Name Anil Kumar Joshi

Roll No. 520949950

Course & SemesterMaster of Business Administration – MBA Semester 3

Subject Name & Code

OM0003 – Supply Chain Management(Book ID: B1074)

Assignment No. Set – 1 & 2

LC name & Code NIPSTec Ltd. 1640

Date of Submission 14.12.2010

Session

OM0003 – Supply Chain Management

Assignment - Set - 1

Q1. Tabulate the events of Supply Chain Management evolution according to chronological dates starting from Ancient times to 2000 AD.

Ans. Six major movements can be observed in the evolution of supply chain management studies: Creation, Integration, and Globalization (Lavassani et al., 2008a), Specialization Phases One and Two, and SCM 2.0.

1. Creation Era

The term supply chain management was first coined by a U.S. industry consultant in the early 1980s. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management.

2. Integration Era

This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration.

3. Globalization Era

The third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in the supply chain of organizations can be traced back several decades (e.g., in the oil industry), it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of supply chain management in organizations with the goal of increasing their competitive advantage, value-adding, and reducing costs through global sourcing.

4. Specialization Era—Phase One: Outsourced Manufacturing and Distribution

In the 1990s industries began to focus on “core competencies” and adopted a specialization model. Companies abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed

management requirements by extending the supply chain well beyond company walls and distributing management across specialized supply chain partnerships.

This transition also re-focused the fundamental perspectives of each respective organization. OEMs became brand owners that needed deep visibility into their supply base. They had to control the entire supply chain from above instead of from within. Contract manufacturers had to manage bills of material with different part numbering schemes from multiple OEMs and support customer requests for work -in-process visibility and vendor-managed inventory (VMI).

The specialization model creates manufacturing and distribution networks composed of multiple, individual supply chains specific to products, suppliers, and customers who work together to design, manufacture, distribute, market, sell, and service a product. The set of partners may change according to a given market, region, or channel, resulting in a proliferation of trading partner environments, each with its own unique characteristics and demands.

5. Specialization Era—Phase Two: Supply Chain Management as a Service

Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution and performance management.

At any given moment, market forces could demand changes from suppliers, logistics providers, locations and customers, and from any number of these specialized participants as components of supply chain networks. This variability has significant effects on the supply chain infrastructure, from the foundation layers of establishing and managing the electronic communication between the trading partners to more complex requirements including the configuration of the processes and work flows that are essential to the management of the network itself.

Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is the leading reason why supply chain specialization is gaining popularity.

Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken root primarily in transportation and collaboration categories. This has progressed from the Application Service Provider (ASP) model from approximately 1998 through 2003 to the On-Demand model from approximately 2003-2006 to the Software as a Service (SaaS) model currently in focus today.

6. Supply Chain Management 2.0 (SCM 2.0)

Building on globalization and specialization, the term SCM 2.0 has been coined to describe both the changes within the supply chain itself as well as the evolution of the processes, methods and tools that manage it in this new "era".

Web 2.0 is defined as a trend in the use of the World Wide Web that is meant to increase creativity, information sharing, and collaboration among users. At its core, the common attribute that Web 2.0 brings is to help navigate the vast amount of information available on the Web in order to find what is being sought. It is the notion of a usable pathway. SCM 2.0 follows this notion into supply chain operations. It is the pathway to SCM results, a combination of the processes, methodologies, tools and delivery options to guide companies to their results quickly as the complexity and speed of the supply chain increase due to the effects of global competition, rapid price fluctuations, surging oil prices, short product life cycles, expanded specialization, near-/far- and off-shoring, and talent scarcity.

Q2. “The utility of forecasts can be enhanced collaborative forecasting among supply chain parteners.” Explain?

Ans. Collaborative Supply Chain Management: Enabling Visibility

The participation of the entire supply chain community leads to improved inventory planning and optimization.

If you’ve tried working with suppliers in multiple locations and different time zones, you know that email is an improvement over voice and fax, but it still falls short of what you need.

Demand Solutions Collaboration provides a collaborative framework to create a supply network that includes credible demand and replenishment signals; shared business processes with customers and suppliers; exception-based management of key performance indicators; coordinated workflow and activity among all trading partners; and a common view of business performance via a secure Internet-based solution. A fourth generation collaborative planning solution, Collaboration works seamlessly across disparate applications and organizations.

Enhanced forecast management and inventory planning through collaboration

Item forecast numbers are based on empirical data. A flexible and hierarchical statistical forecasting engine is essential, but a true collaborative forecast will take into account factors outside the four walls of your company. Accurate and collaborative forecasts improve customer service, enhance inventory planning and optimization and ultimately increase net sales. Demand Solutions Collaboration extends beyond the core forecasting activity to include your external trading partners and internal departments - in real time with a Web-based solution. With Collaboration, you get a more accurate forecast. Your trading partners and customers have visibility into their account plans in your system and are able to enhance the plan. With collaborative plans, everyone can focus on value-added analysis versus data collection.

Collaboration process

Whether you follow CPFR, have your own internal collaboration methodology or don’t have one established yet, Collaboration is flexible and dynamic to tailor the process to support your business. Using Demand Solutions Collaboration tools, you can improve sales and order forecast accuracy, employ automatic exception management and alert notifications, simplify promotion planning and easily analyze business trends. The results:

Increased supply chain visibility Optimized inventories

Reduced stock outs

Lower costs

Satisfied customers

Increased revenue

Demand Solutions Collaboration provides a powerful collaborative platform

Using the flexibility of Collaboration, manufacturers can now share their planned order forecasts with key suppliers. Business alerts, prioritized lists of critical events and automatic resolutions help focus valuable resources on urgent issues. Trading partners can work together to address exception conditions proactively.

Customer demand is synchronized with supplier capabilities for optimized inventory and production. Dynamic views support flexible aggregation and disaggregation of items at various levels of detail, making collaboration much easier. Companies that collaboratively manage their supply chain gain a real competitive advantage.

Dashboards for better response

Demand Solutions Dashboards provide a way to visually present critical data in summary form. The Dashboard functionality can be customized by job function so planners can see the views they need and everyone can make quick decisions and respond to management’s every-changing desire to see forecasting information in multiple formats.

Additional features

Quickly delivers business value and ROIthrough inventory optimization and improved forecasting accuracy

Includes collaborative calendar capabilities to display inter-company promotions

Integrates easily with existing supply chain, CRM and ERP systems

Simplifies complex planning processes with closed-loop demand forecasting capabilities

Accelerates Sales & Operations Planning (S&OP), improves communications and generates alerts for key exceptions

Browser based, which means zero client deployment

Supports XML and EDI for easy exchange of data with trading partners

Provides visibility into the entire supply chain

Exception management(configurable by trading partner)

Ability to define work flows

View data as information to help optimize inventory and maximize profits with Demand Solutions Dashboards

Q3. Write short notes on the following w.r.t. supply chain management.

a) Bar codeb) Radio Frequency Identification

c) Electronic Data Interchange

d) Artificial Intelligence or Expert System

Ans.

A) Bar code:- A barcode is an optical machine-readable representation of data, which shows certain data on certain products. Originally, barcodes represented data in the widths (lines) and the spacings of parallel lines, and may be referred to as linear or 1D (1 dimensional) barcodes or symbologies. They also come in patterns of squares, dots, hexagons and other geometric patterns within images termed 2D (2 dimensional) matrix codes or symbologies. Although 2D systems use symbols other than bars, they are generally referred to as barcodes as well. Barcodes can be read by optical scanners called barcode readers, or scanned from an image by special software.

The first use of barcodes was to label railroad cars, but they were not commercially successful until they were used to automate supermarket checkout systems, a task in which they have become almost universal. Their use has spread to many other roles as well, tasks that are generically referred to as Auto ID Data Capture (AIDC). Other systems are attempting to make inroads in the AIDC market, but the simplicity, universality and low cost of barcodes has limited the role of these other systems. It costs 0.5¢ (U.S.) to implement a barcode, while passive RFID still costs about 7¢ to 30¢ per tag.

B) Radio Frequency Identification:- Radio-frequency identification (RFID) is a technology that uses communication via electromagnetic waves to exchange data between a terminal and an object such as a product, animal, or person for the purpose of identification and tracking. Some tags can be read from several meters away and beyond the line of sight of the reader.

Radio-frequency identification involves interrogators (also known as readers), and tags (also known as labels).

Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency (RF) signal, and other specialized functions. The other is an antenna for receiving and transmitting the signal.

There are three types of RFID tags: passive RFID tags, which have no power source and require an external electromagnetic field to initiate a signal transmission, active

RFID tags, which contain a battery and can transmit signals once an external source ('Interrogator') has been successfully identified, and battery assisted passive (BAP) RFID tags, which require an external source to wake up but have significant higher forward link capability providing greater range.

There are a variety of groups defining standards and regulating the use of RFID, including: International Organization for Standardization (ISO), International Electrotechnical Commission (IEC)

C) Electronic Data Interchange:- Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention.

It is more than mere e-mail; for instance, organizations might replace bills of lading and even cheques with appropriate EDI messages. It also refers specifically to a family of standards, e.g. UN/EDIFACT, ANSI X12.

The National Institute of Standards and Technology in a 1996 publication defines electronic data interchange as "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media.". It goes on further to say that "In EDI, the usual processing of received messages is by computer only. Human intervention in the processing of a received message is typically intended only for error conditions, for quality review, and for special situations. For example, the transmission of binary or textual data is not EDI as defined here unless the data are treated as one or more data elements of an EDI message and are not normally intended for human interpretation as part of online data processing." [

EDI can be formally defined as 'The transfer of structured data, by agreed message standards, from one computer system to another without human intervention'. Most other definitions used are variations on this theme. Even in this era of technologies such as XML web services, the Internet and the World Wide Web, EDI may be the data format used by the vast majority of electronic commerce transactions in the world.

D) Artificial Intelligence or Expert System:- Artificial intelligence (AI) is the intelligence of machines and the branch of computer science that aims to create it. AI textbooks define the field as "the study and design of intelligent agents"where an intelligent agent is a system that perceives its environment and takes actions that maximize its chances of success. John McCarthy, who coined the term in 1956,[3]

defines it as "the science and engineering of making intelligent machines."

The field was founded on the claim that a central property of humans, intelligence—the sapience of Homo sapiens—can be so precisely described that it can be simulated by a

machine. This raises philosophical issues about the nature of the mind and the limits of scientific inquiry, issues which have been addressed by myth, fiction and philosophy since antiquity Artificial intelligence has been the subject of optimism, [but has also suffered setbacks and, today, has become an essential part of the technology industry, providing the heavy lifting for many of the most difficult problems in computer science.

AI research is highly technical and specialized, deeply divided into subfields that often fail to communicate with each other. Subfields have grown up around particular institutions, the work of individual researchers, the solution of specific problems, longstanding differences of opinion about how AI should be done and the application of widely differing tools. The central problems of AI include such traits as reasoning, knowledge, planning, learning, communication, perception and the ability to move and manipulate objects. General intelligence (or "strong AI") is still among the field's long term goals.

Assignment - Set - 2

Q -1. Taking an example of any product, explain the 12 steps involved in procurement process.

Answer:

Procurement is the acquisition of appropriate goods and/or services at the best

possible total cost of ownership to meet the needs of the purchaser in terms of quality

and quantity, time, and location. Corporations and public bodies often define processes

intended to promote fair and open competition for their business while minimizing

exposure to fraud and collusion.

Overview

Almost all purchasing decisions include factors such as delivery and handling, marginal

benefit, and price fluctuations. Procurement generally involves making buying decisions

under conditions of scarcity. If good data is available, it is good practice to make use of

economic analysis methods such as cost-benefit analysis or cost-utility analysis.

An important distinction is made between analysis without risk and those with risk.

Where risk is involved, either in the costs or the benefits, the concept of expected

value may be employed.

Direct procurement and indirect procurement

 

TYPES

Direct procurement

Indirect procurement

Raw material and production goods

Maintenance, repair, and operating supplies

Capital goods and services

FEATURES Quantity Large Low Low

Frequency High Relatively high Low

Value Industry Low High

specific

Nature Operational Tactical Strategic

ExamplesCrude oil in petroleum industry

Lubricants, spare parts

Machinery, computers

Based on the consumption purposes of the acquired goods and services, procurement

activities are often split into two distinct categories. The first category being direct,

production-related procurement and the second being indirect, non-production-related

procurement.

Direct procurement occurs in manufacturing settings only. It encompasses all items that

are part of finished products, such as raw material, components and parts. Direct

procurement, which is the focus in supply chain management, directly affects the

production process of manufacturing firms. In contrast, indirect procurement activities

concern “operating resources” that a company purchases to enable its operations. It

comprises a wide variety of goods and services, from standardised low value items like

office supplies and machine lubricants to complex and costly products and services like

heavy equipment and consulting services.

Procurement topics

Procurement vs acquisition

The US Defense Acquisition University (DAU) defines procurement as the act of buying

goods and services for the government.

DAU defines acquisition as the conceptualization, initiation, design, development, test,

contracting, production, deployment, Logistics Support (LS), modification, and disposal

of weapons and other systems, supplies, or services (including construction) to

satisfy Department of Defense needs, intended for use in or in support of military

missions.

Acquisition is therefore a much wider concept than procurement, covering the whole life

cycle of acquired systems. Multiple acquisition models exist, one of which is provided in

the following section.

Acquisition process

The revised acquisition process for major systems in industry and defense is shown in

the next figure. The process is defined by a series of phases during which technology is

defined and matured into viable concepts, which are subsequently developed and

readied for production, after which the systems produced are supported in the field.

Model of the Acquisition Process.

The process allows for a given system to enter the process at any of the development

phases. For example, a system using unproven technology would enter at the beginning

stages of the process and would proceed through a lengthy period of technology

maturation, while a system based on mature and proven technologies might enter

directly into engineering development or, conceivably, even production. The process

itself includes four phases of development:

Concept and Technology Development: is intended to explore alternative

concepts based on assessments of operational needs, technology readiness,

risk, and affordability.

Concept and Technology Development phase begins with concept exploration.

During this stage, concept studies are undertaken to define alternative concepts

and to provide information about capability and risk that would permit an

objective comparison of competing concepts.

System Development and Demonstration phase. This phase could be entered

directly as a result of a technological opportunity and urgent user need, as well

as having come through concept and technology development.

The last, and longest phase is the Sustainment and Disposal phase of the

program. During this phase all necessary activities are accomplished to maintain

and sustain the system in the field in the most cost-effective manner possible.

Procurement systems

Another common procurement issue is the timing of purchases. Just-in-time is a system

of timing the purchases of consumables so as to keep inventory costs low. Just-in-time

is commonly used by Japanese companies but widely adopted by many global

manufacturers from the 1990s onwards. Typically a framework agreement setting terms

and price is created between a supplier and purchaser, and specific orders are

then called-off as required.

Shared services

In order to achieve greater economies of scale, an organization’s procurement functions

may be joined into shared services. This combines several small procurement agents

into one centralized procurement system.

Procurement process

Procurement may also involve a bidding process i.e, Tendering. A company may want

to purchase a given product or service. If the cost for that product/service is over the

threshold that has been established (eg: Company X policy: "any product/service

desired that is over $1,000 requires a bidding process"), depending on policy or legal

requirements, Company X is required to state the product/service desired and make the

contract open to the bidding process. Company X may have ten submitters that state

the cost of the product/service they are willing to provide. Then, Company X will usually

select the lowest bidder. If the lowest bidder is deemed incompetent to provide the

desired product/service, Company X will then select the submitter who has the next best

price, and is competent to provide the product/service. In the European Union there are

strict rules on procurement processes that must be followed by public bodies, with

contract value thresholds dictating what processes should be observed (relating to

advertising the contract, the actual process etc).

Procurement steps

Procurement life cycle in modern businesses usually consists of seven steps:

Information gathering: If the potential customer does not already have an

established relationship with sales/ marketing functions of suppliers of needed

products and services (P/S), it is necessary to search for suppliers who can

satisfy the requirements.

Supplier contact: When one or more suitable suppliers have been

identified, requests for quotation, requests for proposals, requests for

information or requests for tender may be advertised, or direct contact may be

made with the suppliers.

Background review: References for product/service quality are consulted, and

any requirements for follow-up services including installation, maintenance,

and warranty are investigated. Samples of the P/S being considered may be

examined, or trials undertaken.

Negotiation: Negotiations are undertaken, and price, availability, and

customization possibilities are established. Delivery schedules are negotiated,

and a contract to acquire the P/S is completed.

Fulfillment: Supplier preparation, expediting, shipment, delivery, and payment

for the P/S are completed, based on contract terms. Installation and training may

also be included.

Consumption, maintenance, and disposal: During this phase, the company

evaluates the performance of the P/S and any accompanying service support, as

they are consumed.

Renewal: When the P/S has been consumed and/or disposed of, the contract

expires, or the product or service is to be re-ordered, company experience with

the P/S is reviewed. If the P/S is to be re-ordered, the company determines

whether to consider other suppliers or to continue with the same supplier.

Public procurement

Public procurement generally is an important sector of the economy. In Europe, public

procurement accounts for 16.3% of the Community GDP.

Green public procurement

In Green public procurement (GPP), contracting authorities and entities take

environmental issues into account when tendering for goods or services. The goal is to

reduce the impact of the procurement on human health and the environment.

In the European Union, the Commission has adopted its Communication on public

procurement for a better environment, where proposes a political target of 50 % Green

public procurement to be reached by the Member States by the year 2010.

Alternative procurement procedures

There are several alternatives to tendering which are available in formal procurement.

One system which has gained increasing momentum in the construction industry and

among developing economies in the Selection in planning process which enables

project developers and equipment purchasers to make significant changes to their

requirements with relative ease. The SIP process also enables vendors and contractors

to respond with greater accuracy and competitiveness as a result of the generally longer

lead times they are afforded.

Procurement frauds

Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding an

obligation or causing a loss to public property or various means during procurement

process by public servants, contractors or any other person involved in the

procurement.

Q - 2. Explain the different types of product returns. Briefly explain the impact of Reverse Supply Chain Management on profitability

Answer:

Product returns have often been viewed by customers as a necessary evil, a painful process and, usually, unavoidable. For retailers, manufacturers and distributors, returns have often been seen as a nuisance, a cost center and an area of potential customer dissatisfaction. As long as products are being sold, there will always be some returns. And, for many sellers, the process of handling product returns has been mostly on an ad hoc basis. However, many successful organizations have realized that the returns process incurs significant costs and that an effective product returns strategy, which is a major aspect of reverse logistics (the term that encompasses returns as well as a number of other activities related to items moving “backwards” in the supply chain) can provide a number of benefits. Product returns can be categorized into two groups:

Controllable returns:

Controllable returns result from problems, difficulties or errors of the seller or customer and can be mostly eliminated with the proper strategies and programs by the company or its supply chain partners. Every controllable factor has a cause or causes that could be minimized or eliminated with better forward logistics processes, improved market forecasting, improved product handling or storage and so forth. Products returned because of damage can be eliminated through some combination of improved handling, better packaging, improved transportation and storage of the items as they are being distributed in the supply chain. In essence, this is eliminating problems before they happen. For example this type of return usually occurs because of bad management, errors in publication on web, non standardized shipping, damage goods, wrong item and poor customer services.

Uncontrollable Product returns:

Uncontrollable returns are the returns which cannot be eliminated or stopped by any actions taken by the company. For example these returns can’t be stopped because of distance selling regulation, faulty goods, change of mind and customer behaviour.

Reverse Supply Chain Management also known as Reverse Logistic, is a relatively new concept in Supply Chain Management. As we are aware, in all supply chain activities the flow of goods is from manufacturer to the consumer. In Reverse Supply Chain Management or Reverse Logistics we look at the flow of goods from consumer to the manufacturer. Sounds surprising? This has been happening since time immemorial in the form of “Goods returned”. Some of the recent activities of “exchange offers” and “green standards requirements” have added to the importance and growth of the issue of reverse supply chain.

Reverse Supply Chain Management refers to the activities related to a product or a service after sale. It is a process of tracking items that are returned from the customers and accounting for them in inventory. It also includes automating the return procedures and reducing unauthorised returns.

Impact of Reverse Supply Chain Management on Profitability:

The intention of every organisation in implementing Reverse Supply Chain Management in its business process is mainly to increase the profits and also to build the companies goodwill in the eyes of its customers. This again would help in increasing the profits of the company.

Effective Reverse Supply Chain Management yields direct benefits that include improved customer satisfaction, decreased inventory levels, and decrease in the distribution and storage costs. Experts in this field have noted that, a well administered Reverse Supply Management System would result in savings in transportation, inventory carriage and waste disposal cost and also improves customer satisfaction. It can also be said that an effective Reverse Supply Chain Management improves customer relationship, improves environmental regulatory obedience that increases profitability of the organisations.

A well planned Reverse Supply Chain Management brings profits by utilising technology to evaluate at the point of customer returns. Realising the critical nature of the returns process and treating returns as perishable assets and by establishing the returns process as a high priority.

In order to earn maximum profits from the implementation of Reverse Supply Chain Management organisations must first analyse as to how this will contribute to profits. This is an activity that involves executive management. Initiatives that do not go hand in hand with executive management either have little ability to support organisations profitability or will end up in the closure of the firm.

Q - 3. List out six major computer based information systems and explain each of them briefly with examples.

Answer:

Information Systems (IS) is an academic/professional discipline concerned with

the strategic, managerial and operational activities involved in the gathering,

processing, storing, distributing and use of information, and its associated technologies,

in society and organizations. As an area of study, IS bridges

the multidisciplinary business field and the interdisciplinary computer science field that

is evolving toward a new scientific discipline. An information systems discipline

therefore is supported by the theoretical foundations

of information and computations such that undergraduate students have unique

opportunities to explore the academics of various business models as well as

related algorithmic processes within a computer science discipline. Typically,

information systems or the more common legacy information systems include people,

procedures, data, software, and hardware (by degree) that are used to gather and

analyze digital information. Specifically computer-based information systems are

complementary networks of hardware/software that people and organizations use to

collect, filter, process, create, & distribute data (computing).  Computer Information

System(s) (CIS) is often a track within the computer science field studying computers

and algorithmic processes, including their principles, their software & hardware designs,

their applications, and their impact on society.[15][16][17] Overall, an IS discipline

emphasizes functionality over design.

As illustrated by the Venn Diagram on the right, the history of information

systems coincides with the history of computer science that began long before the

modern discipline of computer science emerged in the twentieth century. Regarding the

circulation of information and ideas, numerous legacy information systems still exist

today that are continuously updated to promote ethnographic approaches, to

ensure data integrity, and to improve the social effectiveness & efficiency of the whole

process. In general, information systems are focused upon processing information

within organizations, especially within business enterprises, and sharing the benefits

with modern society.

Silver et al. (1995) provided two views on (IS) and IS-centered view that includes

software, hardware, data, people, and procedures. A second managerial view includes

people, business processes and Information Systems.

There are various types of information systems, for example: transaction processing

systems, office systems, decision support systems, knowledge management systems,

database management systems, and office information systems. Critical to most

information systems are information technologies, which are typically designed to

enable humans to perform tasks for which the human brain is not well suited, such as:

handling large amounts of information, performing complex calculations, and controlling

many simultaneous processes.

Information technologies are a very important and malleable resource available to

executives. Many companies have created a position of Chief Information Officer (CIO)

that sits on the executive board with the Chief Executive Officer (CEO), Chief Financial

Officer (CFO), Chief Operating Officer (COO) and Chief Technical Officer (CTO).The

CTO may also serve as CIO, and vice versa. The Chief Information Security

Officer (CISO), who focuses on information security management.

Silver et al defined Information Systems as follows:

Information systems are implemented within an organization for the purpose of

improving the effectiveness and efficiency of that organization. Capabilities of the

information system and characteristics of the organization, its work systems, its people,

and its development and implementation methodologies together determine the extent

to which that purpose is achieved

The Discipline of Information Systems

Several IS scholars have debated the nature and foundations of Information Systems

which has its roots in other reference disciplines such as Computer

Science, Engineering, Mathematics, Management Science, Cybernetics, and others 

Differentiating IS from Related Disciplines

Similar to computer science, other disciplines can be seen as both related disciplines

and foundation disciplines of IS. But, while there may be considerable overlap of the

disciplines at the boundaries, the disciplines are still differentiated by the focus, purpose

and orientation of their activities.

In a broad scope, the term Information Systems (IS) is a scientific field of study that

addresses the range of strategic, managerial and operational activities involved in the

gathering, processing, storing, distributing and use of information, and its associated

technologies, in society and organizations. The term information systems is also used to

describe an organizational function that applies IS knowledge in industry, government

agencies and not-for-profit organizations. Information Systems often refers to the

interaction between algorithmic processes and technology. This interaction can occur

within or across organizational boundaries. An information system is not only the

technology an organization uses, but also the way in which the organizations interact

with the technology and the way in which the technology works with the organization’s

business processes. Information systems are distinct from information technology (IT) in

that an information system has an information technology component that interacts with

the processes components.

Types of information systems

A four level pyramid model of different types of Information Systems based on the different levels of hierarchy in an organization

The 'classic' view of Information systems found in the textbooks of the 1980s was of a

pyramid of systems that reflected the hierarchy of the organization, usually Transaction

processing systems at the bottom of the pyramid, followed by Management information

systems, Decision support systems and ending with Executive information systems at

the top. Although the pyramid model remains useful, since it was first formulated a

number of new technologies have been developed and new categories of information

systems have emerged, some of which no longer fit easily into the original pyramid

model.

Some examples of such systems are:

Data warehouses

Enterprise resource planning

Enterprise systems

Expert systems

Geographic information system

Global information system

Office Automation

Information systems career pathways

Information Systems have a number of different areas of work:

Information systems strategy

Information systems management

Information systems development

Information systems security

Information systems iteration

There are a wide variety of career paths in the information systems discipline. "Workers

with specialized technical knowledge and strong communications skills will have the

best prospects. Workers with management skills and an understanding of business

practices and principles will have excellent opportunities, as companies are increasingly

looking to technology to drive their revenue."

Information systems development

Information technology departments in larger organizations tend to strongly influence

information technology development, use, and application in the organizations, which

may be a business or corporation. A series of methodologies and processes can be

used in order to develop and use an information system. Many developers have turned

and used a more engineering approach such as the System Development Life

Cycle (SDLC) which is a systematic procedure of developing an information system

through stages that occur in sequence. An Information system can be developed in

house (within the organization) or outsourced. This can be accomplished by outsourcing

certain components or the entire system. A specific case is the geographical distribution

of the development team (Offshoring, Global Information System).

A computer based information system, following a definition of Langefors, is:

a technologically implemented medium for recording, storing, and disseminating

linguistic expressions,

as well as for drawing conclusions from such expressions.

which can be formulated as a generalized information systems design mathematical

program

Geographic Information Systems, Land Information systems and Disaster Information

Systems are also some of the emerging information systems but they can be broadly

considered as Spatial Information Systems. System development is done in stages

which include:

Problem recognition and specification

Information gathering

Requirements specification for the new system

System design

System construction

System implementation

Review and maintenance