideration: can system be completed by a specific date Technical feasibility - can the system be built? Key consideration: are skills and infrastructure in place to build the system Organizational feasibility - is organization ready for this system? Key considerations: are personnel appropriately skilled? Is organization appropriately structured? Does organization need the system?

Cross-Functional Business Processes

Cross-functional business processes require multiple departments (functions) to work together to achieve the business objectives. Benefits include: -improved communication, coordination, and relationships among departments -Better and more widespread understanding of the processes' business objectives -Greater upstream/downstream task/activity awareness -Increased visibility/understanding of organizational processes -Better and more widespread understanding of how the organization works. -Cross-training and horizontal movement of employees is another potential benefit. Examples include procurement, production, and fulfillment processes. Other examples are included in Figure 6-4.

Crowdsourcing & Crowdfunding

Crowdsourcing involves using the wisdom of crowds for decision-making or design. A survey can be created on Facebook that will allow users to provide feedback on potential slogans for products. Crowdsourcing is also used for technical support. User forums are forms of crowdsourcing in which the community is used to propose answers to other community members' technical problems. Crowdfunding is the use of crowds to perform venture funding or special cause fund raising.

Customer Relationship Management (CRM)

Customer relationship management (CRM) involves managing all aspects of a customer's relationship with an organization to increase loyalty, retention, and the organization's profits. Three major aspects of CRM are sales force automation, customer service management, and marketing automation. -Sales force automation uses software to automate sales activities including sales order processing, customer contacts, and customer order tracking. -Customer service management uses software to coordinate all facets of an organization's customer service efforts. -Marketing automation uses software to automate marketing activities such as e-mail marketing, social media marketing, and online e-commerce content. It also uses software for coordinating marketing and branding efforts across sales channels and for analyzing marketing campaign effectiveness.

Privacy & BI

Customers disclose personal data and information to organizations such as governments and companies for the purpose of facilitating transactions with them. While they may sometimes appreciate it, customers do not provide the data/information to retailers for the purposes of facilitating their marketing to them or to enable the retailers to sell their information to others. Additionally, many companies at present will not purge customer provided information on request -- they view it as their information. We want to argue that it is not the company's information; it is the customer's data/information that is given to the company in trust. We also argue that the customer should have rights about how his/her data is used by the company.

Returns

Damaged, incorrect, or incomplete shipments initiate a returns process. This involves the buyer physically shipping the deficient goods/materials back to the supplier and verifying that the supplier needs to send another shipment to overcome the deficiency. Return processes are exceptions to the supplier's fulfillment process and the buyer's procurement process. This is costly and frequently unpleasant on both buyers and sellers, so steps are typically taken on both sides to minimize returns.

Production Process Data Flow

Data flow during the production process includes data about finished goods, production orders, materials and resources used during production, and storage locations of finished goods that are produced. When production is requested, the needed quantity of the finished good is identified along with when it is needed. The finished good's BOM specifies the quantities of raw materials and components needed to produce one unit of the finished good.

Production Process Data Flow

Data flow in the production process includes data about finished goods, production orders, materials and resources used during production, and storage locations of finished goods that are produced. When production is requested, the needed quantity of the finished good is identified along with when it is needed. The finished good's BOM specifies the quantities of raw materials and components needed to produce the needed quantity of the finished good. When production is authorized, scheduled and released, a commitment is made to produce a specific quantity of finished goods by a certain date. Numerous resources including raw materials/components and work centers are committed to producing the specified quantity of finished goods in the production order. The authorization of production includes the assignment of a production order number and specifies the operations needed to produce the finished good, the work centers that will carry out the operations, and the sequence (product routing) in which the operations will be performed.

Data Quality

Data quality and its appropriateness for use in our analysis is an important aspect of data understanding. For BI purposes, we must understand the amount of data in each field that is missing, its validity, and its granularity. If many records in the data source have no or invalid values in a field that is critical to our understanding of the problem, then this data source is probably not very useful for our purposes. If the data are at too coarse a granularity then we must either find a way to break it down into records that are at the right granularity or decide that this data source is not useful. If the granularity is too fine, then we may need to summarize the data into a coarser set of records. If after examining the available data, we find that we do not have the data that we need to arrive at answer to our question, then we need to return to the business understanding phase and reassess our question to find one for which we have the data.

Database Keys

Database tables are related to each other by means of keys. The keys indicate the relationships between the tables. A primary key is a field or set of fields in a table that make a record unique in the table; for example, in Figure 12-4, book number is the primary key of the book table. In the inventory table, it is possible to have two copies of the same book so there will be duplicates of the ISBN field. Additionally, there are only a limited number of values for the condition, so there can be duplicates of the values in condition, so book number is the only field that makes the record unique. ISBN is the primary key of the book table and author ID is the primary key of the author table. The ISBN field is also found in the inventory table as well as the book table -- this is how the relational database connects tables. The ISBN field acts as a foreign key, a primary key of one table found in another. By using the foreign key, if we need more information about a particular book found in inventory, we can use it to access the book table and get more information about that book.

Decision Trees

Decision trees are used to hierarchically describe decision rules that can be used to predict a certain characteristic or an outcome. This is done by analyzing the effects of the characteristics of the data on the outcome. Today, decision trees are drawn by means of software -- an analyst sets up the data for a decision tree creation program and then the software creates the decision tree. In constructing a decision tree, the software processes the data through a series of steps. At each step, it seeks to decide which of the characteristics have the strongest effect on the outcome. It then divides the data so that the results on the outcome are great.

Direct vs. Indirect Procurement

Direct procurement focuses on acquiring the materials and goods that a manufacturer consumes in its production process. The quantities of materials and goods in a direct materials PO is typically high; purchase order frequency for direct materials is also high. Indirect procurement involves acquiring the materials need to maintain or repair production equipment. It also involves acquiring materials used in the organization's general operations, such as office supplies. Indirect materials are often called MRO (maintenance, repair, and operations) materials. The purchase order frequency for MRO materials can be moderate to high depending on how rapidly they are consumed by the organization.

Discrete Manufacturing

Discrete manufacturing involves the production of distinct, countable items. Because individual items are produced by discrete manufacturing, a serial number or unique identifier can be assigned or affixed to each item that is produced. Automobiles, televisions, smart phones, appliances, and furniture are examples of items produced by discrete manufacturing.

Design Phase

During design, models developed during requirements analysis (of SDLC) are converted into specifications used by programmers for coding. User interface and report layouts are determined. Database construction specifications are spelled out as part of data management design. The hardware and operating system that the application will run on are specified in the system's physical architecture. Program code specifications are spelled out as part of class and method design.

Implementation

During the implementation phase of acquisition, software is placed in production in the work system. The software can be: Vendor software that is modified or implemented vanilla Custom developed software (whether in house or outsourced) Acceptance testing is completed Users are trained Data from systems being replaced are moved to the new system

system definition

During the system definition phase of the SDLC, system components, parameters, and costs are identified. These are articulated in a scope document that includes system: objectives, deliverables, technical parameters, limits, exclusions

E-Commerce

E-commerce is conducting of business activities over the internet and other communication networks. This includes any kind of business transaction including buying, selling, customer service, marketing, and any information based business activity. Over the last 20 years, e-commerce has gone through several developmental phases including Web. 1.0 and Web 2.0.

ERP Software

ERP software links business processes and systems across an enterprise in order to streamline workflow, facilitate information sharing among different functional areas/business units, and to provide sufficient insight into a business's operations to enable data-driven decision-making. ERP software eliminates the need for functional area information systems/software to support the needs of specific business units (such human resources software, accounting software, and warehouse management software). Instead of having separate databases to support different functions, an ERP system stores all company data in a single database that is used organization-wide.

Procurement and ERP Systems

ERP systems automate the creation and transmittal of documents created by buyers during the procurement process. This is illustrated in Figure 8-11. Vendor (supplier) and vendor products/materials data are stored in ERP databases as master data. After it is in the database, master data can be used in any process where it is needed. A vendor's banking information may also be stored as master data. In general, master data contributes to the automation of a business process by populating fields in a process's electronic documents.

ERP Infrastructures

ERP three-tier architectures can be implemented as fully on-premises, fully cloud-computing, or as a combination of on-premises and cloud-computing infrastructures. ERP adopters in the 1980s and 1990s typically implemented their ERP systems on-premises In the 2000s and 2010s, some degree of cloud computing has been typically incorporated with ERP infrastructures. Fully-hosted ERP systems are available from software-as-a-service (SaaS) solution providers. Infrastructure-as-a-service (IaaS) is another cloud-based option for ERP adopters.

Enterprise Resources Planning (ERP)

Enterprise resource planning (ERP) is a process/system used by an organization to manage and integrate the important parts of its day-to-day operations such as: -Purchasing Inventory Sales Marketing Accounting/finance Human resources. When automated by software, ERP enables real-time integrated management of core business processes.

ERP vs. MRP II

Enterprise resource planning (ERP) systems evolved from MRP II systems. Like MRP II, ERP roots go back to MRP. MRP helped companies plan material purchases, MRPII added detailed scheduling and production controls; ERP extends both MRP and MRP II by integrating the information flow among all departments/functions within an organization including finance, marketing, production, shipping, and human resources. A properly configured ERP system improves communication and monitoring and gives all departments/functions real-time access to status of a customer order. As Figure 10-14 illustrates, MRP, MRPII, and ERP are essentially iterations of the same type of system. These are software programs designed to help businesses better manage their costs, control inventory, meet customer delivery expectations, and track and improve their internal processes.

Enterprise Systems Adoption

Enterprise systems (ES) are large-scale application software packages that support business processes, information flows, reporting, and data analytics. They enable an organization to track and control all of its complex business operations. They are used as central command systems for automating the business and facilitating reporting and decision making. Organizations adopt ES to: Operate efficiently Improve business processes Improve workflow and customer facing processes

ES and Procurement

Enterprise systems (ES), including SCM, SRM, and ERP systems provide automated support for numerous procurement process and purchasing activities. SCM systems provide support for purchase order processing, inventory management, goods receipt processing, warehouse management, and supplier management. SRM systems provide targeted support for the procurement process that often results in increased process efficiency, reduced costs, enhanced communication and coordination with suppliers, and continuous process improvement.

BPM Execution & Monitoring

Executing activities involve performing or enacting process steps. -For to-be processes, a computer program or simulation may provide insights into how process steps might unfold. Monitoring activities involve tracking business processes and aggregating statistics about process performance. -Tracking enables the identification of the current state of process instance. -Tracking also enables process level questions to be addressed such as: What is the average time or cost to complete each step? -Monitoring measures fall into three categories: *cycle time measures, *defect rate measures, and *productivity measures. Processing mining tools are processing monitoring methods and tools that enable discrepancies between actual and ideal process execution to be identified. -These assist in identifying bottlenecks and other factors that inhibit process performance.

Finished Goods Warehouse

Finished goods warehouses stores the finished goods produced by the company's manufacturing/production process. Customer orders are filled via the company's fulfillment process from the products stored in its finished goods warehouse(s). It is important for finished goods warehouses to be organized and well-managed to facilitate the fulfillment of customer orders. When a manufacturer sells finished goods stored in its finished goods warehouse(s), it incurs revenue. When products are sold, the manufacturer's accounting system calculates costs of goods sold (COGS) - for each unit of a product, the COGS includes its raw materials/components cost and the labor and resource costs involved with its production.

Fulfillment Strategies

Five major fulfillment strategies can be identified: - Make-to-stock (MTS) - Make-to-order (MTO) - Engineer-to-order (ETO) - Assemble-to-order (ATO) - Digital Copy (DC) There can be considerable variation from company to company in how a fulfillment strategy is implemented. An organizations may utilize more than one fulfillment strategy if it sells a wide range of products or serves multiple types of customers.

BPMN Flow Objects

Flow objects are basic building blocks of BPMN diagrams; they represent the process concepts being modeled. Examples of flow objects are events symbols and activity symbols. Event symbols represent the start and end of a business process as well as important processes in between Circles are used to represent process events. Event symbols can be styled to represent process details. For example an envelope may be used to represent a message.

Business Process Flows

Four types of "flows" can be observed for business process tasks/activities: -Physical flow encompasses the physical activities associated with the business process including the physical movement (flow) of products or materials. -Document flow is the sequence of business documents that are created by the process's tasks/activities. -Data flow corresponds to the data used and/or generated by the process's tasks and activities. -Information flow consists of information that is processed/harvested from business process data flows.

Fulfillment Process

Fulfillment is a process that organizations strive to do correctly and efficiently because it: -Directly interfaces with customers -Affects customer perceptions of the organization -Affects customers' willingness to do repeat business It is often an organization's only revenue generating process. The fulfillment process maps most directly to the outbound logistics activity in the value chain. -However, it also is related to the sales and marketing activity. The fulfillment process is a cross-functional process whose tasks/activities involve (at a minimum) the organization's sales, finished goods warehouse, and accounting functions.

Warehouse Automation Systems

Fulfillment process cycle times have been positively impacted by technologies and systems that support pick-pack-ship tasks/activities in warehouses. As Figure 9-19 illustrates, warehouse personnel responsible for order picking and inventory management have benefited from advancements in wireless devices such as tablets, handheld terminals, and wireless label printers.

Fulfillment, Sales, and Distribution

Fulfillment supports an organization's sales and distribution functions. Sales involves the exchange of products/services for money or services. In most instances, sellers receive money for the products or services they sell to customers, but in some instances, they may receive something besides money (such as a service) in the exchange. Fulfillment is often the organization's only revenue generating process. Distribution involves the tasks/activities associated with making a seller's product or service available to a customer. Distribution can be accomplished directly or indirectly. -In some instances, customers acquire needed products or services directly from manufacturers (producers) or service providers. -In other instances, customers acquire products or services indirectly from producers or service provides via intermediaries or indirect distribution channels.

Hadoop

Hadoop is an open source project that implements the MapReduce process. In addition to the MapReduce process, it provides a Hadoop file system (HDFS) in which the dataset is stored across multiple computers. The HDFS provides the capability to replicate, balance, and move data around from the different machines to ensure reliability and performance. Hadoop has been used to perform management of many types of Big Data, for example, clickstream analysis, marketing analytics, image processing, web crawling, and general archiving. It is used by half of the Fortune 50 companies, Facebook, and Yahoo!.

Types of Tags

Hashtag, a tag preceded by a "#", to classify their tweet. By applying identical hashtags users indicate their continuity with a idea. This type of tagging is also known as social tagging. A folksonomy is a taxonomy or classification of content derived from how people are tagging content that is created by aggregating and compiling user generated tags. An emergent form of tagging is geotagging, putting of tags on maps to identify places of interest.

Benefits of ERP 3-Tier Architecture

Having a distinct user interface (UI) enables users to interact with the ERP software using a variety of client devices. The distinct application processing layer enables adopter organizations to implement the ERP software on computer hardware that their needs. The distinct database layer provides adopter organizations with choices about the database management system (DBMS) and storage technologies. The ERP three-tier software architecture maps directly to client-server architectures.

DC Fulfillment

Historically, Digital Copy is the newest order fulfillment strategy. It coincides with the advent of digital products and the ability to store a company's digital assets and inventory as single digital masters or in digital repositories. In DC fulfillment, copies of digital assets are created on-demand. In the past, this often involved burning a copy of the digital asset on a CD and shipping it to the customer. Today, DC distribution typically involves customer downloads and storage on customers' storage devices. Digital assets include application programs, mobile apps, e-books. Some business research firms also distribute their research papers via digital downloads.

Electronic Data Interchange (EDI)

Historically, EDI systems have been supporting the fulfillment process longer than most of the other fulfillment process automation solutions and technologies. EDI is the electronic exchange of standardized business documents between the computer systems of two companies and historically, EDI was the first B2B (business-to-business) e-commerce system.

Manufacturing/Production Automation

Historically, the manufacturing/production process has been supported by materials requirements planning (MRP), materials resources planning (MRP II), and ERP systems. Industry 4.0 provides insights into how manufacturing/production automation is expected to evolve in the years ahead.

When the Decision is Make ...

If no suitable software packages are available, the only option may be to build the software. Like purchase decisions, there are several questions that have to be answered, including: Does the organization have the technical and project management skills needed to develop the software? Is outsourcing some or all of the development work necessary? Is the application part of the organization's core competency?

Fulfillment Process Data Flow

Important data found in sales quotations includes a unique identifier, seller contact information, customer contact information, product list and details (descriptions, quantities, prices), total and itemized costs, tax details, delivery date, payment terms and conditions, and quotation expiration date. Each sales order includes a unique identifier (e.g. a sales order number) along with the product ID, product description/name, product attributes (e.g. weight, color, size), unit price, and order quantity for each product in the customer order. When a sales order is created in response to a sales quotation, much of this data flows from the sales quotation document to the sales order document.

ES and Decision Making

Improved decision-making often occurs in organizations that adopt enterprise systems. This stems from improved data/information flow, visibility, and transparency. Real time access to enterprise systems data and information facilitates data-driven decision-making and better informed decisions. Some organizations claim that the data/information improvements promote an organization-wide "single version of the truth" about business operations and performance.

ERP & SCM Integration Benefits

Improved efficiency across multiple departments and organizations within the supply chain Improved customer service and retention; greater chance of repeat business from existing customers Automation of workflow that reduces overhead and operational costs IT issues/problems are less likely to create bottlenecks or impede efficiency Quicker adaptation to changes in customer needs/requirements; quicker adaptation to business expansion and growth Products and services can be delivered to customers with greater speed, efficiency, and quality. ERP systems can be programmed to automatically generate purchase orders when inventory levels drop below specified minimums -- such automated purchasing can improve supply chain efficiency. ERP systems can track vendor performance through metrics such as cycle time, cost, and error rates and can be used to negotiate better terms or to justify switching vendors.

Finished Goods Warehouse Personnel

In MTS production, production requests typically originate in the organization's finished goods warehouse. Finished goods warehouse personnel monitor finished goods inventory levels and average daily sales rates relative to sales forecasts and/or historical demand levels. When their monitoring indicates that warehouse inventory levels may fall short of sales forecasts and actual customer demand, they either initiate production requests or communicate with manufacturing/production personnel responsible for creating production requests. Finished goods warehouse personnel are also responsible for receiving and putting away (storing) finished goods produced in the manufacturing/production area and for completing the pick-pack-ship activities in the fulfillment process.

OLAP Drill-down

In Table 12-1, we can see the sales by day and we can see that sales per day were relatively consistent and that more was sold in the South and West. However, Table 12-1, doesn't tell us anything about the relative sales of the various products, but we can pivot the table to see how the products did by removing days and substituting products. In Table 12-1, sales are broken out by product on the rows and regions on the columns to illustrate how sales are distributed over the regions. In Table 12-2, we can see that the South region prefers Strawberry Muesli, followed by Blueberry, and Nut Muesli and that the North region prefers Blueberry Muesli followed by Nut and Strawberry. This gives us the valuable information to plan inventory levels for the different regions.

Raw Materials Warehouse

In a manufacturing facility, the raw materials warehouse stores the raw materials and components used in (consumed by) the manufacturing/production process to make the finished goods that are sold to customers. Raw materials and components are acquired from suppliers via the company's procurement process. For accounting purposes, raw materials cost is recognized in inventory at the point of acquisition and is an asset on the company's balance sheet. Because of the costs associated with raw material inventory acquisition and management, it is important for raw materials warehouses to be organized and well-managed.

ES Ecosystem Software Vendors

In addition to the ES software vendors, there may be dozens (or hundreds) of other software vendors in the ecosystem. Many are designated as "partners" of the ES software vendor, often with some measure of the closeness the partnership with the ES vendor, such as the distinction of being a "gold" or "platinum" partner. Partners often have add-on or bolt-on software products that extend the functionality of the ES product or perform functions that the ES product does not perform very well.

ATO Production

In assemble-to-order (ATO) production, products are assembled from components when orders are received. Rapid fulfillment (fast delivery of ordered products), customization, and flexibility are competitive priorities for ATO production. In ATO production, production involves the use one or more base (standard) modules onto which options can be added according to specifications in the customer order. High-end personal computers (PCs) are examples of products produced using ATO production.

Cluster Analysis

In cluster analysis, analysts attempt group together entities that have common or similar characteristics. In this analysis, we look for groups of cases that are similar based on a set of characteristics. Harrah's used cluster analysis to segment their customers into the 100+ groups of customers along with their gambling characteristics.

Descriptive Analytics

In descriptive analytics, we answer the broad question, "what has happened?" These analysis tools allow the user to look at the past activity and identify what has occurred. These techniques report past results or cluster/segment data. This helps to identify what has happened, but does not predict what will happen in the future or prescribe what should be done. Examples of these techniques include: - Online analytical processing (OLAP) - Dashboards - Recency, frequency, money (RFM) analysis

ETO Production

In engineer-to-order (ETO) production, products are designed from scratch and are subsequently manufactured and delivered to a customer. The receipt of a customer order triggers the design activity. Designing the product may consume many engineering hours and may involve significant collaboration with the customer. This approach is used for very low volume and on-off products, such as a Mars rover.

Porter's Value Chain: Summarized

In essence, Porter is saying that competitive advantage can be achieved when an organization adopts an appropriate competitive strategy in response to competitive forces within its industry and subsequently configures its primary and support value chain activities to ensure that they align with the competitive strategy. Sustainable competitive advantage relies on the alignment of value chain activities with the competitive strategy. Porter's Value Chain Model helps to tie open systems (discussed in Chapter 2) and competitive strategy (discussed in Chapter 3) concepts to an organization's daily operations (primary and support activities. It also serves as a useful bridge for understanding business processes, many of which are best understood within the context of the value chain activities that they support.

Procurement Process Identifiers

In many organizations, procurement is referred to as the "procure-to-pay" process or cycle. Other organizations use "requisition-to-pay" to describe their procurement processes. The "procure-to-pay" process is more likely to include both strategic and operational procurement activities, while "requisition-to-pay" is more likely to be limited to operational procurement activities.

Fulfillment Process Overview

In many organizations, the fulfillment process is a core business process that provides value to customers via the delivery of goods/services that they need. It is a process that most organizations strive to do correctly and efficiently because it directly interfaces with customers and affects customer perceptions of the organization and their willingness to continue to buy products or services from the organization. The fulfillment process maps most directly to the outbound logistics value chain activity. However, it also is related to the sales and marketing activity in the value chain.

Regression Analysis

In regression analysis, the goal is to find an equation that best describes the effect on a dependent variable of a set of independent variables. The business objective is to be able to predict the dependent variable based on the values of the independent variables. An example might be to predict sales based on the household income of the customer.

Kanban

In software development, Kanban is used to visualize work to be done and to manage work in progress. A Kanban Board summarizes all the tasks that the development team should be focusing on along with their status. When a task is completed by the development team, it is removed from the Kanban Board, and new work is added.

Major ERP Software Vendors

In terms of market share, the top ERP software vendors include: SAP Oracle Infor Microsoft Epicor

ES Adoption Evolution

In the 1980s and 1990s, ES adoption was primarily occurred large organizations. -This was due, in part, to the cost of the software and the infrastructure needed to run it. Enterprise system adoption among small and medium size enterprises (SME) became more widespread during the 2000s and 2010s after the introduction of less expensive cloud-based enterprise systems software products. Today, smaller businesses adopt enterprise systems for many of the same reasons as large corporations: to gain company-wide access to business knowledge, increase employee productivity and minimize the duplication of company data. Organizations of all sizes often realize improved teamwork support, improved responsiveness to the marketplace, increased work quality, and greater employee collaboration.

Business Understanding

In the business understanding phase, the BI analyst asks a question to be solved by analytic analysis. To properly ask the question, the analyst must understand the business and the business issue and/or must have access to domain experts who do understand the business and the issue. Business understanding is critical to properly understand the data, how it is interrelated, and what it means in the business.

Extraction

In the data preparation phase of a CRISP-DM project, we then take data from its initial location in order to prepare it for analysis -- this is referred to as extraction. This data can come from internal sources, for example, the databases used in the transaction systems of the organization. In this case, queries can be written to go against the database and produce a file of the desired information. Data can also be purchased from external sources -- for example, food manufacturers often purchase POS data from grocery store chains. Public databases can be utilized. Once extracted, these data are usually formatted in the form of a relational database and queries may be used to produce desired information.

Data Preparation

In the data preparation phase, we extract, transform, and load (ETL) the data. Extract means to take the data from its source; we may not need all the records or all the fields in each record so only those records or fields needed are extracted. Transform refers to converting the data from the source into the form needed for analysis; missing data are populated with default values, invalid data are corrected, and too fine data are summarized -- if we are using data from multiple data sources, it must be combined into a single dataset. Once it is transformed (prepared), the data are loaded into a dataset to be used by the analysis tools. At this point, the total dataset is often partitioned into modeling and validation datasets. The modeling dataset will be used in the modeling phase to create the model, while the validation dataset will be used in the evaluation phase to determine if the model is accurate.

Data Understanding

In the data understanding phase, we identify and evaluate the data that exists for us to determine an answer to our question(s). We examine internal and external data sources. We look at each data source and determine its suitability to help us to answer the question. Multiple data sources may be needed to arrive at an answer. To truly understand the data, we have to understand the contents of each field in the data source, its format, how often it is updated and many other characteristics. Data sources can include in-house systems such as an ERP system. Data sources may also include data from governmental bodies such as Federal Government Census data, voter registration and voting records data, or data purchased from others such as point-of-scale (POS) data from retail stores. It can also include nondigital data such as hand-written notes. This phase of a CRISP-DM project may account for 50% to 80% of total project cost.

Evaluation

In the evaluation phase, we determine if the model generated provides valid answers to our questions. The evaluation takes two different approaches. -The first approach evaluates if the process for developing the model was appropriate -- we verify if sampling was done correctly and the analysis routines were properly executed. -The second approach validates the results; this is done through a process of using validation datasets to test the model. The objective is to determine if the model returns similar results when processed using validation datasets.

MTO Production

In the make-to-order (MTO) production strategy, the production process is triggered by the receipt of a customer-order. This strategy is best suited for low volume, high-cost (and high profit margin) situations where products are custom-produced to customer specification. Products are not produced until confirmed orders are received. Flexibility and customization are key competitive priorities for MTO production. Examples of products produced by MTO production include high-end, specialized medical equipment and aircraft.

Types of Analytics

In the modeling phase of the BI process, there are a number of different analytical techniques that can be used to examine the data. The objective of using these tools is to identify patterns in the data that can be used to guide decision-making. There are three broad categories of tools that can be used: -descriptive analytics -predictive analytics -prescriptive analytics

Modeling

In the modeling phase, different analytical techniques are applied to arrive at a model of the data. The object of data model is to provide a way to answer our questions. For example, if our question is, "what were the characteristics of the customers that most purchased product X?", the resulting model might be a decision tree that illustrates the different characteristics and their propensity to buy product X. At this stage of a CRISP-DM project, it may be determined that the data are insufficiently or improperly prepared, in which case, we return to the data preparation stage to revise the data used for the analysis.

Evolution of Information Assets

In the past, information assets had to be contained in physical assets -- this restricted the availability of the information asset to the availability of physical asset. In the past, information assets had to be contained in physical assets -- this restricted the availability of the information asset to the availability of physical asset. However, when written as a book, the cost to produce and copy has come down -- this makes it much easier to disseminate to many people. And, with a printing press, you can make many copies. Television and radio made it possible to send information to many people and to have more dynamic if one way interaction. With the internet, we now have the capability to interact with many people over great distances with great content for next to zero cost.

Procurement Instance-level Information

In the procurement process, instance-level information includes the information associated with an individual purchase order. For example, the purchasing organization may want information/answers that address questions such as: Has the vendor received the purchase order? Has the vendor shipped the goods/materials specified in the purchase order? Do quantities shipped match the quantities in the PO? Are there any backorders? Has the vendor sent invoice for goods/materials shipped in response to the PO? Has the vendor received payment for the invoice associated with the PO?

Direct to Consumer

In this model, the business does business directly with consumers. B2C and B2B sell-side exchanges are examples. In the direct sales model, the distributor and dealer are disintermediated and the manufacturer sells directly to the customer. The benefits are that the manufacturer owns the customer relationship and receives the direct information about customer desires. Producers can build to orders to precisely what the customer wants and can ship directly. Because of the disintermediation, producers can sell at lower prices. Because of the disintermediation, producers can sell at lower prices.

Full Service Provider

In this model, the company attempts to provide total coverage of customer needs -- a one-stop shopping center for customers looking for a certain kind of item. As shown in figure 11-8, the full service provider has relationships with a number of suppliers from which it purchases its goods and then sells them to customers. It may also provide a marketplace for suppliers and customers to interact. Customers purchase through a single shopping basket products from all the suppliers whether owned by the company or from a third party. Keys to success include ensuring a strong relationship with the customer. Because the full-service provider owns the relationship and the data with the customer, it can follow the trends of demand and tailor its offerings accordingly. To be a one-stop-shop, it needs to have a large variety of products, one approaching a complete list of everything available in that category.

Navigators

In this model, the company provides consolidation/aggregation/connections between groups of people, websites and companies. These companies can provide such functions as search, price, sale, fulfillment, surveillance and enforcement. The classic example of this category is eBay. Where you can search for and find items to buy, bid or purchase the items establishing the price, it provides a way to complete the transaction through its ally PayPal and it provides fulfillment through the capability to print shipping labels.. eBay makes its money through the listing, transaction and other fees that it charges the sellers.

Big Data

Increasing information flow in all aspects of work has resulted in an increasing amount of information available for analysis. Datasets have accordingly become much larger often growing over a petabyte in size: these large datasets have been termed Big Data. Big Data is determined by its volume, when it exceeds a petabyte in size; its velocity, the rate at which it is being generated; and by its variety, when it comes in many forms: structured & unstructured, free-form text, bitstream, clickstream, audio, and video. Big Data's volume, velocity, and variety are all increasing. Big Data is nearly impossible to handle using traditional forms of data management such as relational databases difficult and this has led to the emergence of new technologies to handle Big Data.

Industry 4.0

Industry 4.0 is described as the next phase of the digitization of manufacturing. As Figure 10-21 illustrates, several factors are contributing to Industry 4.0 including: Increases in data volumes, and computational power Increasing connectivity including the Internet of things (IOT) Advances in analytics and business-intelligence (BI) capabilities, New forms of human-machine interaction, including touch interfaces and augmented-reality systems, Improvements in transferring digital instructions to the physical world, such as advanced robotics and 3-D printing, and Advances in machine learning, machine-to-machine (M2M) communications, and artificial intelligence.

Information Assets

Information Assets are goods that are made up of information or data. For example, the content of an encyclopedia or book, Google results or bank account information are information assets in that they provide information to us. Information assets are very different from physical assets such as a machine or a building.

Instance-Level Information in the Production Process

Information about the status of a particular production order enables the organization to address customer questions such as: Has the production order been approved? Has production been scheduled? Have the ordered products been produced

Information Economics

Information and Information products are much different from physical products. Information can be replicated, modified, sold and located in many more places than physical products can. Historically, information was confined in physical objects that limited what we can do with it, but now with the internet and other technologies, information is set free from physical limitations setting up the ability to provide it to more customers. We can now reach more customers with greater richness that we were before. This new capability has disrupted certain industries and created new ones.

Fulfillment Process Instance-Level Information

Information associated with a particular customer order enables the organization to answer questions such as: Has the order been received? Has the order been picked? Packed? Has the order shipped? Has the invoice been sent? Has payment for the order been received?

Process-Level Information for the Fulfillment Process

Information generated from the aggregation of iterations of the fulfillment process can be used to address questions such as: -What is the average time between order receipt and shipment? Is this average time increasing or decreasing over time? -Which customers place the most orders? What do they typically order? -Which products are ordered most often? Which products are ordered least often? -What is the average revenue for a customer order? On average, how much does it cost to fulfill a customer order? -Which customers have the best payment history? Which customers habitually make late payments?

SCM and IT

Information technology is used in a supply chain to create process and information linkages within and between supply chain entities. IT is often used to enhance supply chain visibility -the ability to see what is happening upstream and downstream in the supply chain. IT facilitates integrated supply chain planning and control including supply chain planning, demand/supply management, and collaborative product development. IT facilitates event monitoring, inventory visibility, and SCM business intelligence. IT also enables collaborative logistics and the creation of vendor-managed inventory (VMI) systems.

Process-Level Information for the Production Process

Information that can be aggregated from multiple production orders to identify opportunities to improve the process. Questions that can be addressed include: -What is the average time needed to produce each finished good? -What is the average time needed to complete each operation in the production of a finished good? -Which finished goods are produced most frequently? -What percentage of production orders are completed on time? What percentage are delayed? -What are the common causes of production delays?

Instance-Level Information

Instance-level information (information about the status of a production order) of the production process enables the organization to address customer questions such as: Has the production order been approved? Has production been scheduled? When will production take place? Have the ordered products been produced? When will the ordered products be delivered?

Instance Level Information

Instance-level information associated with a single order enables the organization to address customer questions such as: -Has the order been received? -Has the order shipped? -Has the invoice been sent? -Has payment for the order been received?

Instance Level Information in the Procurement Process

Instance-level information includes the information associated with an individual purchase order. Such as: Has the purchase order been received? Have the ordered goods been shipped? Do quantities received match the quantities ordered in the PO? Are there any backorders? Has the invoice been sent? Has the payment been received?

Business Process Information

Instance-level information is information related to a specific iteration of business process. -Examples include information related to a particular purchase, production, or customer order. Process-level information is aggregated from multiple process instances/iterations. -This enables the organization to address larger questions about the process, some of which may provide insight into how the process might be improved.

Inventory and Information Compromise

It represents a compromise between the information and inventory functions. For the "billboard" function you would want to maximize the amount of space to display many wares that were for sale. However, the inventory function seeks to minimize cost and hence reduce space. This compromise is everywhere when information is combined with physical assets. Fore example, a newspaper would like to provide more and more information however, it is limited for cost considerations to a certain number of pages. This compromise is known as the reach-richness tradeoff.

Privacy

James Moor has defined privacy as "An individual [has] privacy in a situation with regard to others if and only if in that situation, the individual [is] protected from intrusion, interference and information access by others." (Moor 2000.) This definition of privacy includes several elements: unwarranted intrusion, freedom from interference in one's decisions, one's ability to restrict access to and control the flow of one's personal information, which includes freedom from surveillance, being followed, tracked, watched, or intruded upon. A situation can refer to several things such as activities, relationships, or storage in a computer that can be declared private We must distinguish between situations which are naturally private and those that are normatively private. In naturally private situations, we are protected from access and interference from others by natural means. Normatively private situations are those where there is an expectation of privacy, for example, when in your home - these are often defined by laws and policies. These distinctions allow us to identify conditions required for having privacy and a right to privacy and therefore a loss of privacy and a violation of privacy.

Procurement Cost KPIs

KPIs for procurement process costs include: Total cost: This considers the total amount of procurement cost savings from one year to the next after controlling for changes in the volume of procured goods and services. This serves as a measure of procurement's contribution to the organization's financial success in terms of P&L. Cost avoidance: Costs savings realized by delaying an increase in supplier prices or similar mechanisms that result in procurement spending be less than it would have been. Pipeline cost reductions: Cost reductions realized from negotiated cost savings with suppliers. This may result from resourcing a good/service or supplier or from negotiated contract changes.

Fulfillment Process Data Flow

Key data flows in the fulfillment process include data about the goods/materials items included in customer orders. This include each item's product ID, product description/name, product attributes (e.g. weight, color, size), unit price, and order quantity. Much of this data also flows to the order's picking list, shipping document (packing list) and invoice.

Procurement Process KPIs

Key performance indicators (KPIs) are established by many organizations to analyze data related to procurement performance goals. KPIs for supplier performance quality include: Contract compliance: The extent to which the supplier complies with pricing and delivery agreements. Delivery time: Comparing actual delivery times to those quoted in the contract. This might consider the percentages of on-time, late, and early deliveries. Defect rate: This considers the percentage of defective goods received in supplier deliveries. This might be measured in faults per unit or defects per million. Procurement cycle time: This might measure the average time between PO submission and goods receipt or the time between PO submission and supplier payment.

Determining the Acquisition approach

Key questions: Are there existing packages? How well do they match our needs? Do we have the skills needed to implement the software? Do we have the skills needed to modify the software? Is in house custom development an option? Do we have the programming skills? Do we have custom development project management skills? Do we have the technical infrastructure needed to run the software? What upgrades or enhancements will be required? What external help is available to assist with software selection, modification, development, and implementation?

Lean Software Development

Lean software development is based on lean enterprise movement principles and practices. It emphasizes waste reduction and optimizing efficiency within the organization's value stream - the mechanisms that create customer value. Waste is eliminated by focusing work on the most valuable parts of the system, prioritizing them, and delivering them in small batches. Efficiency is emphasized by striving to eliminate bottlenecks and dependencies in the system and through the efficient use of team resources. Because lean believes that those closest to the work are best able to decide how it should be done, lean development teams have significant control over their work flow. Just-in-time lean philosophy is illustrated in fast development speeds and constructing unit tests as program code is written.

SAP ERP & Fulfillment

Like other ERP systems, SAP ERP provides end-to-end support for fulfillment process tasks and activities. It can be configured to support any organization's fulfillment process. Typically, an organization only uses a fraction of SAP ERP's potential breadth of support for the fulfillment process. Some companies may refer to fulfillment as the "order-to-cash" process and may only use SAP ERP to support fulfillment process tasks from the receipt of a customer order to the receipt of the customer payments. Other companies may refer to their fulfillment process and "inquiry-to-cash" because they also leverage SAP ERP capabilities to support pre-sales activities. In traditional SAP-speak, the bulk of the fulfillment process is supported by SAP ERP's Sales and Distribution (SD) module.

Software Development: Waterfall Approach

Like the SDLC, the traditional approach to in house software development can be described as a waterfall model. -The products of the work completed in one phase flow to the next phase. The three phase of traditional in house software development are: -Design Construction Testing

MRP II

MRP II is often described as a computer modelling technique for analyzing and controlling complicated manufacturing/production operations. MRP II facilitates the development of a detailed production schedule that considers machine and labor capacity, scheduling the production runs according to the arrival of materials. MRP II outputs include labor and machine schedules. Data about the cost of production, including machine time, labor time and materials used, and number of units produced, is passed from the MRP II system to the organization's accounting and finance systems.

MRP II Calculations

MRP II systems can predict the lead time and cost of every production component for any manufacturing condition. When a new order is received, MRP II can calculate how much production work will be needed, when the needed production can start, and when the ordered products can be delivered. In addition to production, MRP II systems also track customers, suppliers and accounting functions. MRP II systems also enable just-in-time (JIT) manufacturing; raw materials/components purchase orders and component assemblies can be made "Just in Time". The effects of new orders, changes in production or machine capacity, material shortages, changeover delays and other manufacturing disturbances can be easily calculated and tracked by MRP II systems.

MRP vs. MRP II

MRP software is included in MRP II systems; it is also found in today's ERP systems. By the 1980s, manufacturers began seeking production planning and inventory management solutions that could also forecast inventory requirements and integrate with their accounting systems. Manufacturing Resources Planning (MRP II) systems added such functionality to all the capabilities offered by MRP.

Maintenance Personnel

Maintenance personnel are the subset of manufacturing/production personnel who are responsible for changeovers between production runs and the maintenance of manufacturing equipment. Changeovers include production line tear downs and set ups during which the equipment and/or production line configuration needed to produce one product is re-configured to produce the next.

Major CRM Software Vendors

Major CRM software vendors include: Salesforce Oracle SAP Adobe Systems Microsoft.

Additional ES Ecosystem Components

Major ES vendors often create education partnerships with colleges and universities to facilitate the adoption and use of ES software in university-level courses. One of the most extensive and successful education partnership programs has been established by SAP; it is called the SAP University Alliances (UA). In 2017, the SAP UA included more than 3100 institutions in 110 different countries. The goals of the UA include exposing students to current versions of SAP products and promoting the integration of SAP software into degree curricula. SAP also has created an organized network of user groups within its ecosystem. In North America, the user group is called ASUG (Americas SAP User Group). ASUG chapter members tend to be clustered around major cities, but numerous chapters are state-wide or multi-state. ASUG meetings are typically held quarterly at SAP customer venues. These are usually day-long events that include presentations by SAP ecosystem members (customers, consultancies, and partners). SAP encourages ASUG chapters to embrace SAP UA institutions in their region and to invite students to their meetings to network with SAP customers, partners, and consultancies.

SCM Software Vendors

Major SCM software vendors include: SAP Oracle JDA Software Manhattan Associates Epicor IBM.

Enterprise System Ecosystems

Major enterprise systems vendors, including SAP, Oracle, and Microsoft develop extensive ecosystems around their products. These help establish market leadership. Ecosystems are also developed to lock in existing customers and attract new ones. An enterprise system ecosystem is comprised of three major parties: software vendors, consultancies and adopting organizations (ES software customers). These parties work closely with one another to achieve common goals, such as improving the operating performance of the enterprise ES software adopter.

Which Acquisition Approach Offers the Least Risk at the Lowest Cost?

Make versus Buy It is typically less risky and expensive to purchase a software package, but several questions should be considered. Are packages available that provide at least 75% of the needed functionality? Do we have the technical skills to modify and implement the package? Do we have the infrastructure needed to operate the software? How much will it cost to implement the software package?

MTO Fulfillment

Make-to-order fulfillment is used by companies that produce products with a standard design, but allow aspects of the final product to be customized by customer specifications. This fulfillment strategy is used in high-cost, low-volume industries that manufacture specialized products that meet very specific customer requirements; for example, companies that build high-end aircraft or automobiles MTO is sometimes called build-to-order (BTO) fulfillment because changes are made to the standard design in responses to customer orders. Significant collaboration between suppliers and customers is needed for this strategy to be successful. Extensive customization to the standard design can cause variability in product completion time and expense. Customers who place orders may have to wait weeks, months, or years before the product they ordered is assembled and delivered.

Primary Activities

Primary activities have an immediate effect on the production, maintenance, sales, and support of the products/services that the organization provides to market. In Porter's model, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Service are primary activities. Inbound Logistics encompasses the activities associated with the inbound movement of materials, parts (components), and/or finished goods from suppliers to manufacturing or assembly facilities, warehouses, or retail stores. Essentially, these include all processes involved in receiving, internal distribution, and storing of the raw materials or basic ingredients of a product or service. Operations is concerned with managing the process that converts inputs (e.g. raw materials, energy, labor) into outputs (products and/or services). In a manufacturing organization, operations (aka production) includes all the activities that convert inputs into semi-finished or finished products. Outbound Logistics includes the activities associated with storing and moving finished products/services from the end of the production line to end users. Essentially, outbound logistics includes all the activities associated with delivering products and services to customers including storage, distribution, and transport activities. Marketing and Sales include the activities associated with selling a product or service to customers. Essentially, these include all processes associated making prospective customers aware of products/service and managing relationships with customers. Service encompasses the activities associated with ensuring the product/service works effectively for the buyer after it is sold and delivered. This encompasses the activities required to maintain the value of the products and/or services that customers buy from the organization.

BPM Design & Modeling

Process design includes the documentation of existing ("as-is") processes using process narratives, process flowcharts, data flow diagrams, and BPMN diagrams. -It also involves the design of "to-be" processes to improve or replace existing processes. -Proposed process improvements target workflow, regulatory, market, or other competitive challenges that the organization faces. Modeling activities take process designs and apply combinations of variables (such as cost changes) to determine how the proposed process might operate under different conditions. -It also typically involves running "what-if" analyses on the proposed processes to determine how the process might operate.

Process Manufacturing

Process manufacturing is the manufacturing/production of finished goods by combining supplies and ingredients according to formulas or recipes. Examples of process manufacturing goods include food, beverages, gasoline, pharmaceuticals, plastics, and chemicals. Breweries, chemical plants, and oil refineries are examples of process manufacturing facilities.

BPM Process Optimization

Process optimization activities involve the analysis of process performance data/information to identify real or potential bottlenecks, cost-saving, opportunities, and process improvement opportunities. It also involves leveraging the results of these analyses to make changes to the process design to bring actual process performance closer to ideal performance. Process optimization outcomes may result in changes to the process design, which, in turn, will result in another round of process modeling, execution, monitoring and optimization activities. The iterative nature of BPM activities illustrates that BPM is concerned with continual process improvement, which, over time, should help develop sustainably competitive business processes.

Process-Centered Organizations

Process-centered organization (PCO) structures have emerged as an alternative to traditional functional and product-oriented organization structures installed by organizations during the Industrial Age. PCO structures align organization structures with a business's value-adding processes. In process-centered organizations, employees are organized into multidisciplinary teams whose goals are focused on managing end-to-end tasks/activities of business processes that deliver value to customers.

Process-Level Information

Process-level information aggregated from multiple production orders can be used to identify manufacturing/production process patterns as well as opportunities to improve the process. It enables to the organizations to address questions such as: What is the average time needed to produce each finished good? What is the average time needed to complete each operation in the production of a finished good? Which finished goods are produced most frequently? What is the average quantity of a production order for each finished good? What is the first-time pass rate for each product? What is the average re-work percentage? What is the average scrap rate? What percentage of production orders are completed on time? What percentage are delayed? What are the common causes of production delays? What is the average daily capacity utilization?

Process-level Information

Process-level information is information aggregated from multiple process instances/iterations to address larger issues or provide insights for process improvement. Examples of questions that can be addressed from process-level information about the procurement process include: What is average time from sending a PO to goods receipt? What is the average time from PO submission to goods receipt per vendor? What is the average time from PO submission to goods receipt per good/material? Which vendors consistently deliver on time? Which vendors habitually deliver late? What goods/materials to we order most often? Which vendors do we buy from most often?

Process Level Information

Process-level information that can be generated from the aggregation of iterations of the fulfillment process include: -What is the average time between order receipt and shipment? Is this average time increasing or decreasing over time? -Which customers place the most orders? What do they typically order? -Which products are ordered most often? Which products are ordered least often? -What is the average revenue per customer order? On average, how much does it cost to fulfill a customer order? -Which customers have the best payment history? Which customers habitually make late payments? -Which products have the lowest average order-to-shipment times? -Which products have the highest average order-to-shipment times? The answers to process-level questions provide insights into how the fulfillment process might be improved.

Supply Management

Procurement is often a part of an organization's supply management function The supply management function encompasses the activities associated with identifying, acquiring and managing the products and/or resources needed to run the organization including physical goods, information, services, and other needed resources. Inbound logistics, procurement, and materials management are key aspects of an organization's supply management function. Procurement is also widely viewed as a form of business-to-business (B2B) commerce because it involves the process of buying goods and services from another company

Procurement vs. Purchasing

Procurement is the overarching function that includes the activities and processes to acquire needed goods and services. Procurement is broader in scope than purchasing which includes the activities used by the organization to order and receive goods and services. Purchasing is the process used by the organization to order goods and typically includes activities for requesting goods, request approvals, purchase order creation, and receipt of ordered goods. Procurement goes beyond purchasing by encompassing the establishment of fundamental requirements for goods and services, and sourcing activities such strategic vetting, vendor selection, establishing payment terms, and contract negotiation.

Manufacturing/Production Personnel

Production authorization is performed by manufacturing/production personnel (aka operations personnel). Manufacturing/production personnel are also responsible for production scheduling. Authorization and scheduling often involve prioritizing production requests and identifying the best sequence in which to produce the requested products. When the manufacturer stores finished goods in multiple warehouses, production requests for the same product from two or more warehouses may be combined into a single production order. When production is authorized, a production order (run) is placed in the queue of scheduled production orders.

Construction Phase

Program code is written Any needed hardware is acquired and installed The database is designed Conversion programs - programs that extract data from systems being replaced for movement to the new system - are written and run Routines for manually loading data into the new system are developed

Work system Implementation Process

Project Management Designate the Work System Developing the Technology Implementing the Work System

PMI has produced ________ _______________________ ______ __ _________________

Project Management of Body of Knowledge(PMBOK)

Chapter 5 Summary

Project management is used throughout systems acquisition to ensure that the system is acquired in a timely and cost effective manner. System design and requirements analysis precedes systems acquisition. Acquired software may be vendor packages (modified or not), developed in house (with or without external help), or outsourced development. In house custom development may follow the traditional waterfall model or agile and/or lean methodologies. Thorough software testing includes unit, systems, stress, and acceptance testing. System implementation approaches include plunge (Big Bang), pilot, phased, and parallel implementation.

Process-Level Information for the Procurement Process

Questions that can be addressed about the procurement process from process-level information include: What is average time from sending a PO to goods receipt? What is the average time from PO submission to goods receipt per vendor? What is the average time from PO submission to goods receipt per good/material? Which vendors consistently deliver on time? Which vendors habitually deliver late? What goods/materials to we order most often? Which vendors do we buy from most often?

RFM Analysis

RFM is a method of analyzing and classifying customers based on their historical purchasing patterns that considers how recently (R) a customer has purchased, how frequently they have purchased (F), and how much money they have spent (M). This enables organizations to classify their customers in terms of these three characteristics in order to make decisions about how to relate to them. If we wanted to know how to work with various contributors to a nonprofit for an upcoming promotion, we need information on the recency of donation, frequency of donation, and total dollar amount of donation. We extract Information on each donor's contributions from the data source and then prepare the data by each donor's date of the most recent donation, computing the number of donations over the time period, and finally summing up the total amount of donations. We begin the analysis by classifying the customers' recency of donation. The dataset is sorted based on date of last purchase and then divided into five sections. The most recent 20% of donors a R receive a score of 1 then next most recent 20% an R score of 2 down to the least recent 20% an R score of 5. Then we analyze the frequency of purchase. We resort the dataset based on number of contributions in the last year. Then we divide the dataset into five sections based on frequency of purchasing. The 20% of donors with the most donations receive an F score of 1 then next 20% an F score of 2 down to the least recent 20% an F score of 5. Finally, the data set is sorted again and the divided into five sections based on total volume of money donated. The highest volume 20% of donors receive an M score of 1 then the next highest volume 20% an M score of 2 down to the lowest 20% an M score of 5. After all three actions are taken, you arrive at the format as given in Table 12-4.

RFID Tags

Radio frequency identification (RFID) tags are being increasing affixed to items stored in and shipped from warehouses. These have dramatically improved inventory counting speeds and goods movement tracking. As illustrated in Figure 9-22, RFIDs are increasing affixed to packed boxes. This helps shippers verify instantly whether all the items needed to fulfill a customer order have been loaded into a delivery vehicle.

Reach and Richness

Reach refers to how many people you can share information with. Richness refers to the quality of the information provided to the viewer of the information. When you use physical assets to hold information such as in the Rosetta stone, a newspaper or a grocery store shelf, you must compromise richness to get reach and vice versa.

Order Fulfillment Tasks and Activities

Receive - Process- Pick- Pack - Inventory Management -Ship

Repetitive Manufacturing

Repetitive manufacturing is a type of mass production that makes high numbers of identical units in a continuous flow. This is used to manufacture products that have a continuous and steady demand, such as food products and medical supplies. A company may use repetitive manufacturing to produce its own products or to produce products for other companies. When producers are confident that their products will always be in demand, they can invest in manufacturing equipment that is very fast and highly efficient. Figure 10-4 illustrates repetitive manufacturing in a commercial brewery.

Retailers and E-tailers

Retail companies operate in one or more of three distinct modes. Bricks-and-mortar, operating real life store fronts without a web presence Bricks-and-clicks, operating both real life store fronts and having a web presence Pure-play, having no real-life stores and operating only on the internet. Walmart is an example of a bricks-and-clicks approach, operating stores all over the world along with a web presence. Amazon.com has traditionally been a pure-play competitor having no real-life stores, but that may be changing.

Robotic Assembly

Robots are increasingly being used for product assembly. In automobile manufacturing, robotic assembly of components such as water pumps, gearboxes, and engines has become commonplace. Assembly robots are also used to build computers, household appliances, consumer electronics, and medical devices. Many of these products have been engineered with modular designs that are conducive to robotic assembly. Figure 10-19 illustrates the use of assembly robots to manufacture 3D printers.

CRM & ERP Integration

Robust CRM and ERP integration enables organizations to streamline their sales-oriented. business processes. Providing visibility into both frontend (CRM) and backend (ERP) systems can lead to business process simplification and increased productivity. Some ES vendors (including SAP and Oracle) facilitate CRM and ERP integration via including both CRM and ERP solutions as part of the same suite of ES software. Other ES vendors forge partnerships with one another to ensure that their CRM and ERP products can communicate and share data. A key question with CRM and ERP systems is which system will handle customer billing.

Production and SAP ERP

SAP ERP has been adopted by a wide-range of manufacturers who are often recognized as leaders within their industries. SAP ERP supports both discrete and process manufacturing; it can also support repetitive manufacturing. The data/information in a SAP ERP BOM can be quite extensive and detailed. In a SAP ERP BOM, each part/component has a unique identifier (ID) in the ERP database that is associated with a vendor/supplier and general ledger entry so that every part/component used in the production process can be accounted for. In process manufacturing, BOMs are essentially recipes for making a unit of the finished product. In MTS production, planned orders may be automatically generated when the MRP software is executed; the MRP software may also generate purchase requisitions for raw materials/components quantities that are not currently on hand to produce planned orders.

SCM Software

SCM software includes: -Demand planning software uses statistical tools and forecasting techniques to generate product and material demand forecasts. -Supply chain planning (SCP) software uses sophisticated mathematical algorithms to improve material/product flow and overall efficiency. -Supply chain execution (SCE) software automates materials and product handoffs among supply chain entities. Other SCM software includes warehouse management systems (WMS), global inventory management systems, transportation planning software, & distribution management software.

SRM & ERP Integration

SRM and ERP systems can be integrated in various ways to support the procure-to-pay process (see Figure 7-19). When a SRM user selects a vendor's product from the web catalog, places it in the shopping cart, and chooses "buy", one of two things may happen. In one scenario, the shopping cart item is converted to a purchase requisition in the ERP system and the ERP system assumes responsibility for the remaining steps in the procurement process. In the second scenario, a purchase order is created for the shopping cart item within the SRM system and the PO is replicated in the ERP system. In either scenario, the responsibility for creating the other major documents in the procurement process can be the responsibility of either ERP or SRM users.

SRM Software Categories

SRM software categories include: Sourcing software helps and organization find, evaluate, and engage suppliers. Supplier management software enables an organization to centrally manage and control supplier engagements and to improve buyer-vendor risk management. Electronic procurement software enables organizations to aggregate their suppliers' Web catalogs; it also facilitates electronic invoicing and payment activities. Operational procurement software facilitates the creation, verification, approval, transmission, and confirmation of purchase orders; it is also used to maintain adequate inventory levels and to execute inventory-related transactions. Spend and performance analysis software is used to analyze procurement expenditure data in order to identify opportunities to decrease procurement costs, improve efficiency, and monitor vendor performance. It also helps an organization gain insight into what they are buying and from whom, and to determine the extent to which expected savings from sourcing efforts are being realized.

SRM Software

SRM software includes the use of digital tools to manage relationships between buyers and suppliers and service contractors. SRM software grew out of earlier accounting applications that focused on tracking suppliers' expenses and contracts. SRM software is often in conjunction with SCM software because SCM focuses on relationships with upstream supply chain entities. Purchasing/buyer personnel use SRM software to delineate resupply strategies, administer contracts, assess supplier performance, and establish strategic supplier relationships. SRM software typically supports alerts/notifications for event monitoring/management and to minimize inventory shortages or excesses. SRM collaborative planning tools enable purchasing and/or buyer managers to exchange forecasts with vendors and to maintain historical buyer-supplier data. `

Fulfillment Process Actors

Sales and marketing personnel are responsible for responding to customer inquiries, creating sales quotations, receiving and processing customer orders, entering order details into information systems, and transmitting customer order details to personnel in the finished goods warehouse. Warehouse personnel are responsible for receiving sales orders from the sales and marketing function, order picking, packing, and readying the order for shipment and delivery. Accounting personnel involved with the fulfillment process are responsible for customer billing and payment processing.

Sales Force Automation Systems

Sales force automation systems include: Opportunity management systems automate the tasks/activities associated with identifying/finding new customers for future sales. Contact management systems maintain customer and prospective customer contact information. Sales management systems automate each phase/step in the sales process, including generating sales quotations and processing customer orders; these also help sales representatives organize and coordinate their accounts.

Major CRM Software Vendors

Salesforce Oracle SAP Adobe Systems Microsoft

Production Process Metrics

Schedule attainment (or production attainment) measures actual production as a percentage of the scheduled production. Availability is the ratio of operating time to planned production time. Operating time is planned production time minus downtime (any period of production stoppage). First pass yield is percentage of products that are manufactured correctly and to specifications the first time, without scrap, re-run or rework. Overall yield is the percentage of products produced in a given time period that may, or may not, require re-work

Agile Scrum Methodology

Scrum is a lightweight project management framework for product development using one or more cross-functional, co-located, self-organizing teams that are four to nine in size. The teams are referred to as scrum development teams Each team is facilitated by a ScrumMaster who ensures that the team has everything it needs to succeed (resources, training, isolation from outside interference, etc.) Product features are collected in a product backlog that lists the system's potential features, functions or uses, or needed bug-fixes. The product backlog is prioritized by the product owner

B2B Alternatives

Sell-side exchanges operate very similarly to B2C type storefronts. Business customers come to the site, select and purchase goods. They may use features such as auctions and catalogs. Buy-side exchanges facilitate the procurement functions or organizations. Here the company offers to procure various items and potential suppliers may sell to them. Features include reverse auctions, in which companies bid to provide items, the lowest price winning. Electronic Exchanges, facilitate a marketplace where many buyers and sellers can interact to sell and procure items. In B2B, many of the relationships are customized between buyers and sellers. For example, a make-to-order manufacturer may agree to purchase as certain amount of material from a supplier. Such customized B2B relationships are known as private exchanges.

Deconstruction of Traditional Value Propositions

Separating information and physical assets has contributed to disintermediation, the elimination of the middle man. Some journalists have created their websites or joined others in new sites that provide their journalistic information that is not coupled to a newspaper. Hence, the value proposition of the newspaper has been blown up. Newspapers have been facing increasing revenue decreases as advertisers spend their money elsewhere and readers decline to subscribe. Some newspapers have repositioned themselves as content providers and use their edited new services to provide content to others or as a for pay option to readers, e.g. WSJ.com.

Web 1.0 Business Models

Several e-commerce business models emerged during Web 1.0 that are still with us today. These include: Direct to consumer Full service provider Whole of the enterprise Navigators Virtual community Content provider

ERP Systems & Procurement

Since first introduced, ERP systems have offered strong support for procurement processes. Over time, they have evolved to interact with other enterprise systems (including SCM and SRM) and procurement automation systems (such as EDI) to improve procurement process efficiency and effectiveness. Procurement process data/information generated and saved by ERP systems is often used to create procurement process dashboards and analytics that can contribute to continuous process improvement.

Keys to Success in Virtual Communities

Since the community owner is paid for by advertising, the community becomes more valuable as the community grows and interacts. It is important for the community owner to maintain the vibrancy of the community -- vibrancy is measured in terms of how the community is growing and how much interaction there is between the members. An example of a virtual community is Tidefans.com - a site for boosters and supporters of University of Alabama athletics, especially football.

Six Sigma

Six Sigma is a set of tools and techniques for organization-wide business process improvement that has been adopted by numerous organizations in a wide-range of industries. It strives to improve process output quality by minimizing variability in business and manufacturing processes, especially variability caused by defects in process outputs (products or services). By identifying and eliminating the causes of output defects, process output quality is increased and the process as a whole is improved.

Process Maturity & Lean Six Sigma

Six Sigma uses a set of quality-focused empirical statistical methods to drive process improvement. Within organizations who have adopted Six Sigma, process "maturity" is measured by a sigma rating that identifies the percentage of defect-free outputs. A process that achieves a six sigma rating is one in which 99.99966% of process iterations produce outputs that are defect-free. Six Sigma ideas have been combined with lean manufacturing to create a methodology named Lean Six Sigma. Numerous organizations use Lean Six Sigma to drive efficiency and organization-wide innovation within their business processes.

Customer Service & Social Media

Social Media Listening involves having employees listen and respond to comments on Facebook, Twitter and other social media sites. This provides the company with information about what customers are saying about their products. Responses from the company provide customers with a sense of community and enables the company to change its image from a faceless organization to one with which customers can have a relationship. Social Media Listening can also allow companies to take corrective action quickly. Monitoring social media looking for signs of dissatisfaction enable organizations to respond very quickly to customer complaints.

Social Networking

Social Networking is also enabled by social media. Creating a virtual community around a company, product, or service is not a trivial undertaking. While some of this can be done by means posts and pages in Facebook - getting customers to stay in the community and keeping the community vibrant often requires social networking. Social networking involves using social media to build social capital

Social Media and HRM

Social capital can also benefit HR processes. Finding and recruiting personnel can be a very tiresome and expensive process. Both employers and job seekers are increasing searching for one another online. Increasingly employers are placing the job listings on online sites and search social media for potential candidates such as such as Monster (www.Monster.com), CareerBuilder (www.careerbuilder.com) or aggregator sites such as ziprecruiter (www.ziprecruiter.com) which posts their jobs on many different jobsites. Employers have increasingly found that profiles on LinkedIn can provide a ready list of candidates for a position.

Social Capital

Social capital can be thought of as the bank of good will held by others about you or your organization that you can call upon to help you with your activities. You have social capital with each person that you are in contact with and with each interaction with them you either build up your bank of capital or spend some of your capital. Based on your interactions, you can have a large bank of capital or a negative balance. Since this balance is what you have to draw on when you need to access them for something that you need, it is important for you to build your social capital long in advance of your need. To build social capital you must first establish relationships and then build capital with those with whom you have relationships.

Social Media & Business

Social media applications allow sharing of information across a network of users. Examples include Facebook, LinkedIn, Twitter, Instagram and Pinterest. Growth in social media use has been enormous. Facebook has grown from 150 million users in 2008 to 1.15 billion users in 2013 to 1.8 billion in January 2017. Facebook is currently the most popular social media platform with 80% of online adults using it --this is compared to about 35% using Instagram, Pinterest, LinkedIn and Twitter.

Social Media CRM

Social media have had major impacts on both the marketing management and customer service management aspects of CRM. Social media marketing has emerged as an important component of marketing campaigns and in some campaigns, this overshadows traditional marketing channels (television, radio, and print media). Social media listening has emerged as an important aspect of customer service management; knowing what customers and prospective customers are saying about an organization's products and services on social media positions the organization to quickly identify and respond to customer service needs.

Purchase and Implement "vanilla"

Software is purchased from a software vendor and used "as-is" "Vanilla" means to use the software without modifying it This acquisition approach is feasible when the software matches the processes and activities in the work systems where it will be used This may also be used when it is acceptable to the organization to modify its work system processes and activities to align with the software

Business Process Decomposition

Some business processes are more complex than others. Complex business processes can be broken down into sub-processes. Each sub-process has its own trigger(s), sequence of tasks/activities, and outcomes.

ERP Vendor Selection Phases

Some organization's address the vendor selection questions summarized above within a systematic vendor selection process that includes the following phases: Research and requirements analysis Vendor comparison Request for proposals/quotations Technical validation Financial due diligence

ES & Business Transformation

Some organizations have purposely adopt and implement ERP systems and other ES to achieve dramatic improvements in productivity, efficiency, and process outputs. In essence, top managers of the organizations leverage ES to force the organization to make major or radical changes in business processes and operations that the organization might otherwise be unwilling or unable to make. This is essentially a strategic decision to make changes that top management thinks are necessary to ensure sustained competitiveness and survival. Because this is top-down organizational change that borders on being (or is) radical in nature, it typically stirs significant resistance among organizational employees. Such top-down, heavy-handed business transformation shares some of the goals of business process reengineering (BPR).

Robot Variety

Some robots are programmed to repeatedly carry out specific actions without variation and with high levels of accuracy. Such robots are likely to be found in repetitive manufacturing facilities. The actions that these robots perform are determined by programmed routines that specify the sequence, direction, distance, acceleration, velocity, and deceleration of a series of coordinated motions. Other robots are much more flexible as to the orientation of the object on which they are working. In some instances, the robot must first determine the task that needs to be performed on the object before it begins working on it. Guidance for such flexible robots may be provided by visual sensors and machine vision sub-systems linked to computers or controllers. Artificial intelligence (AI) is increasingly used to support industrial robot flexibility.

Strategic Procurement

Strategic procurement includes the development of long-range plans for ensuring timely supply of critical goods and services. It also includes: The assessment of the organization's demand for a product or service, Establishing a strategy for acquiring needed goods and services, Supplier evaluation and selection, Contract negotiation, and Supplier integration These are summarized in Figure 8-2.

Supplier Relationship Management (SRM)

Supplier relationship management (SRM) is a comprehensive approach for managing an organization's engagement with organizations that supply the goods and services that it uses. The goal of SRM is to streamline the processes that connect an organization to its suppliers and to make those processes more effective. SRM includes procurement processes as well as a variety of related processes such as forging mutually beneficial strategic partnerships with specific suppliers. SRM involves separating suppliers into categories based on the value (or risks) that they can bring to the organization

SRM & Strategic Procurement

Supplier relationship management (SRM) systems are frequently described as strategic procurement systems because they focus on joint value creation and collaboration with a limited number of suppliers. SRM software helps procurement managers complete the activities summarized in Figure 8-2. It also helps organizations monitor supplier performance after strategic partnerships are formed. SRM systems help organizations reduce procurement costs and reduce supply disruption risks. SRM can help an organization become a "preferred" customer by its suppliers and reduce price volatility for the materials that it needs.

Support Activities

Support (secondary) activities assist the primary activities and make up the basis of the organization. In Porter's model, support activities include Firm Infrastructure, Human Resource Management, Technology Development, and Procurement. Firm Infrastructure encompasses the support activities that enable the organization to maintain its daily operations. Accounting, finance, legal, public relations, quality assurance, and both general and strategic management are examples of firm infrastructure activities that keep organizations operating on a day-to-day basis. Human Resource Management includes the support activities that develop the organization's workforce. Recruiting, hiring, training/developing, and compensating are examples of human resource management activities. Downsizing activities (dismissing or laying off) personnel are also examples of human resource management activities. Technology Development includes the activities associated with the internal and external development and optimization of the organization's products and/or services. IT, technological innovation, and the development of new products from new technologies are examples of technology development activities. This includes the support activities associated with the equipment, hardware, software, procedures, and technical knowledge used by the organization to transform inputs into outputs. Procurement activities are the support activities involved with the acquisition of goods and/or services from external sources. Procurement activities include establishing and managing relationships with suppliers and negotiating prices and purchasing contracts for the materials and resources consumed by the organization's operations/production processes.

ERP System Characteristics

The ability of an ERP system to integrate business functions and operations is illustrated in Figure 10-15. Today, to be considered a full-fledged ERP system, a software vendor's ERP product must be able to support manufacturing, human resources, accounting and finance, sales, purchasing, and inventory management processes. It must also be able to be able to serve as an integration point for an organization's SCM, CRM, and SRM systems. Because it can interface and interact with other enterprise systems, an ERP system is widely viewed as the heart of an organization's suite of enterprise applications.

Procurement Process Strategic Goals

The alignment of procurement and corporate strategy is a goal in many businesses. Improving the organization's competitive position within its industry is another strategic goal for procurement. Procurement can contribute to the organization's competitive strategy (e.g. cost leadership or differentiation). It can contribute to corporate strategy is by creating sustainable advantage within the industry. Strategic procurement can also help an organization reduce risk and improve supplier performance.

WMS Benefits

The benefits associated with adopting and using a WMS can include: -Reduced fulfillment time -Increased inventory accuracy -Improved customer service -Better utilization of warehouse space -Increased warehouse productivity -Reduced warehouse labor cost

Bill of Materials (BOM)

The bill of materials (BOM) document identifies the components (raw materials and sub-components) needed to produce a single unit of a finished good. The bill of materials for a finished good is used to identify the quantities of raw materials and sub-components needed to complete a production order. This is a very important input to the production process's issue raw materials task/activity.

EDI Documents

The buyer transmits its order to a supplier (seller) using the standard EDI procurement order (PO) document, the EDI 850 document. The supplier's computer system receives the customer (PO) and often acknowledges order receipt via EDI 855 (purchase order acknowledgment) document. It then hands off the PO content to the computer system(s) that the company uses to process and fulfill customer orders. When the order is picked, packed, and shipped, the supplier can send a standard EDI invoice document (the EDI 810 document) to the customer. The supplier may also send a standard EDI advance ship (shipping) notice (ASN) document to notify the buyer of impending deliveries. The ASN is like a packing list; the ASN is EDI document 856. Payments for EDI facilitated order fulfillment typically involves ACH (Automated Clearing House) transfers between buyer and seller bank accounts. In some instances, a buyer can initiate an ACH payment by sending an EDI 820 document to its bank.

EDI Evolution

The central idea of EDI has always been direct connections among buyer and vendor computer systems When EDI was first introduced, electronic documents were exchanged over telephone lines using modems or via point-to-point dedicated circuit that connected the buyer's computer system to the supplier's computer system. To reduce telecommunication costs, many organizations now use value-added networks (VANs) or virtual private network (VPN) connections to exchange EDI documents. Since the 2000s, the public Internet has become the dominant network for EDI connections among buyers and sellers.

Production, Procurement, & Fulfillment

The creation of a delivery document in the fulfillment process results in finished goods inventory reductions equal to the number products included in the customer delivery. These inventory reductions, may, in turn, trigger the creation of production requests (planned orders) to restore finished goods inventory depleted by customer orders. When a planned order is converted to a production order and scheduled for production, the quantities of raw materials/components needed to manufacture the specified product quantities are assigned to the production order. If available raw materials/components are insufficient, the production order will trigger the creation of purchase requisitions to ensure that raw materials/components inventory level will be sufficient to complete production.

Fulfillment Process Document Flow

The cross-functional nature of MTS fulfillment is evident in the flow of its key documents (see Figure 9-11. The green documents are generated by the sales function, the blue documents are generated by the accounting function, and the other documents are key documents in the finished goods warehouse. Other documents that may be part of a company's fulfillment process include customer inquiries, sales scheduling agreements, sales contracts, credit memos, and debit memos.

MRP Data

The data used by an MRP system includes: A forecast of the products that need to be produced in the next (few) month(s). Existing customer orders Existing purchase orders Existing production orders The bill of materials (BOM) of the materials/components required to produce each product The time required to manufacture products in the existing production schedule Existing raw materials/components inventory Existing finished goods inventory Planning factors such as reorder points and safety stocks

Web 1.0

The first phase of e-commerce was the recognition that sales transactions could be performed over the internet. This recognition created a wholly new direct sales channel for companies. Customers could self-service including finding and researching products and then purchasing those items over the internet. During this phase, various types of commerce became common that still exist today.

Fulfillment Process Names

The fulfillment process is a cross-functional process whose tasks/activities involve (at a minimum) the organization's sales, finished goods warehouse, and accounting functions. The fulfillment process is often called the order-to-cash process because it involves the tasks/activities associated with receiving customer orders, shipping ordered goods/materials, and processing customer payments. In some organizations, it is called the quotation-to-cash process because prospective customers are provided with quotations which specifies the unit prices for specific products for a specific time duration.

Warehouse Management Systems (WMS)

The fulfillment process tasks/activities that take place in warehouses is typically supported by warehouse management system software. A warehouse management system (WMS) is a software application that supports the day-to-day operations in a warehouse. WMS programs enable centralized management of tasks such as tracking inventory levels and stock locations. WMS software guides inventory receiving and put-away, optimizes order picking, packing, and shipping, and advises on inventory replenishment.

Sprints

The functionality of the product is delivered in a series of sprints. A sprint is a short development period (less than 1 month) in which a working, testable, product increment is delivered. The product own creates a sprint backlog by selecting items from the product backlog that can be completed within the sprint period. At the end of the sprint, an iteration review and retrospective is done. Stakeholders review the delivered functionality and make suggestions and identify corrections and/or additional functionality to add to the product backlog. The agile process is illustrated in Figures 5-6 and 5-7.

Production Process Goals and Measures

The goals, measures, and KPIs for a company's production process typically align with its production strategy; however, some commonalities exist. In companies that use MTS, MTO, and ATO, improving productivity, asset utilization, and efficiency are typically identified as production process goals. Manufacturing firms often measure the achievement of production execution, production cost, production quality, and inventory management goals. They often have KPIs for capacity utilization, production yield, overhead costs, machine efficiency, and production plan adherence. Production quality measures include scrap percentage, rework percentage, and inspection pass rates. Inventory management measures include inventory turns and inventory on hand.

Chapter 11 Summary

The internet technologies changed information economics and eliminated traditional compromises between reach and richness. With web applications, businesses can now offer a richer experience while reaching more customers. Web 1.0 brought new forms of e-commerce including B2C, B2B, C2C, and G2C. Online business models that emerged in Web 1.0 are still used today including direct-to-consumer, full-service provider, whole of the enterprise, navigator, virtual community, and content provider. Web 2.0 provides interactive capabilities to customers using techniques such as netcasting, mashups, reputation systems, wikis, and RSS feeds. It allows for user generated content to co-generate business for the organization. Social Media such as Facebook and Twitter, allow social interaction with customers and others; this facilitates marketing activities such as branding activities and viral marketing and market research. Social media are used in HRM to recruit and hire candidates. Social media also facilitates crowdsourcing and crowdfunding. Internet technology also enables collaboration between team members in distant locations and on different working schedules. Different technologies exists to support the various geographical and time proximities to enable teams to collaborate. The internet technologies provide a wide range of capabilities for 21st century business people to seek competitive advantage in their marketplaces. Internet technologies have become essential aspects of business that all business people need to understand.

MTS Production

The make-to-stock (MTS) production strategy is driven by finished goods inventory levels. Finished goods are stored in one or more warehouses until they are needed to fulfill customer orders. MTS is usually a "build-ahead" production approach in which production plans are based on sales forecasts and/or historical demand and production takes place before customer orders are received. In some instances, MTS production may be reactive to customer demand; if warehouse inventories fall below predefined levels, the production process may be triggered to bring inventories back to acceptable levels. Key competitive elements of this strategy are low-cost and consistent quality. Because it is designed to match production and inventory to consumer demand, the success of the MTS strategy is often determined by the accuracy of demand forecasts.

Production Strategies

The make-to-stock production strategy is driven by finished goods inventory levels. -Finished goods are stored in one or more warehouses until they are needed to fulfill customer orders. -When warehouse inventories fall below predefined levels, the production process is triggered to bring inventory back to acceptable levels. In the make-to-order production strategy, the production process is triggered by the receipt of a customer-order. -This strategy is best suited for low volume, high profit margin situations where products are custom-produced to customer specification.

A Customer Bill of Rights

The person or organization that provided the data owns the data and has the right to determine what is done with that data. This includes whether the data is used for any other purpose beyond facilitating a transaction. Data collected from nonprivate sources should be handled according to the reasonable expectation of privacy. The person or organization that holds another's data should delete any records on the request of the provider including any summarized information derived from that data. Companies hold data in trust for the owner and therefore must keep data secure from unauthorized disclosure. Companies and governments cannot use the information for invasion of privacy of the data creators.

Production Process Documents

The planned order is created by the production process's request production task/activity; it is a formal request for production that specifies what finished goods need to be produced and the quantity (number of units) that is needed. The production order document is created during the authorize production task/activity; it is a formal commitment to produce the specified quantity of finished goods by a specific date and/or time. The production order formally commits numerous resources, including time, raw materials, work centers, and production workers to the production of the finished goods specified in the production order.

Fulfillment Process Physical Flow

The primary physical flows within the fulfillment process include the movement of products/materials within the warehouse as part of the order picking, packing, and shipping tasks/activities. Picking involves the removal of items from warehouse storage locations to the area in which packing activities take place. Once packed, bundled items are moved out of the warehouse to delivery vehicles. Some companies own the delivery vehicles that are used to move ordered items to buyer locations. Others partner with logistics companies to handle customer deliveries.

Three-Way Match

The procedure used by accounting/personnel to reconcile the data/information in an invoice with the data/information in the purchase order and goods receipt document is called the three-way match. It is an internal, accounting control procedure used when processing a supplier. Its purpose is safeguard the organization's assets by avoiding making payments for incorrect or fraudulent invoices. The "three-way" refers to the three documents involved in the matching process: The invoice which received from the supplier. This becomes part of the organization's accounts payable when it is approved. The purchase order that sent to the supplier. The goods receipt document (receiving report) created by the organization after receiving the shipment of goods specified in the PO.

Chapter 8 Summary

The procurement process is found in virtually every organization. There are two forms of procurement: strategic and operational. Manufacturing organizations have two major types of procurement: direct and indirect. Procurement process KPIs for supplier performance quality and costs are frequently used. Procurement process actors include business unit personnel, purchasing personnel, warehouse personnel, and accounting personnel. The process's document flow includes purchase requisition, purchase order, goods receipt, vendor invoice, and invoice payment. The process's physical flow is the shipment of goods/materials from supplier to buyer. Key data/information flows include the descriptions, quantities and prices of goods/materials in purchase orders, shipments, and invoices. Instance-level information enables questions related to a specific purchase order to be answered. Process-level information enables the identification of ways/opportunities to improve the procurement process. Complicating issues include supply chain scope, legal issues, FOB points, payment terms, and returns. EDI, online marketplaces, VMI software, SRM systems, SCM systems, and ERP systems provide automated support for procurement process activities.

Procurement Process Overview

The procurement process is the sequence of activities used by an organization to obtain needed materials. Virtually every organization has a procurement process. The procurement process is associated with the inbound logistics component of Porter's value chain. Purchasing is an important aspect of the procurement process; purchasing is identified as a secondary activity within Porter's value chain model. There are three fundamental activities associated with an organization's procurement process: (1) ordering needed materials from suppliers; (2) receiving ordered materials; and (3) paying the supplier. In most organizations, these activities are carried out by actors in multiple departments or functions which means that procurement is a cross-functional business process.

Production Process

The production process includes the tasks/activities used by an organization to transform inputs (raw materials and/or components) into outputs (products and services) that are valued by customers. It is more complex than the procurement and fulfillment processes and it is typically integrated with both. The production process supports the operations activity in Porter's Value Chain model. Because it shares integration points with procurement and fulfillment, the production process can also be mapped to the inbound logistics, marketing and sales, and outbound logistics activities in the value chain.

Production Process Overview

The production process includes the tasks/activities used by an organization to transform inputs (raw materials and/or components) into outputs (products and services) that are valued by customers. It is more complex than procurement and fulfillment processes and it is integrated with both procurement and fulfillment in well-run businesses. Because the production process creates (produces) goods/services that are valued by customers, it is a core business process. The production process is best understood within the context of operations in Porter's Value Chain model.

Establishing Relationships

The purpose of establishing relationships is to identify those who have the resources that could potentially help you or your company in business and then form a relationship with them. You are found at the left side of the graph and you have relationships with A, B and C. B has a relationship with D and E. The dotted line is the boundary of your organization. If you want to access the expertise that person D or want to make sales calls on the organization in which D and E are in, you should first establish relationships with D and E.

Social Media Purposes

The purpose of social media is to build social relationships and communities of interest. Different social media platforms target different audiences. -For example, Facebook and Google + target general social networking across all individuals and organizations. -LinkedIn focuses on business networking. In the business world, social media can be used to perform many different functions in marketing and customer service.

CRISP-DM

The standard methodology for doing an analytic project is given by the cross-industry standard process for data mining (CRISP-DM). This is a public standard developed in 1996; it is industry-neutral and is the most widely used process for data mining. As shown in Figure 12-2, the CRISP-DM process has six iterative steps. -Business understanding -Data Understanding -data preparation -modeling -evaluation -deployment

Systems Development Life Cycle

The systems development life cycle (SDLC) is a well known approach for acquiring or developing work and information systems. The development/acquisition phases of the SDLC includes: system definition, requirements analysis, system design, system construction, testing,implementation The SDLC is a waterfall model because each phase is completed in sequence and is completed before the next one begins (see Figure 5-3).

Testing

The testing phase ensures that the system functions as specified and designed. As individual program models are completed, they are subject to unit testing to ensure that it functions correctly. After passing unit tests, program models are integrated into subsystems which in turn are integrated into the complete system. Then system testing takes place to ensure that all the pieces work together as they should. Conversion programs are also tested during system testing to ensure that data is correctly loaded. Acceptance testing involves user interaction with the system and its data to ensure that it meets their expectations.

Three-way match

The three-way match is an important accounting control within the procurement process. It reconciles (matches) Purchase Order (PO), Goods Receipt, and Invoice data. When the data in these documents align, payment to the vendor can be authorized. Essentially, when organization's Goods Receipt document verifies the receipt of the correct quantities of the goods ordered in the PO when vendor's Invoice specifies the correct quantities of the correct goods and correct prices, payment can be authorized.

ERP Implementation Strategies

The two most widely used ERP implementation strategies are "the Big Bang" ERP implementation strategy and the "phased- roll out" ERP implementation strategy. The Big Bang ERP implementation strategy involves rolling out the ERP system all at once. This strategy requires considerable pre-implementation preparation to ensure implementation success as well as a fall back plan. In the Phased Rollout ERP implementation strategy, the ERP system is rolled out in phases according to a pre-determined plan. Users are adapt to a series of smaller changes made over an extended time period. There can be module by module, business unit by business unit, or geographic location by geographic location. A third, less popular implementation option is the parallel adoption strategy. This involves running the new ERP system alongside the old system(s) that it is replacing for a period of time.

Whole of the Enterprise

The whole of the enterprise approach is used to provide a single interface to a large organization. It has two different versions: front page, in which an umbrella web page provides links to individual business unit web pages; and integrated in which the entire operation is provided in an integrated manner to the customer. Governments have typically pioneered this approach although very large organizations adopted the front page approach in the early days of web 1.0. As show in figure 11-9, the single point of contact provides a landing page for the customer. The majority of traffic is designed to flow first to the landing page and then to the business units.

Enterprise Systems Examples

There are many types of enterprise systems. Four of the most widely used types of ES are: -customer relationship management (CRM) systems -supply chain management (SCM) systems -supplier relationship management (SRM) systems -enterprise resources planning (ERP) systems.

Key Aspects of Group Work

There are two key aspects to team work: time location and geographical proximity. Time location means the clock time at which the different team members are working. -Often there are wide disparities in the clock time between team members. Geographical proximity refers to the physical location at which the team members work. -Team member in the same place are in close geographical proximity whereas those that are far apart are in dispersed proximity. These two aspects create differences in how the teams work together.

E-Procurement

There are two major forms of electronic procurement (e-procurement): electronic data interchange (EDI) and online marketplaces. Some solutions used by today's organizations are hybrid mixtures of EDI and online marketplaces. Electronic data interchange (EDI) provides buyers and sellers with a pre-defined, standardized way of exchanging business documents including quotations, purchase orders, purchase order receipts/confirmations, and invoices. In EDI, the structure and content of business documents are standardized to enable their contents to be transmitted electronically between the computer systems of buyers and sellers.

Internal Capability Assessment

This involves getting honest answers to several questions including: Do we have the technical skills needed to build the work system? Do we have the project management skills needed to oversee in house development of the work system? Do we have the technical infrastructure needed to run the software packages? Are upgrades needed? Once the organization knows what is available and its internal capabilities, it can decide whether to build or purchase the software and what it will take to make it work.

Purchase and Modify

This involves modifying vendor software to fit the needs of the organization Many software programs have parameters that can be adjusted to conform the software to different ways of operating Adjusting such parameters is configuration If configuration is insufficient to meet organizational needs, the software may be customized. Customization involves changing or writing new program code to provide changed or new software functionality Configuration and customization of ERP systems is common and is often performed under the guidance of consultants

Custom Development

This involves writing software from scratch This approach may be used when there is no vendor software that matches the work systems processes and activities or when it is not feasible or cost effective to modify vendor software to conform to work system requirements. There are three ways to do custom development Completely in house without external help - this is possible when the organization has the programming expertise needed to write the program code on staff In house with external help - some of the software is developed by the organization's programmers and the rest is developed by contract programming firms Outsourced development - all of the software is developed by one or more contract programming firms.

Web 1.0 and ERP

To accomplish Web 1.0 e-commerce, a tight integration to the company's ERP system is required. To provide rapid, accurate response to the customers' orders, an automated connection to the organization's order entry system is needed. Companies without such connections were challenged with rekeying transaction data and unacceptable delays and errors. Very accurate inventory is also required to prevent canceled orders due to inventory stock outs. Prior to e-commerce and ERP integration, companies often had to extract orders from the web site and re-enter them into their order management system which was often associated with errors and omissions. Integrated with web front end with the ERP back end resolved this problem.

Navigator Keys to Success

To be successful in this type of business, the company must have sufficient infrastructure to handle all of the transactions entered by the users. It must also generate sufficient volume in transaction fees to cover the cost of this infrastructure. Finally, it must have sufficient "stickiness", the ability to attract users to and to keep them on the site. eBay can attract and keep both buyers and sellers because the buyers come because the merchandise they want to find is there and the sellers come because the buyers are there. This enables eBay to have a virtuous cycle of growing buyers and sellers to its site.

Test cases and Scripts

To ensure that the new system is completely tested, test cases and scripts are constructed. -Test cases describe what is to be tested -Test scripts specify how the test will be performed Load (stress) tests are run to ensure that system provides required response times and can handle expected transaction loads. When test results are different from expectations, "bug reports" are generated. -A bug is a defect in system functioning. -The programming team corrects the bugs and tests (unit, system, acceptance) are rerun.

Sales Force Automation Systems

Today's CRM systems emerged from sales force automation systems designed to help sales personnel convert prospective customers (leads) into buyers. Sales force automation systems include: -Opportunity management systems that automate the tasks/activities associated with identifying/finding new customers for future sales. -Contact management systems which maintain customer (and prospective customer) contact data/information. -Sales management systems that automate each phase/step in the sales process, especially those associated with generating quotations and processing customer orders.

Full-fledged ERP Systems

Today, to be considered a full-fledged ERP system, a software vendor's ERP product must be able to support: Manufacturing Human resources Accounting and finance Sales Purchasing, and Inventory management processes It must also be able to be able to serve as an integration point for an organization's SCM, CRM, and SRM systems. Because it can interface and interact with other enterprise systems, an ERP system is the heart of an organization's suite of enterprise applications.

ERP Implementation Challenges & Issues

Top management commitment Reengineering business processes Integration of ERP with other BIS applications ERP consultants Selecting employees for the implementation team Employee training

Fulfillment Process Goals & Measures

Two areas determine the overall success of the fulfillment process: order accuracy and order cycle times. -Order accuracy is the ratio of error-free orders to total orders shipped. The closer order accuracy is to 100%, the better. -Order cycle time the amount of time between order receipt and shipment. Some companies use a perfect order metric (POM) to evaluate the overall performance of their fulfillment process. -For an individual order, the metric is achieved when the delivered order is complete (accurate), on-time, is not damaged, and includes the correct documentation.

ETO Fulfillment

Unlike MTO fulfillment, in engineer-to-order fulfillment, there is no standard product design. With ETO, the final product is designed and built to customer specifications and each product has some unique characteristics. An ETO project results in a one-off product. The ETO fulfillment process has an identifiable design phase which involves considerable dialog with the customer. Designers, typically engineers, may develop several iterations of diagrams to align the product with customer specifications. In the construction industry, the ETO process is sometimes called the design-to-build process. There can be considerable variability in process completion time and expense with ETO fulfillment. Like MTO, the ETO process cycle may last for weeks, months, or years.

Characteristics of Web 2.0 Applications

User generated content -- the capability for users to create some, some, major parts or all the application. Emergent Structure. The contents of the site are the result of user activity mixed with website owner activity. Tagging -- the use of keywords or phrases for classification or taxonomy purposes. Mashups - leveraging content provider content to provide web site content. Netcasting includes posting audio files (podcasting) and video files (videocasting) on the web for public consumption.

Chapter 6 summary

Value chain primary and secondary activities links competitive strategy to work systems and IS. Business processes are sequences of linked tasks/activities that produce outputs needed and/or valued by customers. Well-designed business processes are both efficient and effective. There are three main types business processes: management processes, operational processes, and support processes. Cross-functional business processes require interaction and coordination of multiple departments (functions) to work together to complete tasks/activities; these are common in process-centered organizations. Four "flows" may be observed the sequence of process tasks/activities: physical flow, document flow, data flow, and information flow. Three common operational business processes are the procurement, fulfillment, and production processes. Business process flowcharts, data flow diagrams, and BPMN diagrams are commonly used to visualize and document business processes. Business process improvement initiatives include BPM, BPR, Six Sigma, and Lean Six Sigma.

Vendor Managed Inventory (VMI)

Vendor managed inventory (VMI) involves collaboration among suppliers and buyers to streamline inventory management and order fulfillment. The goal of VMI is increased communication among buyers and suppliers that results in better alignment among business objectives and supply chain operations for both. In VMI, buyers typically allow suppliers to monitor the inventory levels of the goods/materials they order from suppliers. When the on-hand inventory level falls to the order point, VMI software automatically sends a purchase order to the supplier and a PO acknowledgement to the buyer. In some arrangements, order points are established to support just-in-time inventory management initiatives.

Procurement Process Actors

Warehouse personnel are responsible for monitoring direct materials inventory levels and initiating purchase requisitions. Business unit personnel monitor indirect materials inventory levels and initiate purchase requisitions. Purchasing unit personnel aggregate purchase requisitions into purchase orders (POs). Shipping/receiving personnel receive the materials/goods that are ordered from suppliers. Accounting/finance personnel are responsible for receiving invoices from suppliers and issuing payments.

Web-based SRM

Web-based SRM software provides a real-time interface between the organization and its suppliers. It enables buyers to check PO status and scheduled delivery dates. Because it enables suppliers to monitor buyer stock levels, web-based SRM is often an important part of vendor managed inventory (VMI) partnerships. SRM software supports e-procurement by enabling buyers to aggregate suppliers' Web catalogs, accept electronic invoices, and make electronic payments. SRM software also facilitates the creation, transmission, and confirmation of POs and the execution of inventory-related transactions.

Web-based SRM Software

Web-based SRM software provides a real-time interface between the organization and its suppliers. It enables buyers to check the status of purchase orders or scheduled delivery dates. Web-based SRM enables suppliers to monitor the organization's stock levels to determine when the organization needs to be re-stocked --; this is critical in vendor managed inventory (VMI) partnerships.

Examples of Web 2.0 Applications

Weblogs or blogs are online journals that let people post their own comments, graphics and videos. Microblogging refers to blogs that allow the user to write a short message and then transmit it -- this includes Text Messaging and applications such as Twitter. Really Simple Syndication (RSS) is a web format for publishing frequently updated works --it allows automatic reception of information you want to receive. Wikis are collaborative web pages that allows users to manage content. The most famous is Wikipedia. Mashups, netcasts, and social media are other Web 2.0 applications.

VMI Partnerships

When a VMI arrangement is established, the responsibility for managing the buyer's inventory of the goods/materials shifts from the supplier from the buyer to supplier. In some arrangement, the supplier retains ownership of the inventory at the buyer's location until it is sold to buyer customers. The supplier essentially becomes a business partner that is responsible for maintaining adequate inventory levels at the buyer's location(s). So, from the perspective of buyers, an important determinant of VMI success is establishing partnerships with suppliers that dependably monitor and replenish inventory.

Production and SAP ERP

When a planned order is converted to a production order, a uniquely numbered production order document is saved to the ERP database. The conversion process also results in "issuing/assigning" the raw materials/components needed to produce the specified quantity of finished goods to the production order. When the production order is completed and confirmed, the specified quantity of finished goods is moved from the production area to the finished goods warehouse. This goods movement is verified by the creation and saving of a uniquely numbered Goods Receipt document in the ERP database.

Work Centers & Product Routings

When a production order is released for production, manufacturing/personnel at work stations in the production area monitor and/or perform the production tasks in the sequence needed to produce the product. A work center is a location where work needed to produce a product is carried out. It may be a machine, a group of machines, a production line, an assembly area, or a person or group of people responsible for completing a specified set of operations. As a product is produced, it is routed among work centers until it is completed. Product routings specify the sequence of work centers used to produce a product. In manufacturing facilities that produce multiple products, there can be significant variation among product routes.

Raw Materials Warehouse Personnel

When a production order is released, the raw materials and components needed to produce the specified quantity of products to be released are moved from the raw materials warehouse to work centers in the production area. Raw materials warehouse personnel are responsible for ensuring that these materials movements take place. They are also responsible for monitoring raw material and components inventory levels and initiating purchase requests when raw materials inventory falls below the levels needed to meet sales forecasts, historical demand, and actual volume of customer orders. This often requires coordination with the company's sales function and personnel in the finished goods warehouse.

Backorders

When a supplier cannot ship the quantity for a good/material specified in a buyer's PO, the difference between the specified and shipped quantity may be backordered. This happens when the vendor's supply of a good/material is less than the quantity specified in the buyer's PO. When the purchasing contract allows backorders, the supplier can sell inventory to the buyer that it does not have at the time that it receives the PO. Because they are exceptions to a supplier's fulfillment process and a buyer's procurement process, backorders create complications for both suppliers and buyers and increase the inventory management challenges of both.

SRM Strategic Partnerships

When an organization enters a strategic partnership with a supplier, high levels interaction and collaboration are often required to make the business processes that connect them efficient and effective. Both organizations are likely to share closely-held information with the other in order to improve the coordination of their interactions and to enable each of them to be more profitable.

Fulfillment Process Data & Information Flow

When customer order details are passed to the finished goods warehouse, product ID, description, attributes, and quantity flow from the sales order to a picking document (picking list) that associates ordered items with warehouse storage locations. Sales order details also flow to the shipping document (packing list) that specifies the ordered items included in the shipment to the customer. In MTS fulfillment, customer billing address, customer ID, product ID and/or product description, item quantity, and unit prices also flow from sales orders to the invoice generated by the accounting function.

Work Centers

When production is authorized and released, a commitment is made to produce a specific quantity of finished goods by a certain date. Numerous resources including raw materials/components and work centers are committed to producing the specified quantity of finished goods in the production order. -A work center is a location where specific work operations needed to produce a finished good are carried out. -During production, the product is routed among work centers until the finished good is complete.

Goods Receipt Document

When production is completed and confirmed, the finished goods are moved from the production area to the finished goods warehouse. During the receive finished goods task/activity, a goods receipt document is created by finished goods warehouse personnel. This documents that verifies receipt of the goods produced for the production order. The creation of this document triggers the updating of the warehouse's finished goods inventory.

BI-Based Organizations

When properly constructed, an organization gains intelligence by which to make decisions by extracting information from existing systems within the organization or from external data sources to the company. This information is processed and placed in a data warehouse. From this data warehouse, information is extracted and processed using analytical technologies in applications to provide actionable data for decisions. All this activity should be controlled by processes for describing the data; ensure that the data is of high quality and that the process runs to meet the needs of the organization.

System Acquisition Options

When requirements are finalized, the organization must decide how system will be acquired and/or developed Multiple options exist including: Purchase off the shelf and implement "vanilla", Purchase off the shelf and modify, Custom development: Done completely in house Done in house with help, Outsourcing all work system development work

Richness & Collaboration

When selecting collaboration technology, one must consider the "richness" of the medium in comparison with the type of communication to be done. Variation in richness affects the dynamics of the meeting by the way information is provided. For example, in a videoconference, a relatively rich medium, you can see the facial expressions and hear the voice inflection of the participants like what you can in face-to-face meeting. In Facebook postings however, a relatively non-rich medium, you only see the text and therefore do not have access to the facial expressions and voice inflections. In a less-rich medium there is a greater potential for misunderstandings. Where sensitive subjects such as negotiations are discussed, it is important to have correct understanding of nuances, a richer medium should be selected.

MRP Software Calculations

When the MRP software program is run, its uses data to determine the net requirements for the materials needed to produce each product for each period of the planning horizon (e.g. for the next month or quarter). This includes the calculation of net requirements for raw materials, component parts, and sub-assemblies used to build the product. The MRP software first calculates the gross requirements, then subtracts out existing inventory levels and adds safety stock levels to determine net requirements. The main outputs of MRP processing includes planned orders (to meet demand forecasts for the planning horizon), released orders (to meet current demand), and changes to planned orders made by production managers (cancellations, quantity changes, date changes). An MRP run may also generate purchase requisitions for raw materials/components.

In House Development

When the decision to made to build the software in house, software design, construction, and testing is performed by staff within the organization. This may be augmented by contract personnel to supplement or provide skills or capabilities that the organization lacks. Two major approaches exist for in house development: The traditional waterfall approach Agile development

Separating Information from Physical Assets

When we can separate the information from the physical object, we can release value. For example, when we use the internet to display item for sales, their quantities, and sell-by-dates, the amount of space and cost needed for display is condensed. Widespread connectivity via the internet allow us to expose more people to the information without loss of quality.

Collaboration vs. Cooperation

When we collaborate, we work together to accomplish a task. In so doing, we iteratively develop our deliverable and through constructive feedback improve it with each iteration so that at the end we have the best product the team can produce. In contrast, cooperation emphasizes the idea of working separately. Here each member produces their own work and at the end they join their individual activities together to make the deliverable. The internet and social media enable more collaboration between individuals and organizations.

Asynchronous Technologies

Where team members must work asynchronously. technologies that allow work sharing are employed. Here again technologies like GoogleDocs, Sharepoint and Dropbox allow users to work on documents at different times and put them in an agreed upon place for reference by other team members. Discussion forums such as a Facebook page are useful for where asynchronous opinion sharing can take place.

Collaboration Technologies for Non-co-located Teams

Where users are not in the same space, they can use GoogleDocs to share and edit a document together while using a conference call technology such as Skype for voice communications technologies. Alternatively, if this is a presentation style of meeting, they can use WebEx or GoToMeeting to provide screen sharing capabilities in a webinar settings. Screensharing refers to allowing all the member so the team to see one of the members' desktops from their PC. A webinar is a contraction of "web based seminar" in which a presentation is performed online -- attendees see the computer screen often with presentation slides of the presenter. Videoconferencing refers to when each of the participants to the meeting is present in video on the conference -- each attendee will be required to have a camera on their computer with which to show their face; Skype and WebEx provide this capability.

ATO Fulfillment

With assemble-to-order fulfillment, the product ordered by the customer is built from an existing stock of existing components. The customer often has a variety of choices for each product component. ATO fulfillment is sometimes called assemble-to-request fulfillment. By being able to request the components to be included in the final product, the customer often experiences sense of personalized product customization. ATO fulfillment has become popular for the fulfillment of customer orders for footwear, apparel, accessories, and "customized" computers.

Leveraging RFM Results

With the computation complete, we can determine what to do with each donor during a donation campaign. For example, to save marketing dollars, we decide that won't contact donors who score 4 or 5 on all three of the RFM dimensions - this means that Donor 2 will not be contacted. Similarly, we have some big contributors who have not donated in a while and we want to contact them specially to ask for a donation - this means that donors who score a 1 or 2 in terms of M but scored a 4 or 5 in R and F (such as Donor 4) would be contacted. Finally, we want to contact frequent and recent but small contributors to try to get them to give more; these are donors with an M score of 4 or 5 but R and F of 1 or 2 - such as Donors 7 and 9. All other donors would receive the standard promotion literature.

How Does a Value Chain Work?

Within the organization, a product/service pass through a chain of activities and each activity adds value to the product/service. According to Porter, the total value added by an organization's value chain activities is greater than the sum of the value added by each value chain activity. Primary and secondary (support) value chain activities are included in Porter's Value Chain Model. These are illustrated in Figure 6-1. Organizations use primary and support activities as building blocks for creating valuable products/services and distinctiveness within the market.

Social Capital Currencies

You can build social capital by: Enhancing your contact's ability to do their jobs (task related currency) Enhancing their position in the organization (position related currency) Providing inspiration for their work (Inspiration Currency) Strengthening your social relationships (Relationship Currency).

Physical vs. Information Assets

You can't copy or modify a physical asset usually without significant effort and cost. An information asset can be copied or modified usually without that much effort. Physical assets wear out but information assets don't -- they can become obsolete or false but they don't wear out. Similarly, you can sell a physical asset only once. Once you give it to the buyer you cannot sell it again. To try to do so is called fraud. However, you can sell and information asset many times. A physical asset is located only in one place; however, information assets can be in many places. Finally, information assets are experience goods, goods you must try to determine the quality. All new products are experience goods. But some goods like a new entry on a blog must be experienced for the quality to be determined.

During the initiate phase Project Boundaries

defined and articulated in a project charter

Virtual Teams

Teams that may not be able to meet in the same room or at the same time are referred to as virtual teams. Virtual teams must collaborate in different ways than teams that are co-located. Virtual teams usually must use technology to communicate with each other. Teams that can meet at the same time can use synchronous communications. Those who cannot work at the same time must user asynchronous communications.

Project Management

"application of knowledge, skills, tools and techniques to meet project requirements"

Compliance projects

"must do" projects completing them with the least amount of resources

Project Planning/ Plan phase

- management process, project scope is delineated and project objectives are specified -interactive process working with stakeholders establishing timetables creating budgets identifying risks determining resource levels establishing communication plans

Project Justification

-compliance projects -operational projects -strategic projects

Operational Project Justification

-cost/benefit analysis -payback period -Return on investment ROI

Multi criteria Scoring models

-determine which projects to start and which to delay -balance different selection criteria against project characteristics to provide a way to compare projects against one another

Benefits of a Formal Project Management Process

-development of work systems -deliver desired business benefits -are implemented for the best cost -execution pf feasible projects -reduced risk of failure by ensuring top management support -assurance that work systems requirements are correct by acquiring stakeholder approval

Return on Investment (ROI)

-frequently calculated -how much money is gained relative to the amount spent on the project

Agile Development Methods

1. Agile methods focus on being adaptive to changes and maximizing opportunities to deliver value rather than adhering to a plan. 2. Unlike the waterfall approach, work is not determined up front, it is determined as the project unfolds through continuous interaction with projects owners. 3. Agile methods feature incremental, iterative, and evolutionary development. 4. Instead of one big software release, there are numerous smaller releases.

Content Providers Keys to Success

Aggregators often purchase content because it is too expensive to produce themselves for the value provided, e.g., WSJ.com purchases sports news. The keys to success for content providers are to ensure that you are the best in class in your field, that your company's name is attached to the content that your company provides, and that your company has a strong network of aggregators that you supply.

ERP & Integrated Business Processes

Businesses are attracted to ERP systems because of their ability to integrate business processes. Today's full-fledged ERP systems support/integrate manufacturing, human resources, accounting and finance, sales, purchasing, and inventory management processes. Many organizations also use their ERP systems to integrate their SCM, CRM, and SRM systems. ERP systems support/integrate core business processes including procurement, fulfillment, and production.

ES Ecosystem Consultancies

Consultancies provide a bridge between the software vendors and adopting organizations. Their presence in the ecosystem serves as a useful division of labor, which allows everyone else to focus on what they do best. Consultants are often employed by adopting organizations to oversee ES adoption, implementation, maintenance, and upgrade processes. They often bring valuable ES project management expertise and experience to the ecosystem.

Production Process Actors

Depending on its manufacturing/production strategy, a company's production process may include actors from the engineering function, raw materials warehouse, production/manufacturing, and finished goods warehouse. Engineers perform design work in engineer-to-order (ETO) production and may be involved in some make-to-order (MTO) manufacturing processes. For most companies, raw materials warehouse personnel, production/manufacturing personnel, maintenance personnel, and finished goods warehouse personnel have roles in the production process.

Requirements Analysis

Functional requirements are determined. Multiple method may be used including : interviewing users and managers, joint application development, analyzing the existing system, business process modeling

Procurement Process Physical Flow

In the procurement process, products/materials are physically transferred (shipped) from a vendor (supplier) location to the purchasing organization's location Once the shipped products/materials are inspected and compared to products/materials specified in the PO, they are often moved from the point of receipt to inventory storage locations.

Major SRM Software Vendors

SAP, ORACLE, IBM, Infor, Mercateo

Production Process Physical Flows

There are more physical flows in the production process than in the procurement or fulfillment process. These include: -The movement of raw materials and/or components from the raw materials warehouse to work centers in the production area. -The movement of work-in-progress among work centers in the production area. -The movement of finished goods from the production area to the finished goods warehouse.

Social Media Business Issues

There are number of business issues that arise when considering the use of social media. First, the amount of money to be spent on funding social media operations. Computing return on the investment in social media can be challenging. Another question is how to handle and respond to user generated content, especially if it is negative, inflammatory, false, or nutty. Employee generated content may also need to be carefully managed. All of these issues need to be addressed as part of a Social Media Policy, the principles by which the organization will utilize social media.

ERP Vendor Selection Issues

There are numerous questions that should be considered when choosing the ERP vendor. These include: -What is the vendor's reputation and situation? What technologies are included in the vendor's ERP solution? What are the ERP system's functionalities and ease of use? What are the true costs of the vendor's ERP solution What kind of support and training is available? Numerous sub-questions are associated with each of these larger ERP vendor selection questions.

Production Process Physical Flow

Typically, there are more physical flows associated with the production process than the procurement or fulfillment processes. The primary physical flows associated with the production process involve: the movement of raw materials/components from raw material storage locations to work centers, the movement (routing) of partially completed finished goods among work centers involved in producing the finished goods, and the movement of finished goods from the production area to storage locations in the finished goods warehouse.

Project Portfolio

a list of prioritized projects

PMBOK

a project is a "temporary endeavor to create a unique product, service or result"

During the initiate phase Project stakeholders

are identified

PMI ___________ programs for project ____________ that are globally recognized.

certified managers

Formal Project Management Phases

initiate plan execute monitor and control plan execute complete

Project Management Institute(PMI)

international professional organization for project managers

During the iniate phase, busiiness case for the work system

is prepared

Initiate Phase Activities

project is defined and permission to begin the process is obtained

Project management is carried out through the application of ____________ ____________________ ____________

project management processes

Project success

the project delivers a product or service that provides desired business benefits

Projects are justified based on

type