CHAPTER 10 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

          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 

            §         Plan

Acompany must have a plan for managing all the resources that go toward meeting customer demand for products or services.

            §         Source

Companies must carefully choose reliable suppliers that will deliver goods and services required for making products

            §         Make

This is the step where companies manufacture their products or services. This can include scheduling the activities necessary for production, testing, packaging, and preparing for delivery.

            §         Deliver (Logistic)

Companies must be able to receive orders from customers, fulfill the orders via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payments.

            §         Return

This is typically the most problematic step in the supply chain. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products

Visibility

                                       §         Visibility – more visible models of different ways to do things in the supply chain have emerged.  High visibility in the supply chain is changing industries, as Wal-Mart demonstrated

                                       §         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

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

Ø  Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain

Ø  Supply chain execution (SCE) software – automates the different steps and stages of the supply chain

Competition

Speed 

Chapter 9 Extending The Organization Supply Chain Management

Chapter 9 Extending The Organization 

Supply Chain Management 

Chapter 9

Extending The Organization - Supply Chain Management 

Reasons for the growth of decision-making information systems

* People need to analyze large amount of information

* People must make decision making quickly 

*People must apply sophisticated analysis techniques, such as modeling and forecasting to make good decision   

*People must protect the corporate asset of organization  

Models information to support managers and business professionals during the decision making process .

Modeling a simplified representation or abstraction of reality

Three quantitative models used by Decision Support System (DSS). 

Executive Information Systems (EIS)

Four most comment categories of (AI)

CHAPTER 8 Accessing Organizational Information – Data Warehouse

CHAPTER 8

Accessing Organizational Information – Data Warehouse 

History of Data Warehousing

qData warehouses extend the transformation of data into information

qIn the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functions

qThe data warehouse provided the ability to support decision making without disrupting the day-to-day operations 

Data Warehouse Fundamentals

qData warehouse – a logical collection of information – gathered from many different operational databases – that supports business analysis activ

ities and decision-making tasks

qThe primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository for decision-making purposes

qExtraction, transformation, and loading (ETL) – 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

qData mart – contains a subset of data warehouse information

Multidimensional Analysis and Data Mining

qDatabases contain information in a series of two-dimensional tables

qIn a data warehouse and data mart, information is multidimensional, it contains layers of columns and rows

üDimension – a particular attribute of information

Multidimensional Analysis and Data Mining

qCube – common term for the representation of multidimensional information

qData mining – the process of analyzing data to extract information not offered by the raw data alone

qTo perform data mining users need data-mining tools

ØData-mining tool – uses a variety of techniques to find patterns and relationships in large volumes of information and infers rules that predict future behavior and guide decision making

Information Cleansing or Scrubbing

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

qInformation cleansing or scrubbing – a process that weeds out and fixes or discards inconsistent, incorrect, or incomplete information

Contact information in an operational system

qStandardizing Customer name from Operational Systems

qInformation cleansing activities

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

v

vPrinciple BI enablers include:

üTechnology

üPeople

üCulture

Technology

vEven the smallest company with BI software can do sophisticated analyses today that were unavailable to the largest organizations a generation ago.

vThe largest companies today can create enterprisewide BI systems that compute and monitor metrics on virtually every variable important for managing the company.

vHow is this possible? The answer is technology—the most significant enabler of business intelligence.

People

vUnderstanding the role of people in BI allows organizations to systematically create insight and turn these insights into actions.

vOrganizations can improve their decision making by having the right people making the decisions.

vThis usually means a manager who is in the field and close to the customer rather than an analyst rich in data but poor in experience.

Culture

vA key responsibility of executives is to shape and manage corporate culture.

vThe extent to which the BI attitude flourishes in an organization depends in large part on the organization’s culture.

Perhaps the most important step an organization can take to encourage BI is to measure the performance of the organization against a set of key indicators.