chapter extension 8 functional processes, applications, and systems

Chapter Extension 8

Functional Processes, Applications, and

Systems

Q1 How do functional processes relate to functional applications and systems?

Q2 What are the functions of sales and marketing applications?

Q3 What are the functions of operations applications?

Q4 What are the functions of manufacturing applications?

Q5 What are the functions of human resources applications?

Q6 What are the functions of accounting applications?

Study Questions

CE11-2Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Functional processes

Processes that support a single organizational function• Accounts payable,

sales lead-tracking, customer support business processes

Functional application

Computer program that supports or automates major

activities in a functional process

Q1: How Do Functional Processes Relate to Functional Applications and Systems?


Determine

requirements of

function

Evaluate functiona

l applications and select closest

fit

Implement

application in

context of

supported

functional process

Alter proces

s or software

Build remainin

g components of an informati

on system

Acquire and install hardware,

populate database, adapt

standard procedures, and

train staff

Creating Functional Information Systems


•Model of “as-is” functional process•Create components •Evaluate functional applications and select one that provides closest fit

•Implement processes/application•Build remaining components of information system

Functional process

Organizations acquire functional application software and adapt it to support functional processes by creating functional information systems

Functional Applications and Business Process Management (BPM)


Process: Reserving golf tee

times and tennis courts

Model process and

determine specific

requirements

Identify potential off-the-shelf

applications and select

Create default and

custom procedures for using software

Example of a Functional Application at Fox Lake: Reservation Application


Acquire hardware, populate database,

modify procedures, train users

Q2: What Are the Functions of Sales and Marketing Applications?


Find and transform prospects into customers and sell more product to existing customers

• Prospect generation• Send postal mailings and email• Web sites may be used to send

product information, white papers for contact information

• Maintains customer name, product interests, past purchases, history of contacts with customer

Lead-tracking

applications

Lead-generation application

s

Lead Generation and Lead Tracking Applications


Form for Lead Tracking and Customer Management


• Obtain additional sales from existing customers

• Maintain customer contact and order-history data

• Track customer credit status

Customer-management applications

• Compare past sales records with projections and sales estimates

• Assess desirability of product to different market segments

• Manage product through life-cycles

Product and brand

management applications

Customer-Management and Product and Brand Management Applications


Manage finished-goods inventory and movement of goods to customer

Used by non- manufacturers, distributors, wholesalers, retailers

Principle operations applications

•Finished-goods inventory management•Order entry •Order management •Customer service

Q3: What Are the Functions of Operations Applications?


Functions of Operations Applications


• Inventory applications: Support inventory control, management, and policy

• Manufacturing-planning applications

• Manufacturing-scheduling applications

• Manufacturing operations applications

Manufacturing

applications

Q4: What Are the Functions of Manufacturing Applications?


• Figure CE11-4

Manufacturing Information Systems


•Support inventory control, management, and policy

•Cover inventory control, track goods and materials into, out of, and between inventories

•Use UPC bar codes and RFID tags

Inventory applications

•Use past data to compute stocking levels and reorder levels, and reorder quantities according to inventory policy

•Computing inventory counts and losses

Inventory-management applications

Q4: What Are the Functions of Manufacturing Applications? (cont’d)


•Large inventories to minimize operations disruptions and lost sales due to outage

•Increase sales via greater selection and availability

Inventories viewed as

assets

•Keep inventories small, eliminate if possible

•Just-in-time inventory policy (JIT)

Inventories viewed as liabilities

•Wal-Mart has large inventories in stores, but minimizes inventories in warehouses and distribution centers

Hybrid

Inventory Policy: Two Schools of Thought


• Implement inventory philosophy• Find balance between inventory

cost and item availability • Compute ROI• Report effectiveness of current

inventory policy• Evaluate alternative policies by

performing what-if analyses

Inventory applications help to:

Inventory Policy: Two Schools of Thought (cont’d)


• List of materials that comprise subassemblies to be manufactured

Bill of materials (BOM)

• May be augmented to show labor and equipment requirements

Schedule equipment, people, and

facilities

Manufacturing-Planning Applications


Bill of Materials Example


Sample Manufacturing Plan


• Demand pull products through manufacturing in response to signals from customers or other production processes. (Demand-side method, JIT)

Pull manufacturin

g process

• Analyze past sales levels, estimate future sales, create master production schedule. Produce and push into sales (Supply-side method).

Push manufacturin

g process

Combined push and pull

systems

Three Philosophies of Manufacturing


• Company creates an MPS and plans manufacturing accordingly, but it uses kanban-like signals to modify schedule.

•Application that plans need for materials and inventories used in manufacturing process

Materials requirement

planning (MRP)

•MRP plus planning of materials, personnel, machinery

•Linkages with sales, marketing via MPS

•“what-if” analyses on variances

Manufacturing resource

planning (MRP II)

Manufacturing-Scheduling Applications


Computer programs operate lathes, mills, and robots, and even entire production lines

• Operate production lines• Computer-aided manufacturing• Computer-aided design• Robotics

These run machines rather than support business processes

Manufacturing Operations


• Recruitment• Compensation, pensions,

bonuses, and so on in liaison with Payroll

• Training and development • Assessment

HR Functions Support

Q5: What Are the Functions of Human Resources Applications?


Functions of Human Resources Applications


Cost-accounting─determine marginal costs and profitabilityAccounts receivable─includes receivables, payments, collectionsCash management─scheduling payments; planning use of cash

Financial reporting─produce financial statements

General ledgers─show assets and liabilities

Accounts payable─reconcile payments against purchasers

Budgeting─allocate and schedule revenues and expenses

Treasury applications─concern management and investment

Q6: What Are the Functions of Accounting Applications?


Functions of Accounting Applications


Active Review


Q1 How do functional processes relate to functional applications and systems?

Q2 What are the functions of sales and marketing applications?

Q3 What are the functions of operations applications?

Q4 What are the functions of manufacturing applications?

Q5 What are the functions of human resources applications?

Q6 What are the functions of accounting applications?

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Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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