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Management Information Systems
Chapter Nine
Achieving Operational Excellence and Customer Intimacy: Enterprise Applications
Md. Golam KibriaLecturer, Southeast University
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Enterprise Business Systems E-business means using the Internet, other
networks, and IT to support Electronic commerce Enterprise communications and collaboration Web-enabled business processes
E-commerce is the buying, selling, and marketing of products, services, and information over the Internet and other networks
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Transaction Processing Systems Cross-functional information systems that
process data resulting from the occurrence of business transactions Transactions include sales, purchases, deposits,
withdrawals, refunds, and payments Online transaction processing (OLTP) is a real-
time system that captures transactions immediately
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The Transaction Processing Cycle
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Enterprise Systems/ ERPEnterprise Resource Planning ( ERP)
Enterprise systems, also known as ERP, which are based on a suite of integral software modules and a common database.
The database collects data from many different divisions and departments in a firm, and from a large number of key business processes in Manufacturing and Productions, Sales and Marketing, Finance and Accounting, and Human Resources,
Making the data available for applications that support nearly all of an organization’s internal activities.
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Why ERP is Required?Typical Business Process:
Finance & Accounting
Customer
Sales
HR
Shop Floor Execution
Production Planning
Inventory
Vendors
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Key Observations:
A typical enterprise has many departments These departments continuously communicate and
exchange data with each other The success of any organization lies in effective
communication and data exchange within the departments as well as associated third party such as Vendors, Outsourcers, and customers.
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Types of Enterprise Systems
Decentralized Systems Centralized Systems or ERP
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Decentralized Systems
Data is Maintained locally at the individual departments Departments do not have access to data of other
departments
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Problems with Decentralized Systems
Finance & Accounting
Customer
Sales
HR
Shop Floor Execution
Production Planning
Inventory
Vendors
Loss of Revenue and Customer Dissatisfaction
Data Maintenance cost goes up
Material and Inventory cost increases
Labor cost increase
Loss of reputation and may face legal action
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Centralized Systems
Data is maintained at a central location and is shared with various departments
All departments have access in data of all departments
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Benefits of Centralized Systems/ ERP
Finance & Accounting
Customer
Sales
HR
Shop Floor Execution
Production Planning
Inventory
Vendors
Increase revenue and customer delight
No data duplicationLabor cost decreases
Payments on-time, no legal action
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Key Benefits of ERP Eliminates the duplication, discontinuity, and
redundancy in data Provides information across departments in real
time Provides control over various processes Increases productivity, better inventory
management, promotes quality, reduced material cost, effective human resources management, reduced overheads what boosts profit.
Better customer interaction, increased throughput, improved customer service.
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Supply Chain Management SystemsWhat is Supply Chain
A firm’s supply chain is a network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customer. It links suppliers, manufacturing plants, distribution centers, retail outlets, and customers.
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Management Information Systems
Supply Chain Management SystemsNIKE’S SUPPLY CHAIN
This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers and sneaker soles.
© Prentice Hall 201115
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Upstream supply chain: Firm’s suppliers, suppliers’ suppliers, processes for
managing relationships with them Downstream supply chain:
Organizations and processes responsible for delivering products to customers
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Information Systems and Supply Chain Management
Inefficiencies cut into a company’s operating costs Can waste up to 25% of operating expenses
Just-in-time strategy: Components arrive as they are needed Finished goods shipped after leaving assembly line
Safety stock Buffer for lack of flexibility in supply chain
Bullwhip effect Information about product demand gets distorted as it passes
from one entity to next across supply chain
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How IS Facilitates SCM? Decide when and what to produce, store, and move Rapidly communicate orders Track the status of orders Check inventory, transportation, and warehousing
costs Track shipments Plan production based actual customer demand Rapidly communicate changes in product design
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Customer relationship Management