Integrating IT Systems with Supply Chains
Cagliano R. et al,(2006) “Supply chain management research studies categorise processes that make easy overall business flows including five major areas; Product, negotiation, ownership, information, and promotion”.
Richey N, (2003). “It has been also noted that associates in the supply chain are joined by partnerships across multiple roles, tasks and functions are classified into four major areas such as material source, manufacturing, wholesaling and retailing”
Mentzer,(2004) “Intra company information systems are primary and essential element, one hand enables companies to attain better control and visibility, on the other hand also assist companies in cost reduction and better customer service; which ultimately improve the overall performance of supply chain” .
Enterprise Resource Planning (ERP) systems have been largely adopted by companies over past decade holding core capabilities of MRP as well. One of the major reason of its adaptation that existing information systems are often incompatible with each other plus each information system designed to meet the needs of specific function.
Mentzer (2004) also highlights the work of Davenport (1998). “ ERP was developed to fill the gap of existing information system which is single and integrated system capable of streamline data flow throughout an organization rather than specific function, hence provide better gain in company efficiency and bottom line”.
In addition, Mentzer (2004) noted the work of Minahan (1998) “ that companies are capable to show remarkable improvement in their supply chain management practices and investment through the usage of ERP, which help to achieve reduce inventory, shorten life cycle and lower cost”.
This thesis aims to provide detailed comprehensive and essential information required to understand the current impact of IT and lean on the industry. It helps in analyzing the impact of information technology and lean strategies on currently existing firms. After analyzing thoroughly, the role of IT lean systems in supply chain, then it provides necessary recommendations while reviewing the theoretical best practices at the same time. Recommendations would help in understanding which companies need to improve in their current approach towards lean, ERP and supply chain management systems, so that an organization can operate efficiently and optimally.”
Preliminary Review of the Literature
It has been mentioned in the work of (Andel 1997; Cook 199; Daugherty, Myers and Ricehy 2002) “Technology is a strategic tool used to facilitate the management of supply chain and ultimately its network(s), help to decrease uncertainty, manage performance and bring supply chain flexibility”.
Richey R.G., (2003).stated that “information management is an important function of supply chain management and appropriate technology is required to assist physical flow of product, flow of promotion, flow of ownership at each stage of supply chain”
Lambert, Cooper and Pagh (1998) stated “Supply chain management processes which needs to be integrated for supply chain to operate effectively are customer service management, customer relationship management, demand management, order fulfillment, manufacturing flow management, procurement, product development and commercialization and returns”.
Dhingra (2001) stated “Information technology has re-defined the ways of doing successful business. Introduction of web-based technology has transformed business thinking and operations, so use of new technology has also been adopted in ERP and SCM systems, i.e. by introducing a web-enabled ERP system. This allows Customers to directly access suppliers ERP systems and manufacturers in turn can provide real time information like inventory, order details, pricing and shipping status. Thus web-enabled ERP systems provide real time flow of reliable and necessary information to all the supply chain members”.
Slack N. et al (2007) stated that “Some potential problems of complexity and routine maintenance also arises with evolve of web-integrated ERP system; compel system to go offline”.
The brief functionality of ERP system defined by Slack N. et al, (2007) “A complete enterprise-wide business solution. The ERP system consist of software support modules such as marketing and sales, filed services, product design and development, production and inventory control, procurement, distribution, industrial facilities management, process design and development, manufacturing, quality, human resources, finance and accounting, and information services. Integration between the modules is stressed without the duplication of information ERP database integrates and coordinate information from all parts of the organization”.
Chang I-C.et al,(2008) suggested that “ ERP emphasizes integration of the flow of information relating to the major functions of the firm. The broader and more complex the organization is, the more it requires integrating this information flow. When applying supply chain management (SCM), orders can be forecasted efficiently and correctly, stock costs for supply chain partners can be reduced, and a manufacturing schedule can be set to optimize manufacturing and supply time”.
Traditionally, supply chain management did not have any ERP systems to monitor and control the flow of information and due to this reason, information flow was comparatively slow. However in late 1990’s, many companies started focusing on reducing lead time and increasing the internal efficiency of the business.
Dhingra, (2001) “Therefore, Enterprise Resource Planning (ERP) systems whose basic objective is to increase the efficiency internally by managing the flow of the information became popular and were widely adopted. Soon, after a period of time companies started realizing that internal efficiency can only be improved if they start focusing on increasing the capability and efficiency of the supply chain. As supply chain have continuous real time information flow across its functions and also advancement in technology to produce shorter life cycles, played an important role in integrating both ERP applications and SCM software’s”.
Dhingra, (2001) “Integration of ERP systems in SCM allowed the companies to increase efficiency throughout the supply chain by managing the error-free flow of information. ERP played a vital role in integrating the whole supply chain as ERP systems also allows integration of planning, scheduling and controlling systems as well. It is very vital to understand the main difference between values added, non-value added or waste processes, in order to implement lean thinking. It is often very difficult to understand the difference while dealing with the supply chain as a whole”.
Harrison and Hoek, (2005) “To implement lean, the best way is to identify key components within the supply chain and then implement lean thinking on each component separately. After applying lean to each component, the focus is on to link up these components together in most effective way so that waste can be reduced while combing them” The term ‘Lean thinking’ introduced by James Womack and Daniel Jones (1996), based on five basic principles explain by Harrison and Hoek (2005) Lean thinking is a cyclical route to seeking perfection by eliminating waste and there by enriching value from the customer prospective. The end-customer should not pay for the cost, time and equality penalties of wasteful process in the supply network.
Found P., (2006) stated that “Management of demand-driven lean approach is not possible and controllable without the help of software for many organizations when the demand patterns are inconsistent and production capacity is fixed in the short-term. In many of these successful companies it is the technology which is aligned in lean way that is enabling them to outperform their competitors. Information technology helps in continuous monitoring, measuring and responding in real time to key performance metrics”.
Research Questions and Objectives
How companies align and operate in terms of their supply chain strategies and information systems?
How companies integrate their IT systems with supply chain management systems?
Critically analyse lean concept on information systems of the companies?
It studies the IT systems and its structure with in a company. This dissertation will focus on the importance of technology in lean implementation.
The aim of this research work is to study the principles of supply chain management in detail and to highlight different ways in which supply chain integration can be achieved. It is believed that supply chains have become a major concern for many companies and efficient and reliable operation of supply chains can give competitive advantage over other firms. Research work focuses on finding ways to implement lean concept on information systems of the companies. The research goal is to provide information for manufacturing and IS managers who are considering to integrating lean manufacturing with ERP.”
In order to carry out an academic research, one should first decide over the purpose of the research. According to Eriksson & Wiedersheim-Paul (1999) stated that “ Main purpose of academic research can be descriptive, explanatory or exploratory”.
So, by going through the research, reader can analyze in which direction the study will go. In other words, the way research is structured shows the exact purpose of the study.
Kotzab et al, (2005)” “A Research Methodology is the procedural framework within which the research is conducted. It describes an approach to a problem which may be operationalised into a research programme or process… within which the facts are placed so that their meaning may be seen more clearly.”
Selecting appropriate research methods are vital for a good research. It all depends on the type of research and study required in the dissertation to determine the research methods. There are various research methods related to qualitative research and quantitative research which are applicable to almost all types of research.So both quantitative and qualitative data from secondary data are to be used and both inductive and deductive reasoning is to be mentioned in order to create my research realistic in nature.
However as my research work is associated to applied research, so the appropriate research methods that were elected:
CASE STUDY :Oil and Gas Development Company Limited (OGDCL)
Oil and Gas Development Company Limited (OGDCL) is a state corporation of Pakistan. It was established in 1961 to prospect, refine and sell oil and gas in Pakistan.
By 1966, OGDCL had emerged as the dominant prospector in Pakistan with several significant discoveries in the Indus Basin.
In 1997, OGDCL was converted into a public limited company.
In 2005, the company reported a turnover of Rs.96,755 million.
On May 4th, 2006 the government of Pakistan appointed a Citigroup-led consortium to advise the state-run Privatisation Commission on the sale of 10 to 15 per cent (or 430 to 645 million shares) of the company. OGDCL is the second Pakistani company to have been listed at the London Stock Exchange.
During the fiscal year ended June 30, 2006 the Company made five oil and gas discoveries at Nim-1, Dars Deep-1, Tando Allah Yar North-1, Kunnar Deep-1 and Bahu-1. OGDCL's daily production, including share from joint ventures averaged 39,659 barrels (6,305.3 m3) of oil; 937 million cubic feet (26,500,000 m3) of gas, and 358 metric tons of liquefied petroleum gas. The Company holds exploration acreage comprising 40 exploration licenses covering an area of 75,905 square kilometers, including 16 exploration licenses covering an area of 28,066 square kilometers granted to OGDCL during fiscal 2006.
In early 2007, the company had a market capitalization of PKR 510.9 million in Karachi Stock Exchange. The company has 11,000 employees on its payroll
A case study will be conducted of Oil & Gas Development Company Limited (OGDCL) to go through on my research as an overview of company has been informed.
Data Collection Methods
Girolami, Bryman A., and Bell E. (2007)”mentioned that
“Secondary research is the way by which the existing research is utilized for information gathering rather than primary research. It is the method by which the already researched material and information is explored studied and relevant data is collected according to the requirements”.
I have selected secondary data collection due to lack of time and contact problem in selected company.
Typical examples of secondary research methods are journals, online articles, books, newspapers, encyclopaedia’s, EBSCO database and other documentations. These resources help in identifying other people work and research and enable the researcher to develop his own research and ideas by utilizing these resources properly.
I arrange an interview both middle and senior management at OGDCL Pakistan to address the second and third objective. I will use semi-structured interviews so that I have flexibility to explore new ideas come up. I will discuss these questions with my supervisor and my friends. The interview session will be 30 minutes.I will interview 6 people in which include team leaders and middle managers.
I would like to seek that what are the view of community about OGDCL in which that how people think about activities of OGDCL and also seek views from their employees and How much benefits they will get so the best way I am doing my questions to address second and third objectives.
Analysis of Data
I will use Weft ADA so that analyse the results of the interviews. Software is uncomplicated and easy to use.
For the Questionnaires I will explore the data in to Excel and use its statistic facilities for presentational and descriptive.
As my research is a single case study, there will be limitations to its generalisability. Limited Literature regarding the specific field of research. Research is an iterative process so that process will proceeds my work and time is another factor of limitation due to I may be able to generalize other Oil and gas operations or to other organizations operating in Pakistan.
Finally, Due to time limitation factor, I may not be able to visit Pakistan to get Primary Data.
I will follow BES Ethical Guidelines and complete the Ethics Compliance Form.I will keep and collect the data securely.
I understand what plagiarism is and wherever I use the work of others I will give an acknowledgement and paraphrase into my own words whilst being true to original content.
In the figure that follows an estimation of the dissertation process is shown by using Timetable and Gantt Charts.
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