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Decision Support System

A Decision Support System (DSS) is a collection of integrated software applications and hardware that form the backbone of an organization s decision making process. Companies across all industries rely on decision support tools, techniques, and models to help them assess and resolve everyday business questions. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. Definition: A DSS is an interactive computer based information system with an organized collection of models, people, procedures, software, databases, telecommunication, and devices, which helps decision makers to solve unstructured or semistructured business problems. They are designed in such a way that help managers to select one of the many alternative solutions to a problem.

Characteristics of DSS 1. Handle large amounts of data like database searches 2. Obtain and process data from different sources including internal and external data stored on mainframe systems and networks 3. Provide report and presentation flexibility to suit the decision maker's needs 4. Have both textual and graphical orientation like charts, trend lines, tables and more

5. Perform complex, sophisticated analysis and comparisons using advanced software packages 6. Gives the decision maker a great deal of flexibility in solving simple and complex problems 7. Perform "what-if" and goal-seeking analysis.

Capabilities of DSS 1. Support for problem-solving phases including the intelligence, design, choice, implementation and monitoring 2. Support for different decision frequencies that range from one-of-a-kind (i.e., merging with another company) to repetitive (i.e., how much inventory to purchase this week) 3. One-of-a-kind decisions are handled by an ad hoc DSS 4.Repetitive decisions are handled by institutional DSS

5. Support for different problem structures ranging from high structured and programmed to unstructured and non-programmed 6. Support for various decision-making levels including operational-level decisions, tactical-level decisions and strategic decisions

A DSS application can be composed of following subsystems: 1. Data Management subsystem: The database management subsystem includes a database, which contains relevant data for the situation and is managed by software called the database management system (DBMS). The database management subsystem can be interconnected with the corporate data warehouse which is a repository for corporate relevant decision-making data. 2. Model Management subsystem:

The model base gives decision makers access to a variety of models and assist them in decision making. Eg. statistical, financial, optimization and/or simulation models

The model base can include the model base management software (MBMS) that coordinates the use of models in a DSS. This component can be connected to external storage of data.

3. Knowledge-based Management subsystem: This subsystem can support any of the other subsystem or act as an independent component. This type of subsystem has specialized problem-solving expertise relevant to a specific narrow task. The "expertise" consists of knowledge about a particular problem domain, understanding of problems within that domain, and "skill" at solving one or some of these problems. Hence, It provides intelligence to augment the decision makers own. 4. User Interface subsystem: The user interface, also called the dialog management facility, it allows users to interact with the DSS to obtain information. The User interface requires two capabilities; the action language that tells the DSS what is required and passes the data to the DSS and the presentation language that transfers and presents the user results. Design and Development of DSS The development process of DSS relates with the long-term business plans of the organizations. DSS requires resources like capital, time and capacity. The end result is information in the form of reports. Most of the organizations do not recognize information as a resource. They see information as a routine necessity. As an organization grows, the information also increases manifold. The DSS plans are developed concurrent to the business plans.

The Decision Support System (DSS) may be developed using following ways: 1. Prototype method

2. Life cycle approach In the prototype method, initial methods are developed first. Once implemented, the system is refined and modified as per new specifications. This iterative process is followed till the system is accepted by the user.

In life cycle approach, the DSS development is carried out through different phases. The phases are: Intelligence, Design, Choice, Implementation and Monitoring. The choice of DSS design is decided on the basis of nature of the system and its applications.

Decision Making at Top Level A decision is basically resource allocation process that is irreversible except that a fresh decision may reverse it or it may overrule the earlier one. A decision is a reasoned choice among alternatives. The decision maker having authority over the resources being allocated makes a decision. The decision can be of various types like simple decision in which there is only one decision is to be made with many alternatives, decision may be goal oriented; decision may be strategic or tactical. The decision capacity involves intelligence, design, choice and implementation of decision maker. The DSS designed for Attendance Capturing & Recording for Birla Corporation Limited mainly generates the reports like Daily Attendance, Monthly Attendance, and Sick Report etc. on which the top management by receiving these reports analyses and the decisions regarding shifting the priority of the job, observing the performance and corrective measures are taken.

Reporting from the Designed DSS

The DSS developed specifically helps HR managers to keep the control on working of the staff at various levels. The proposed system has following advantages: 1. Workers individual information is stored separately. 2. Searching of particular information became faster. Generation of various reports made review process easy.

4. Due to user friendly interface the matter became easy to understand. 5. Password oriented system increased security of data. 6. There are facilities of full database backup and central control of user. 7. Well-defined authorization and security levels. 8. The developed system is on-line and economical.

The Reports generated are as per the format by which it will help top management to take decision concerned with human resource in attendance recording and capturing which is one of the basic needs of any organization. Other Applications of DSS: clinical decision support system for medical diagnosis Bank loan officers & engineering firms agricultural production forest management Canadian National Railway reducing derailments

GROUP DECISION SUPPORT SYSTEMS Definition: A Group Decision Support System can be defined as a system that combines communication, computing, and decision support technologies to facilitate formulation and solution of unstructured problems by a group of people. A GDSS is frequently based on a local area network of microcomputers in a meeting room (although the system may also be distributed across several rooms or locations). Using a GDSS, group members may exchange comments, rank solution alternatives, edit group documents, or perform some other type of collaborative group work. Results of the group's discussion or votes may be displayed at the individual computer terminal screens or on a projection screen at the front of the meeting room. The comments, rankings, or voting results may also be printed out as minutes of the meeting for future reference. THE GDSS AT THE UNIVERSITY OF MISSISSIPPI Researchers at the University of Mississippi have developed a large, generalpurpose, face-to-face GDSS which consists of one microcomputer at the front of an auditorium for the group leader or facilitator and 54 microcomputers in a Ushaped configuration on four elevated tiers for the group members. Four of the 54 microcomputer stations at the front of the room are specifically designed for wheelchair access. In addition, an overhead projector allow the group to see displays at the front of the room. The GDSS uses GroupForum (software developed at the University of Mississippi by the author) which includes four programs for idea generation and voting: Brainstorm, Rank, Rate, and Quest.

Brainstorm is an idea generation program that allows group participants to simultaneously and anonymously exchange ideas on a specific question proposed to the group Figure 1: Brainstorm Sample Screen --------------Question: How can we improve the MBA curriculum?

1. Recruit better students into the MBA program. 2. Have more practical courses that apply to the real world. 3. Have specializations within the program. . RANK: Rank allows participants to order alternatives or choices according to some criterion. RATE: Rate allows participants to evaluate alternatives using several criteria. Any scale agreed upon by the group may be used to rate the items (for example, 1 to 5 or 1 to 10) QUEST: Quest allows participants to answer a multiple-choice or open-ended, online questionnaire.

An Executive Support System ("ESS") is designed to help senior management make strategic decisions. It gathers, analyses and summarizes the key internal and external information used in the business. A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit - with the instrument panel showing them the status of all the key business activities. ESS typically involve lots of data analysis and modeling tools such as "what-if" analysis to help strategic decision-making. ESS supply the necessary tools to senior management. The decisions at this level of the company are usually never structured and could be described as "educated guesses." Executives rely as much, if not more so, on external data than they do on data internal to their organization. Decisions must be made in the context of the world outside the organization. The problems and situations senior executives face are very fluid, always changing, so the system must be flexible and easy to manipulate. The Role of ESS in the Organization

Executives often face information overload and must be able to separate the chaff from the wheat in order to make the right decision. On the other hand, if the information they have is not detailed enough they may not be able to make the best decision. An ESS can supply the summarized information executives need and yet provide the opportunity to drill down to more detail if necessary.

As technology advances, ESS are able to link data from various sources both internal and external to provide the amount and kind of information executives find useful. As common software programs include more options and executives gain experience using these programs, they're turning to them as an easy way to manipulate information. Many executives are also turning to the Web to provide the flexibility they need. Benefits of ESS Executive Support Systems don't provide executives with ready- made decisions. They provide the information that helps them make their decisions. Executives use that information, along with their experience, knowledge, education, and understanding of the corporation and the business environment as a whole, to make their decisions. Executives are more inclined to want summarized data rather than detailed data (even though the details must be available). ESS rely on graphic presentation of information because it's a much quicker way for busy executives to grasp summarized information Advantages

Easy for upper-level executives to use, extensive computer experience is not required in operations Provides timely delivery of company summary information Information that is provided is better understood Filters data for management

Improves tracking information Offers efficiency to decision makers

Disadvantages System dependent Limited functionality, by design Information overload for some managers Benefits hard to quantify High implementation costs System may become slow, large, and hard to manage Need good internal processes for data management May lead to less reliable and less secure data

Examples of ESS The Sutter Home Winery uses mostly external data, including information from the Internet, in its ESS. It organizes the information in order to help executives make decisions based on trends in the marketplace. The information includes data on competitors and information from market research. Sutter uses its system output to determine sales forecasts, marketing campaigns, and investment plans. Managers at the Royal Bank of Canada are able to choose their own criteria (from among 15 choices) to drill down and navigate data through easy-touse interfaces. They don't have to accept data in formats chosen by someone else who may not understand individual manager's needs. Data analysis is more timely because the information is quicker to obtain and more convenient than before. Characteristics of ESS

Degree of use:- High, consistent, without need of technical assistance

Computer skills required Very low -must be easy to learn and use Flexibility High - must fit executive decision making style Principle use- Tracking, control Decisions supported - Upper level management, unstructured Data supported- Company internal and external Output capabilities -Text, tabular, graphical, trend toward audio/video in future Graphic concentration - High presentation style Data access speed - Must be high, fast response how ESS allows companies to make more pro-active decision? Without ESS: A Re-Active Business Decision A CEO receives a call from an online advertising company offering an incredible rate on pay-per-click ads, but for a limited time. Now its up to the CEO to quickly figure out which products will yield the most return on the advertising investment. First the executive logs into an online advertising dashboard to compare costs, response rates and return from previous campaigns.

Then he gets on the phone with a warehouse account manager, or logs into an inventory management database. From the warehouse, he finds out the cost to ship each product, the list price of each product and which products have been sitting on the shelves the longest or accruing the most storage fees. With all of this data and information in place, the executive can figure out which product will likely yield the highest return and finally respond to the advertising offer before the deadline expires.

With ESS: A Pro-Active Business Decision

The ESS sends an alert to the company CEO that product X was stored for X number of days, or that the warehouse storage costs for product X have exceeded a certain total dollar amount.

Working from that report, the executive alerts his sales and marketing employees to research the most cost-effective ways to move product X off the shelves. Here the CEO is not scrambling to reply to an outside call from an advertising company. The ESS alert put him in the drivers seat and gave the sales and marketing team lead time to find the best solutions to move those products. This is a good example of how an ESS can streamline business intelligence and decision-making. Enterprise Resource Planning

ERP is one of the most widely implemented business software systems in a wide variety of industries and organizations. ERP is the acronym of Enterprise Resource Planning. ERP is just not only a software. ERP definition refers to both; ERP software and business strategies that implement ERP systems.

ERP software consists of multiple software modules that integrate activities across functional departments - from production planning, parts purchasing, inventory control and product distribution to order tracking.

ERP implementation utilizes various ERP software applications to improve the performance of organizations for 1) resource planning, 2) management control and 3) operational control. Most ERP software systems include application modules to support common business activities like finance, accounting and human resources.

ERP Systems

ERP is much more than just a computer software. An ERP System includes ERP Software, Business Processes, Users and Hardware that run the ERP software.

An ERP system is more than the sum of its parts or components. Those components interact together to achieve a common goal - streamline and improve organizations' business processes. Most important factor for ERP system is the users. Successful implementation of any ERP System more depends on intelligent users who are going to use them, because any standard ERP Software would consist hundreds of input information for any particular business activity. Thus good knowledge of each entity of system to the users is most important factor in ERP Software. History and Evolution of ERP IBM sold a calculating computer back in the 1950 s to replace manual accounting activities. It later added engineering capabilities to its software offering, allowing the American army to conduct large amounts of missile trajectory computations. During the1960s most organizations designed, developed and implemented centralized computing systems, mostly automating their inventory control systems using inventory control packages (IC). These were legacy systems based on programming languages such as COBOL, ALGOL and FORTRAN. Material requirements planning (MRP) systems were developed in the 1970s which involved mainly planning the product or parts requirements according to the master production schedule. Following this route new software systems called manufacturing resources planning (MRP II) were introduced in the 1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements. MRP II included areas such as shop floor and distribution management, project management, finance, human resource and engineering. The problem started when large organizations began to have too many different information systems. These computer systems were created by different software

vendors, used non-compatible technologies and proprietary languages . Connecting two such systems was almost impossible.

Also, the business processes within an organization were not standard . Since each department had its own custom information system, the processes within the different departments were also custom. Communication between two departments-and their own custom information system-involved a lot of misunderstanding, incorrect transfer of information and manual work that was required where automatic procedures could not be implemented.

That was the big promise of ERP a single, comprehensive, cross organizational information system that would support all processes within an organization. Since the entire software was supplied by the same software vendor, flow of information between the different software modules-from purchasing to finance, from inventory to sales-was an integral part of the application. No longer did the technical specialists had to implement special interfaces between the system or worse-having to manually update information from one system to another. The flow of information between the different departments was completely transparent.

Another important advantage ERP systems had was that they enabled company management to deploy company-wide processes. Because all departments and locations of the company used the same information systems, business rules could be created in the ERP system that forced each department to behave in a certain, predefined way. For example, when a sales representatives would place a customer order in the ERP system, it is possible to create a rule that checks if stock is available to satisfy that order. If it is available, it will be automatically allocated to fill that order, a picking slip will be printed in the warehouse and the product will be shipped to the customer. If stock is not available, a purchase order will be generated by the system and sent to the supplier.

During the 2000, ERP vendors added more modules and functions as add-ons to the core modules giving birth to the extended ERPs. These ERP extensions include advanced planning and scheduling (APS), e-business solutions such as customer relationship management (CRM) and supply chain management (SCM). Ideally, ERP delivers a single database that contains all data for the software modules, which would include:

Manufacturing Engineering, bills of material, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow Supply chain management Order to cash, inventory, order entry, purchasing, supply chain planning, supplier scheduling, inspection of goods, commission calculation Financials General ledger, cash management, accounts payable, accounts receivable, fixed assets

Project management Costing, billing, time and expense, performance units, activity management Human resources Human resources, payroll, training, attendance. Customer relationship management Sales and marketing, commissions, service, customer contact and call center support Data warehouse and various self-service interfaces for customers, suppliers, and employees Access control - user privilege as per authority levels for process execution Customization - to meet the extension, addition, change in process flow

Understanding ERP

Business process reengineering - new possibilities in terms of business processes 2. Database integration - logical links between databases Enhanced user interfaces - initiate down-line processes - offer wider reporting options

4. Data transport between companies - sharing of strategic information and logistical data between companies partnered in supply chains

Extended and distributed applications - accommodates many users having different needs Implementation

ERP's scope usually implies significant changes to staff work processes and practices. Generally, three types of services are available to help implement such changes 1. consulting, 2. customization, and 3. support. Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants. Small projects can require months; multinational and other large implementations can take years. Customization can substantially increase implementation times

Process preparation Implementing ERP typically requires changes in existing business processes. Poor understanding of needed process changes prior to starting implementation is a main reason for project failure. It is therefore crucial that organizations thoroughly analyze business processes before implementation. This analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system.

Research indicates that the risk of business process mismatch is decreased by: 1.linking current processes to the organization's strategy; 2. analyzing the effectiveness of each process; 3. understanding existing automated solutions.[ ERP implementation is considerably more difficult (and politically charged) in decentralized organizations, because they often have different processes, business rules, data structures, authorization hierarchies and decision centers. This may require migrating some business units before others, delaying implementation to work through the necessary changes for each unit, possibly reducing integration or customizing the system to meet specific needs. A potential disadvantage is that adopting "standard" processes can lead to a loss of competitive advantage. While this has happened, losses in one area are often offset by gains in other areas, increasing overall competitive advantage. Configuration Configuring an ERP system is largely a matter of balancing the way the customer wants the system to work with the way it was designed to work. ERP systems typically build many changeable parameters that modify system operation. For example, an organization can select the type of inventory accounting FIFO or LIFOto employ, whether to recognize revenue by geographical unit, product line, or distribution channel and whether to pay for shipping costs when a customer returns a purchase. Customization ERP systems are theoretically based on industry best practices and are intended to be deployed "as is"[23][24]. ERP vendors do offer customers configuration options that allow organizations to incorporate their own business rules but there are often functionality gaps remaining even after the configuration is complete. ERP customers have several options to reconcile functionality gaps: 1. Technical solutions: includes rewriting part of the delivered functionality,

2.writing a homegrown bolt-on/add-on module within the ERP system, or 3. interfacing to an external system. All three of these options are varying degrees of system customization, with the first being the most invasive and costly to maintain. Alternatively, there are non-technical options such as changing business practices and/or organizational policies to better match the delivered ERP functionality.

Key differences between customization and configuration include: Customization is always optional, whereas the software must always be configured before use The effect of configuration changes on system behavior and performance is predictable and is the responsibility of the ERP vendor. The effect of customization is less predictable, is the customer's responsibility and increases testing activities. Configuration changes survive upgrades to new software versions. Some customizations survive upgrades, though they require retesting. Other customizations (e.g. those involving changes to fundamental data structures) are overwritten during upgrades and must be reimplemented. Customization Advantages: Improves user acceptance Offers the potential to obtain competitive advantage vis--vis companies using only standard features. Customization Disadvantages: Increases time and resources required to both implement and maintain. Inhibits seamless communication between suppliers and customers who use the same ERP system uncustomized.

Extensions ERP systems can be extended with thirdparty software. Extensions offer features such as: archiving, reporting and republishing; capturing transactional data, e.g. using scanners, access to specialized data/capabilities, such as consolidated marketing data and associated trend analytics. advanced planning and scheduling (APS) Data migration Data migration is the process of moving/copying and restructuring data from an existing system to the ERP system. Migration is critical to implementation success and requires significant planning. Unfortunately, it often receives insufficient attention.

The following steps can structure migration planning:

Identify the data to be migrated Determine migration timing Freeze the toolset Decide on migration-related setups Define data archiving policies and procedures.


The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include: Sales forecasting, which allows inventory optimization Chronological history of every transaction through relevant data compilation in every area of operation.

Order tracking, from acceptance through fulfillment Revenue tracking, from invoice through cash receipt Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)

ERP systems centralize business data, bringing the following benefits: They eliminate the need to synchronize changes between multiple systems consolidation of finance, marketing and sales, human resource, and manufacturing applications They bring legitimacy and transparency in each bit of statistical data. They enable standard product naming/coding. They provide a comprehensive enterprise view (no "islands of information"). They make realtime information available to management anywhere, any time to make proper decisions. They protect sensitive data by consolidating multiple security systems into a single structure


Customization is problematic. Reengineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities ERP can cost more than less integrated and/or less comprehensive solutions. High switching costs associated with ERP can increase the ERP vendor's negotiating power which can result in higher support, maintenance, and upgrade expenses. Overcoming resistance to sharing sensitive information between departments can divert management attention. Integration of truly independent businesses can create unnecessary dependencies. Extensive training requirements take resources from daily operations.

Irrespective of whether the company is a multi-national, multi-million dollar organization or a small company with single digit million turnover, the goal of system selection is to source a system that can provide functionality for all of the business processes; that will get complete user acceptance; management approval and, most importantly, can provide significant return on investment for the shareholders.

Attempting to select an ERP system is further exacerbated by the fact that some systems are geared for discrete manufacturing environment where a distinct amount of items make up a finished product while others are more suited to process industries such as chemical and food processing where the ingredients are not exact and where there might be re-work and byproducts of a process.

In the last decade, companies have also become interested in enhanced functionality such as customer relationship management and electronic commerce capability. Given all of the potential solutions, it is not uncommon for companies to choose a system that is not the best fit for the business and this normally leads to a more expensive implementation.

Thus, it is understandable that "ERP Costs can run as high as two or three percent of revenues . A proper ERP system selection methodology will deliver, within time and budget, an ERP system that is best fit for the business processes and the user in an enterprise. Poor system selection Companies seldom use a fully objective selection methodology when choosing an ERP System. Some common mistakes include: Incomplete requirements Because implementation of a new ERP system "requires people to do their job differently, it is very important to understand user requirements, not only for current processes, but also future processes (i.e., before and after the new system is installed). Without detailed user requirements, review of systems for functional best-fit rarely succeeds. The requirements must go into sufficient detail for complex processes, or processes that may be unique to a particular business.

Reliance on vendor demos Vendor demonstrations tend to focus on very simplistic processes. A typical demonstration shows an ideal order to cash process where a customer orders a quantity of product that is in stock. The reality in most businesses is that most customers have varying and more complex commercial arrangements, and products are not always in stock.

Over-emphasis on system cost While the cost of an ERP system is significant for a company, other important decision criteria, such as functionality; future proofing; underlying infrastructure [network & database]; and e-commerce capability among others, may be under stressed. Selection bias

It is not unusual that the decision on which system to purchase is made by one individual or by one department within the company. In these situations, an ERP system that may be excellent at one function but weak at other processes may be imposed on the entire enterprise with serious consequences for the business.

Failure to use objective professional services One of the main reasons for failure in system selection is the understandable lack of knowledge within the company. Experienced consultants can provide information on all of the packages that are available in the marketplace; the latest functionality available in the most common packages and, most importantly, can assist the user in deciding whether a specific requirement would provide added value to the user and to the business. However, it is worth noting that the professional help must be provided by objective consultants who have no affiliation with ERP system vendors. "If a consultancy has built up an expertise in the use of a particular package then it is in its interest to recommend that package to its client Inability to understand offering by ERP vendor "It is estimated that approximately 90% of enterprise system implementations are late or over budget . A plausible explanation for implementations being late and over budget is that the company did not understand the offering by the vendor before the contract was signed. A typical example of this would be the scenario where a vendor may offer 5 days of services for the purpose of data migration. The reality is that there is a huge amount of work required to input data onto a new system. The vendor will import the data into the new system but expects the company to put the data into a file that is easy to import into the system. The company are also expected to extract the data from the old system; clean the data and add new data that is required by the new system. "ERP, to be successful, requires levels of data integrity far higher than most companies have ever achieved or even considered. Inventory records, bill of materials (BOM), formulas, recipes, routings, and other data need to become highly accurate, complete and properly structured". This typical scenario is one of many issues that cause implementations to be delayed and invariably lead to requests for more resources.

A proper system selection methodology To address the common mistakes that lead to a poor system selection it is important to apply key principles to the process, some of which are listed hereunder: Structured approach The first step in selection of a new system is to adopt a structured approach to the process. The set of practices are presented to all the stakeholders within the enterprise before the system selection process begins. Everyone needs to understand the method of gathering requirements; invitation to tender; how potential vendors will be selected; the format of demonstrations and the process for selecting the vendor. Thus, each stakeholder is aware that the decision will be made on an objective and collective basis and this will always lead to a high level of co-operation within the process.

Focused demonstrations Demonstrations by potential vendors must be relevant to the business. However, it is important to understand that there is considerable amount of preparation required by vendors to perform demonstrations that are specific to a business. Therefore it is imperative that vendors are treated equally in requests for demonstrations and it is incumbent on the company [and the objective consultant assisting the company in the selection process] to identify sufficient demonstrations that will allow a proper decision to be made. Objective decision process "Choosing which ERP to use is a complex decision that has significant economic consequences, thus it requires a multi-criterion approach." [9]. There are two key points to note when the major decision makers are agreeing on selection criteria that will be used in evaluating potential vendors. Firstly, the criteria and the scoring system must be agreed in advance prior to viewing any potential systems. The criteria must be wide-ranging and decided

upon by as many objective people as possible within and external to the enterprise.

In no circumstance should people with affiliations to one or more systems be allowed to advise in this regard.

Full involvement by all personnel The decision on the system must be made by all stakeholders within the enterprise. "It requires top management leadership and participation it involves virtually every department within the company. Representatives of all users should: Be involved in the project initiation phase where the decision making process is agreed; Assist in the gathering of requirements; Attend the Vendor Demonstrations; Have a significant participation in the short-listing and final selection of a vendor.

Supply Chain Management Systems:

1. What is SCM? 2. Information Systems & SCM 2.1 Inefficiencies in SCM 2.2 BullWhip Effect Eg. P&Gs Pampers Diapers

How Information Systems facilitate SCM: Information from Supply Chain Management Systems helps firms: Decide when and what to produce, store and move. Rapidly communicate orders

Track the status of orders Check inventory availability and monitor inventory levels Reduce inventory, transportation and warehousing costs Track shipments Plan production based on actual customer demand Rapidly communicate changes in product design Establishing inventory levels for raw materials, intermediate products and finished goods Identifying the transportation mode to use for product delivery

Most Important function is Demand Planning.

EG. Whirpool Corporation: It uses SCM systems to match production with customer demand. It uses software produced by i2 Technologies, that includes modules for Master Scheduling, Deployment Planning and Inventory Planning. It also uses i2s web based tool for collaborative planning, forecasting and replenishment for sharing and combining its sales forecasts with those of its major sales partners. It helped Whirpool increase availability of products in stock when customers needed them to 97%, while reducing the number of excess finished goods in inventory by 20% and forecasting errors by 50% Demand Driven Supply Chains: From Push to Pull Manufacturing and Efficient Customer Response: 1.Push Based:

Forecasts or best guesses of demand for products 2. Pull based: 2.1 Only Actual product demand is used by manufacturers. 2.2 What customers have ordered only moves up and down of supply chain.

The internet technology make it possible to move from sequential supply chains to concurrent supply chains, where information flows in many directions simultaneously among members of a supply chain network. Members of the network immediately adjust to changes in schedules or orders. Business Value of Supply Chains: Increases sales and availability of products Total SCM cost represent up to 25 -75% of operating costs in many industries.