Management Information Systems Islamia University of Bahawalpur Delivered by: Tasawar Javed Lecture 10

The Role of Information Technology Overview of Chapter

The 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. 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 Technology Business area Where e-business could impact Strategic aim Manufacturing/ service provision CAD manufacturing JIT 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

The Role of Information Technology 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

Supply Chain Management 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

SCM The transformation of product from node to node includes activities such as: Production planning Purchasing Materials management Distribution Customer service Forecasting when 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 Managing the Chain Managing the chain primarily concentration on managing the movement of the following three areas: Materials/inventory Information Funds Inventory 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 Fund Management Importance of IT 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

SCM For 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

SCM In the pull model, customers use electronic connections to pull whatever they need out of the system Electronic 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 Revisited The 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 Manage selling, delivery etc Market Research New products development Market products Purchase materials Produce products

Porter’s Value Chain Revisited In 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 Revisited Obviously, 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