CASE STUDY : IInd
- Plocharski Company (Automation :Yes or No?)
The Production and inventory mangers of the company have asked to make a attempt to convince the president and vice president that new information system is essential to the continued success of the firm.
Inorder to convince the management regarding adoption of the new information system in the company . We have to first identify the major problems and their implication on the future of the this well established company.
Major Problems in Present Production and Inventory system of Plocharski Company
- Manual Job Order and tracking card are prepared to track and keep record of inventory. Earlier when size was small the company could maintain manually but now when size has increased the company should start thinking as improper stock keeping and inventory valuation leads to wastage of valuable stock, other related resources and obsolesce.
- No follow ups of scheduled target dates . Deadlines for goods delivery is never met. Customers are taken for granted. They have to come to the Company and enquire bout their order.
- The competition is increasing. The other manufacturers have started
imitating their designs. They are not proactive in their approach. They should follow such an scheduling approach so that Just-In-Time method can be implemented .and avoid wastages and meet target on time.
- Management of the company is adamant over adopting new techniques of information flow. This approach may hamper the business of the growing firm.
- Job order and raw materials inventory are updated once in a week and updating process takes once a week.The is too slow and is good only if the company has monopoly in market.
IMPORTANT INFORMATION GATHERED TO SUPPORT DECISION
There are many measures of perforance like:
- Speed
- Response time
- Number of users supported
- System testing
This test is known as benchmarking test.
APPROACH FOR SELECTING EFFECTIVE APPROACH FOR DEVELOPING AND IMPLEMENTING A NEW SYSTEM FOR INVENTORY AND PRODUCTION CONTROL
The steering committee’s responsibility to make a final decision about the selection of information system . As they know their system well they can negotiate with the vendor for specific resources . The key factors which help us in developing the system for the company are as follows :
The vendor system should be compatible with the organization’s data. Delay in providing needed output will occur once computer is operational.
The Cost and benefit of each Proposed system
The accountant will compare the cost of each vendors proposed system in relation to the system’s anticipated performance benefits. The difference between purchasing and leasing each vendor’s system should be evaluated. If steering committee satisfied the most appropriate vendor is chosen.
Maintainability of each Proposed system
The ease with which each computer can be modified in future. e.g when taxation rates changes the system should be flexible to makes changes. As cost of maintaining is about 5 times the cost of actual software. The latest software should be chosen.
Compatibility of each proposed system with existing System
It refers to the ability to implement and interface the new system with the existing computer hardware, software and operating procedures.
Vendor support
The vendor chosen for system establishment should provide following support :
- Training classes for employees
- Help implementing and testing new system
- Assistance in maintaining the new system through a maintenance contract
- Backup systems for temporarily processing company data, if required.
Systems implementation is often called the “ action Phase” of a systems study because the recommended changes from prior analysis , design and development work are now put into operation. Implementation could be lead to confusion.
Prepare the physical site
Before going ahead, the organization should arrange for the actual physical site. If new site has to be arranged then how much cost has to be incurred.
Determine functional changes
The company has to consider the probable effect of new accounting system on reporting structure and personnel relationship. Ignorance of Human relationship may lead to long term problem.
Select and Assign Personnel
Introduction of new system will modify the job structure of many employees. The employees whose job is getting eliminated or reduced should be offered job in new system or be given sufficient notice of termination.
Train Personnel
Before the introduction of new system the employees should be given adequate training and feedback session should be considered otherwise new system though very efficient will prove to be a failure.
Acquire & Install Computer Equipment
Once physical place is planned , the terminals, routers , servers are bought and positioned as per the plan.
Estabilish Internal Controls
Organisation should implement internal controls inorde to safeguard its assts, ensure the accuracy and reliability of accounting data, promote operating efficiency and encourage employees.
Convert data files
When converting to new system, an organization may have to convert its data files to newer, more useful formats.
Acquire Computer Software
The implementation team must also install the software that was acquired or developed for the project.The software from indepent vendor is called canned software while bundled with hardware is called turnkery systems.
