Information Systems in Scm and Erp Essay

2.1.Introduction With the variety of requirements for information within businesses, most businesses tend to have several information systems operating at the same time. Executives require information to plan for the future, middle management require information to monitor and control whilst employees require information to help them carry out their duties. In this essay we look at information systems in supply chain management and enterprise resource management. 2.2.Discussion There are various types of information systems, these include office automation systems, transactional processing systems, decision support systems, management information systems and knowledge management systems. In identifying the use of information systems in enterprise resource planning and supply chain management, we first have to understand what these represent. 2.2.1Review of Information Systems, ERP and SCM Information systems are an integrated set of components for collecting, storing, processing and communicating information. Organisations rely on information systems to manage their operations and compete in the marketplace effectively and efficiently. Information systems rely on three key resources i.e. technology, people and information. Bocij et al. (2008) describe enterprise resource planning (ERP) as systems that provide a single solution with integrated functions and a unified database for major business functions across the value chain for example: finance, sales, distribution, marketing and human resource management. ERP systems enable efficient planning, managing, and controlling of all core business processes across multiple locations. According to Bocij et al.(2008) supply chain management (SCM) consists of a series of activities that moves material from suppliers through operations to customers. SCM enables more efficient management of the supply chain by integrating the l inks in a supply chain; which may include suppliers, manufacturer, wholesalers, retailers and final customers. 2.2.2Information Systems in Supply Chain Management Information systems are critical to a supply chain management. They automate simple and complex tasks and provide management with reports concerning logistics. Information systems in supply chain management analyse the flow of products and provide information and status on items, determine profitability and the most effective way to manage inventory. The information system enables the retailer to identify inventory levels, inventory turnover rates while identifying usable warehouse space. Information systems are used to optimize the logistical process such as receiving, storage and distribution. The role of an information system is to collect raw data for transaction processing. Through specialized reporting and enquiries, the system produces reports to assist management to make decisions which impact operations. Compiled data is used to determine strategies which impact inventory costs, distribution costs and product cycles. Added benefits of information systems in supply change management include the ability for customers to track the delivery of an item with an assigned tracking number; and management of inventory based expiry dates or no sell by dates i.e. last in, first out or first in, first out (Unknown). 2.2.3Information Systems in Enterprise Resource Planning Enterprise Resource Planning (ERP) systems refer to the software packages that integrate all the data and the related processes of an organisation into a unified Information System. It is designed to facilitate the administration and optimisation of internal business processes across an enterprise. ERP is used extensively by larger retail chains as a competitive tool for efficiency. ERP software uses a single database that allows different departments to communicate with each other through information sharing. ERP systems serve an important function by integrating separate business functions such as material management, product planning, sales, distribution, finance and HR, into a single application. Hyperone would benefit from an integrated infrastructure which continuously monitors and dispatches the necessary information of the flow of goods from supplier to cash register. Flexible, process efficient and reliable information are critical to retail business and ERP packages have been introduced to tackle IT complexity. Some ERP retail solutions include critical functions like inventory tracking, ordering and replenishment, loss prevention and task management. ERP systems help in the decision making process such as formulating pricing strategies, merchandising planning, inventory optimisation and store execution. They also help in managing workflow through automation which enables management to monitor and control inefficiencies in processes (unknown:2011) The key components of a retail ERP system include: * Merchandise management which includes activities such as the setting up, maintenance and management of the retail outlet, keeping track of the prices of the items, inventory, and the different vendors etc., facilitating a more efficient retail option. * Retail planning which enables retailers to plan activities at a large and small scale, factoring in economies of scale to achieve desired efficiencies. * Supply chain planning and execution enables a retailer to run the business more efficiently by closely monitoring and managing their supply chains. However, it must be noted that most ERP systems need to integrate with other systems such as management information systems (MIS), business intelligence (BI) or data mining tools in order to extract, analyse and construct data into readable information. 2.3.Conclusion Information systems are integral to enterprise resource planning and supply chain management for the effective management of information across all functions of the business. Both supply chain management and enterprise resources planning systems comprise of transactional processing systems and with integrated management information systems they provide crucial information in a timely manner.