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Syllabus Roles Motivation Pro MIS 101 Strategy

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Introduction to Course

Oran Kittithreerapronchai1

1Department of Industrial Engineering, Chulalongkorn UniversityBangkok 10330 THAILAND

last updated: November 2, 2013

ProMIS v2.0: intro 1/ 27


Outline

...1 Contact Information and Syllabus

...2 Roles and Agreement

...3 Motivation for course

...4 Basic Concepts

...5 Information & Operation Strategy



Contact Information

Name: Oran Kittithreerapronchai, PhDOffice: Room 603, Engineering Building 4Office Hour: Wednesday 12:30-13:00 or by appointmentEmail: [email protected]: 02-218-6832WWW: http://www.ie.eng.chula.ac.th/ ̃oran/

http://orankitti.site44.com

Name: Poom LuangjamekornOffice: Room 808, Engineering Building 4Office Hour: Wednesday 12:00-13:00 or by appointmentEmail: [email protected]: 02-218-6848WWW: http://www.ie.eng.cula.ac.th/ ̃poom/

161.200.89.228/ ̃weberp


mailto:[email protected]

http://www.ie.eng.chula.ac.th/~oran/

http://orankitti.site44.com/

mailto:[email protected]

http://www.ie.eng.chula.ac.th/~poom/


Syllabus: Before we start

GoalsAware of roles and decisions of IT in production and operation environmentConvert business requirements into necessary inputs and suitable processesUnderstand key concepts of operation management, production control, andinformation systemDesign a basic module and analyze related data



Grading Policy

GradingCases Study (30%)Midterm Exam (30%)Project (40%)Quizzes + Participation (5% bonus)

Grading & Scores85 and above: final grade id definitely ’A’between 50 and 85: A, B+, B, C+, . . . ,D50 and below: final grade is possibly ’F’



Class Rules & Agreements

No class attendance, except during workshopDon’t miss workshopDon’t interrupt othersBe responsible, especially meeting time and assignmentParticipate during class; this is Master level course

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......Exam is designed to test student basic knowledge of the course.



Code of honors

Education with ethic standards and social responsibilitiesTrust as integral and essential part of learning processSelf-discipline necessityDishonesty hurts the entire community

adapted from: Georgia Institute of Technology –The Honor Code

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......Any violation to code of honors will severely punished, especially cheating andplagiarism



Textbook and References

Textbook• Motiwalla, L. 2012. Enterprise Systems for Management. Pearson,

New Jersey.

References• Olson, D. L. 2004. Managerial Issues of Enterprise Resource Planning

Systems. McGraw-Hill, New York• Oz, E. 2009. Management Information Systems. Cengage Learning,

Boston• Nahmias, S. 2001. Production and Operations Analysis. McGraw-Hill,

New York• McLeod, R. 2009. Management Information Systems. Prentice-Hall

International, New Jersey



US Steel & Auto Manufacturing

Steel IndustryMedieval iron ̸= steel, labor intensive → armoryIndustrial Revolution: high grade ore, blast furnace → railwayWW II-Current: many scrap, mini-mill → vehicleAltenative: aluminum, plastic, carbon-tube

Auto IndustryBefore Model T: experimental (gas, electric, stream)Ford Model T: vertical integrated

Any customer can have a carpainted any colour that he wants so long as it is black

Henry Ford, 1923

After Ford Model T: safety (volvo), JIT & qualityOil Embargo-Current: fuel efficiency & environment



US Other manufacturing

Textile: non-perishable by skilled workers & globally (RM, M/C, FG)1st world: near market & fashionable city, sweat shop3st world: low cost + outsourcing → quota (TAW → THA → VET)

Food & Pharmaceutical: batch, long shelf life, curving for new thingsHome: fresh, local → economy of scale (tomato)National: ’blockbuster’ + ads +R&D → safety & quality (consistency)Global: ’syrup model’ (coke, lay) → reverse (slow coke)

Pulp/Paper: process, pollutedBefore internet: growing demand, capital intensive, max utilizationAfter internet: over capacity, efficiency & quality



Lessons from the past

Change is everywhere and ever increasing, so does competitionMarket must response to customer demandPower shifts to retailersQuality and safety are important (failures, regulations)Relationship shifts among plant-vendors-supplier

merge (new market, reduce overhead, ’right’ portfolio, quick expansion)contract manufacturer (reduce risk, core competition)

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......Effective response → Better integration & communication → Right computersystems



Hierarchy of information

source: Computer-Integrated Manufacturing (CIM)

2010s ERP II2000s ERP1980s MRP II1970s MRP & PLC1960s BOMP

Decision structure VS Information interval



Computational levels/history

Period Concept System Purpose1960s paper dragon payroll & inventory

mgt.speed acct & paperprocess

1970s informationfactory

MRP, facilitate sale & marketing& reporting

1980s customized mgtcontrol

MRP II decision support sys., exe.support

1990s integration,competitiveadvantage

ERP promote survival & valueof org

2000s agility & valuechain

ERP II inter- & global org



ERP’s impact on a plants

source: AMR Research Report 2000



Problems of adopting IT in plants

There are complex data types: e.g. vectors, matrices, pictureAnalysis is important: data mining is not well-defined → MS ExcelEach industry/factory is unique: e.g., BOM VS formula, pharmaceuticalVS chemical,Quality is not black & white: i.e., diff grade for diff customerThere are many possible processes: e.g., test → more tests,Shop floor scheduling is dynamic: i.e., bottleneck

adapted from: Ake et al. Information Technology for Manufacturing



Macro view of manufacturing

..

Mac

hine

s

.M

ans

.En

ergy

.

Mon

ey

.

Info

rmat

ion

.

Resources

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Material

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Material

. + added value.

material flow

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resource flow

.Manufacturing

organization

source: Cecelja. 2000. Manufacturing Information & Data Systems.



Two inseparable parts: OM & MIS

Production and Operation ManagementWhat: how to better manage and design in production & service environmentIdea: using data & models → predictionExample: forecasting, production planning, inventory control, MRP, CRPIssues: tedious, data, calculation

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......Business Process Re-engineering (BPR), Project Management

Management Information SystemWhat: how to better communicate internally & externallyIdea: sharing information & automating some tedious tasksExample: Payroll, Web-based, Expert system



Why a company implement computer system?

Fear & Believe: legacy system (Y2K), customer mandate (Nike, RFID–DoD& WalMart)Standardize & Platform: standard process (international), merge &acquisitionAccuracy & Efficiency & Control: operation (relay → PLC), consolidatedata (reports– accounting), eliminate tedious task (payroll– HR)Visibility & Integration: communication (Satellite–WalMart), data visibility(Boon-Tha-Worn)Process improvement: economy of scale, paperless office, reduce inventory(VMI)



Concepts of PROMIS

Manufacturing Information System: complex (models), pitfall, unique,users (education & nature)Required Data → Information: database design , analysis , planningImplement ̸= Improvement: roles of re-engineering, reaping benefitsInformation → Integration: working around legacy system, involve end-userIT as an enables: linkage between strategy & action, reducing time,communicating across locations & organizationIT Project = Project Management: project requirement, financialevaluation, exit strategy, system & module selection



How a company compete with others?

Price: Wal-mart, Big Cola, DensoAgility & Responsive: Zara, Dell,Superb Quality: Leica, Louis Vuitton, HermesInnovation & Flexibility: Apple, Sony, Sumsung, BMWConvenience & Presence: 7-Eleven, Starbucks, McDonaldService & Coverage: Facebook, CitiBank

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......Information technology is strategic advantage, not strategic necessity



Terminology

Strategic information system: an information system that helps seizeopportunitiesStrategic advantage: using strategy to maximize company strengthsCompetitive advantage: having maximized an organization’s strengths tobeat its rivalsSwitching costs: expenses incurred when customer stops buying from onecompany and starts buying from anotherFirst mover: one offers the first new product or service.Critical mass: clients that is large enough to attract other clientsProduct differentiation: persuading customers that your product is betterthan competitorAffiliate program: linking to other companies and rewarding



Business strategy: Five forces model

cost leadershipdifferentiationfocusstrategic positioningcustomer service

source: www.vectorstudy.com


http://www.vectorstudy.com/management_theories/porters_five_forces.htm


Porter’s model → Generic strategy

source: www.vectorstudy.com


http://www.vectorstudy.com/management_theories/porters_five_forces.htm


Generic strategy

source: Oz, E. Management Information Systems. pp. 43



Strategic IS questions

..Can IS changebusiness competition?

.Can IS changesupplier’s power?

. Can IS build inswitching cost?

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Can IS create barriersfrom new entry?

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Can IS generate newproduct/service?

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• reduce costs• identify alter. sources• improve quality

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• increase buyer knowledge• reduce service cost• discover more buyers

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• differentiate product/service• preemptive strike• establish new market• create new channel

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new entrants

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substitute product

.power of suppliers

.power of buyers

source: Cecelja, F. 2002. “Manufacturing Information and data Systems”



Porter and Millar’s Framework

Industry structure and rules of competition has changed (e.g., ATM machine)Firms have outperformed competition using IT (e.g., K-mart VS Wal-mart)Firms can spawn a new business (e.g., UPS 3PL)

How much/urgent to invest in IT?: Five-Steps ProcessAccess information intensityDetermine the role of IT in businessRank how IT can create competitive advantageInvestigate how IT might spawn new businessesPlan to take advantage of IT



Operation Strategy and IT

Classical StrategyStrategy Technology Infrastructure Marketing & SalesLow cost • Dedicated

equipment• RM planning • Economy of scale

Service level • Reservecapacity

• FG inventory • Dependability

Product variety • Flexiblemachines

• Skilled workers • Customerresponsive

• Reservecapacity

• Flexiblescheduling

Productinnovation

• Generalpurpose

• R&D • Market leadership

• Team skills • New segments


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