At this point, you may be wondering how an organization can possibly keep track of all of the information and documents flowing through an IPP. You are not alone.
TECHNOLOGY APPLICATION 13.2
Supply Chain Management
Garden.com is a Web site that sells flowers and garden supplies. It does not grow its own products. When a customer places an order online, Garden.com routes it to one or more of its suppliers. Because plants require a relatively long time to grow, they clearly cannot be “manufactured” on demand. Therefore, the suppliers need to have a pretty good idea of what demand will be like in the future, and they also need to build in some reserves in case some of the product line perishes before it can be sold. The suppliers also need to worry about over-producing, since plant care requires costly people, water, and space. Garden.com needs to keep tabs on which plants and other products are not currently available to keep the Web site updated. Given the close relationship these companies must maintain, Garden.com created an order-taking system that would help predict demand for itself and each supplier, and also provide customers with the ability to track orders online.
Dell Computer uses a “pull to order” process to build customized computers on demand. Dell relies on just-in-time manufacturing and delivery to achieve a four-hour production cycle time.
After Dell notifies its suppliers of the receipt of an order, components are delivered within an hour and a half. Once the parts for a particular computer are delivered, Dell begins to
assemble, test, and integrate the finished product. Most customers receive their custom-manufactured machine within five days.
Source: Constantine Von Hoffman, “Stand, (Pick) and Deliver,” CIO Magazine (April 15, 2000); Marc L. Songini, “Just-in-Time Manufacturing,” Computerworld (November 20, 2000): 50.
Many large manufacturing organizations have pondered the same problems and yearned for solutions. As noted in the introduction to this chapter, ERP systems have become the best solution to date for organizations wishing to simplify human resources planning, inventory control, production planning and control, and so forth. Technology Application 13.3 provides some examples.