The Supply Chain Activities of Audi - Report Example

Work-Related Project Analysis, Part II Introduction The report intends to explore the supply chain activities of Audi, one of the leading manufacturing organizations of luxury and sports cars. In order to assess the existing supply chain management (SCM) activities of the organization, the discussion of the report highly involves the application of effective system analysis tools and describing work-related information system’s architecture in terms of data, processes, interfaces and networks that facilitate to improve the supply chain efficiency of Audi. In addition, the report also provides a clear representation of the physical data flow and any other necessary diagrams. It also explains their significance in terms of streamlining supply chain operations of Audi. With regard to the key objective of the report, the report tends to include the use of DIA software, which has provided a major support to depict a clear demonstration of the system tools along with their work-related information system’s architecture in the context of different data, processes, networks and interfaces. Concept of Information System’s Architecture and its Application Method Information System’s Architecture can be defined as a process or analytical tools that help to identify business functions and rules along with system structure, technical construction and different product technologies for the information system of an organization. It usually consists of four different layers which include product delivery structure, business process architecture, technical architecture and system architecture (Zachman, 2010). In the context of Audi, the organization incorporates an integrated framework, which encompasses each activities relating to its different operational activities. The SCM approach of the company encompasses major elements with the assistance of which it can run its business more efficiently. The increasing competitiveness amid the global organizations has made the SCM process more complicated and effective through which a firm can obtain competitive advantage. Moreover, an effective SCM approach can also facilitate the organization to manage different processes of an organization ranging from raw material processing to delivering products to the ultimate users. Principally, the SCM approach considerably involves five major key areas such as production, inventory, location, transportation and information. The key areas of the SCM approach assist an organization is conducting operations systematically and with better efficiency for better sustainability. The data information system regarding various SCM operations of Audi provides a clear description of the information shared by the departments in order to perform procurement, manufacturing and distribution of products functions efficiently. The following figure critically represents the flow of information in Audi to produce and market its wide range of luxury and sports vehicles. Fig: Data Information Flow in SCM of Audi Batch System Architecture of Audi The above diagram critically demonstrates the alternative procurement system of Audi such as Batch system and EDI system of the organization that plays an essential role for the organization to successfully achieve its procurement goals across its different manufacturing plant locations. According to the observation of the current procurement functions of the organization, it has been critically identified that the batch system framework includes five major sectors such as inventory control process, purchasing process, mailroom process, mail service and vendor. The processes help the company to obtain and record transaction data of inventory records associated with its manufacturing plants. In addition, the batch system architecture of the company also helps to effectively record vendor data and facilitates the manufacturing operations to maintain a balance of costs associated with procurement of raw materials and machinery equipment while producing wide range of exceptional products. Electronic Data Interchange (EDI) Architecture The EDI architecture can be regarded as an effective alternative framework that helps Audi to perform its different SCM operations in accordance with the need and demand of the market. The framework helps the organization to meet the competitive scenario of the car manufacturing industry. In relation to the above diagram, the EDI alternative system significantly includes six key stages such as customer, production planning, purchasing process, EDI system, vendors’ EDI system and vendors’ order processing system. According to the architecture design of EDI system, the framework helps the organization to make the overall supply chain functions cost-efficient, as it tends to record raw data of the current market trends along with demand of the customers. In this regard, the production plan is designed in accordance with the needs and demand of the customers, which helps the production units to obtain appropriate raw data regarding the required raw materials and equipment for meeting the market demand. The alternative also tends to improve the data management functions regarding the transactions made by the organization with its vendors and helps to execute production plan appropriately (Jenei et al., n.d.). Information System’s Architecture Representation through Process and Dataflow Diagram The information system architecture is recognized to play an essential role for the multinationals due to its wider and effective features that aid organizations in making competitive production plan. In relation to the SCM functions in Audi, the organization tends to involve an effective along with easily understandable design, which provides a clear description of its wide range of supply chain activities (Sowa & Zachman, 1992). With regard to the current supply chain activities of Audi, the organization has been highly observed to involve a wide range of stages that have been briefly discussed with the help of following information system architecture. Fig: Information System’s Architecture of Audi With reference to the above illustrated information system architecture, it has been identified that the supply chain functions in Audi can be integrated into a clear and easily understandable architecture. According to the above illustration, the system architecture demonstrates data, processes, interfaces and networks about different supply chain management functions and activities in Audi. In relation to the above architecture, it has been identified that the supply database of the organization tends to record supply related information relating to raw material, equipment and system application suppliers of the organization. It plays an essential role in the manufacturing plan for Audi to estimate appropriate cost and meet expected value of the customers. The database system of supply information tends to examine the required amount of raw material and equipment needed in order to fulfill the orders made by the customers of the organization (Diaz, 2006). The illustration regarding the information system architecture of Audi also includes effective database management system regarding the orders made by the customers of the organization. The order database management functions of the organization generally involve different activities that include gathering, prioritizing and evaluating orders in accordance with availability of resources in the manufacturing plant. It plays an essential role for the manufacturing plant in terms of allocating requirements of the customers and managing their priorities on the basis of the key manufacturing guidelines of the organization (Jenei et al., n.d.). In the context of warehousing operations, the supply chain activities of the organizations are highly focused on maintaining appropriate guidelines of the inventory management strategies. The inventory management functions of Audi have been observed to include wide range of operations that ensure to minimize the cost of the organization in managing raw materials and manufacturing related equipment. Moreover, the customer order database management system of Audi also tends to manage production line and helps the manufacturing operations to minimize possible complexities. In addition, the customer order database management system also ensures providing appropriate information about additional features along with the actual payment and delivery time of finished products. In this regard, it can be stated that the customer order database management system is one of the key elements in the overall supply chain management functions of Audi (Jenei et al., n.d.). Correspondingly, the sales database in the supply chain function also plays a crucial role for Audi to accumulate adequate efficiency in processing and delivering of final products to the customers. The database management functions relating to the sales of finished products tend to provide detail information about each production line along with required resources in the manufacturing functions. It involves activities relating to collecting and tracking records about the products to be sold in accordance with the orders made by the customers. Moreover, it also facilitates the production lines to obtain appropriate lead time and costs of production, which further help the organization to make effective investment decision in procurement and other manufacturing operations. It further helps in recording sales and provides adequate support to forecast demand in the competitive car manufacturing and marketing business industry (Diaz, 2006; Jenei et al., n.d.). Conclusion The information system architecture designed for Audit has illustrated the principle information management functions of the organization. In accordance with the architecture developed for the organization, it can be stated that the supply chain operations of Audi involves a wide range of practices that are highly focused on meeting the expectation level of the customers along with providing adequate value through products. According to the observation of the architecture, the database management systems regarding supply, order and sales of products are few of the key determinants behind the successful manufacturing and marketing operations of Audi. The information management system of the organization significantly helps the organization to maintain its long-term sustainability and achieve long-term competitiveness in the recent car market. In addition, the strategy associated with warehouse and inventory management functions can be considered as a major supportive element of the organization to meet its annual commercial objectives. References Audi-mediaservices.com. (2014). Audi Logistics: 30 years of the car loading platform. Retrieved 15 October 2014, from https://www.audi-mediaservices.com/publish/ms/content/en/public/pressemitteilungen/2014/10/08/audi_logistics__30.html Diaz, L. (2006). The Supply Chain of the Audi A8 V8 4.0l Diesel Engine. Evaluation of Cooperative Planning In Supply Chains, 97-157. doi:10.1007/3-8350-5714-6_4 István Jene, Krisztina Demeter & Andrea Gelei. The effect of strategy on the use of supply chain management tools – Exploratory survey in the Hungarian automotive industry. Budapest University of Economic Sciences and Public Administration, 63-74. Sowa, J. F. & Zachman, J. A. (1992). Extending and formalizing the framework for information systems architecture. IBM Systems Journal 31(3), 590-616. Zachman, J. A. (2010). A framework for information systems architecture. IBM Systems Journal 26(3), 276-292. Read More