1. Topic 5
Decision Support

2. Decision Support Decision Making and Information Systems
Types of decisions, examples
TPS, MIS, DSS
Executive Support Systems
Supply Chain Management
Customer Relationship Management
Enterprise Resource Planning

3. Types of Decisions

4. TPS – Transaction Processing Systems
Basic business systems that serve the organization’s operational level
Input: Transactions, events
Processing: Sorting, listing, merging, updating
Output: Detailed reports, lists, summaries
Users: Operations personnel, supervisors
TPS
Data

5. MIS – Management Information Systems
Serve management level; provide reports and access to company data
Input: Summary transaction data, high-volume data, simple models
Processing: Routine reports, simple models, low-level analysis
Output: Summary and exception reports
Users: Middle managers
TPS
Data

6. MIS – Management Information Systems

7. DSS – Decision Support Systems
Serve management level with data analysis for making decisions
Input: Low-volume data or massive databases, analytic models, and data analysis tools
Processing: Interactive, simulations, analysis
Output: Special reports, decision analyses, responses to queries
Users: Professionals, staff managers
TPS
Data
Other
Data
Other
Data

8. DSS – Voyage Estimating System

9. Executive Support Systems
Other
Data
TPS
Data
Other
Data
Provide communications and computing environment that serves the organization’s strategic level
Input: External and internal aggregate data
Processing: Graphics, simulations, interactive
Output: Projections, responses to queries
Users: Senior Managers

10. Executive Support Systems

11. Executive Support Systems

12. Putting Decision Support All Together
The 4 Major Types of Information Systems

13. Control the actions of machines and equipment
Putting Decision Support All Together
The 4 Major Types of Information Systems
System
Description
Organizational Level
Machine control
Control the actions of machines and equipment
Production planning
Decide when and how many products should be produced
Facilities location
Decide where to locate new facilities

14. Global Supply Chain Management

15. Global Supply Chain Management

16. Global Supply Chain Management
Some Lingo
Some Global Issues
The Bullwhip Effect in Supply Chains
Information Technology
Improvement Ideas
Cases

17. Global Supply Chain Management

18. Global Supply Chain Management
Factors to be considered when moving from (mostly) domestic chains to global ones

19. HP DeskJet Printer (Vancouver)
Global Supply Chain Management
HP DeskJet Printer (Vancouver)
PCAT = Printed Circuit Assembly and Testing FAT = Final Assembly and Testing Print Mech. Mfg. = Print Mechanism Manufacturing DC = Distribution Center
Supplier
FAT
IC Mfg
PCAT
Print
Mech Mfg
European DC
Customer
US DC
Far East DC
1 week
1 day (US) - 5 weeks

20. Global Supply Chain Management
HP and DeskJet Background.
Problems and Goals.
Potential Solutions.
HP Solution.

21. Global Supply Chain Management

22. Bullwhip Effect due to Seasonal Sales of Campbell Soup
Global Supply Chain Management
The Bullwhip Effect
Recurring Theme:
Orders to upstream members exhibit greater variance than actual orders at PoS (demand distortion)
The variance of orders increases as one moves upstream (variance propagation)
200
400
600
800
Weeks
Bullwhip Effect due to Seasonal Sales of Campbell Soup
Order Quantity 1 52
Shipments from Manufacturer to Distributors
Retailers’ Sales

23. Global Supply Chain Management

24. Bullwhip Effect due to Seasonal Sales of Campbell Soup
Global Supply Chain Management
Results:
200
400
600
800
Weeks
Bullwhip Effect due to Seasonal Sales of Campbell Soup
Order Quantity 1 52
Shipments from Manufacturer to Distributors
Retailers’ Sales

25. Global Supply Chain Management

26. Global Supply Chain Management
Supply Chain Management Systems:
Supply Chain Management:
Supply Chain:

27. Information Systems Can Help Supply Chain Participants:
Global Supply Chain Management
Information Systems Can Help Supply Chain Participants:

28. Global Supply Chain Management
Inbound
Production
Outbound
Sales and
Customer
logistics
processes
logistics
marketing
service
Information Technology
Upstream
Downstream

29. Global Supply Chain Management
Yes No

30. Global Supply Chain Management
Logistics
Most supply chains use inter-modal transportation, multiple transportation channels (railway, truck, etc) to move products from origin destination
This creates supply chain complexities

31. Global Supply Chain Management
GOALS

32. Global Supply Chain Management
A Good SCM System will help a firm

33. Global Supply Chain Management
Identify the problem(s) Haworth was facing.
What alternative solutions were available to management?
How well did the chosen solution work?
What people, organization, and technology issues need to be addressed?

34. Global Supply Chain Management
Additional SCM Resources
i2 Technologies –
Manugistics
Supply Chain Knowledge Base – supplychain.ittoolbox.com
Supply Chain Management Review –
CIO Magazine –
About Inc. (Logistics/Supply Chain) – logistics.about.com
IBM -
Oracle/PeopleSoft Supply Chain –
Institute for Supply Chain Management –

35. Customer Relationship Management - CRM

36. Sample CRM System Infrastructure

37. A Good CRM System will help a firm
More precise and targeted marketing campaigns.
Effective management of the sales process.
Providing superior service and support.
Better understanding of customer needs.
Tailoring offerings.
Integration of pertinent customer information.

38. Additional CRM Resources
Siebel Systems –
Salesforce.com
cio.com
MyCustomer.com
IBM -
CRM Today –
Business2.0
CRM Knowledge Base – crm.ittoolbox.com
destinationCRM.com

39. Enterprise Resource Planning

40. Enterprise Resource Planning
Enterprise Resource Planning Systems is a computer system that integrates application programs in accounting, sales, manufacturing, and other functions in the firm
This integration is accomplished through a database shared by all the application programs
ERP can be considered an initiative launched to better manage business processes across the organization using a common, integrated database, shared data management applications and reporting tools.

41. Enterprise Resource Planning - Background
An organization’s critical business processes often cut across many of its functional units.
In most organizations, each process has its own data needs and applications that operate as distinct systems.
The results of this approach:
- Function-Centric view in the business units
- Operational Inefficiencies
Example: A customer order
Sales
Accounting
Purchasing
Production
Logistics

42. The Idea of MRP Enterprise Resource Planning - Background
ERP evolved from MRP (Material Requirements Planning) and MRP II.
Customer orders
Forecasts
Material requirements plan
Inventory records Inventory transactions
Bills of materials
Routings
Time standards
MRP
explosion
Master production schedule
Manufacturing resource plan
Cost and
financial data

43. The Idea of MRP II Enterprise Resource Planning - Background
“Instead of having one set of numbers for the operating system in manufacturing and one set kept by the financial people – once the manufacturing people have numbers that are valid, the financial people can use these to get their numbers. Of course, whenever there are two systems – the numbers are bound to be different. With MRP II, everybody can be working with the same set of numbers, but that’s only the technical difference. The big difference comes in the way management uses these tools…MRP II becomes a company game plan for manufacturing, marketing, engineering, and finance.”
Oliver Wright, The Executives Guide to Successful MRP II, 1982.

44. Enterprise Resource Planning – Background Timeline

45. SAP AG
The Idea of ERP
A German firm, is a world leader in ERP software.
-Designed to operate in a three-tier client/server configuration
-Applications are fully integrated so that data are shared between all applications

46. R/3 System Functional Components
Accounts Payable
Accounts Receivable
General Ledger
Capital Investments
Open Item Management
ABC (costing approaches)
Asset Management
Financial
Accounting
Customer Management
Order Management
Configuration Management
Billing
Rebate Processing
R/3 System
Sales & Distribution
Human Resources
Functional
Components
Payroll
Benefits
Scheduling
Personnel Development
Workforce Planning
Travel Expense Accounting
Largest and most complex
Materials Management
Plant Maintenance
Quality Management
Production Planning and Control
Project Management
Budgeting
Manufacturing
& Logistics

47. SAP Functional Components

48. Reasons for implementing ERP
Desire to standardize and improve processes
To improve the level of systems integration
To improve information quality
Integrate Financial Information
Integrate Customer Order Information
Standardize and Speed Up Manufacturing Processes
Reduce Inventory
Standardize Human Resources Information
Global Outreach
Avoid Redundancies

49. ERP Disadvantages Time-consuming Expensive Fit Vendor Dependence
Too many features, too much complexity
Process Rigor (Standardized)

50. The General ERP Process
Product Analysis
Module Selection
Process Analysis
Data Analysis
Applications Integration
Testing and Installation
Employee Training
Average Implantation Time
24+ Months
Meta Group Study

51. How Much Does an ERP Implementation Cost?
The size and geographic distribution of the company.
The size of the ERP package.
Hardware
Software
Consultants and Analysts Fees
Time
Training
A large company may spend from $ 50 to $ 100 M or more USD for an integrated ERP implementation.
Meta group survey; 63 companies (large and small) in a range of industries.
Average cost $ 15,000,000.
High $300 M, $300,000,000 USD
Low $ 400 K, $400,000 USD

52. ERP Integration

53. Successful ERP Implementation Criteria
Top Management Support
Good Cost Estimation
Realistic Expectations
ERP Implementation
Cultural Impact
Training
Customization and Integration

54. Two More Examples Pitney Bowes Cut overall operations costs by 28%.
Sales reps can quote in < 15 minutes versus hours
4% increase in sales - $160 M / year
FoxMeyer
Bankrupt
Sued SAP AG

55. Hillerich & Bradsby
About Hillerich & Bradsby

56. Additional ERP Resources
SSA Global Technologies –
SAP –
Oracle/PeopleSoft –
IBM -
Microsoft (Great Plains) –
Also, American Software, i2, Manugistics

57. Additional ERP Resources

58. Additional ERP Resources

59. Managing the Change

60. Managing the Change - Successfully
1. Economic Feasibility
Tangible Benefits
Intangible Benefits
Implementation Costs
Operational Costs

61. Managing the Change - Successfully
2. Address the Organizational Change Involved!

62. Managing the Change - Successfully
3. User Involvement & Influence

63. Managing the Change - Successfully
3. User Involvement & Influence
Bridge the User / Designer Communications Gap
User Concerns
Designer Concerns
Will the system deliver the information I need for my work?
How much disk storage space will the master file consume?
How quickly can I access the data?
How many lines of code will it take to perform this function?
How easily can I retrieve the data?
How can we cut down CPU time when we run this program?
How much clerical support will I need to enter the data into the system?
What is the most efficient way of storing the data?
How will the operation of the system fit into my daily business schedule?
What database management system should we use?

64. Managing the Change - Successfully
4. Management Support

65. Managing the Change - Successfully
5. Project Management