Business 2710

Course: Business 2710

Name: Allison Kenny

Student Number: 200442846

Word Count: 948

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1. Current business process model

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1. There are several problems that the current process creates for the company.    The biggest problem is that there are many ways the company is losing money and are not able to maximize their profits. The company relies on “best guess practices” to determine the amount of products it needs produce each month, which does not allow for changes in a buyers order. If the company does not produce enough of their products, it will lose out on profits it could have earned by meeting all orders. If this is a continuous problem, buyers may seek other companies to buy from, as they would want a reliable place to purchase from. Should the company decide to produce a higher quantity of their products, they will incur additional costs maintaining the extra products while they wait for it to be sold. Should the extra products not be sold, the company must absorb the income loss of the discarded products. Another way in which the company is losing money is in the amount of wages they must pay out in order to develop a production schedule. 9 days of wages are paid out in manual data entry alone. This is a large amount of manual labor that could be reduced greatly should a better and more efficient process be implemented. Another 8 days of wages are paid to employees to read and analyze the data and determine what amount of production will best meet the needs of the of senior management. If all information were presented in one single estimate, instead of a separate estimate from sales and from production, it would give the company a clearer picture with more accurate information and would not require as much analyzing.

Another problem that is created by using the existing production planning process is, the increased chance of wrongful data entry. With data being entered manually, there is always an increased risk that numbers and information will be entered incorrectly. Since the data must be manually entered twice, into two different systems, there is the increased chance that data could be wrongfully entered twice. This could cause many problems for the company as they base their production schedule off of the numbers that have been inputted. Wrongful data entry could cause the company to produce too much of a product or not enough of a product. Also, the information that has been entered are analyzed by two different departments, sale and production, and both departments come up with their own sales targets. These targets are often different; therefore, the company is not given consistent and cohesive information in which to draw their conclusions from. Again, this will cause the company to over or under produce their products.

1. A lot of these problems could be solved using enterprise systems. Enterprise systems help a company optimize work flow by offering a single, unified database that is able to gather information from all relevant business processes and develop accurate and up to date production schedules. The biggest change would be to how the data is inputted into the system. Instead of having data manually inputted into two different systems at two different times, the database can input orders as they are processed right into the system.  At the end of the month, all order information is available to view and the company can trust that the information is correct. This will solve the problem of incorrect data information leading to incorrect forecasts. It also eliminates the need to spend 9 days inputting data, thus saving the company money. Enterprise systems are able to connect various parts of the company together including: inventory, production, sales, orders. Bringing this information together on the same platform will enable the company to develop real time and accurate reports for review. They will be able to plan production based on actual customer demand rather than basing it on “best guess”. It eliminates the need for two different departments to analyze the same data and come to two different conclusions, which could result in a inaccurate production schedule. This will help the company both save money as well and make more money. They are able to check the system at any time and see how the production system relates to the order management system and are able to change production based on customers needs. They are able to rapidly communicate between departments and produce more inventory if a customer requests it or reduce production if they determine they have an excess of product on hand that is not moving. This will also eliminate the need to spend 8 days analyzing the data and developing a production master schedule.

1. The biggest way the company will be able to lower their incurred costs is by reducing the amount they pay out in wages. By implementing an enterprise system, they are able to eliminate the labor-intensive job of manual data entry. This takes 9 days off of the entire production planning process. By having real time and accurate information easily available for review, the remaining 8 days spent should also be able to be cut down by at least half. Having the entire production planning process go from 17 days down to a possible 4 days is 13 days of wages the company is able to save on. This is a huge savings to the company and they are then able to allocate those hours to other departments, or get rid of them all together. By having a more accurate set of data, the company is better able to address the needs of their clients, meaning they can eliminate the need to carrying extra products in the event a customer asks for them.

1. Business process model after enterprise software implementation.

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