1. For an additional fee, a customer purchasing a Sears Roebuck appliance, such as a washing machine, can purchase a three- year service contract. The contract provides free repair service and parts for the specified appliance using an authorized Sears service provider. When a person with a Sears service contract needs to repair an appliance, such as a washing machine, he or she calls the Sears Repairs & Parts department to schedule an appointment. The department makes the appointment and gives the caller the date and approximate time of the appointment. The repair technician arrives during the designated time framework and diagnoses the problem. If the problem is caused by a faulty part, the technician either replaces the part if he is carrying the part with him or orders the replacement part from Sears. If the part is not in stock at Sears, Sears orders the part and gives the customer an approximate time when the part will arrive. The part is shipped directly to the customer. After the part has arrived, the customer must call Sears to schedule a second appointment for a repair technician to replace the ordered part. This process is very lengthy. It may take two weeks to schedule the first repair visit, another two weeks to order and receive the required part, and another week to schedule a second repair visit after the ordered part has been received.
Diagram the existing process.
What is the impact of the existing process on Sears’ operational efficiency and customer relationships?
What changes could be made to make this process more efficient? How could information systems support these changes? Diagram the new improved process.
2. Management at your agricultural chemicals corporation has been dissatisfied with production planning. Production plans are created using best guesses of demand for each product, which are based on how much of each product has been ordered in the past. If a customer places an unexpected order or requests a change to an existing order after it has been placed, there is no way to adjust production plans. The company may have to tell customers it can’t fill their orders, or it may run up extra costs maintaining additional inventory to prevent stock- outs.
At the end of each month, orders are totaled and manually keyed into the company’s production planning system. Data from the past month’s production and inventory systems are manually entered into the firm’s order management system. Analysts from the sales department and from the production department analyze the data from their respective systems to determine what the sales targets and production targets should be for the next month. These estimates are usually different. The analysts then get together at a high- level planning meeting to revise the production and sales targets to take into account senior management’s goals for market share, revenues, and profits. The outcome of the meeting is a finalized production master schedule. The entire production planning process takes 17 business days to complete. Nine of these days are required to entire and validate the data. The remaining days are spent developing and reconciling the production and sales targets and finalizing the production master schedule.
Draw a diagram of the existing production planning process.
Analyze the problems this process creates for the company.
How could an enterprise system solve these problems? In what ways could it lower costs? Diagram what the production planning process might look like if the company implemented enterprise software.