Tuesday 25 August 2015

Chapter 10 – Extending the Organization – Supply Chain Management

BASICS OF SUPPLY CHAIN

SCM – the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
The supply chain has three main links.
  •        Materials flows from suppliers and their upstream suppliers at all levels
  •        Transformation of materials into semi-finished products, or the organization’s own production processes
  •        Distribution of products to customers and their downstream customers at all levels





INFORMATION TECHNOLOGY’S ROLE IN THE SUPPLY CHAIN


Information technology’s primary role in SCM is creating the integrations or tight process and information linkages between functions within a firm such as marketing, sales, finance, manufacturing, and distribution – and between firms, which allow the smooth, synchronized flow of both information and product between customers, suppliers and transportation providers across the supply chain.




VISIBILITY 
  • ·         Supply Chain Visibility is the ability to view all areas up and down the supply chain. Changing supply chains requires a comprehensive strategy buoyed by information technology. Organizations can use technology tools that help them integrate upstream and downstream, with both customers and suppliers.
  • ·         The bullwhip effect occurs when distorted product demand information passes from one entity to the next throughout the supply chain.


CUSTOMER BEHAVIOR
  • ·         The behavior of customers has changed the way businesses complete. Customers will leave if a company does not continually meet their expectations. They are more demanding because they have information readily available, they know exactly what they want, and they know when and how they want it.
  • ·         Demand planning software generates demand forecasts using statistical tools and forecasting techniques. Companies can respond faster and more effectively to consumer demands through supply chain enhancements such as demand planning software.
  • ·         Once an organization understands customer demand and its effect on the supply chain it can begin to estimate the impact that its supply chain will have on its customers and ultimately the organization’s performance.



COMPETITION
  • ·         Supply chain planning (SCP) software uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.
  • ·         Supply chain execution (SCE) software automates the different steps and stages of the supply chain. This could be as simple as electronically routing orders from a manufacturer to a supplier.



SPEED 
  • ·         These systems raise the accuracy, frequency and speed of communication between suppliers and customers, as well as between internal users.
  • ·         Another aspect of speed is the company’s ability to satisfy continually changing customer requirements efficiently, accurately and quickly.




SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS
  • ·         To succeed in today’s competitive markets, companies must align their supply chain with the demands of the markets they serve.
  • ·         Supply chain performance is now a distinct competitive advantage for companies proficient in the SCM area.


MAKE THE SALE TO SUPPLIERS
  1. The hardest part of any SCM system is its complexity because a large part of the system extends beyond the company’s walls. Not only will the people in the organization need to change the way they work, but also the people from each supplier that is added to the network must change. Be sure suppliers are on board with the benefits that the SCM system will provide.

WEAN EMPLOYEES OFF TRADITIONAL BUSINESS PRACTICES

  1. Operations people typically deal with phone calls, faxes and orders scrawled on paper and will most likely want to keep it that way. Unfortunately, an organization cannot disconnect the telephones and fax machines just because it is implementing a supply chain management system. If the organization cannot convince people that using the software will be worth their time, they will easily find ways to work around it, which will quickly decrease the changes of success for the SCM system.

ENSURE THE SCM SYSTEM SUPPORTS THE ORGANIZATION GOALS

  1. It is important to select SCM software that gives organizations an advantage in the areas most crucial to their business success. If the organizational goals support highly efficient strategies, be sure the supply chain design has the same goals.

DEPLOY IN INCREMENTAL PHASE AND MEASURE AND COMMUNICATE SUCCESS


  1. Design the development of the SCM system in incremental phases. For instance, instead of installing a complete supply chain management system across the company and all suppliers at once, start by getting it working with a few key suppliers, and then move on to the other suppliers. Along the way, make sure each step is adding value through improvements in the supply chain’s performance. While a big-picture perspective is vital to SCM success, the incremental approach means the SCM system should be implemented in digestible bites and also measured for success one step at a time.

BE FUTURE ORIENTED 


  1. The supply chain design must anticipate the future state of the business. Because the SCM system likely will last for many more years than originally planned, managers need to explore how flexible the systems will be when (not if) changes are required in the future. The key is to be certain that the software will meet future needs, not only current needs. 











Monday 24 August 2015

Chapter 9 - Enabling The Organization - Decision Making

Decision Making 

  •      Reasons for Growth of Decision Making Information System


-          People need to analyze large amounts of information 
– Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and dimensions people need to consider when making a decision or appraising an opportunity
-          People must make decisions quickly 
– Time is of the essence and people simply do not have time to sift through all the information manually
-          People must apply sophisticated analysis techniques, such as modeling and forecasting, to  make good decisions 
– Information systems substantially reduce the time required to perform these sophisticated analysis techniques
-          People must protect the corporate asset of organizational information 
– Information systems offer the security required to ensure organizational information remains safe.
  •       Model – A simplified representation or abstraction of reality
  •       IT systems in an enterprise
  •  


Transaction Processing System
  •      Moving up through the organizational pyramid users move from requiring transactional information to analytical information




  •       Transaction processing system – the basic business system that serves the operational level (analysis) in an organization
  •      Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information
  •      Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making



Decision support systems
  •      Decision support system (DSS) – models information to support managers and business professionals during the decision-making process
  •       Three quantitative models used by DSSs include;


1.       Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model
2.       What-if analysis – checks the impact of a change in an assumption on the proposed solution
3.       Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of outputs

What-if analysis


Goal-seeking analysis


Executive information system 
  •       Executive information system (EIS) – A specialized DSS that supports senior level executives within the organization
  •       Most EISs offering the following capabilities;


-          Consolidation – involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information
-          Drill-down – enables users to get details, and details of information
-          Slice-and-dice – looks at information from different perspectives

  •       Interaction between a TPS and an EIS




  •      Interaction between a TPS and a DSS




  •       Digital dashboard – integrates information from multiple components and presents it in a united display


Artificial intelligence (AI)
  •       The ultimate goal of AI is the ability to build a system that can mimic human intelligence
  •       Intelligent system – various commercial applications of artificial intelligence
  •      Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn
  •      Four most common categories of AI include;


1.       Expert system – computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems
2.       Neural network – attempts to emulate the way the human brain works
o   Fuzzy logic – a mathematical method of handling imprecise or subjective information
3.       Genetic algorithm – an artificial intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem
4.       Intelligent agent – special-purposed knowledge-based information system that accomplishes specific tasks on behalf of its users

Data Mining


  •      Data-mining software includes many forms of AI such as neutral networks and expert systems

Chapter 8 : Acessing Organizational Information - Data Warehouse

DATA WAREHOUSE FUNDAMENTALS

- A data warehouse is a logical collection of information-gathered from many different operational database-that supports business analysis activities and decision-making tasks.
- The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository in such a way that employees can make decisions and undertake business analysis activities.
- The data warehouse then send subsets of the information to data mart.
- A data mart contains a subsets of data warehouse information

*Figure above show compiles information from internal database or transactional database and external database through extraction, transformation and loading (ETL) which a process that extracts information from internal and external database, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

MULTIDIMENSIONAL ANALYSIS AND DATA MINING

- A cube is the common term for the representation of multidimensional information.
Data Mining is the process of analyzing data to extract information not to offered by the raw data alone. It is known as 'knowledge discovery'
- To perform data mining user needs data mining tools 
Data Mining Tools use a variety of techniques to find patterns and relationships in large volumes in information and infer rules from them that predict future behavior and guide decision making. 

INFORMATION CLEANSING OR SCRUBBING

Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect or incomplete information.
- It occur during ETL process and second on the information once if is in the data warehouse

BUSINESS INTELLIGENCE

- Business Intelligence refers to application and technologies that are use to gather, provide access to, and analyze data and information to support decision-making efforts. 

Enabling Business Intelligence :

- Technology
- People
- Culture