问答题
2.Forion Electronics (Forion) manufactures a range of electronic goods. Its business has grown rapidly over the last ten years and is now complex and international. Forion manufactures over 100 different products, selling into 25 different countries. There is a supplier base of over 200 companies from which Forion sources. As the business has become more complex, the board has found it difficult to pull together all the information that they require in order to make
decisions.
The current information systems are developed in-house and are based in the functional departments (such as purchasing, manufacturing, warehousing and delivery, selling and marketing). The organisation uses the financial system as a means of bringing together information for an overview of corporate performance.
There have been a number of examples of problems encountered with information in Forion:
– there are inefficiencies arising from ordering the wrong amount of subcomponents;
– there are often stock-outs or obsolescence of unsold goods in the warehouses, although the marketing department prepares good sales forecasts; and
– sometimes, there are insufficient delivery vehicles available to meet customer deadlines.
The board of Forion believes the problems arise from poor information sharing within the company. They are considering the purchase of an enterprise resource planning system (ERPS) to be the single information system for the whole organisation.
Also, Forion is planning to launch a smartphone. However, in order to make it competitive they need to have high-visibility, durable screens. As the cost of screen development is considerable, it has been decided to form a strategic alliance with a well-known screen manufacturer to provide this key component for the new smartphone. Bon Accord Screens (BAS) has been chosen as the strategic ally, as they have a strong reputation for their quality of manufacturing and new product development. BAS has been trying to break into the smartphone market for several years.
The alliance agreement has stipulated three critical areas of performance for BAS’ supply to Forion:
1. quality of manufacturing, measured by fault rates of screens supplied being within agreed tolerances (so that they fit Forion’s phone-bodies);
2. time of delivery, measured by the number of times a shipment is more than one day overdue; and
3. the ability to provide technical upgrades to the screens as the market demands.
The service level agreement (SLA) will be based on these three points and there will be financial penalties built into the agreement if BAS fails to meet these.
Required:
问答题
(a) Discuss the integration of information systems in an ERPS and how the ERPS may impact on performance management issues at Forion. (10 marks)
【正确答案】Enterprise Resource Planning Systems (ERPS) are software systems designed to support and automate the business processes of large enterprises. ERPS help in identifying and planning the use of resources across the organisation in all activities. As a unified database of corporate information, ERPS will aid the flow of information between all functions both within Forion and also with key outside stakeholders (e.g. suppliers such as BAS).
ERPS handle many aspects of operations including manufacturing, inventory, distribution, invoicing and accounting. They also cover support functions such as human resource management and marketing. These all seem appropriate for Forion.
ERPS can also contain SCM (supply chain management) and CRM (customer relationship management) software. Automated systems would seem appropriate at Forion given the number of customer and supplier relationships which Forion has to manage.
An ERPS also addresses the common issue of poor communication between departments. It will help across the three problems mentioned.
The inefficiencies arising from ordering the wrong volume of subcomponents would occur because purchasing and manufacturing are not using a common database so that purchasing may be using erroneous or out-of-date information. This will lead to extra costs in inventory handling and storing.
The stock-outs will result in poor customer service as goods are not available for immediate shipment. The obsolescence problems will result in direct financial losses as inventory is written off. Both of these problems will be the result of poor integration of the manufacturing schedule with the expected level of orders. ERPS will be welcomed as it will make use of the expertise of the marketing department in forecasting and making this available to manufacturing managers when setting their production plans.
The lack of vehicles available to meet delivery deadlines could be aided by the manufacturing schedule linking in to the delivery schedule so that optimal use can be made of the delivery fleet. This would also allow the delivery managers to plan for use of subcontractors to do delivery if there is not internal transport available and so avoid customer disappointment.
【答案解析】
问答题
(b) Evaluate, from Forion’s viewpoint, the usefulness of the three critical areas in the alliance agreement for measuring the performance of BAS. (8 marks)
【正确答案】Considering the points raised overall, it is surprising that they seem to be addressing the strengths of BAS. BAS will have been chosen as an ally because it is a good company. However, it may be worth considering if there are weaknesses and if measures should be put in place in the agreement to guard against these. The points seem reasonable given the critical nature of the screen in the production process of a smartphone and the setting of penalties is wise.
Taking each point in turn:
Manufacturing quality would be expected to be high given BAS’ reputation; however, it will be a critical part of the assembly process and faults will lead to either delayed delivery (if spotted in internal inspection) or else lead to customer dissatisfaction and rework costs to repair faulty items.
The time of delivery will dictate the volume of screen inventory which Forion has to hold and so impact on any attempt to run a just-in-time system of manufacturing. It may be necessary to give BAS access to Forion’s production scheduling system (via the new ERPS possibly) in order to achieve such a close working relationship.
Unlike the other two issues, the point on the provision of technical upgrades does not provide a metric for measuring this. It will be difficult to set a minimum performance level as such upgrades will be difficult to predict and it would be reasonable for BAS to reject (or ignore) a vaguely worded clause which would not be enforceable.
The size of the penalties would need to be commensurate with damage to the reputation of the product from BAS’ failure.Mobile phone customers are notable for having rapidly dropped previous market leaders when their products fail to deliver (e.g. Nokia, Blackberry). Therefore, it would be reasonable for potentially large penalties to be payable. Forion should note that these will only be claimable if they hold to their side of the agreement and so must carefully attend to the information and resources which need to be provided to BAS.
【答案解析】
问答题
(c) Evaluate the relative reliability of financial and non-financial data from internal and external sources in the context of the alliance between Forion and BAS. (7 marks)
【正确答案】Financial and non-financial data
Financial data has the advantage of being heavily checked and policed as part of the annual audit regime operating in most organisations. Financial data also has the advantages of being quantitative and so objective, whereas it can be difficult to judge the relative value of, for example, two customer complaints.
For the accountant, the collection and interpretation of financial data is thus straightforward and an everyday activity.Qualitative, non-financial data will often require to be transformed into quantitative data by applying 1–5 scales but it will never escape from the problem of being judgemental and subjective. Not all non-financial data is qualitative; however, the planning and scheduling data will be quantitative.
Internal and external sources
Forion will have greater control over the accuracy of internal data within its own ERPS than the external data, such as might be supplied by suppliers for their deliveries. External sources of data such as for the SLA will obviously be highly contentious if there is the possibility of penalty payments resulting from breaches of the agreement. Therefore, Forion may want to put in place its own inspection regime in order to confirm such data. Unreconciled differences between information systems are often a source of dispute in alliances such as the one with BAS.