We begin by considering the state of competition in the international manufacturing environment and the pressures to improve efficiency and react quickly to customers’ demands. We then focus on the push toward enterprise resource planning systems (ERP) as an Information Systems approach to demands for timely production. ERPs were initially created to integrate manufacturing processes. Over time, other processes were incorporated with the manufacturing pieces, and versions of the software were produced for service firms and distributors, based on their integrated databases and processes. Enterprise systems are a second generation of ERP, in that they add functionality that expands the reach of their processes across a company and its partners throughout the supply chain. This discussion of enterprise systems includes those e-business extensions that are facilitating supply chain management by linking information in partnering organizations’ enterprise systems. A company’s supply chain includes all of the business processes that are involved in obtaining components and materials from suppliers and producing the goods that are ultimately sold to customers. In the following two sections, we survey some important trends in production processes and demonstrate how these are integrated in an ERP environment. Three related functional areas that support the production process are also discussed: cost accounting, human resources management, and inventory management.
Entire books have been devoted to some of the topics in this chapter, and this brief chapter provides only an overview of these production processes. Because some of the information depends on accounting knowledge, you may want to consult operations management or accounting texts for more details on these topics.
- To analyze the forces that exist in the contemporary production environment and trends that have emerged
- To describe the role of ERP systems in integrating the total manufacturing Environment
- To list principal components of a modern integrated production process (IPP) and describe how those components interact with one another
- To analyze the impact of automation on the IPP
- To describe the key inputs, outputs, data, and processes included in production planning and control, including links to the cost accounting, human resource management, and inventory management processes
- To describe the fundamental characteristics and impact of supply chain management software