management information system

MANAGEMENT

INFORMATION SYSTEM

SUBMITTED BY-

KUSH SHARMA

Contents

S No Topic Page No

1 Introduction 03

2 What is VSM 04

3 Purpose of VSM tool 04

4 Sections of VSM 06

5 How to Create a VS map 09

6 VSM Symbols 11

7 VSM Process Steps 16

8 Financial Management 21

9 Productivity 24

10 Enterprise Resource Planning 28

11 e-Business Model 28

12 Conclusion 40

13 References 41

VALUE STREAM MAPPING

Introduction

A value stream is defined as all the value-added and non-value-added actions required to bring a specific

product service or combination of products and services to a customer including those in the overall

supply chain as well as those in internal operations

VSM is an extremely valuable tool in lean manufacturing and the continuous improvement effort

Traditionally it is a pencil-and-paper visualization tool that shows the flow of material and information

as a product makes its way through the value stream hence waste and its sources can be identified This

initial map that identifies the sources of waste in a production process is referred to as the current state

map However the purpose of value stream mapping is not only to identify the sources of waste but also

to eliminate the sources of waste by developing future state value stream that can be implemented in a

short period and ultimately the production process is improved

Through VSM a business process is examined from beginning to end An end-to-end system map is

created this is called the current state map A future state map shows how things should work in order to

gain the best competitive advantage The opportunities for improvement at each step that would have a

significant impact on the overall production system are highlighted on the future state map and then

implemented creating a leaner production process

The key to VSM is to see the big picture as a sum of the parts Rather than optimizing one part

of one step or ―fixing something broken you see how that step fits into the overall production

process and how changing it will affect the overall process This provides the opportunity to

visualize how different types of changes or a combination of changes at multiple places in the

process will affect the entire system The change or set of changes that will result in the most

efficient production overall can then be chosen

It is often associated with manufacturing it is also used in logistics supply chain service related

industries healthcare software development and product development

VSM technique involves flowcharting the steps activities material flows communications and other

process elements that are involved with a process or transformation

A Value Stream Map is a diagram of all actions (both value added and non-value added) required

to bring a product through from raw material to the arms of the customers

ldquoWhenever there is a product for a customer there is a value stream The challenge lies in seeing

itrdquo

What is Value Stream Mapping

A value stream map is a special type of flow chart that is used to depict and improve

a) the flow of the thing being processed and

b) information that controls the flow of the thing being processed

Purposes of a Value Stream Management tool

1 Graphically illustrate and analyze the flow of the thing being processed and the information

needed to process it

2 Highlight problems and proposed countermeasures - in highly visual ways

3 Focus direction for your lean transformation teams

4 Serve as a dashboard to monitor and continuously improve

Preparation - Before forming your Value Stream Team

Use the Product Family Matrix template to define your product and service families

Define the segment of the value stream that you will be mapping

First pass - Understand the Current State

Train your Value Stream Mapping team

Physically walk the path of the thing being processed -

documenting process steps

Create your As Is value stream map

Choose the metrics you want to measure

Enter your data

Second Pass - Analyze and Reflect

Analyze and gain consensus for your value stream analysis

Identify problems and root causes

Reflect ponder and think

Play catchball

Third Pass - Improve

It is common to improve your value stream in phases

1 Meet customer demand (immediately)

2 Organize for continuous flow

3 Level the work flow

For each phase create a Value Stream Plan with specific assignments and deadlines

Each next phase should have a timeline of no more than six months to have everything on

that Value Stream Plan completely implemented

Continuously Improve

Manage your lean value stream

Add data for multiple scenarios

Sections of the Value Stream Map - Examples

Section 1 Header Data

Section 2 Information Flow

The flow of the information that drives the flow of the thing being processed

Section 3 Flow of the thing being processed

Section 4 Lean Metrics - within each process

Section 5 Lean Metrics - between processes

Section 6 Simultaneous processes

Section 7 Bottom Line Analyses

Section 8 Old State Comparison

Section 9 HideUnhide Rows

Initially value stream mapping can seem a bit intimidating There are lots of funny looking icons and zig

zaggy lines that upon first glance seem to do nothing but confuse things

Potential Opportunities for Improvement Include

middot Eliminating redundant approvals

middot Improving the flow of paperwork

middot Restructuring how orders are handled andor

middot Labeling and rearranging a storage area to avoid ordering redundant supplies

7 Steps to Current State Value Stream Mapping

1 Diagram needs to be on one sheet of paper

2 Use the standard format for the diagram

3 Use the standard symbols for the diagram

4 Capture all of the data yourself

5 Walk Understand and Validate the process

6 Involve as many people as practical

7 Use paper and pencil

bull Visual Representation of a Value Stream or the work process

bull Pencil amp Paper Tool with lots of post its

bull Helps Reveal Waste amp Problems with the Flow

bull It Establishes a common language to document a processes

bull Provides a blueprint for improvement

Three Steps in Understanding the Value Stream

Before a current-state value stream map can be created a project team must identify and understand the

value stream Following is a three-step method for identifying value streams

1 Create a List of Products and Group Them in Families -

Some companies offer varied products and services For example an investment company offers

different investment opportunities A finance company offers different types of loans including first

mortgages home equity car loans and small business loans It is relatively easy to group products

into families by constructing a simple table like the one below The goal is not only to identify

all product families but also to identify what process steps each product utilizes

2 Determine which product or service is considered primary

While a productservice may utilize different processes a company needs to concentrate on one

process at a time focusing on processes critical to company goals In many instances a companys

improvement plans may be filled with process improvement projects with no clear link to its overall

goals or vision With limited resources available efforts need to be concentrated only on those

projects that really need to be done Selecting which product family to analyze will depend on the

individual business situation Examples of productsservices to analyze include those that

Stem from company goalsvision

Utilize the most process steps

Are known to have high defect rates

Represent the voice of the customer and offer the highest customer rate of return

Are high volume in dollars andor units

3 Document the steps of the process - initial walk-through

During the walk-through think about the customer How does the customer receive the product or

service What triggers the product or service to be delivered to the customer What are the inputs

From where are these inputs supplied Once the walk-through is completed there should be enough

initial data to understand the value stream and begin creating a current-state value stream map

with a more detailed depiction of the value stream

Value Stream Mapping Example

Four Steps To Value Stream Mapping

Define and pick the product or product family

Create the ―current state value stream mapping (CSVSM)

Create the ―future state value stream mapping (FSVSM)

Develop an action plan to make the CSVSM and FSVSM

How to Create a Value Stream Map

How to do Value Stream Mapping

Value stream Mapping will help you to identify and eliminate the wastes in your processes

enabling you to make more profit and better satisfy your customers

By creating a map showing you current state with all of the current flows of products and

information you can enable an analysis of your current state and develop your future state value

stream map as something to aim towards with your improvements

Gather Data for Value Stream Mapping

A value Stream Map is not something that can be created from the comfort and peace of your

office you have to get out and observe the actual process not what is written in the company

manuals and other documentation

You need to go out and start to gather the actual data that reflects the reality of what goes on in your

company

Start with the Customer and walk backwards through the process record your data meticulously as

you go identifying any obvious waste as you do so and inventory levels Record information flows as

well as the flow of material

Typical data to be collected is as follows

Cycle time (time taken to make one product)

Change over time (from last good piece to next)

Uptime (on-demand machine utilisation)

Number of operators

Net available working time

Scrap rate

Pack sizepallet sizes

Inventory

Yield

Lean

Lean is a well-defined set of tools that increase customer value by eliminating waste and creating flow

throughout the value stream The following bullets describe lean improvements

Inexpensive to implement

Focus on improving the process not the people

Address the batch and queue mentality of silos

Promote simple error proof systems

The Lean Steps

Value Stream Mapping Symbols

The Symbols are typical symbols used when creating a value stream map the map is best done by hand

in pencil so that you can modify and improve on it as you create it the most important thing here is

getting the data organized in a meaningful manner

Common Icons Used in Value Stream Maps

Here is a key to Lean symbols used in the value stream maps in this toolkit

TYPICAL VSM SYMBOLS

Transportation shapes

Most transportation shapes need no explanation

There are so many modes of transportation however that you might want to add some custom shapes to

depict a mode of transportation used in your unique value stream

(Perhaps a pipeline A vacuum tube A rocket A horse and buggy)

Rather than cluttering our standard template with every form of transportation known to man we make it

easy for you to add your own custom shapes

Custom Shapes for Value Stream Analysis

In addition to all of the standard value stream mapping symbols that come with your Systems2win

template it is very easy to add your own custom shapes

1 Simply paste any image from the clipboard to your current worksheet or

2 You can easily personalize your master Systems2win template - so that your custom shape is

always available every time that any of your licensed users open your (personalized) template

Types of Lines and Arrows

Used in value stream mapping and other types of lean process flow charts

Red dashed arrow = message flow arrow - indicating the flow of information

Every message arrow should have a text box to explain the type and frequency of information

and can optionally have a shape indicating the mode of information transfer (eg phone FAX email

etc)

Red dot-dash arrow = Expedite information

Example The expedite arrow containing the telephone - between Process 3 and 4

To change the dash property of any arrow right-click gt Format AutoShape gt Colors and Line gt

Dashed

Broad white arrow = Shipment to Customers or from Outside Sources

such as suppliers and third-party logistics providers

Thick black dashed arrow = Push Arrow

Example Between Process 4 and 5

The thing being processed is being produced according to some pre-determined (non-Lean) schedule -

and then is pushed downstream - whether or not the next downstream process has any need for it

Thin black arrow = Flow Arrow

Examples Between Processes 2 3 and 4

This is the most common arrow to indicate the flow of the thing being processed

Dotted black arrow = Expedited Flow

Example The dotted black arrow containing the airplane - between Processes 3 and 4

In this example there are usually daily shipments between Processes 3 and 4 but about twice a year the

production manager for Process 3 gets a phone call requesting an urgent plane shipment

Dashed blue arrow = Kanban flow

Kanbans are a simple way to authorize release of work or materials

What is a kanban

A kanban is any signaling device that gives authorization and the minimal instructions needed

a) for a supplying process to know what to produce or

b) for a material handler to know what items to replenish

Circular black arrow = Withdrawal

The circular arrow between Process 1

and 2 conveys the exact same

information as the symbols between

Process 2 and 3 - using one simple

symbol as a shorthand shortcut

Define Process Flows in VSM

The first thing to record is your actual process flow which are the specific process steps and in what

order do they come Map out the Flow from Supplier in the top left to the Customer in the top right

Each process should be documented in the order in which they occur

VSM Process Steps

Define Your Value Stream Map Information Flows

Detail out the flow of information from the company to suppliers from customer to the company and

how the information flows between the different processes Record what the information is daily plan

customer order monthly schedule and so on

VSM Information Flow

Add Process Data to your Value Stream Map

The next thing to add is the process data for each step in the overall process Add the data which you

have gathered when you studied the process You should include the location and size of any

inventory cycle times setup times and all other recorded data This will give a full outline of how your

processes flow Your lead time at each stage is calculated by multiplying the inventory by the cycle

time which will tell you how long it will take to process all of your inventory through the system

Analyse Value Stream Map

The completed map will tell us an enormous amount about our processes it will show how we use

information and schedules to push production rather than pull production It shows how we run batches

of material rather than trying to flow it through our processes We can also look at how much our value

add is as a proportion of our overall lead time in this case we are looking at 8 minutes of value adding

time from a lead time of over 8 days not an untypical result

Most Value Stream Maps show that product is worked on for 5 or less of the time that it is within

our companies most of the time it sits in inventory waiting to be processed

Create Future State Value Stream Map

The future state VSM is created using the same symbols and process as the current process map

However what we need to do is try to define a process flow that better meets the needs of our customers

whilst removing as much waste as possible

Firstly confirm the required process flow what processes are required in which order Then the actual

demand of the customer what is the Takt time Tact time being the drum beat at which the customer

actually demands product

Each process must be able to meet the Takt time or we will not meet customer demand too fast and we

make inventory

To make this work we must ensure that we have repeatable reliable processes we must introduce ideas

and Total Productive Maintenance (TPM) Without reliable repeatable processes we will end up with

stock being held as a safety buffer

Once we have our future state map we can plan to implement our changes once implemented we repeat

the process to gain further improvements of our processes

The Three Steps to Value Stream Mapping

1 Current State Drawing

The current production system is drawn by first conducting a walk through of the entire system

from beginning to end During the walk through gather information on the shop floor and

analyze the current production system Then draw a basic overview map with process and

material flows represented by different symbols on the map A set of existing symbols can be

used or a new set created but the method of mapping should always be kept consistent within the

company to gain better staff understanding and awareness After the basic production process is

understood more detail is added to the map at each process step creating a comprehensive picture

of the current system

2 Future State Drawing

Future state ideas will likely arise while gathering information in the first step You can either keep a

running list of these ideas and turn them into a future state map after you have completed the current state

map or draw the future state map alongside the current state map A key to creating a more Lean future

state is identifying areas of overproduction and root causes of waste in the current production system and

finding ways to reduce or eliminate them in the future system The idea behind creating a Lean value

stream is to create only what is needed when it is needed A few ways to help accomplish this are to use

takt time (the rate of customer demand) to synchronize the pace of production with the pace of sales

develop a continuous flow and level the production mix More details on how to Lean the value stream

can be found in the resources below

3 Work Plan and Implementation

In this step a work plan is prepared based on the future state value stream map that describes specific

ways in which the future state map will be achieved VSM is a tool to identify areas that need

improvement in the value stream By itself VSM will not produce the desired change implementation is

key to achieving results Implementation is usually best done in stages since the entire system is affected

One way of doing this is to break the future state map into segments or loops and implement changes

within one loop at a time The work plan should also include measurable goals and checkpoints Once the

work plan is implemented a new more efficient current state is formed To keep continuous

improvement happening in your business once a future state becomes a new current state a new future

state map should be drawn and the cycle continued An annual value-stream review is a good way to

keep things moving

Why Draw Pictures

A factory is enormously complex Only visuals convey enough information to understand the pieces

relationships hidden waste and time-domain behavior

Visualization brings a deep understanding and major break throughs in productivity and other

performance It leads to consensus on systemic problems and remedies While finished charts

communicate information about a situation the real value is the mapping itself This is where insights

grow paradigms shift and consensus builds

Value Stream and Process Maps take different perspectives but the work they visualize is the same

Which Process Map Should Use

Why not take advantage of both models by using detailed process mapping and adding value stream

mapping data into it While each type of map is used to identify different variables there is more value in

combining components of value stream with detailed process mapping Detailed process mapping has all

the process components the value stream map does and it can be broken down in much greater detail

Due to the time involved in constructing detailed process maps one could include detailed process

mapping after value stream mapping has located the bottleneck

Value stream mapping requires both current- and future-state process maps However future-state maps

are often less well-defined in services or administrative organizations These organizations typically

require a strategic perspective like what the new service delivery model looks like Value stream

mapping typically focuses on a single product family but choosing only one product family may not be

appropriate in a service organization - especially if the customer can choose between different channels

For example in banking the customer may choose channels such as online email or telephone banking

Focusing on a single product family may not provide the insight needed to identify all available

improvement opportunities In such cases the value stream mapping methodology can be combined with

other tools such as a bottleneck analysis

Bottom line value stream mapping is a powerful tool that helps identify the vital few Lean and Six

Sigma projects that will yield the most value to the process tagged for improvement And its approach of

current- and future-state maps allows Six Sigma practitioners to know where they are starting from

where they are going and how they will get there When a company reaches tomorrow it will be much

more rewarding if it knows the route it followed

Manufacturing systems are faced with continuously changing market conditions Due to this fact

enterprises are permanently forced to adapt their organizational and personnel structures to new

requirements created by these changing market conditions In order to fulfil these requirements it is

becoming more and more important to take the cost intensive personnel resources into consideration In

analysing the relationship between employee and organization two extreme standpoints can be

distinguished One school of thought claims that organizations do not exist (reification) there are only

people (parts) working together to obtain specific goals The opposite standpoint is the claim that

separate human beings cannot function without a social context such as an organization providing a

meaning to the life of individual employees The most important aims and tasks of personnel

departments realize at the modern organizations are the following activities

Personnel planning

Recruitment

Selection

Work and task systems

Training and development

Assessment

Rewarding

Participation

2 Personnel planning The planning which focuses on the prognoses of the future demand of the

organization on workers is first step in the logging of human supplies both from among already engaged

in the enterprise how and from behind him The frame thanks to conducted recruitment and selection

becomes in the course of the selection appeared person or persons applying about the work group

fulfilling criteria required by the institution After positive finishing the process of recruitment and

selection the management of the organization makes the decisions about the employment The planning

of human resources consists in the settlement of the future workings which aims to undertake for the

achievement the appointed aim Planning of human supplies answers the strategy of the organization

defines future structure and the size of the employment The process of the planning of human supplies

defines the level of personnel needs indispensable to frame and the realization of the strategy of the

management human supplies This is the process in which should be consider the present and future

requirements in the face of workers in the relationship with the realization of the established strategy

The basis of the success of this process is good employment plan arising from early worked out strategy

of the development The datum-point of the human resources planning is to determine factors which

influence on that supplies The internal factors connected with the firm and external factors resulting

from the surroundings of the organization should be qualified Factors connected with the firm are

following

Vision mission and the aims of the activity of the firm

Plans in the range of production and logistics the development of technology marketing and finances

the organizational structure of the enterprise

The financial shape of the enterprise

Size and structure of possessed human supplies according to such the criteria as the occupied position

of work lids possessed qualifications

Efficiency of the work

Applied technique and technology

Time of the work

The most important factors connected with surroundings of the firm

Situation on the labour market

Accessibility and the information topicality relating to free places of the work

Economic situation

Position of the firm on the market her credibility

Competition of different organizations in the peculiarity matters connected with the height of offered

pays and the possibilities of the development of the professional career

Rate and the directions of the development of used and related technologies

Valid law regulations which contain norms and duties of the employer in the range of workers

employment

Development of education and

Education conditioning the quality of the accessible supplies of the work

Financial Management

Financial management of not-for-profits is similar to financial management in the commercial sector in

many respects however certain key differences shift the focus of a not-for-profit financial manager A

forprofit enterprise focuses on profitability and maximizing shareholder value A not-for-profit

organizationlsquos primary goal is not to increase shareholder value rather it is to provide some socially

desirable need on an ongoing basis A not-for-profit generally lacks the financial flexibility of a

commercial enterprise because it depends on resource providers that are not engaging in an exchange

transaction The resources provided are directed towards providing goods or services to a client other

than the actual resource provider Thus the not-for-profit must demonstrate its stewardship of donated

resources mdash money donated for a specific purpose must be used for that purpose That purpose is either

specified by the donor or implied in the not-for-profitlsquos stated mission The management and reporting

activities of a not-for-profit must emphasize stewardship for these donated resources The staff must be

able to demonstrate that the dollars were used as directed by the donor The shift to an emphasis in

external financial reports on donor restriction has made the use of fund accounting systems even more

critical Budgeting and cash management are two areas of financial management that are extremely

important exercises for not-for-profit organizations The organization must pay close attention to whether

it has enough cash reserves to continue to provide services to its clientele Cash flow can be extremely

challenging to predict because an organization relies on revenue from resource providers that do not

expect to receive the service provided In fact an increase in demand for a not-for-profitlsquos services can

lead to a management crisis It is difficult to forecast contribution revenue in a reliable manner from year

to year For that reason the control of expenses is an area of increased emphasis Budgeting therefore

becomes a critical activity for a not-for-profit

The combination of a competitive global environment and mandatory regulatory compliance makes

successfully managing your finances one of the biggest challenges Financial Management offers a

refreshing new approach to business a suite of accounting applications built for the highly regulated

post-Sarbanes-Oxley Act world built around a series of ―global engines that support effective financial

management and control anywhere

Easily monitor and track invoicing payments asset management payroll and benefits in order to cut

costs and improve cash flow Financial modules can assist you in boosting your bottom line-the definitive

test of your success and competitive advantage

Financial Management tools include

Global Engines

General Ledger

Accounts Payable

Accounts Receivable

Tax Connect

Credit Card Processing

Multi-Currency Management

Multi-Company Management

Fixed Assets Management

Cash Management

Financial Management is distinguished by its broad focus on managing processes and resources both

within and across locations companies and global boundaries

Global Engines

Financial Management is built around a series of unique global engines which in turn support the global

nature of business today enabling effective operations in existing and new markets as necessary As your

business is extended through a combination of organic growth mergers and acquisitions it can become

challenged by complex and demanding global financial and regulatory burdens ndash demands that you must

adapt to instantaneouslyGlobal engines are designed to add accounting agility and flexibility to your

business while simultaneously allowing you to meet the local financial and legal compliance

requirements of individual markets

General Ledger

General Ledger is the heart of Financial Management processing and posting all accounting transactions

created throughout applications as well as entries made directly within the ledger While it is seldom

accessed outside of the accounting and tax departments the General Ledgers impact is felt throughout an

entire enterprise The information and controls which flow from the General Ledger system enable an

organization to operate efficiently comply with fiscal regulations underpin strong corporate governance

and drive enterprise performance General Ledger provides the accounting controls and system security

necessary to help ensure the integrity of your companys financial data

Accounts Payable

Accounts Payable (AP) allows you to enter supplier invoices for purchases that you make then create

checks for the invoices you want to pay The system can generate payments for all invoices due those for

a particular supplier or only for specific invoices If a supplier calls you to discuss an invoice you will

have complete information at your fingertips and that history can be kept indefinitely

Accounts Payable allows you to update both purchase orders in Purchase Management as well as actual

job costs Adjustments are created if the purchase price does not match the invoiced price With Accounts

Payable you will know how much you owe and when it is due

Production management

Scheduling is an important tool for manufacturing and engineering where it can have a major impact on

the productivity of a process In manufacturing the purpose of scheduling is to minimize the production

time and costs by telling a production facility when to make with which staff and on which equipment

Production scheduling aims to maximize the efficiency of the operation and reduce costs

Production scheduling tools greatly outperform older manual scheduling methods These provide the

production scheduler with powerful graphical interfaces which can be used to visually optimize real-time

work loads in various stages of production and pattern recognition allows the software to automatically

create scheduling opportunities which might not be apparent without this view into the data For

example an airline might wish to minimize the number of airport gates required for its aircraft in order

to reduce costs and scheduling software can allow the planners to see how this can be done by analyzing

time tables aircraft usage or the flow of passengers

Companies use backward and forward scheduling to allocate plant and machinery resources plan human

resources plan production processes and purchase materials

Forward scheduling is planning the tasks from the date resources become available to determine the

shipping date or the due date

Backward scheduling is planning the tasks from the due date or required-by date to determine the start

date andor any changes in capacity required

The benefits of production scheduling include

Process change-over reduction

Inventory reduction leveling

Reduced scheduling effort

Increased production efficiency

Labor load leveling

Accurate delivery date quotes

Real time information

Productivity

Inputs

Inputs are plant labor materials tooling energy and a clean environment

Outputs

Outputs are the products produced in factories either for other factories or for the end buyer The extent

to which any one product is produced within any one factory is governed by transaction cost

Within the factory

The output of any one work area within the factory is an input to the next work area in that factory

according to the manufacturing process For example the output of the cutting room is an input to the

sewing room

For the next factory

By way of example the output of a paper mill is an input to a print factory The output of a

petrochemicals plant is an input to an asphalt plant a cosmetics factory and a plastics factory

For the end buyer

Factory output goes to the consumer via a service business such as a retailer or an asphalt paving

company

Resource allocation

Resource allocation is assigning inputs to produce output The aim is to maximize output with given

inputs or to minimize quantity of inputs to produce required output

Marketing management

Marketing management is a business discipline which is focused on the practical application

of marketing techniques and the management of a firms marketing resources and activities Rapidly

emerging forces of globalization have compelled firms to market beyond the borders of their home

country making International marketing highly significant and an integral part of a firms marketing

strategy Marketing managers are often responsible for influencing the level timing and composition of

customer demand accepted definition of the term In part this is because the role of a marketing manager

can vary significantly based on a business size corporate culture and industry context For example in a

large consumer products company the marketing manager may act as the overall general manager of his

or her assigned product To create an effective cost-efficient Marketing management strategy firms must

possess a detailed objective understanding of their own business and the market in which they

operate In analyzing these issues the discipline of marketing management often overlaps with the

related discipline of strategic planning

Structure

Traditionally marketing analysis was structured into three areas customer analysis company analysis

and competitor analysis (so-called 3Cs analysis) More recently it has become fashionable in some

marketing circles to divide these further into certain five Cs customer analysis company analysis

collaborator analysis competitor analysis and analysis of the industry context

Customer analysis is to develop a schematic diagram for market segmentation breaking down the market

into various constituent groups of customers which are called customer segments or market

segmentations Marketing managers work to develop detailed profiles of each segment focusing on any

number of variables that may differ among the segments demographic psycho graphic geographic

behavioural needs-benefit and other factors may all be examined

Marketing Strategy

If the company has obtained an adequate understanding of the customer base and its own competitive

position in the industry marketing managers are able to make their own key strategic decisions and

develop a marketing strategy designed to maximize the revenues and profits of the firm The selected

strategy may aim for any of a variety of specific objectives including optimizing short-term unit

margins revenue growth market share long-term profitability or other goals

To achieve the desired objectives marketers typically identify one or more target customer segments

which they intend to pursue Customer segments are often selected as targets because they score highly

on two dimensions 1) The segment is attractive to serve because it is large growing makes frequent

purchases is not price sensitive (ie is willing to pay high prices) or other factors and

2) The company has the resources and capabilities to compete for the segments business can meet their

needs better than the competition and can do so profitably In fact a commonly cited definition of

marketing is simply meeting needs profitably

The implication of selecting target segments is that the business will subsequently allocate more

resources to acquire and retain customers in the target segment(s) than it will for other non-targeted

customers In some cases the firm may go so far as to turn away customers who are not in its target

segment

In conjunction with targeting decisions marketing managers will identify the desired positioning they

want the company product or brand to occupy in the target customers mind This positioning is often an

encapsulation of a key benefit the companys product or service offers that is differentiated and superior

to the benefits offered by competitive products

Project process and vendor management

Once the key implementation initiatives have been identified marketing managers work to oversee the

execution of the marketing plan Marketing executives may therefore manage any number of specific

projects such as sales force management initiatives product development efforts channel marketing

programs and the execution of public relations and advertising campaigns Marketers use a variety

of project management techniques to ensure projects achieve their objectives while keeping to

established schedules and budgets

More broadly marketing managers work to design and improve the effectiveness of core

marketing processes such as new product development brand management marketing communications

and pricing Marketers may employ the tools of business process reengineering to ensure these processes

are properly designed and use a variety of process management techniques to keep them operating

smoothly

Effective execution may require management of both internal resources and a variety of external vendors

and service providers such as the firms advertising agency Marketers may therefore coordinate with the

companys Purchasing department on the procurement of these services Under the area of marketing

agency management (ie working with external marketing agencies and suppliers) are techniques such as

agency performance evaluation scope of work incentive compensation RFxs and storage of agency

information in a supplier database

Reporting Measurement Feedback And Control Systems

Marketing management employs a variety of metrics to measure progress against objectives It is the

responsibility of marketing managers ndash in the marketing department or elsewhere ndash to ensure that the

execution of marketing programs achieves the desired objectives and does so in a cost-efficient manner

Marketing management therefore often makes use of various organizational control systems such as

sales forecasts sales force and reseller incentive programs sales force management systems

and customer relationship management tools (CRM) Recently some software vendors have begun using

the term marketing operations management or marketing resource management to describe systems

that facilitate an integrated approach for controlling marketing resources In some cases these efforts

may be linked to various supply chain management systems such as enterprise resource

planning (ERP) material requirements planning (MRP) efficient consumer response (ECR)

and inventory management systems

Measuring the return on investment (ROI) of and marketing effectiveness various marketing initiatives is

a significant problem for marketing management Various market research accounting and financial

tools are used to help estimate the ROI of marketing investments Brand valuation for example attempts

to identify the percentage of a companys market value that is generated by the companys brands and

thereby estimate the financial value of specific investments in brand equity Another

technique integrated marketing communications (IMC) is a CRM database-driven approach that

attempts to estimate the value of marketing mix executions based on the changes in customer behavior

these executions generate

ENTERPRISE RESOURCE PLANNING

Enterprise Resource Planning ERP is business management software that allows an organization to use a

system of integrated applications to manage the business ERP software integrates all facets of an

operation including development manufacturing sales and marketing

E BUSINESS MODEL

A business model is a high-level description of an application type which contains all the common

features which can be found in specific examples of the model For example one of the most popular

business models is the e-shop which describes a website that sells products The model is general in that

it does not describe the item that is sold or the mechanisms that are used to carry out the sales process

The remainder of the unit describes a series of e-commerce and e-business models

The e-Business model like any business model describes how a company functions how it provides a

product or service how it generates revenue and how it will create and adapt to new markets and

technologies It has four traditional components as shown in the figure The e-Business Model These are

the e-business concept value proposition sources of revenue and the required activities resources and

capabilities In a successful business all of its business model components work together in a cooperative

and supportive fashion

E-Business Concept

The e-business concept describes the rationale of the business its goals and vision and products or

offerings from which it will earn revenue A successful concept is based on a market analysis that

identifies customers likely to purchase the product and how much they are willing to pay for it

Goals and Objectives

The e-Business concept should be based in part on goals such as become a major car seller bank or

other commercial enterprise and to become a competitor to some of the well-known firms in each of

these industries Objectives are more specific and measurable such as capture 10 of the market or

have $100 million in revenues in five years Whether these goals and objectives are realistic or not and

whether the company is prepared to achieve these goals is addressed in the business plan process for

startup firms and in the implementation plan for an existing firm that is considering a significant

change In looking at the business model it is sufficient to know what the goals and objectives are and

whether they are being pursued

The E-Business Concept and Market Research

The selection and refinement of the business concept should be integrally tied into knowledge of the

market it serves In performing market research care must be taken to account for the global reach of

the Internet for both customers and competitors It is also important to remember that markets shift and

can shift rapidly under certain conditions But most important is to truly understand what the market is

who comprises it and what do they want

Figure The e-Business Concept

e-Business Technology

It is widely acknowledged today that new technologies in particular access to the Internet tend to

modify communication between the different players in the professional world notably

relationships between the enterprise and its clients

the internal functioning of the enterprise including enterprise-employee relationships

the relationship of the enterprise with its different partners and suppliers

The term e-Business therefore refers to the integration within the company of tools based on

information and communication technologies (generally referred to as business software) to improve

their functioning in order to create value for the enterprise its clients and its partners

The term e-Commerce (also called Electronic commerce) which is frequently mixed up with the term e-

Business as a matter of fact only covers one aspect of e-Business ie the use of an electronic support

for the commercial relationship between a company and individuals

E Business Technology provides professional services that help your business take full advantage of the

Internet and the World Wide Web We focus on how these technologies can improve your business

processes in a cost-effective manner

Comprised of talented professionals with extensive experience in business consulting web-design

programming and integration e Business Technology looks to establish a trusted long-term relationship

with our customers Weve been through the ups and downs of the Internet market and with that

experience and our successful track record we are ready to serve you

CREATION OF VALUE

The goal of any e-Business project is to create value Value can be created in different manners

As a result of an increase in margins ie a reduction in production costs or an increase in

profits E-Business makes it possible to achieve this in a number of different ways

Positioning on new markets

Increasing the quality of products or services

Prospecting new clients

Increasing customer loyalty

Increasing the efficiency of internal functioning

As a result of increased staff motivation The transition from a traditional activity to an

e-Business activity ideally makes it possible to motivate associates to the extent that

The overall strategy is more visible for the employees and favors a common culture

The mode of functioning implies that the players assume responsibilities

Teamwork favors improvement of competences

As a result of customer satisfaction As a matter of fact e-Business favors

a drop in prices in connection with an increase in productivity

improved listening to clients

products and services that are suitable for the clients needs

a mode of functioning that is transparent for the user

As a result of privileged relationships with the partners The creation of

communication channels with the suppliers permits

Increased familiarity with each other

Increased responsiveness

Improved anticipation capacities

Sharing of resources that is beneficial for both parties

An e-Business project can therefore only work as soon as it adds value to the company but also to its

staff its clients and partners

CHARACTERIZATION OF THE e-BUSINESS

A company can be viewed as an entity providing products or services to clients with the support of

products or services of partners in a constantly changing environment The functioning of an

enterprise can be roughly modeled in accordance with a set of interacting functions which are

commonly classified in three categories

Performance functions which represent the core of its activity (core business) ie the production

of goods or services They pertain to activities of production stock management and purchasing

(purchasing function)

The management functions which cover all strategic functions of management of the company

they cover general management of the company the human resources (HR) management functions as

well as the financial and accounting management functions

The support functions which support the performance functions to ensure proper functioning of

the enterprise Support functions conver all activities related with sales (in certain cases they are part

of the core business) as well as all activities that are transversal to the organization such as

management of technological infrastructures (IT Information Technology function)

Enterprises are generally characterized by the type of commercial relationships they maintain

Dedicated terms therefore exist to quality this type of relationship

B To B (Business To Business sometimes written B2B) means a commercial relationship

business to business based on the use of a numerical support for the exchange of information

B To C (Business To Consumer sometimes wrritten B2C) means a relationship between a

company and the public at large (individuals) This is called electronic commerce whose definition is

not limited to sales but rather covers all possible exchanges between a company and its clients from

the request for an estimate to after-sales service

B To A (Business To Administration sometimes written B2A) means a relationship between a

company and the public sector (tax administration etc) based on numerical exchange mechanisms

(teleprocedures electronic forms etc)

As an extension of these concepts the term B To E (Business To Employees sometimes written B2E)

has also emerged to refer to the relationship between a company and its employees in particular

through the provision of forms directed at them for managing their career vacation or their

relationship with the company committee

The concept of e-Business is nonetheless very flexible and covers all possible uses of information and

communication technologies (ICT) for any and all of the following activities

Making the relationships between the enterprise and its clients and different partners (suppliers

authorities etc) more efficient

Developing new business opportunities

Facilitating the internal flow of information

Controlling the different processes of the enterprise (production warehousing purchasing sales

human resources etc)

The goal is therefore to create privileged communication channels between the enterprise and its

environment and link them with its internal processes to better control internal and external costs

E - B u s i n e s s T e c h n o l o g y - S e r v i c e P r o v i d e r s

Service providers include many kinds of businesses that provide outsourced services electronically to

other businesses The general concept is that the service is connected at the backendlsquo of a firmlsquos

operations to enhance their own product or service offering or perhaps to do so at a lower cost than the

firm could do itself

Importantly with any Service Provider the key issues include reliability security capacity and speed If

a business depends on another to support a part of its business it will become reliant on that service

provider Typically a major firm would seek a SLA (Service Level Agreement) with its service

providers which might include penalties for significant downtimelsquo or service outageslsquo

These services tend to be abbreviated a xSPlsquos where the x is an abbreviation for the kind of service

offered for example

ASP - Application Service Provider ndash a business that hosts a software application and usually provides

access via a browser link so that with a simple Internet connection and browser software can be

accessed and operated remotely

MSP - Managed Service Provider also called a management service provider is a company that manages

information technology services for other companies via the Internet Common services provided by

MSPs include remote network desktop and security monitoring patch management and remote data

back-up as well as technical assistance Most MSPs provide these services on a monthly basis which

give small and medium sized businesses an option to have their IT needs taken care of instead of paying

for on-site staff

PSP - Payment Service Provider (or IPSP ndash Internet Service Provider) ndash includes a range of different

payment services such as Worldpay Paypal Nochex Western Union and so on These businesses allow

other businesses to receive payments from customers via credit card debit card and other electronic

banking services In particular for small businesses and individuals a PSP can provide a secure and cost-

effective solution many such traders would be too small to afford the cost of setting up electronic

payments themselves or might be considered too small for merchant facilities by their bank

ISP ndash Internet Service Provider ndash offers internet access through broadband leased line ISDN dial-up

link mobile access and so on In many cases ISPs also offer secure website hosting and associated email

and data storage facilities

TSP - Telecom Service Provider - a business or organization that offers users access to the Telephone

and related services In the past most TSPs were government-run in most countries due to the nature of

capital expenditure involved in it But today there are many private players in most regions of the world

and even most of the government-owned companies have been privatized

Building the e-Business Infrastructure

Few in business today are unaware of the power of e-business to transform whole organizations Yet any

organization hoping to exploit its potential must develop an infrastructure that can cope with the demands

of e-business Are you prepared

Infrastructure is a major issue today as it is the crucial determinant of how easily corporations can

respond to the increasingly urgent demands of their executives We need it nowlsquo is an e-business mantra

IT directors can only deliver if they have an appropriate infrastructure This Report illustrates how

companies are setting about meeting the challenge of building the e-business infrastructure

What makes the challenge so taxing is that most companies already have an installed base of technology

that represents a major sunk cost The installed base is highly complex in many cases consisting of

multifarious disparate components To replace it with a new more unified platform is time-consuming

and risky It will also be subject to the pressures that result in platform fragmentation everyone has to

confront the problem of enormous pressure towards fragmentation

At the same time new technology suppliers are emerging in the form of more mature and sophisticated

outsourcing vendors and more radically application service providers (ASPs) who may enable

companies to finesse the infrastructure problem (though they are not yet mature enough to achieve this)

In this Report we view infrastructure not only in terms of technology but also in the wider context of

various sources of supply of technology platform services

expertise and skills required to deliver infrastructure technology

processes required to manage them

complementary investments required to enable IT infrastructure to deliver appropriate e-business

solutions

The Report will resonate most with senior IT executives but is in fact highly relevant to senior business

executives ndash technology is merely the context for what is essentially an organizational and management

issue

In conclusion the Report reflects the process of building e-business infrastructure It sees infrastructure

as a dynamic process to be managed rather than as a state to be achieved Today it is fundamentally

about preparing organizations for a continually changing business environment There is no technology

blueprint rather multiple approaches that contribute to an organizationlsquos ability to respond to and deliver

e-business

Many e-Business opportunities fail due to inadequate infrastructure With Building the e-Business

Infrastructure discover how you can successfully exploit e-business opportunities

Put simply e-business is the application of sound business principles via modern global technology-

based communications media As such it reaches far and wide affecting everyone from staff to

management players to competitors e-Business must address business models values operational

dynamics and include both audience and enterprise

Infrastructure determines how easily corporations can respond to the increasingly urgent demands of its

executives how they can respond to the fast-food data requirements of modern business and the

competitive nature of a global marketplace

The technical infrastructural elements of e-business consist of Internet and server technologies hardware

and software That is the Internet intranets extranets networks security solutions and a myriad of

applications promoting customer relationship management knowledge management business

intelligence integrated supply chain management and many others

However infrastructure is much more than technology It is the dynamic interaction and management of

strategy skilled people tools and processes ndash It drives and must be driven by e-business Discover how

you can create an organizational infrastructure that supports e-business with this report

Many e-Business opportunities fail due to inadequate infrastructure

This report addresses

infrastructure as a management issue

role and dynamics of infrastructure

trends and developments in e-business and infrastructure technology

people infrastructure

sources and supply of technology and platform services

the expertise and skills required to deliver infrastructure technology

investments necessary for optimum e-business delivery

the role of outsourcing as an infrastructural element

With all the hallmarks of a Business Intelligence management report

Building the e-Business Infrastructure is the complete management resource containing

original and exclusive research results and analysis from a survey commissioned exclusively for

this report

analysis of the latest e-business trends and developments

insights and experiences from many leading commentators from the field of

e-business and infrastructure development

fourteen in-depth case studies illustrating how leading organizations have exploited e-business

opportunity through addressing infrastructure issues

Optional CD-ROM format allowing greater flexibility and versatility in information sharing

A good infrastructure is critical to the success of an e-Business Infrastructure must be viewed as part of

the overall picture not a stand alone component It must be tightly coupled with all other components

such as strategy processes and organization However infrastructure decisions are sometimes taken in

isolation That results in ―technology for technologylsquos sake The best hardware or software is often not

the best for every situation Much like Rolls Royce might not be the ―best car for a farmer in Idaho

Business requirements should drive infrastructure selection A complete and thorough analysis that

weighs in key factors such as portability scalability existing skills future direction and cost should

result in an infrastructure that is the ―best one for that situation

E BUSINESS ENVIRONMENT AND STRATEGIES

The rate of change in e-business presents an enormous challenge to managers Business on the Internet is

just beginning and is evolving through a process of trial and error Management flexibility is a key for

survival and success in e-business

The environment of any organization consists of all of the factors that are beyond its control but

influence it in one way or another To counter the potential adverse affects of these factors the e-business

can respond with strategies An external strategy is an approach to deal with factors in the external

business environment such as competitors markets and technological developments that are beyond the

companys direct control

Technology for E Business

Technology plays a vital role in e-business Nevertheless companies often consume significant resources

in technology only to find out their business goals are not effectively met

Implementing a product idea is always a challenge with the usual on-target on-budget on-time criteria

Among the crucial tasks is to get the right technical resources - a team with great sense of responsibility

project leads with adequate management skills and leadership individual contributors with domain

expertise Other challenges include proper decision in make versus buy for individual components of a

project and effective knowledge transfer in a out-sourced situation

Internet technologies have revolutionized the business world by creating a global online marketplace

Appropriate understanding for the technologies and the impact of different design choices of

technologies (including the Internet and open systems) dramatically affects both functional and non-

functional aspects of the e-business solution

In from a few short years e-business has gone a simple concept to an undeniable reality and for good

reason It works for everyone consumers businesses and governments The e-business technologies are

based on all the technologies existed on e-commerce extranets virtual organizations publishing

Technology Options

The next model maximizes the use of open standards and protocols versus proprietary technologies The

most important technologies used in ebusiness and implemented by IBM Software Strategy for e-

business are Java Extensible Mark up Language (XML) Java 2 Platform Enterprise Edition (J2EE)

Presentation layer Web application server Integration server Protocols Objects Struts Eclipse MVC

patterns Common Object Request Broker Architecture (CORBA) Transactions Many of these

technology choices continue to evolve and expand as the open standards specification evolves to include

a broader view of the enterprise architecture Next figure demonstrates some of the common ebusiness

technologies Some technologies such as Java and XML can apply to more than one layer

Trends in e-Business Technologies

As e-business continues to develop various technologies associated with computing underlie its

evolution Currently the Javatrade programming language and platform the Extensible Mark up Language

and trans-coding are emerging as major technologies for performing e-business functions

Conclusion

The primary values of e-business such as cost savings revenue growth and customer satisfaction are

proving to be only the tip of the iceberg Having realized the benefit of Web-enabling individual business

processes many companies now seek further return on investment (ROI) by integrating new and existing

e-business applications and technologies The key to their success is to find a way to give customers what

they want without the expense of traditional business operations The direction toward Web services will

particularly help ―Net Generation companies that are born on the Webmdashto become successful by

allowing their services to be easily discovered worldwide and easily integrated with other services

ranging in scale from other Net Generation services to enterprise-scale services

Contents

S No Topic Page No

1 Introduction 03

2 What is VSM 04

3 Purpose of VSM tool 04

4 Sections of VSM 06

5 How to Create a VS map 09

6 VSM Symbols 11

7 VSM Process Steps 16

8 Financial Management 21

9 Productivity 24

10 Enterprise Resource Planning 28

11 e-Business Model 28

12 Conclusion 40

13 References 41


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solutions



issue





e-business






























this report







































Technology Options













Conclusion


































keep things moving

Why Draw Pictures







































Personnel planning

Recruitment

Selection



Assessment

Rewarding

Participation

















following









Time of the work




Economic situation






employment


































Global Engines

General Ledger

Accounts Payable

Accounts Receivable

Tax Connect





Cash Management



Global Engines








General Ledger








Accounts Payable































Labor load leveling



Productivity

Inputs


Outputs



Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion











































Personnel planning

Recruitment

Selection



Assessment

Rewarding

Participation

















following









Time of the work




Economic situation






employment


































Global Engines

General Ledger

Accounts Payable

Accounts Receivable

Tax Connect





Cash Management



Global Engines








General Ledger








Accounts Payable































Labor load leveling



Productivity

Inputs


Outputs



Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion














Time of the work




Economic situation






employment


































Global Engines

General Ledger

Accounts Payable

Accounts Receivable

Tax Connect





Cash Management



Global Engines








General Ledger








Accounts Payable































Labor load leveling



Productivity

Inputs


Outputs



Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion


























Global Engines

General Ledger

Accounts Payable

Accounts Receivable

Tax Connect





Cash Management



Global Engines








General Ledger








Accounts Payable































Labor load leveling



Productivity

Inputs


Outputs



Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion









Global Engines








General Ledger








Accounts Payable































Labor load leveling



Productivity

Inputs


Outputs



Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion





























Labor load leveling



Productivity

Inputs


Outputs



Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion









Within the factory



sewing room




For the end buyer


company

Resource allocation
















Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion









Structure










Marketing Strategy
















segment
















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion




















smoothly































E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion



















E BUSINESS MODEL












E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion









E-Business Concept







































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion



































CREATION OF VALUE













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion













































































offered for example









for on-site staff



































solutions



issue





e-business






























this report







































Technology Options













Conclusion





































solutions



issue





e-business






























this report







































Technology Options













Conclusion











issue





e-business






























this report







































Technology Options













Conclusion


















this report







































Technology Options













Conclusion

































Technology Options













Conclusion









Conclusion









management information system

Business

value stream teamuse

value stream mapchoose

future state value stream

onthat value stream

value stream management

lean value streamadd

overall process

vsm process steps