Advantages and disadvantages of using SCM information system

1. Briefly describe the business processes supported by a Supply Chain Management (SCM) information system. In a global business like Emerson what are the advantages and disadvantages of using a SCM information system? With Emerson’s many divisions using different suppliers, what would be the benefits of using a single SCM information system for all of its divisions?

2. Global companies like Emerson have suppliers, manufacturing, distribution, and retail operations. List and briefly describe the technologies and devices (used for input, output, and communication) that are used with SCM information systems. Choose two different input devices and discuss the advantages and disadvantages of each. Discuss the benefits that they provide to the business?

3. Consider that you have to implement a new SCM information system for Emerson. Describe each of the different implementation options. Discuss the advantages and disadvantages of the different implementation options. Make a recommendation and justify?

4. Modern SCM information systems and with the use of other technologies have supported businesses in improving environmental sustainability by reducing carbon emissions. Research and find an example. Briefly describe the system and how it works and how carbon emissions where reduced. Discuss what decision making is performed and how does the SCM information system contribute to the decision making. Discuss the advantages and disadvantages to the business?

1. Supply chain management is a systematic process that helps in achieving high level of cooperation and coordination between various business functions within a single organization. Thus it aims towards achieving various financial benefits along with control over different business activities. The SCM information system is perhaps a step ahead in new age supply chain management system. It helps in achieving the similar targets of supply chain management using the management information system or MIS in action. Therefore a supply chain management information system is developed that creates a network to keep coordination of movement of the raw material, track of movement of goods and deliver quality goods and service to the customer using the web system. This way an attempt is made to integrate the resources and achieve logistics gains that could help in bringing down costs and expenditures. Hence integration in the business process is achieved through the enhanced information system that could help in scheduling inventory flow, control business process, coordinate production function and achieve customer service thereon (Bazerman, 1998).

A number of advantages and disadvantages of using SCM information system are as follows.

1. Advantages:
2. The company got a chance to integrate various business activities.
3. Transportation management for freight carriers of different businesses can be achieved.

• Various business units, logistics suppliers and providers of different services can use exchange of information for increasing and improving efficiency and effectiveness of business.

1. It helps in providing a solution to the brittle system.
2. Common communication mechanism and data formats can be achieved.
3. An increase in inventory control can be achieved.

(CEB information Technology, 2012)

1. Disadvantages:
2. An additional expenditure of establishing and maintaining a hub for interconnecting business activities has to be borne on regular basis.
3. The management will have to reveal all business related information to the hub.

• An update of information in the system has to be achieved at regular intervals.

1. The management has to take care of the hub administration as well.
2. The outcome of the hub will depend on the ability of the employees than the system itself.
3. Chaos and unnecessary delays can become the outcome of the new updated SCM information system based business process.

(Caligiuri et al., 2009)

Emerson using the single SCM information system can help the company in many ways stated below.

1. The company got a chance to integrate business activities of its 70 separate business units that actually purchased goods from nearly 35,000 suppliers.

2. The application of ANSI ASC X12 format and OAGIS XML helped in building an ERP system that helped the hub specially made for to bring interconnection between the various business activities.

• The investment of $500,000 in the hub resulted in giving many times returns to the company.

1. The control over the business operation increased manifolds.
2. 70 smaller businesses were brought together to achieve one big customer title for the purchase of the company.
3. The hub helped in processing of transactions up to 100,000.

• The problem of over or under stock was finally removed.
• A cost cut of 35% is achieved by putting 10 suppliers in one shipment.

(Andrew, 2007)

2. The list of various technologies and devices that could help the global company like Emerson to coordinate for suppliers, manufacturing, and distribution and retail operations are discussed as below.

1. Bar coding and Scanner:

Technologies and devices that can help global companies like Emerson to coordinate efficiently

It is a representation of codes in the form of bars which are scanned to identify and track the movement of the goods in the supply chain at various stages of process.

1. Enterprise Resource Planning or ERP:

It is an automated information system that helps in retrieving various business activities and functions following the transaction based information system sharing method.

1. Inventory management:

It is method of recording the movement of the inventory using the circular process through which the purchase, tracking, movement and reordering is done to maintain a definite level of inventory.

1. Radio frequency identification or RFID:

RFID helps in scanning the tag by using radio frequency signals as against the traditional bar code scanning system. This way the expiry and various other important information about the product can be easily be retrieved.

1. Software agents:

Java, JADE, Voyager, ZEUS etc are among the various software agents that in the present day world support the artificial intelligence by attributing to the intelligence and acting on behalf of the company agents.

1. Decision support systems:

The decision support system is a automated information system that helps in organizational decision making process by supplying the data and other information related to the issue so that the most appropriate decision making can be reached by the company.

1. Web services:

Web services include the use of XML along with the following standards such as SOAP or Simple Object Access Protocol, UDDI or Universal description discovery and integration and WSDL or Web Services Description Language.

The two most useful input devices in the present day world includes web services and decision support system (Karim & Hamdan, 2010). The advantages and disadvantages of each are stated below.

1. Web services:
2. Advantages:
3. The use of latest web services for the administration and control for the supply chain management can be achieved.
4. The latest information about the business process and services can be retrieved.
5. The application of latest software for the supporting business activities can be achieved.
6. 24 hour web facility helps in achieving high end goals for the company.
7. Disadvantages:
8. The latest web services will cost high to the business operation.
9. The company management will have to take more pains to feed the latest data in the web service set up.
10. Various business secrets are feared to be revealed through the use of the web services.
11. The customers will be able to use the web services only when they have the required data inputs that could be used for revelation of the required information.
12. Decision Support System:
13. Advantages:
14. It helps the management to take wise and upgraded decision on the latest inputs received from the business operations.
15. It helps in taking the most appropriate decision that ensures sustenance and development for the business.
16. The latest technological inputs and processing methods are used for getting more reliable outputs.
17. Company goals can be improved and achieved easily using the decision support system in application.
18. Disadvantages:
19. The decisions taken cannot ensure quality output as it just acts as a platform for taking wise decisions and does not offer the decision itself.
20. The management will have to share important information on the system which could be stolen by other company agents or double agents.
21. The company will have to keep double records of the data so that the information can be processed and used thereafter.
22. The management will have to ensure that safe passage of usage and block the unauthorized usage which will require an additional effort for safeguarding the decision support data using latest security methods.

Advantages and disadvantages of web services and decision support system

This way the benefits that they provide to the business include the followings.

1. High efficienc
2. Achieving effectiveness of business operations.
3. y of business is achieved.
4. Company goals are met easily.
5. Business control is made easier.
6. Expenditures can be decreased through effective management using latest information system in action.

(Teale et al., 2003)

3. The implementation of a new SCM information system for Emerson includes the following different implementation options.

1. Applying Electronic Data interchange or EDI:

It is a process of computer to computer exchange of information in a more structured and automatic manner. This can help the company in achieving first step towards automation.

1. Warehouse management:

It is a method of management that included recording of various business activities such as receipt of goods, storage, production and stock rotation using the radio frequency communication system.

1. Transportation management:

This method deals with the scheduling and management of the multiple transportation system that are required to be followed to achieve on time disposal of business operations.

An addition of the new age of Supply Chain Management Information System can be applied in the Emerson includes the followings.

1. Electronic commerce:

It is actually the use of electronic medium for exchange of information using the electronic email, fund transfer, data interchange etc.

1. Electronic supply chains:

It is a virtual supply chain management using the value added network using open networks and standard protocols.

1. Web services:

The Web services as stated earlier include the use of XML along with the following standards such as SOAP or Simple Object Access Protocol, UDDI or Universal description discovery and integration and WSDL or Web Services Description Language. Emerson can continue to make transactions through the two data formats called the EDI which uses ANSI ASC X12 format along with the OAGIS XML.

This way the above stated method can help the company in saving huge expenditures on goods that are actually supplied from one location from different suppliers ordered by its separate business operations. Thus an approximate of 35% expenditure is saved using the coordinated ordering and delivery system which puts together 10 suppliers in the same shipping container. This method took an initial investment of $500,000 to create a hub for supporting the business activities of various small businesses of the company but resulted in recovering the cost several times (Schwabe, 2014).

Advantages of different implementation options:

1. Applying Electronic Data interchange or EDI can help in easy input and application of decision making for the company.
2. Warehouse management will help in recording the latest updated storage about stock and its regular rotation thereby identifying the right time for the new purchase.

• Transportation management helps in scheduling and managing the multiple transportation related business operations.

1. Electronic commerce helps in quick and easy transfer of information to the right authority in the organization.
2. Electronic supply chains helps in achieving a virtual added network system that helps in improving the business operation and achieve long term objectives and gains for the organization.
3. Web services helps in supporting the business operation using the latest software and technological upgrades.

(Brynjolfsson & Hitt, 2000)

Disadvantages of different implementation options:

1. Applying Electronic Data interchange or EDI needs an initial huge investment.
2. Warehouse management cannot ascertain the coming rise or fall in demand of goods and services produced by the company.

• Transportation management requires extra efforts and recruitment for the purpose which in turn adds to the tension for management and expenditures accordingly.

1. Electronic commerce may result in easy loss of information through non recipient of mail or hacking that may lead to steal away of information.
2. Electronic supply chains increases chances of information getting accessed by non authorized person if not taken care of the login regarding information.
3. Web services sometimes make the whole system so complex that it becomes difficult to handle the whole business system.

Methods to achieve optimal transportation and logistics

(March, 1994)

Recommendations:

1. Emerson needs to apply the electronic data interchange after making the employees capable of using the whole system. This can be done by giving appropriate training programs to the employees.
2. The warehouse system should be applied with latest data inputs so that the most effective and efficient output is achieved. Thus Emerson needs to employ special employees for the purpose of updating and uploading the business transactions related to warehouse handling.
3. The transportation management requires support of the management to achieve quality output and gains. Thus Emerson needs to direct its management to cooperate and coordinate with its various transportation management systems which is a part of the whole supply chain management information system to achieve high benefits.
4. Electronic commerce should be used along with the system security software application.
5. Electronic supply chains should be followed at priority by Emerson.
6. Web services should be applied and used in the regular business activities.

(Malhotra, 2002)

4. It has been rightly said that the modern Supply Chain Management Information System along with other technologies have supported businesses in improving environment sustainability by reducing carbon emissions. Various examples of SCM information system improving environment sustainability includes the reforming management system in Toyota Automobiles which has followed the techniques such as Lean production system, Just-In-Time technique and automation process in business. This led to the increase in efficiency and effectiveness of the business activities. Also it brought down the expenditures on inventory and wastage which earlier added to the cost of production. This way the best results in the form of quality output is achieved by Toyota Automobiles. This way the carbon emission due to extra production, wastage etc was reduced (Bain and Company guide, 2013).

Another best example for SCM information system is of Emerson which has achieved improved business activities using EDI along with ANSI ASC X12 and OAGIS XML. This method help the company in achieving various benefits stated below.

1. The control over the business operation increased manifolds.
2. 70 smaller businesses were brought together to achieve one big customer title for the purchase of the company.

The hub helped in processing of transactions up to 100,000.

1. The problem of over or under stock was finally removed.
2. A cost cut of 35% is achieved by putting 10 suppliers in one shipment.
3. The company got a chance to integrate business activities of its 70 separate business units that actually purchased goods from nearly 35,000 suppliers.

The application of ANSI ASC X12 format and OAGIS XML helped in building an ERP system that helped the hub specially made for to bring interconnection between the various business activities.

The investment of $500,000 in the hub resulted in giving many times returns to the company.

(Andrew, 2007)

The decision making therefore performed helps in controlling the business operations, increasing efficiency of management and improving productivity of business. The advantages and disadvantages to the business are therefore discussed below.

1. Advantages:
2. Efficiency and effectiveness of business is achieved through decision making based on updated data inputs.
3. Business set higher goals and achieves them easily.

• Management of business operations increases.

1. Control over the business transactions improves.
2. Cost reduction is achieved.

(ROBBINS & JUDGE, 2011)

1. Disadvantages:
2. Investment is required for the application of the SCM information system into action.
3. Recruitment of specialist is required for the application of SCM information system.

• Dependence on the experts increases.

1. The company information gets shared.
2. The application of the SCM information system does not ensure quality outcome as they offer options for decision and not the appropriate solutions itself.

(Andries et al., 2012)

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