Business Benefits of Supply Chain Management Systems - Assignment Example

? MANAGEMENT INFORMATION AND COMMUNICATION SYSTEM By Presented to Question Supply chain management systems Introduction Firms exist with the fundamental aim of making maximum profits, which enables them expand their business operations. In this regard, a business firm that wants to make maximum profits should maintain a constant supply of goods and services to its customers. In addition, the business firm should monitor the stock of raw materials required in the production of goods and services and make the requisite replenishments in order to ensure a steady supply. In order to achieve the constant supply of raw materials and the supply of goods and services to the consumers, a business firm should ensure that their supply chain management systems are effective. In this case, only an effective supply chain management system can enhance the firm’s responsiveness to its customers’ needs and utilisation of its resources. In effect, the supply chain management system enables a firm’s coordination during the processes of planning, production, and logistics with the suppliers. Business Benefits of Supply Chain Management Systems A business should be able to evaluate the status of its supplies and resources while maintaining an inventory system along the supply chain. Bowersox, Closs and Cooper (2010, p. 133) called this visibility, which is the ability of a business to track its resources and inventory along the supply chain while evaluating and managing any information regarding the resources and inventory. In effect, supply chain management systems benefits a business by using the information in the supply chain to plan against any potential problems along the supply chain. Consequently, the evaluation of these problems enables businesses to manage any potential risks, which enhances the responsiveness of a business towards its consumers’ needs. Supply chain management systems enables a firm to integrate both the supply and demand chains, which enhance a firm’s knowledge of the required capacity, required materials, and any constraints in the supply chain (Bowersox, Closs and Cooper 2010, p. 133). In this case, a firm is capable of forecasting on the customers’ demand for its products, which makes the business plan its operations using the available resources to produce the product according to the consumers’ demand. In addition, a business will benefit by planning for the consumers’ constraints such as transportation and storage capacities, raw materials required, and the amount a firm should produce in order to meet the consumers’ demands. Supply Chain Management Systems and Coordination of Planning, Production, and Logistics with Suppliers As earlier indicated, one business benefit of supply chain management systems to a firm is the ability of a firm to remain responsive to its consumers’ demand. In effect, an effective system will enhance a firm’s planning of its production to meet the market demand, which is the process of demand management. Bowersox, Closs and Cooper (2010, p. 133) noted, “Demand management develops the forecast that drives anticipatory supply chain processes.” The importance of the “anticipatory supply chain processes” in a business firm is to establish the amount of products to produce and the raw materials required in the production of the products. In effect, an organisation maintains a steady contact with the suppliers of raw materials based on the firm’s projections and stock available. A supply chain management system enables a business to identify the goods that require production in a firm. In this way, a firm will be able to balance between its ability in terms of resources available and the manufacturing stock. It is important to point out that these resources include the most significant resource of human capital. Bowersox, Closs, and Cooper (2010, p. 135) called this product planning and noted, “It uses the statement of requirements obtained from demand management in conjunction with manufacturing resources and constraints to develop a workable manufacturing plan.” Hence, a supply chain management system will enable a firm coordinate the resources required for production while paying attention to human capital suppliers and suppliers of other resources necessary for production. Finally, a firm should always avail products to its customers according to the customers’ demand, which emphasises the importance of logistic planning. Bowersox, Closs, and Cooper (2010, p. 136) noted, “Logistics planning coordinates transportation, warehousing, and inventory within the firm and between supply chain partners.” Thus, logistic planning in the supply chain system enables a firm to forecast on its transportation and warehousing requirements, which is crucial in coordinating with the suppliers of these essential services. Conclusion Based on the foregoing, there are benefits that businesses accrue from systems in the management of the supply chain. However, responsiveness to the customers’ requirements is the fundamental benefit since it enables a firm to plan for its production based on demand. On the other hand, planning based on demand is a result of forecasting, which is a key role of an effective system in the supply chain. Conversely, a supply chain system coordinates the firm's planning with suppliers by enabling the firm to identify the amount of products required, which allows suppliers to supply the necessary materials and resources for productions. Similarly, the systems enable a firm to coordinate its supply chain systems with human capital suppliers to produce goods while maintaining a balance between the firm’s resources and manufacturing of stock. In addition, the systems enable the firm plan for effective logistics with transportation and warehousing suppliers. Question 3: Business Advantages and Disadvantages of Enterprise systems Introduction In the contemporary business world, the systems and infrastructure for enterprise are increasingly becoming of critical concern to businesses more so in the process of integrating applications that enhance business operations. In this case, there are various approaches and ideologies that different businesses have been trying which proves the importance of this infrastructure and systems in business. Thus, it is commonplace to find businesses lost in a confusing marketing language while trying to find the right applications and data integration solutions for their firms. Nevertheless, getting the right application or data integrated solution is crucial to a firm’s business operations. One such application or data integrated solution is enterprise systems tailored to fit into the requirements of an organisation, which utilises the system. In effect, the organisation benefits by enhancing its effectiveness in the performance of essential tasks. Despite enterprise systems having many advantages to a firm, such as providing a single database, disadvantages abound with the use of enterprise systems in a firm. Advantages The fundamental advantage of enterprise systems is their ability to centralise an organization’s data. Gelinas, Dull and Wheeler (2011, p. 58) noted the role the centrality of the database played in verifying “the accuracy of new data elements entered into the database, and applies business rules to permit only authorised changes to the database.” In this case, the verification of new data into the database ensures that the organisation’s data is reliable, valid, and accurate. In addition, the centrality of the database makes a company analyse the trends in an organisation and forecast on future events that may affect the performance of an organisation. On the other hand, the database is crucial in providing timely information to the organisation whenever the organisation requires any information regarding its operations. In this regard, an enterprise system collects a variety of information regarding a business organisation and stores the information in the organisation’s databases. In effect, Gelinas, Dull and Wheeler (2011, p. 58) noted the systems “can make the data available for use by all interested and authorized parties inside and outside the organisation.” The timely information is important in an organisation's decision making process. Gelinas, Dull and Wheeler (2011, p. 58) noted enterprise systems enhanced “seamless integration and accessibility of information across the organisation.” In this case, the system links all the departments in an organisation to work hand-in-hand with each other since the central database acts as a connection of all the functions in the organisation. Since an enterprise system supports an organisation’s business infrastructure, the system can link such functions as customer service, management, production, and accounting. In addition, the seamless integration improves an organisation’s productivity. Furthermore, an organisation that integrates enterprise systems ensures better financial management practices since linking various departments reduces the cost of personnel in an organisation. Disadvantages Gelinas, Dull and Wheeler (2011, p. 59) observed the inability of enterprise systems in supporting “traditional business processes that may be best practises for that organisation.” In effect, employees may find the system too complicated, unusable, or even inaccurate during operation. Therefore, the organisation may spend a considerable amount of time and other resources managing the change for the employees while at the same time implementing the system. As a result, the organisation directs most of its resources to train their employee’s to adopt the enterprise systems. On the other hand, Gelinas, Dull and Wheeler (2011, p. 59) noted enterprise systems led to a “loss of flexibility in rapidly adapting to desired new business process in the post-implementation period.” It is obvious that an organisation designs an enterprise system to fit its objectives and requirements during the implementation stage. On the other hand, a business keeps on improving its operations with time, which effectively implies that a change in business operations requires reorganising the design of the enterprise system. However, an enterprise system is rigid and changing the design requires a lot of time and financial resources to fit the new system into the ongoing changes in a business organisation. Finally, it is important to point out that delegation of roles in a business organisation is one of the key factors that influence the success in the contemporary business world. However, Gelinas, Dull and Wheeler (2011, p. 59) noted centralisation of the database in enterprise systems was against decentralised empowerment, which is similar to delegation of duties in an organisation. In effect, this is a disadvantage since an organisation practices centralised control instead of decentralised empowerment. Conclusion The modern business world requires organisations to integrate technological applications in their business systems. In effect, such applications and systems enhance the performance of business operations in an organisation and give an organisation an impetus to profitability. One such application or data integration solution is the enterprise system. These systems are expensive to implement in an organisation in terms of time required to train employees and the financial resources needed for purchase. In addition, the systems leave a little room for flexibility after implementation. However, it is important to point out that the advantages of these processes far outweigh the disadvantages since an organisation benefits in enhancing its operations. In effect, enhanced operations are crucial for an organisation to make maximum profits in a business organisation. References Bowersox, D. J., Closs, D. J. and Cooper, M. B., 2010. Supply Chain Logistics Management,3rd ed., New York: McGraw Hill/Irwin. Gelinas, U. L., Dull, R. B. and Wheeler, P. R., 2011. Accounting Information Systems, 9th ed., Stamford: Cengage Learning. Read More