Executive Summary On Supply Chain Information Systems - Essay Example

Executive Summary Business organizations have always had the need of having information readily available about the work being performed all around the organization. The need for information is imperative for business success. In the business environment of the 21st century which has been transformed by the speed of information after the internet age and the birth of the convergence age information has become more valuable than ever. Business organizations need a way to gain access to important information their employees can utilize to perform their duties as well as a way to satisfy the need of other stakeholders such as the clients and vendors. The business function responsible for supplying the information needed to satisfy the needs of the organization and related stakeholders is called the information system of an enterprise whose business function is referred too as supply chain information system (SCIS). An information system (IS) is a set of interrelated subsystems that work together to collect, process, store, transforms and distribute information for planning, decision making and control purposes (Moscove & Simkin & Bagranoff). The survival and success of a business in today’s business environment depend on the capabilities of a firm’s supply chain information systems. The SCIS are the threads that link logistic activities into an integrated process for a firm (Bowersox & Closs & Cooper, 2007, p.99). The advantages of having an information system in place are outstanding. Company can create a business 100% free of paperwork which reduces administrative costs. Information can be retrieved from remote terminals by employees from the company’s information which allows employees to work outside the office. The IS in itself is also an information storage database. Efficiency is achieved in lots of processes by integrating information systems of different business units of global enterprises. Work perform by a person in the system is updated in real time which allows other members of the organization to monitor employee work and utilize the information immediately after it is entered. This paper studies, analyzes and describes many aspects of supply chain information systems such as organizational structures, business inputs and outputs of IS, the impact of IS on an operation, key IS components, systems designs and recommendations for improving information systems. Organizational Structure SCIS systems allow the entire organization to reap the benefits of having a system in place to facilitate the transfer of data and information. The SCIS is structured in four different levels to accomplish the goals of executive management and other stakeholders including the actual users of the system. The four SCIS levels are transactions systems, management control, decision analysis and strategic planning (Bowersox, et. al., 2007, p.99).The first level is the most active level and the one that creates most of the data that will later be manipulated to by other person for other uses. This first level is the transactional system. An example of a first level operation based on the 1st level transactional system is a customer placing an order for an item through a corporate website linked to the SCIS of a company or by calling and directly placing the order with a representative of a firm who directly enters that transactional data of the order been placed into the SCIS. Management reporting and performance measurement are related to the 2nd level of SCIS. The third level involves the software needs of the system, while the 4th level SCIS relates to the interrelated and interconnected relational databases utilized with the system to enhance its functionality. The SCIS is structure to perform both input and output of data and information packages. Input and Output of the SCIS The roots of input-output analysis are actually based on terminology and application from another field study, Economics, which originated the input-output concept through the work of a recognized scholar named Francis in 1758 (Arkansaspreservation). This information systems in order to collect data that is entered in the SCIS to later by utilized by someone to create some sort of results / output with the help of the SCIS. The four levels of the SCIS are related to the input-output model. The first level, transactional level, is mostly related to input of data into the SCIS. The input process of input of data has been enhanced by new technologies that facilitate the process. The internet, bar coding, scanning, product codes and recent inventions such as radio frequency identification tags (RFID). Radio frequency identification tag is a technology that uses a combination of electrostatic and electromagnetic coupling in order to identify items in a unique manner (Searchnetworking, 2007). This technology is unique because the tag allows system analyst to track the location of a moving item from inside the SCIS by the radio signal emitted by the RFID. The input function is the backbone of the system, but in order to have full output capacities the SCIF must become a fully comprehensive integrated system. In order to achieve the desired outputs of a SCIS there are four major components: enterprise resource planning (ERP) or legacy systems, communication systems, execution and planning systems (Bowersox, et. al, 2007, p.101). The most important component that helps create the functionality of the system is the ERP or legacy system. It is the backbone of the system that stores and maintains all historic data, process of transaction, and it allows monitoring of the system (Bowersox, et. al, 2007, 101). The ERP creates a standardized type system that allows companies to add modules to increase the capabilities of the SCIS. The importance of ERP towards the supply chain in a firm did not exist before the 1990 due to the old emphasis of focusing on internal improvements (Walsh, 2001). Along with the internet age came a revolution in ERP design that allowed modules to be built after creating the SCIS for specific functional areas such as logistics, purchasing, marketing and accounting. Since the modules are connected to the same SCIS they automatically become interconnected. The simplicity of ERP makes them extremely popular in the marketplace. The input and output relation has elements that have nothing to do with automated computerized systems. There is a manual system and logical structure that allows inputs and outputs to be created inside the SCIS. A supply chain system includes planning and coordination components such as sales and operation management, capacity constraints, logistics requirements, manufacturing requirements and procurement requirements. (Bowersox, et. al, 2007, p.118). Organizational Usage An integrated SCIS allows companies to utilize the SCIS for various purposes. The second organizational level of a SCIS is good example the type of uses member of an organization can achieve by using an SCIS. The management team is able to obtain data from the system to prepared comprehensive reports and analysis that measure the performance of the organization as a whole, its members and any specific area of the business. A company uses the SCIS to facilitate the process of ordering products or services, provide customer service, purchasing materials, supplier relationships, managerial decision making among other uses. The input a company obtains through the SCIS allows the firm to collect a lot of import data to accomplish a firm’s goals. For example receiving customer feedback from a corporate website linked to the system allows the company to make certain minor in some cases major changes to satisfy the needs of the clientele. A simple input of customer feedback for the SCIS was transform into an output in the form of an implemented plan that transformed the organization in a positive manner. IS Organizational Impact An SCIS has a tremendous impact in the operation of an organization. It allows the firm to interconnect and becomes the most critical tool that allows globalization of multinational companies to occur. There are important modules that are can be inserted into a SCIS such as a customer management relationship systems (CRM). A CRM system and the SCIS as a whole has a positive impact on sales revenue, cost reductions, increased operational efficiency, staff productivity and automation (Taunory, 2007). The SCIS connect three important supply chain elements: logistics, procurement and manufacturing and it is the portal that interacts with customers, supplies and service providers (Bowersox, et. al, 2007, p.109). An improperly designed SCIS can have negative impacts on a firm such as duplication of tasks, inaccurate information and faulty decision making if the decision are based on erroneous data. HW and SW Hardware and Software are the two major infrastructure requirement of an SCIS. Some major hardware requirements of a SCIS include a server, computer network, broadband internet connection and other components such as bar code readers, RFID, scanners, fax machines and any other required peripheral hardware required for specific applications. The key software requirements of an SCIS are the ERP or legacy systems, enterprise execution systems and the related modules for the particular applications of the different departments of an organization. Other functionally enhanced software such as CRM are major software improvement to a SCIS. A computer language that allows the efficient creation of a SCIS is extensive markup language XLM language which is the key language that allowed the creation of the internet, the most important connectivity device of computers to particular information systems. Recommendations Information is an important element of the business world in the 21st century. The value of it is a critical success factor of all firms. The information technology field has changed a lot due to the speed in which is knowledge is being generated with the birth of the convergence age. In the past this field design information systems that emphasize only on the internal need of a company. This has totally changed and due it company now referred to the IS as SCIS. The first major recommendation for system designers is to make a clear assessment of all the organization stakeholders in order to be able to design a system the fits the needs of the clients, suppliers, service providers as well as the company and all its departments. The system must completely interconnect. In order to realize this goal the best alternative is to write programming codes utilizing XML format, the internet programming language. The budget of the system designer is major consideration in the designing process. A company with a low budget can find solution in either hardware or software. The system in itself is composed of various separate computers with their typical software and hardware requirements. If a firm wants to save money then switching from a Microsoft Windows platform to free Linux based systems in the computer terminals is a good start. The productivity software should also be switch form Microsoft office to cheap corporate licenses from companies such as OpenOffice.org that sell corporate licenses for a fraction for of the costs. The software utilized in the servers should also be Linux based. These are some simple cost reduction solutions. A second major recommendation for the system designer is to perform a through analysis of the internal supply chain system architecture. The actual requirements and procedures of different firms have variation and the system should be tailored to meet the needs of a particular company. A CRM is a must if a company wishes to gain the desired return on investment from its SCIS. If money is tight and the firm is small the CRM can wait little, but the system must design with the CRM upgrade in mind and set date for the implementation CRM. The CRM can be visualized by a company as an asset that will increase the level of efficiency of the operation. References Arkansansaspreservation.org. Input-Output analysis: Technical Description and Application. Retrieved October 28, 2007 from http://www.arkansaspreservation.org/pdf/publications/Appendix%20A%20Input-Output%20Analysis.pdf Bowersox, D., Closs, D., Cooper, M.D. (2007). Supply Chain Logistics Management (2nd edition). Mc-Graw Hill. Mascove, S., Simkin, M., Bagranoff, N. (1999). Accounting Information Systems (6th ed.). New York: John Wiley & Sons. Searchnetworking.com (2007). RFID. Retrieved November 1, 2007 from http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci805987,00.html Taunory, D. (2007). Back in Black: Understanding the financial impact of CRM. CRM Today. Retrieved November 3, 2007 from http://www.crm2day.com/library/EpulEyyFpkkBEVfRsg.php Walsh, K. (2001). Enterprise Resource Planning Systems and Supply Chain Management. Retrieved October 28, 2007 from http://projects.bus.lsu.edu/independent_study/vdhing1/erp/#How Read More