EXTENDING THE ORGANIZATION-SUPPLY CHAIN MANAGEMENT

CHAPTER 10 : EXTENDING THE ORGANIZATION- SUPPLY CHAIN MANAGEMENT

Supply Chain Management

-The average company spends nearly half of every dollar that it earns on production
-In the past, companies focused primarily on manufacturing and quality improvements to 
 influence their supply chains.

Basics of Supply Chain

• The supply chain has three main links:

 1.Materials flow from suppliers and their “upstream” suppliers at all levels  
 2.Transformation of materials into semifinished and finished products through the          
     organization’s own production process   
 3.Distribution of products to customers and their “downstream” customers at all levels

• Organizations must embrace technologies that can effectively manage supply chains

Information Technology's Role in the Supply Chain

• IT’s primary role is to create integrations or tight process and information linkages between 
   functions within a firm

• Factors Driving SCM

Visibility

• Supply chain visibility – the ability to view all areas up and down the supply chain
• Bullwhip effect – occurs when distorted product demand information passes from one entity 
  to the next throughout the supply chain

Consumer Behavior

• Companies can respond faster and more effectively to consumer demands through supply 
   chain enhances

• Demand planning software – generates demand forecasts using statistical tools and 
   forecasting techniques

Competition

• Supply chain planning (SCP) software– uses advanced mathematical algorithms to 
   improve the flow and efficiency of the supply chain
• Supply chain execution (SCE) software – automates the different steps and stages of the 
   supply chain
• SCP and SCE in the supply chain

Speed

•Three factors fostering speed

Supply Chain Management Success Factors

•SCM industry best practices include:

1.Make the sale to suppliers 
2.Wean employees off traditional business practices 
3.Ensure the SCM system supports the organizational goals 
4.Deploy in incremental phases and measure and communicate success

5.Be future oriented

SCM Success Stories

•Top reasons why more and more executives are turning to SCM to manage their extended 
  enterprises

• Numerous decision support systems (DSSs) are being built to assist decision makers in the 
  design and operation of integrated supply chains
• DSSs allow managers to examine performance and relationships over the supply chain and 
  among:    
 –Suppliers     
 –Manufacturers    
 –Distributors    
 –Other factors that optimize supply chain performance

ENABLING THE ORGANIZATIONAL -DECISION MAKING

CHAPTER 9 : ENABLING THE ORGANIZATIONAL- DECISION MAKING

Decision Making



- Model – a simplified representation or abstraction of reality

- IT systems in an enterprise

Transaction Processing Systems





-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 (analysts) 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 output

- What-if analysis

- Goal-seekin analysis

- Interaction between a TPS and a DSS

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 details, of information

–Slice-and-dice – looks at information from different perspectives



 - Interaction between TPS and an EIS

- Digital dashboard – integrates information from multiple components and presents it in a unified display

Artificial Intelligence (AI)

Intelligent system – various commercial applications of artificial intelligence

Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and

                                                  learn

The ultimate goal of AI is the ability to build a system that can mimic human intelligence

-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

–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 neural networks and expert

 systems

- Common forms of data-mining analysis capabilities include :
  a) Cluster analysis
  b) Assosiation detection
  c) Statistical analysis

ACCESSING ORGANIZATIONAL INFORMATION-DATA WAREHOUSE

CHAPTER 8 : ACEESSING ORGANIZATIONAL INFORMATION-DATA WAREHOUSE

History of Data Warehouse



- Data warehouses extend the transformation of data into information

- In the 1990’s executives became less concerned with the day-to-day business operation 

   and more concerned with overall business functions

- The data warehouse provided the ability to support decision making without disrupting the

  day-to-day operations

Data Warehouse Fundamentals

- Data warehouse - a logical collection of information – gathered from many different

 operational databases – that supports business analysis activities and decision-making task

-The primary purpose of a data warehouse is to aggregate information throughout an

 organization into a single repository for decision-making purposes

- Extraction,tranformation,and loading - a process that extracts information from internal

 and external databases, transforms the information using a common set of enterprise

 definitions, and loads the information into a data warehouse

-Data mart – contains a subset of data warehouse information

Data Warehouse Fundamantels

Multidimensional Analysis and Data Mining





- Databases contain information in a series of two-dimensional tables

-In a data warehouse and data mart, information is multidimensional, it contains layers of

 columns and rows

   a) Dimension – a particular attribute of information

- Cube - common term for the representation of mutidimensional information

Information Cleansing or Scrubbing

- An organization must maintain high-quality data in the data warehouse

- Information cleansing or scrubbing – a process that weeds out and fixes or discards

  inconsistent, incorrect, or incomplete information

- Contact information in an operational system

- Standardizing Customer name from Opreational System

- Information cleansing activities

- Accurate and complete information

Business Intelligence

- Business intelligence – information that people use to support their decision-making

  efforts

- Principle BI enablers include:

   –Technology

   –People

   –Culture







STORING ORGANIZATIONAL INFORMATION-DATABASE

 

 

CAHPTER 7 : STORING ORGANIZATIONAL INFORMATION-DATABASE

 

Relation Database Fundamentals

- Information is everywhere in a organization.

- Information is stored in databases

  a) Database - maintains information about various types of objects(inventory),events

      (transactions),people(employees),and places(warehouse).

  b) Database models include :

      - Hierarchical database model - information is organized into a tree-like structure(using

        parent/child relationships) in such a way that it cannot have too many relationships.  

      - Network database model - a flexible way of representing objects and their relationships.

      - Relational database model - stores information in the form of logically related two-

        dimensional tables.

 

 

Entities and Attributes

 - Entity - a person,place,thing,transaction,or event about which information is stored

   a)  The rows in each table contain entities

   b) In Figure 7.1 Customer includes Dave'Sub Shop and Pizza Places entities.

 - Attributes(fields,columns) - characteristics or properties of an entity class.

   a) The columns in each table contain the attributes.

   b) In Figure 7.1 attributes for Customer include Customer ID,Customer Name,Contact Name. 

 

 

Key and Relationships

- Primary keys and foreign keys identify the various entity classes(tables) in the database.

  a) Primary key - a field (or group of fields) that uniquely identifies a given entity in a table.

  b) Froreign key - a primary of one table that appears an attribute in another table and acts to

      provide a logical relationship among the two tables. 

 

Keys and Relationships ( Example)

Potential relational database for Coca-Cola.

 

Relational Database Advantages

 - Increased flexibility

   a) Handle changes quickly and easily

   b) Provide users with different views

   c) Have only one physical view

       - Physical view - deals with the physical storage of information on a storage of information on a

         storage device, eg : hard disk

   d) Have multiple  logical view

       - Logical view - focuses on how uses logically accesss information,eg : a mail-order buss- 2

         people view diff format (logical views) but the same physical view.

 

 - Increased scalability and performance

   a) A database must scale to meet increased demand,while maintaining acceptable performance

       level,eg : scalability and performance.

 

 - Reduced information redundancy

   a) Database reduce information redundancy.

       - Redundancy - the duplication of information or storing the same information in multiple places.

 

 - Increased information integrity (quality)

   a) Information integrity is measures the qualityof information.

   b) Integrity constraint is rule that help ensure the quality of information.Example : Relational

       integrity constraint and business-critical integrity constraint.

 

 - Increased information security

   a) Information is an organizational asset and must be protected.

   b) Database offer several security features including : password,access level and access control.

 

Database Management Systems

 - Database management systems( DBMS) is software through which users and application programs

   interact with database.

Data-Driven Web Sites

- Data-driven Web site is an interaction Web site kept constantly updated and relevant to the needs

  of its customers through the use of database.

 

Data-Driven Web Site Business Advantages

- Development

- Content management

- Future expandability

- Maximizing human error

- Cutting production and update costs

- More efficient

- Improved stability

 

Data-Driven Business Intelligence

- Business intelligence in a data-driven Web site

Integrating Information among Multiple Databases

- Integration is allows separate systems to communicate directly with each other is foward integration

  and backward integration.

- Forward integration and backward integration

 

- Building a central repository specifically for integrated information

 





 











Exploring Business Initiatives

CHAPTER 6 : EXPLORING BUSINESS INITIATIVES

Organization Information

 

- Information is everywhere in an organization. 

- Employees must be able to obtain and analyze the many different levels,formats,and gralarities of

  organizational information to make decisions.

- Sucessfully collecting,compiling,sorting,and analyzing information can provide tremendous insight

  into how an organization is performing.

 

 

The Value of Timely Information

- Timeliness is an aspect of information that depends on the situation.

- Real-time information- immediate,up-to-date information.

- Real-time-system-provide real-time information in respone to query requests.  

 

The Value of Quality Information

- Business decisions are only as good as the quality of the information used to make the decisions

 

The Value of Quality Information

-Characteristics of high-quality information include :

• Accuracy
• Completeness
• Consistency
• Uniqueness
• Timeliness
   





Organizational Structure that Support Strategic Initiatives

CHAPTER 5 : ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES.

Organizational Structures

 

- Organizational employees must work closely together to develop strategic initiatives that create

  competitive advantages.

- Ethnics and security are two fundamental building blocks that organizations must base their

  business upon.

 

IT Roles and Responsibilities

 



- Information technology is a relatively new functional area,having only been around formally for

  around 40 years.

- Recent IT-related strategic positions is Chief Information Officer(CIO),Chief Technology Officer

  (CTO),Chief Security Officer(CSO),Chief Privacy Officer(CPO) and Chief Knowledge Office

  (CKO).

 

       1) Chief Information Officer(CIO) is oversees all uses of IT and ensures the startegic

           aligenment of  IT with business goals and objectives.Broad CIO functions include :

 

          a) Manager - Ensuring the delivery of all IT project,on time and within budget.

          b) Leader - Ensuring the strategic vision of IT is in line with the strategic vision of the

                             organization.

          c) Communicator - Building and maintaining strong executive relationships. 

      

       2) Chief Technology Officer(CTO) is responsible for ensuring the throughput,speed,accuracy,

           availability,and reliability of IT.

       3) Chief Security Officer(CSO) is responsible for ensuring the security of IT systems.

       4) Chief Privacy Officer(CPO) is responsile for ensuring the ethical and legal use of

           information.

        5) Chief Knowledge Office(CKO) is responsible for collecting,maintaining,and distributing the

            organization's knowledge.

 

The Gap Between Business Personnel and IT Personnel

- Business personnel possess expertise in functional areas such as marketing,accounting,and sales.

- IT personnel have the technological expertise.

- This typically causes a communications gap between the business personnel and IT personnel.

 



 

Improving Communications

- Business personnel must seek to increase their understanding of IT.

- IT personnel must seek to increase their understanding of the business.

- It is the responsibility of the CIO to ensure effective communication between business personnel

  and IT personnel. 

 

Organizational Fundamentals-Ethnics and Security

- Ethnics and security are two fundamental building blocks that organizations must base their

  bussiness on to be successful.

- In recent years,such events as the Enron and Martha Steward,along with 9/11 have shed new light

  on the meaning of ethics and security.

- Ethics- the principle and standards that guide our behavior toward other people.

- Issues affected by technology advance :

• Copyright
• Fair use doctrine
• Pirated software
• Counterfeit software

- Security is organization information is intellectual capital-it must be protected.

- Information security is the protection of information from accidental or intentional misuse by

  persons inside or outside an organization.

- E-business automatically creates tremendous information security risks for organizations.

 

 

 

 

PAST YEAR EXAMINATION

OCTOBER 2009 (PART D)

1) Identify five (5) of competitive advantages used by AirAsia?  (5 marks)
     - Developing new products or services.
     - Entering new markets.
     - Increasing customer loyalty.
     - Decreasing costs.
     - Attracting new customers.

2) Which of the Porter's generic strategies were applied by AirAsia in the case study and
     explain with example. (6 marks)
    

     The Porter's generic strategies were applied by AirAsia is cost leardership.Cost leadership is  has

     a low cost and broad market.AirAsia competes by offering a broad range of products at low price.

     Its business strategy is to be low-cost provider of goods for the cost-conscious consumer.For

     example,AirAsia operates scheduled domestic and international flights and Asia's largest low

     fare,no frills airline.AirAsia pioneered low cost trvelling in Asia. 

 

3) Based on Porter's Five Force Model,analyze AirAsia buyer power and supplier power.(9 

    marks)

 

   Porter's Five Force Model divided by five is buyer power,supplier power,threat of substitute

   product or services,threat new entarant and rivalry among existing competitors.

 

  Buyer power is the ability of buyer to affect the price they must pay for an item.For

  example,AirAsia operates with the world's lowest unit cost of US$ 0.023/ASK(available set per

  kilometer) and a passenger break-even load factor of 52% .

 

 Supplier power is the suppliers' ability to influence the prices they charge for supplies(including  

 materials,labour,and services).For example,AirAsia currently the main customer of the Airbus

 A320.The company has placed and order of 175 units of the same plane to service its routes.