Tuesday, 25 August 2015

Chapter 10 – Extending the Organization – Supply Chain Management


SCM – the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
The supply chain has three main links.
  •        Materials flows from suppliers and their upstream suppliers at all levels
  •        Transformation of materials into semi-finished products, or the organization’s own production processes
  •        Distribution of products to customers and their downstream customers at all levels


Information technology’s primary role in SCM is creating the integrations or tight process and information linkages between functions within a firm such as marketing, sales, finance, manufacturing, and distribution – and between firms, which allow the smooth, synchronized flow of both information and product between customers, suppliers and transportation providers across the supply chain.

  • ·         Supply Chain Visibility is the ability to view all areas up and down the supply chain. Changing supply chains requires a comprehensive strategy buoyed by information technology. Organizations can use technology tools that help them integrate upstream and downstream, with both customers and suppliers.
  • ·         The bullwhip effect occurs when distorted product demand information passes from one entity to the next throughout the supply chain.

  • ·         The behavior of customers has changed the way businesses complete. Customers will leave if a company does not continually meet their expectations. They are more demanding because they have information readily available, they know exactly what they want, and they know when and how they want it.
  • ·         Demand planning software generates demand forecasts using statistical tools and forecasting techniques. Companies can respond faster and more effectively to consumer demands through supply chain enhancements such as demand planning software.
  • ·         Once an organization understands customer demand and its effect on the supply chain it can begin to estimate the impact that its supply chain will have on its customers and ultimately the organization’s performance.

  • ·         Supply chain planning (SCP) software uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.
  • ·         Supply chain execution (SCE) software automates the different steps and stages of the supply chain. This could be as simple as electronically routing orders from a manufacturer to a supplier.

  • ·         These systems raise the accuracy, frequency and speed of communication between suppliers and customers, as well as between internal users.
  • ·         Another aspect of speed is the company’s ability to satisfy continually changing customer requirements efficiently, accurately and quickly.

  • ·         To succeed in today’s competitive markets, companies must align their supply chain with the demands of the markets they serve.
  • ·         Supply chain performance is now a distinct competitive advantage for companies proficient in the SCM area.

  1. The hardest part of any SCM system is its complexity because a large part of the system extends beyond the company’s walls. Not only will the people in the organization need to change the way they work, but also the people from each supplier that is added to the network must change. Be sure suppliers are on board with the benefits that the SCM system will provide.


  1. Operations people typically deal with phone calls, faxes and orders scrawled on paper and will most likely want to keep it that way. Unfortunately, an organization cannot disconnect the telephones and fax machines just because it is implementing a supply chain management system. If the organization cannot convince people that using the software will be worth their time, they will easily find ways to work around it, which will quickly decrease the changes of success for the SCM system.


  1. It is important to select SCM software that gives organizations an advantage in the areas most crucial to their business success. If the organizational goals support highly efficient strategies, be sure the supply chain design has the same goals.


  1. Design the development of the SCM system in incremental phases. For instance, instead of installing a complete supply chain management system across the company and all suppliers at once, start by getting it working with a few key suppliers, and then move on to the other suppliers. Along the way, make sure each step is adding value through improvements in the supply chain’s performance. While a big-picture perspective is vital to SCM success, the incremental approach means the SCM system should be implemented in digestible bites and also measured for success one step at a time.


  1. The supply chain design must anticipate the future state of the business. Because the SCM system likely will last for many more years than originally planned, managers need to explore how flexible the systems will be when (not if) changes are required in the future. The key is to be certain that the software will meet future needs, not only current needs. 

Monday, 24 August 2015

Chapter 9 - Enabling The Organization - Decision Making

Decision Making 

  •      Reasons for Growth of Decision Making Information System

-          People need to analyze large amounts of information 
– Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and dimensions people need to consider when making a decision or appraising an opportunity
-          People must make decisions quickly 
– Time is of the essence and people simply do not have time to sift through all the information manually
-          People must apply sophisticated analysis techniques, such as modeling and forecasting, to  make good decisions 
– Information systems substantially reduce the time required to perform these sophisticated analysis techniques
-          People must protect the corporate asset of organizational information 
– Information systems offer the security required to ensure organizational information remains safe.
  •       Model – A simplified representation or abstraction of reality
  •       IT systems in an enterprise

Transaction Processing System
  •      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 (analysis) 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 outputs

What-if analysis

Goal-seeking analysis

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

  •       Interaction between a TPS and an EIS

  •      Interaction between a TPS and a DSS

  •       Digital dashboard – integrates information from multiple components and presents it in a united display

Artificial intelligence (AI)
  •       The ultimate goal of AI is the ability to build a system that can mimic human intelligence
  •       Intelligent system – various commercial applications of artificial intelligence
  •      Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn
  •      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
o   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 neutral networks and expert systems

Chapter 8 : Acessing Organizational Information - Data Warehouse


- A data warehouse is a logical collection of information-gathered from many different operational database-that supports business analysis activities and decision-making tasks.
- The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository in such a way that employees can make decisions and undertake business analysis activities.
- The data warehouse then send subsets of the information to data mart.
- A data mart contains a subsets of data warehouse information

*Figure above show compiles information from internal database or transactional database and external database through extraction, transformation and loading (ETL) which a process that extracts information from internal and external database, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.


- A cube is the common term for the representation of multidimensional information.
Data Mining is the process of analyzing data to extract information not to offered by the raw data alone. It is known as 'knowledge discovery'
- To perform data mining user needs data mining tools 
Data Mining Tools use a variety of techniques to find patterns and relationships in large volumes in information and infer rules from them that predict future behavior and guide decision making. 


Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect or incomplete information.
- It occur during ETL process and second on the information once if is in the data warehouse


- Business Intelligence refers to application and technologies that are use to gather, provide access to, and analyze data and information to support decision-making efforts. 

Enabling Business Intelligence :

- Technology
- People
- Culture

Chapter 7 - Storing Organizational Information - Databases

Relation Database Fundamentals 

  • Information is everywhere in an organization.
  • Information is stored in databases
   - Databases - maintains information about various type of objects (inventory), events (transactions), people (employees) and place (warehouse)

Learning Outcomes 

  • Define the fundamental concepts of the relation database model.
  • Evaluate the advantage of the relation database model.
  • Compare relation integrity contraints and business-critical integrity contraints.

Relation Database Fundamentals 

  • Database models include :
1.     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.
2.     Network database model - a flexible way of representing objects and their relationships.
3.     Relational database model - stores information in the form of logically related two-dimensional tables.


 - A database maintains information about various types of objects (inventory), events (transaction), people (employees) and place (warehouses).

Hierarchical database model is information is organized into tree-like structure that allows repeating information using parent/child relationships in such a way that it cannot have too many relationships.

- The network database model is a flexible way of representing objects and their relationships.

-The relational database model is a type of database that stores information in the form of logically related two-dimensional tables.


- A entity in the relational database model is a person, place, thing, transaction or event about which information is stored.
-Attributes called fields or columns are characteristics or properties of an entity class


-A primary key is a field (group/fields) that uniquely identifies a given entity in a table.

-A foreign key is a primary key of one table that appears as an attributes in another table and acts to provide a logical relationships between the two tables.


* Increased Flexibility
* Increased Scalability and Performance
* Reduced Information Redundancy
* Increased Information Integrity (Quality)
* Increased Information Security

Increased Flexibility

- Database provide flexibility in allowing each user to access the information in whatever way best suits his or her needs.
- The distinction between logical and physical views is important in understanding flexible database user views.
-The physical views of information deals with the physical storage of information on a storage device such as a hard disk.
- The logical views of information focuses on how users logically access information to meet their particular business. 

 Increased Scalability and Performance

- Only a database could 'scale' to handle the massive volumes of information and the large numbers of users required for the successful launch of the Ellis Island website.
Scalability refers to how well a system can adapt to increased demand.
Performance measures how quickly a system performs a certain process or transaction.

Reduced Information Redundancy

 - Redundancy is the duplication of information, or storing the same information in multiple places.
- Redundant information occurs because organizations frequently capture and store the same information in multiple locations.
- The primary problem with redundant information is that it is often inconsistent which make it difficult to determine which values are the most current or most accurate.

Increased Information Integrity (Quality)

Information integrity is a measures the quality of information
- Within a database environment, integrity constraints are rules that help ensure the quality of information. It can be defined and built into the database design.
- Two types of integrity constraints are :
·                     Relational integrity constraintsrules that enforce basic and fundamental information-based constraints
·                     Business-critical integrity constraintsenforce business rules vital to an organization's success and often require more insight and knowledge than relational integrity constraints.

Increased Information Security

- Information is an organizational asset.
- Database offer many security features such as

Passwords - provide authentication of the user
Access levels - determines who has access to the different types of information
Access control - determines types of user access such as customer service representatives might read-only access

- Database can increase personal security as well as information security.

- A database management systems (DBMS) is software through which users and application programs interact with a database.

Data-Driven Websites

- A data-driven website is an interactive website keep constantly updated and relevant to the needs of its costumer through the use of a database.

Data-Driven Website Advantages
·                     Development : Allows the website owner to make changes any time
·                     Content management : A static website requires a programmer to make updates.
·                     Future expandability : Having a data-driven website enables the site to grow faster than would be possible with a static site.
·                     Minimizing human error 
·                     Cutting production and update costs
·                     More efficient
·                     Improved stability


- An integration allows separate systems to communicate directly with each other.

- A forward integration takes information entered into a given system and sends it automatically to all downstream processes.

- A backward integration - takes information entered into a given systems and sends it automatically to all upstream systems and processes.