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InformationSystemsWithintheOrganization

Dr.RickJerz

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Goals

• Identify themaincharacteristics and typesofenterprise systems

• Explain the purpose oftransaction processingsystems (TPS)

• Explain the typesofsupport informationsystems canprovide foreach functional areaofthe organization

• Understand Enterprise ResourcePlanningsystems(ERP)

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ExampleofDisconnectedSmallBusinessSystems

• ~1991,small business scenario• Design department, files on floppy disks• Purchasing• Accounting• Shop floor• Marketing/Sales

• Solution: Fileserver(Novell)

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SmallversusLargeOrganizations

• Deere• Columbus

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TransactionProcessing

• Customer buysaproduct – atransaction• What happens?

• Apieceofpaperthatgoestomanypartsofabusiness

• Marketing,Finance,Operations

• Modern transactions• Onlinetransactions,Internet-based(website)• Communicationsenhanced(datatravelsfast)• Leanmanufacturing(speed)

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TransactionProcessingSystems(TPS)

• Continuous ‘real-time’datacollection• Efficiently handle highvolumes ofdata andlargevariations inthose volumes

• Avoiderrors anddowntime• Recordresultsaccurately andsecurely• Maintain privacy and security• Sourcedataautomation• Batch processing

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OrganizationOverview

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Finance

• Handles themoney• Financial andeconomic forecasting• Budgeting• Multiple currencies• Bankingand investment• Financial analysis

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Marketing

• Sales• Product andserviceconfiguration• Customer relationship management (CRM)

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Operations

• Forecasting• Location and facility layout planning• Capacity planning• Scheduling• Managinginventories• Assuring quality• Motivating employees• Supply chain management (SCM)• Andmore...

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OrganizationOverview

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EvolutionofMaterialsRequirementsPlanningSoftware

• Materialrequirements planning (MRP):Computer-based information systemforordering and scheduling ofall componentpartsandfinal customer products taking intoaccount inventories

• When customers orderproducts, whatsupplies need tobeordered,when shouldtheybeordered,andin whatquantities,taking into account what wemight haveinstock

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BillsofMaterial

• List ofcomponents, ingredients, andmaterials needed tomakeproduct

• Provides product structure

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BillsofMaterial

BB(2)(2) Std. 12Std. 12”” Speaker kitSpeaker kit CC(3)(3)Std. 12Std. 12”” Speaker kit w/ Speaker kit w/ ampamp--boosterbooster11 BB(2)(2) Std. 12Std. 12”” Speaker kitSpeaker kit CC(3)(3)Std. 12Std. 12”” Speaker kit w/ Speaker kit w/ ampamp--boosterboosterBB(2)(2) Std. 12Std. 12”” Speaker kitSpeaker kit CC(3)(3)Std. 12Std. 12”” Speaker kit w/ Speaker kit w/ ampamp--boosterbooster11

EE(2)(2)EE(2)(2) FF(2)(2)

Packing box and Packing box and installation kit of wire, installation kit of wire,

bolts, and screwsbolts, and screws

Std. 12Std. 12”” Speaker Speaker booster assemblybooster assembly

22 EE(2)(2)EE(2)(2) FF(2)(2)

Packing box and Packing box and installation kit of wire, installation kit of wire,

bolts, and screwsbolts, and screws

Std. 12Std. 12”” Speaker Speaker booster assemblybooster assembly

EE(2)(2)EE(2)(2) FF(2)(2)

Packing box and Packing box and installation kit of wire, installation kit of wire,

bolts, and screwsbolts, and screws

Std. 12Std. 12”” Speaker Speaker booster assemblybooster assembly

EE(2)(2)EE(2)(2) FF(2)(2)

Packing box and Packing box and installation kit of wire, installation kit of wire,

bolts, and screwsbolts, and screws

Std. 12Std. 12”” Speaker Speaker booster assemblybooster assembly

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DD(2)(2)

1212”” SpeakerSpeaker

DD(2)(2)

1212”” SpeakerSpeaker

GG(1)(1)

AmpAmp--boosterbooster

33 DD(2)(2)

1212”” SpeakerSpeaker

DD(2)(2)

1212”” SpeakerSpeaker

GG(1)(1)

AmpAmp--boosterbooster

DD(2)(2)

1212”” SpeakerSpeaker

DD(2)(2)

1212”” SpeakerSpeaker

DD(2)(2)

1212”” SpeakerSpeaker

DD(2)(2)

1212”” SpeakerSpeaker

GG(1)(1)

AmpAmp--boosterbooster

GG(1)(1)

AmpAmp--boosterbooster

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Product structure for Product structure for ““AwesomeAwesome”” ((AA))AA

LevelLevel

00Product structure for Product structure for ““AwesomeAwesome”” ((AA))

AALevelLevel

00

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LeadTimes

• Thetime requiredto purchase,produce, orassemble anitem• Forpurchaseditems– thetimebetweentherecognitionofaneedandtheavailabilityoftheitemforproduction

• Forproduction– thesumoftheorder,wait,move,setup,store,andruntimes

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Time-PhasedProductStructure

|| || || || || || || ||

11 22 33 44 55 66 77 88Time in weeksTime in weeks

|| || || || || || || ||

11 22 33 44 55 66 77 88Time in weeksTime in weeks

FF

2 weeks2 weeks

3 weeks3 weeksFF

2 weeks2 weeks

3 weeks3 weeks

2 weeks2 weeks

3 weeks3 weeks

1 week1 week

AA

1 week1 week

AA

2 weeks2 weeks

1 week1 weekDD

EE2 weeks2 weeks

1 week1 weekDD

EE

2 weeks2 weeks

DD

GG

1 week1 week

2 weeks2 weeks

DD

GG

1 week1 week

1 week1 week

2 weeks to 2 weeks to produceproduce

BB

CC

EE1 week1 week

2 weeks to 2 weeks to produceproduce

BB

CC

EE

Start production of DStart production of DStart production of DStart production of D Must have D and E Must have D and E completed here so completed here so

production can production can begin on Bbegin on B

Must have D and E Must have D and E completed here so completed here so

production can production can begin on Bbegin on B

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BenefitsofMRP

• Betterresponse tocustomer orders• Fasterresponse tomarketchanges• Improvedutilization offacilities andlabor• Reduced inventory levels

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MaterialRequirementsPlanningII

• OnceanMRPsystemisinplace, inventorydatacanbeaugmented byother usefulinformation• Laborhours• Material costs• Capital costs• Virtually anyresource

• SystemisgenerallycalledMRPIIorMaterialResourcePlanning

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ERP

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EnterpriseResourcePlanning(ERP)

• ERPmodules include• BasicMRP• Finance• Humanresources• Supplychainmanagement(SCM)• Customerrelationshipmanagement(CRM)

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ERPandMRP

Table 13.6

Finance/Accounting

General Ledger

Accounts Receivable

Payroll

Accounts Payable

Table 13.6

Finance/Accounting

General Ledger

Accounts Receivable

Payroll

Accounts Payable

Table 13.6

Finance/Accounting

General LedgerGeneral Ledger

Accounts ReceivableAccounts

Receivable

PayrollPayroll

Accounts Payable

Accounts Payable

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ERPCompanies

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ERPImplementation

• Takestime• Cost money• Training isneeded• Support isneeded• Good people areneeded.

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AdvantagesofERPSystems

• Provides integration ofthesupply-chain,production, andadministration

• Createscommonality ofdatabases• Canincorporate improved bestprocesses• Increasescommunication andcollaborationbetween business units andsites

• Hasanoff-the-shelf software database• Mayprovide astrategicadvantage

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DisadvantagesofERPSystems

• Isveryexpensiveto purchaseand evenmoresotocustomize

• Implementation mayrequiremajorchangesinthe company andits processes

• Issocomplex that manycompanies cannotadjustto it

• Involvesanongoing, possibly neverending,processforimplementation

• Expertise islimited with ongoing staffingproblems

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TheFuture

• ERP(+???),ERPisheretostay!

• Opportunities• Jobs• Skills

• Systemsapproach• Business systemswill bedriven bystrength ofanorganizations information systems

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