E-Enabled Operations Management

  • ID: 3335877
  • Book
  • 290 Pages
  • John Wiley and Sons Ltd
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Although the theory of operations management has been presented in many textbooks published in the last two decades, the subject of e–enabled operations management is rather short of easily accessible literature.  The approach to operations management described in this book is unusual with respect to what is found in standard textbooks. Information and Communication Technologies (ICT) impact the ways firms are organised and managed, and as a consequence change the practical means used to conduct business operations.

The features of this book are threefold.

System approach to business modelling: Business activities, controlling functions and associated information systems are described within a coherent analytical system framework allowing a clear understanding of the various current control and costing concepts.  Operations costing is not usually included in textbooks as part of operations management, but it should be. Cost targeting has become an integral part of good practice of business management.

Validity of models: Apparently simple models are analyzed in depth. Students must be fully aware of the assumptions made when models are formulated and of their conditions of validity. Applying a model implies automatically that assumptions of a sort are taken for granted.

Logistics, procurement and quality management: These three business functions are critical key success factors for managing e–enabled supply chains from suppliers to customers. That is why their main tools are introduced in this document.

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PREFACE xiii

PART 1. MODELING OF BUSINESS STRUCTURES 1

CHAPTER 1. SYSTEM APPROACH TO BUSINESS OPERATIONS AND INFORMATION ENGINEERING 3

1.1. System approach to conduct business operations 3

1.1.1. General considerations 3

1.1.2. System description 4

1.2. Information engineering 6

1.2.1. Information as a resource 6

1.2.2. Explicit and implicit information 6

1.2.3. Clarification of some terms 7

1.2.4. Characteristics of information systems 7

1.2.5. Information system content for a manufacturing company 8

1.3. System approach to describing inventory–controlled storage 8

CHAPTER 2. BUSINESS MODELING BY PROCESS AND MANAGEMENT APPLICATIONS 13

2.1. Process definition and control 13

2.1.1. Definition 13

2.1.2. Process control mechanisms 14

2.2. Process modeling in perspective 15

2.2.1. General considerations 15

2.2.2. Management applications 17

2.3. Management by process 19

2.3.1. Activity–based costing and budgeting of products/services 20

2.3.2. Activity–based management 28

2.3.3. Information system: relationships between processes, activities and data 30

CHAPTER 3. BUSINESS MODELS: CONTROL MODELS, FLOW MODELS, ORGANIZATION MODELS, FUNCTION MODELS 33

3.1. Organizational structure as a blueprint for information systems 33

3.2. Business models 36

3.2.1. Definitions 36

3.2.2. Examples of business models 38

3.2.3. Example of business function model 39

3.2.4. Examples of business flow model 40

3.3. Aris–toolset: a software–toolset: a software package for business modeling 43

3.3.1. Introduction 43

3.3.2. Logic connectors in event–driven processes 45

3.3.3. Exercises 46

3.4. Supply–chain operations reference modeling 49

3.4.1. Introduction 49

3.4.2. What is a process reference model? 50

3.4.3. Model scope and structure 52

3.4.4. Applying the reference model to configurability 54

PART 2. MANAGERIAL CONCEPTS AND SOFTWARE PACKAGES IN PERSPECTIVE 57

CHAPTER 4. FROM MATERIALS REQUIREMENT PLANNING (MRP) TO ENTERPRISE RESOURCE PLANNING (ERP) CONCEPTS AND THE ASSOCIATED SOFTWARE PACKAGES (PICS AND COPICS OF IBM TO ERP–LABELED PACKAGES) 59

4.1. From MRP to ERP concepts 59

4.1.1. Overview of the evolution of management thinking 59

4.1.2. Correlation between management thinking and DBMS 63

4.1.3. Styles of manufacturing 64

4.2. Inventory control system 65

4.2.1. Basic model: reorder quantity 65

4.2.2. Basic model: lead time and threshold stock 67

4.2.3. Generalization of the basic model 68

4.2.4. Probabilistic situation: service levels and safety stock 69

4.2.5. Delivering into stock over time: economic manufacturing quantity (EMQ) 72

4.3. Manufacturing resource planning 76

4.3.1. Defining planning and scheduling 76

4.3.2. General description of the MRP technique 76

4.3.3. MRP–related concepts in action 80

4.3.4. Implementation of MRP–related concepts in the maintenance field 88

4.4. The just–in–time concept 93

4.4.1. Introduction 93

4.4.2. Core features of the just–in–time concept 94

4.4.3. JIT and inventory management 96

4.4.4. JIT and resources capacities 97

4.4.5. JIT and kanban 99

4.5. Customer order decoupling point 102

4.5.1. Description 102

4.5.2. Deploying an MPS within a CODP context 103

4.6. Contrasting the various control concepts 104

CHAPTER 5. SPECIFIC FEATURES OF ERP PACKAGES 107

5.1. Featuring ERP philosophy of software packages 107

5.2. ERP–tagged software packages for managing business processes available in the marketplace          108

5.3. Function capabilities of the SAP CRM package 108

5.3.1. Why CRM? 108

5.3.2. Function capabilities of CRM software systems 110

5.4. Reference control model of a manufacturing firm 111

5.5. Finance reference control model 120

PART 3. BEYOND ERP PACKAGES: THE E–ENABLED ENTERPRISE 123

CHAPTER 6. CHANGE IN BUSINESS PROCESSES INDUCED BY E–COMMERCE AND E–BUSINESS 125

6.1. General considerations for approaching the digital economy 125

6.2. Change in business structures 127

6.3. Microeconomic approach to the digital economy 130

6.4. E–commerce 132

6.4.1. Distinction between e–commerce and e–business 132

6.4.2. E–commerce from different perspectives 133

6.4.3. Business models for e–commerce exchanges 135

6.5. Changes in business processes induced by e–enabled business operations 135

6.5.1. Dell business model and its evolution 136

6.5.2. Bricks–and–mortar model 138

6.5.3. Virtual firm model 139

6.6. Online auction process 140

6.6.1. Introduction 140

6.6.2. Online auction process in a high–tech manufacturing company 140

6.6.3. Description of the market place COVISINT 143

6.6.4. Exercise 144

6.7. E–commerce, sales chains and ROI 149

6.7.1. General setting 149

6.7.2. ROI of e–commerce in sales chains 152

CHAPTER 7. CONTROL PARAMETERS FOR E–ENABLED SUPPLY CHAIN 155

7.1. Collaborative planning, forecasting and replenishment 155

7.2. Control parameters for e–enabled supply chain 157

7.2.1. Master production schedule 158

7.2.2. Projected available balance (PAB) 159

7.2.3. Available to promise (ATP) 159

7.3. The bullwhip effect 160

7.3.1. The model 161

CHAPTER 8. INTEGRATION OF ERP PROCESSES WITH E–COMMERCE AND E–BUSINESS PATTERNS 163

8.1. Information system architecture and business processes 163

8.1.1. What is a layer architecture? 163

8.1.2. What is a layer architecture describing a business? 164

8.1.3. Developing a layer architecture 165

8.1.4. Relations between different layers 166

8.1.5. Relations between different subsystems inside a layer 167

8.2. Business workflows and information system architecture 168

8.3. Integration of ERP processes with e–commerce and e–business 169

CHAPTER 9. ROLES OF INFORMATION TECHNOLOGIES FOR MAKING BUSINESS MODELS FLEXIBLE 175

9.1. Information technologies: engine of change 175

9.1.1. CAD/CAM 176

9.1.2. Quality of service and speed of delivery 176

9.1.3. Virtual organizations 176

9.2. Approach to the specific functions of virtual collaborative context 177

9.3. Applications of portals 181

9.3.1. How portals impact business organizations 181

9.3.2. Portals and negotiations in business life 181

9.3.3. Scenario of a collaborative e–enabled working environment in the fashion–sensitive textile sector 184

9.3.4. Example of a collaborative design environment 191

9.3.5. Benefits of electronic negotiations 193

PART 4. CRITICAL BUSINESS FUNCTIONS FOR E–ENABLED OPERATIONS MANAGEMENT 197

CHAPTER 10. LOGISTICS 199

10.1. Logistics in perspective 199

10.1.1. Overview 199

10.1.2. Components of logistics 200

10.1.3. Logistics and the digital economy 201

10.2. Logistics and hierarchical layers of management within the framework of supply chain management 203

10.2.1. General context 203

10.2.2. Promotion of logistics strategy by Toshiba of Japan 205

10.3. Information system for e–logistics 206

10.3.1. Introduction 206

10.3.2. Goods movement control system and its components from the customer side 208

10.3.3. Goods movement control system and its components from the provisioning side 211

10.3.4. Electronic data interchange 214

10.4. Logistics flow process management: logistics performance indicators 224

10.4.1. Definition 224

10.4.2. Logistics key indicators 224

10.4.3. Definitions of logistics key indicators 226

10.5. Location analysis of warehouses and transportation 227

10.5.1. Transportation method 228

10.5.2. Procedure of the transportation method 229

10.5.3. Stepping–stone method 229

10.5.4. VAM method 230

10.5.5. Problem setting 231

10.5.6. Solution with the northwest corner rule and the stepping–stone method 232

10.6. Reverse logistics: cash from trash and environmental issues 235

CHAPTER 11. SOURCING AND PHYSICAL DISTRIBUTION 237

11.1. Sourcing policy 237

11.1.1. Pure market option 237

11.1.2. Controlled competition option 238

11.1.3. Vertical integration option 238

11.1.4. Advantages versus disadvantages of the various options in relation to business strategy and types of products 239

11.2. Physical distribution policy 243

11.2.1. Objectives and constraints 243

11.2.2. Various patterns of physical distribution 244

11.2.3. Choice of a physical distribution option 245

CHAPTER 12. QUANTITATIVE QUALITY MANAGEMENT 247

12.1. ISO 9000 standards: impact upon business operations 247

12.2. Acceptance testing 248

12.3. Operating characteristic curve 248

12.4. Average outgoing quality 252

12.5. Terms used in an acceptance plan for attributes 255

PART 5. CASE STUDIES 257

CHAPTER 13. CASE STUDIES: HELLAS CORPORATION AND THE E–ENABLED CAR INDUSTRY 259

13.1. Hellas Corporation case study 259

13.2. The e–enabled car industry 263

13.2.1. Introduction 263

13.2.2. Assignment 264

13.2.3. Car manufacturing 264

INDEX 269

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Jean–Pierre Briffaut
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