PREM PREMKUMAR, Associate Professor of Information Systems, College of Business, Iowa State University, Ames, Iowa. HUGH WATSON, Professor of Management Information Systems, Terry College of Business, University of Georgia, Athens, Georgia.
TASK 1: DESIGNING SUPPLY CHAINS FOR
TASK 2: IMPLEMENTING COLLABORATIVE
TASK 4: MANAGING SUPPLY CHAIN
TASK 5: MAKING MONEY FROM THE SUPPLY
Factory
The components of a solution set consist of hardware and software products whose operations cover all levels of the electronic factory control hierarchy and vertical and horizontal dimensions in the supply chain. As part of the long-term perspective, supply chain planning tends to focus on the structure of the supply chain and the simulation of various operational strategies. However, the cost of the procurement process (ie, the cost of people, facilities and equipment employed in the procurement process) is small compared to the cost of the materials purchased.
One of the rapidly developing horizontal applications in the E-factory is the area of integration between the internal and external business processes. As a result, there is a blurring of the supply chain planning and supply chain execution system packages. As a result, collaboration in the E-factory environment is one of the essential ingredients going forward.
THE VALUE CHAIN IS BACK
Probably the most important change has been the opportunity to connect and extend the value chain to external vendors, business partners and customers. This represents a whole new dimension, but it may well be the key to competitive advantage, bearing in mind that competitive advantage is the ultimate goal of value chain automation. In its August 1998 issue, CIO magazine selected 100 companies for what it called "value chain excellence."2 Impressively, the process used 28 judges and selected companies were evaluated based on overall profitability and positive approach to value chain optimization.
It works the same whether one trades in dollars, guilders or yen, and is an excellent example of expanding the value chain. Companies look to systems like SAP as a way to standardize the value chain across the organization: creating a single standard while discarding old systems, extracting and reformulating old data into new formats, and the way data is extracted and used change is a monumental job. The point being made is that revisiting the value chain requires a careful analysis of various factors on the part of the CIO and the company's operations manager.
IT INFRASTRUCTURE
This whole area is certainly a hot issue and will remain so for years to come. While Moore's Law states that technology doubles in power every 18 months with no increase in price, this can be misleading. The total cost of ownership has steadily risen as Moore's Law focuses on hardware, not software, and the cost of using the desktop.
There is such a thing as hidden costs: the productive time people spend talking to the helpdesk and their colleagues to get the systems working. The lack of common, easy-to-use and flexible software, aimed at the new users, who are often infrequent users and have less technical skills than the dedicated users, are real obstacles. Suffice to say, developing a standardized integrated infrastructure has become an essential element, especially in the world of mergers and acquisitions and in the world of connectivity with workstations on virtually every desk and reaching more people every day.
ELECTRONIC COMMERCE
There are many start-up companies that use the Internet to communicate, advertise, provide information through search engines, and help individuals and companies set up attractive websites. Amazon does indeed sell information, but in the form of tangible books that you order, pay for with a credit card and receive from a book warehouse. This author uses Amazon.com to find and order books, and the system works.
As with any new technology, the first problem is asking the question, "Where does it fit into the company's strategy?" The optimal use depends on the industry, the competitive position and the specific niche that the company is targeting in the market. However, there is no doubt that the Internet will dramatically change the way business is done for all but a few. The Internet really shines a light on Marshall McLuhan's "global village" metaphor. There is "gold" in the hills.
KNOWLEDGE MANAGEMENT
Knowledge management can be viewed as the conversion of data (raw material) into information (finished goods) and from there into knowledge (actionable finished products). The implication is that knowledge gives one the power to act, to make decisions that produce value for the company. As an example, a real competitive advantage is that of a consultant doing business with an insurance company in Sydney, Australia, who has the collective knowledge of the consultant company's experience in dealing with insurance companies around the world, and so on a way that the consultant's knowledge can be used effectively.
An important prerequisite for developing such capabilities is that the company's performance system rewards knowledge sharing. There are countless articles and conferences on knowledge management, and often the response to such a blitz is that the subject is actually a fad and will soon fade away. The principles of knowledge management – the concept of discovering the tacit knowledge in the minds of employees that has proven successful, making that knowledge accessible to others across the organization, and using advanced technology to achieve this – will remain a solid foundation. and successful business practice.
ALIGNING IT STRATEGY WITH BUSINESS STRATEGY
Functional Integration
In this first plateau, ISM information systems support the existing work flow in business functions (functional departments) such as production, sales and finance separately. Information systems are developed and built by IT experts according to the functional specifications of users. Data processing in the 1960s and 1970s can also be characterized as functional integration, although the IS organization was completely centralized, with a single technical platform due to technological limitations (mainframe economies of scale) and user concerns. - distribution was very limited due to the almost complete lack of IT knowledge.
Cross-functional Integration
Process Integration
The purpose of applying IT is to achieve (sustainable) competitive advantage in existing product-market combinations (PMCs). The IS organization on this ISM plateau cannot be completely decentralized; on the other hand, a centralized organization is inconsistent with the line managers' responsibility for their information systems. Therefore, the IS function must be selectively decentralized (a combination of centralization and decentralization), so that the responsibility for IS is spread over different parts of the organization.
For example, the development of decentralized systems and the centralized management of data and technical infrastructure. Information systems are built by IT experts under the supervision of line management, and IT decisions are made by a steering committee of line managers and IS managers, chaired by a member of senior management. Most organizations where IT is of strategic importance, such as banks, insurance companies, publishing/printing companies and transport companies, are now at this ISM level.
Business Process Redesign
Today, business process reengineering (BPR) is used by most organizations where IT is of strategic importance. For organizations where IT is of strategic importance, reaching this ISM plateau was a major challenge in the 1990s and beyond. The purchasing department sent the purchase order to the supplier, and a copy went to the accounts payable department.
When the goods arrived, the employee at the receiving station sent a receipt to the accounts for payment. These drastic productivity improvements brought about by radical process changes characterize this ISM plateau. It is sometimes argued that renovation projects that result in less than 50% improvement are not worthy of the name BPR.
Business Redesign
For correct function, the characteristics of the subsystems should be placed in the same column (plateau). A faster transition to a higher plateau can be achieved by adequate planning and control of the necessary activities. All subsystems in the organizational domain and the IT domain of the current ISM plateau are consistent with each other.
By working together, the value chain of each of the participating companies can be improved. In this way, the advantages of popular forms of horizontal and vertical integration of businesses can be obtained without real purchase. The following paragraphs provide brief descriptions of each ISM plane, the subsystems of IS strategy, information systems, information infrastructure, IS organization, and IS management of the IT domain.
Functional Integration (Transaction Automation)
Cross-Functional Integration (Procedure Automation)
The goal of joint use of IT is a (permanent) competitive advantage in existing product-market combinations. The goal of joint use of IT is competitive advantage in existing and new combinations of products and markets. Exhibit 4 summarizes the seven subsystems of the IT domain on each ISM plateau for a coalition of organizations.
The subsystems in the IT domain of each ISM plateau in coalitions of organizations subsystem. Minimal hierarchy due to integration of management and execution and use of IT for coordination. Self-organizing and self-learning functions due to the integration of management and execution (a network organization is a learning organization).
DESIGNING SUPPLY CHAINS FOR COMPETITIVE ADVANTAGE
The best way technology can add value is by providing more time—the most precious commodity for businesses and individuals. In fact, the way the technology is packaged – the deliverables for the supply chain, value chain or whatever – is almost always unique to each company. Company spokesman Wade Hyde, however, summarizes what FoxMeyer found in the following comment: “The computer integration problems we had were a significant factor that led to the bankruptcy filing.”7.
To reconcile the differences (or "gaps"), the organization generally needs to restructure its processes to fit R/3. Reactions from trading partners—the esker firms—not only vary, but may actually result in the loss of some of the anticipated benefits of EDI adoption from the perspective of the overall distribution system. Another survey of companies that supply to major automobile manufacturers found that most of the supplier companies were unable to identify any benefits of using EDI.2 The suppliers had adopted EDI simply to avoid losing business to it manpower hub company.
