Learning Objectives
LO 11-1: Construct an information flow map.
See figure 11.1, information flow map, page 328. To construct an information flow map one must first conduct an information audit. An information audit determines the firm’s current internal and external information users. Then, actually map the internal and external users’ information flows. Once this is accomplished identify information needs that are not being satisfied. Discuss these potential needs with all internal and external users. Based on feedback on the information needs, change the information flow map to reflect them.
LO 11-2: Explain the uses of MRP, DRP, and MRPII systems.
The material requirements planning (MRP) system performs an analysis of a company’s existing internal conditions and determines the assembly and purchase requirements for a given product manufacturing schedule. The distribution requirements planning (DRP) system allows the firm’s distribution centers to communicate orders to the MRP. The DRP system enables the management of the movement of stock into and out of each facility. The manufacturing resource planning (MRPII) system allows managers to perform “what-if” analyses of likely outcomes based on potential capacity and production timing decisions
LO 11-3: Describe the historical developments and current use of ERP systems.
Information is essential to planning and decision makings. Not only is it important to have information available, it is critical that the information be easily accessible and as effortless as possible to share. These needs have driven the development of software planning systems. The planning systems—material requirements planning (MRP), manufacturing resource planning (MRPII), and enterprise resource planning (ERP)—have evolved over time to integrate more individual information databases; thus, connecting these links of the information value chain into a more robust and comprehensive enterprise-wide planning system. The latest iteration, ERP, when implemented effectively, can be used to improve decision-making, enhance demand forecasting, reduce logistics cost, improve warehouse management, improve customer service and retention, improved financial management, etc.
LO 11-4: Summarize the underlying principles of business process management.
The underlying principles of business process management are (1) processes must be adequately mapped and documented, (2) key processes should focus on customers, (3) procedures should be documented to ensure consistency and repeatability of quality performance, (4) measurement activities should assess individual processes, (5) process management should be based on continuous improvement, and (6) use best practices to ensure superior competitiveness.
LO 11-5: Recall three important trends in Enterprise Resource Planning.
Cloud computing is possibly the most important trend in enterprise resource planning (ERP). The benefits of cloud computing are no infrastructure, no data centers, no servers, and no platform management. The other two trends are big data and social media. Big data analysis involves mining huge amounts of data to obtain a competitive edge. Social media is a major source of customer information and coupled with big data analysis can identify customer needs, wants, and provide the ability to respond to customer trends.
Chapter Outline
Download a chapter outline in Word to help you study and take notes.
