Management Information Systems

Islamia University of Bahawalpur

Delivered by:Tasawar Javed

Lecture 9

Overview of ChapterThe Role of Information

Technology

Connection to the internet will not, of itself, deliver e-business. Suitable hardware, software and business processes have to be in place. Here are some examples of how e-business could affect various business areas.

The Role of Information Technology

Business Area Where e-business could impact

Strategic aim

R&D •Internet used for research purpose•Access to research database•Access to patent database

To be a leader in innovation. To develop unique, differentiated products

Design •CAD Fast production of new designs & products. CAD will make designs cheaper and faster

The Role of Information TechnologyBusiness area Where e-business

could impactStrategic aim

Manufacturing/ service provision

CAD manufacturingJIT inventories

Flexible, low cost, but tailored to customers requirement

Communication with customers

Website and email

Inbound logistics Organization of the supply chain

Low cost, low inventory balances, flexible manufacturing

The buy side e-commerce transactions

Automating the purchases cycle

Low cost as less human intervention

Outbound logistics Organization of the distribution chain

Low cost, low inventory balances, fast delivery to customers

The sell side e-commerce transactions

Automating the sales cycle

Low cost as less human intervention, greater accuracy

Making websites interactive Search Online forms Members only section to the site Interactive questionnaires/surveys/polls Animation Subscription email list Links to other sites Downloadable files Contact us Site map Text only version of the site Multilingual requirement Provision for printing and bookmarking

The Role of Information Technology

Many business prosper or fail depending on the success of their relationship with their suppliers and with those who they supply. The use of IT and internet can provide efficiency to supplying the links involve the supply chain and to the consumer.

Raw material and then transformation to the finished goods all activities included between these two are encompasses in SCM

Nodes in the supply chain includes supplier, manufacturer, wholesaler then retailer and to the final consumer

Upstream (transaction between firm and supplier) and Down stream (customers) SCM

Supply Chain Management

The transformation of product from node to node includes activities such as:

Production planning Purchasing Materials management Distribution Customer service Forecastingwhen each firm can be competitive through improvements to its

internal practices, ultimately the ability to do business effectively depends on the efficient functioning of the entire supply chain

SCM

SCMManaging the ChainManaging the chain primarily concentration on managing the

movement of the following three areas: Materials/inventory Information FundsInventory control Amongst other things, this will include a consideration of: Number, location and size of warehouses and distribution centres Production scheduling; new products can be integrated in supply

chain A transportation strategy (routes, timings)

SCM Information Management

Key elements Potential levels of end-user and customer demand Daily production and distribution plans Resource availability and utilization

Fund Management Sufficient funds available Avoid disruption Supply chain sustained Strong relation of trust

Importance of IT Providing, storing, managing, and interrogating the Information

Management part of SCM IT can provide aid for that business areas

SCMFor example; a wholesaler’s inability to adequately maintain inventory control or

respond to sudden changes in demand for stock may mean that a retailer can not meet final consumer demand. Conversely, poor sales data from retailers may result in inadequate forecasting of manufacturing requirements.

Push vs Pull Push = supplier-led. Pull = customer/ market led. Consumers have a direct voice in the

functioning of the supply chain. This is what e-commerce facilitates and this was very rare prior to the

development of e-commerce. Many businesses have developed this further into upstream SCM

SCMIn the pull model, customers use electronic connections to

pull whatever they need out of the systemElectronic supply chain connectivity gives end customers the

opportunity to give direction to suppliers, for example, about the precise specifications of the products they want

Ultimately, customers have a direct voice in the functioning of the supply chain

E-commerce creates a much more efficient supply chain that benefits both customers and manufacturers. Companies can better serve customer needs, carry fewer inventories, and send products to market more quickly

Porter’s value Chain RevisitedThe profit can be generated by adding the such activities in the

business area that customer value and willing to pay for it. It could be skill and knowhow related, organizational or manufacturing

The traditional value chain has been criticised because it Is designed primarily to describe manufacturing business Doesn’t emphasise the importance of the customer enough. It is

product led rather than market led

Porter’s Value Chain Revisited

Market Research

New productsdevelopment

Market products

Purchase materials

Produce products

Manage selling, delivery etc

Porter’s Value Chain RevisitedIn terms of this model, e-business enables companies to: Carry out continues market research as products are ordered and sold Use the results of continuous to order goods, design new products and

design special offers Allow great flexibility and speed of response, provided members of the up-

stream supply chain (suppliers) also embrace e-business

The whole supply chain must be flexible and efficient it any one member of its is to benefit from better market information. There’s no point one company knowing what its customers want if its suppliers and distributors cannot respond adequately

Porter’s Value Chain RevisitedObviously, if e-business capability is present in all members of the

supply chain, management of the chain is becoming more feasible: selling, delivering, ordering, designing, and manufacturing can all be linked electronically permitting:

Cost saving Time savings Faster innovations Better marketing Better quality

Thank you!!! Q&A