4

ROLE OF TECHNOLOGY IN
MANAGING OPERATIONS
The Role of Technology
The last decade has seen an unprecedented growth in technological capability. We
are all
familiar with the Internet and how it changed communication and business. However,
that is just one type of technology. Indeed information technology enables
companies to
share real-time information across the globe, improve their response time to
customers,
improve the quality of their processes, and design products in innovative ways.
However,
many other technologies discussed in this chapter also impact operations, including
those that change how we manufacture and process goods.
Technology can be acquired to improve processes and maintain up-to-date standards.
Technology can also be used as a competitive advantage. For example, by acquiring
technology a company can improve quality, reduce costs, and improve product
delivery.
Technology can also increase speed of production. This can provide an advantage
over
the competition and help gain market share. However, investing in technology can be
costly and entails risks, such as overestimating the benefits of the technology or
incurring
the risk of obsolescence due to rapid new inventions.
Use of technology can have a large strategic impact on firms. For example,
companies
can use technology to help them gain an advantage over their competitors, whether
it be
improving their manufacturing processes or communicating with customers. For this
reason technology has become a critical factor for companies in achieving a
competitive
advantage. In fact, studies have shown that companies that invest in new
technologies
tend to improve their financial position over those that do not. However, the
technolo-
gies a company acquires should not be decided on randomly, such as following the
latest
fad or industry trend. Rather, the selected technology needs to support the
organization's
competitive priorities, as we learned in Chapter 3, "Understanding Operations
Strate-
gies," with the examples of FedEx and Southwest Airlines. Also, technology needs to
be selected to enhance the company's competitive priorities and add to its
competitive
advantage.
•
83

Technology should be acquired to support the company's chosen competitive

priorities,
not just to follow the latest market fad. Also technology may require the company
to
rethink its strategy. For example, when the Internet became available it was
generally
assumed that it would replace traditional ways of doing business. This has not
turned out
to be the case. In fact, for many companies the Internet enhanced traditional
methods.
Activities such as shipping, warehousing, transportation, and even physical contact
must
still be performed. For example, pharmacy chains such as Walgreens and CVS found
that
although customers place orders over the Internet, they prefer to pick up their
orders
in person. Similarly, airlines discovered that an easy-to-use Web site can increase
book-
ings. However, successful use of a technology such as the Internet requires
companies
to develop strategies that integrate the technology. As you can see, acquiring
technology
is an important strategic decision for companies. Operations managers must consider
many factors when making the decision to purchase technology.
Types of Operations Technologies
There are three broad categories of operations technologies. They are
differentiated
based upon their application, but all three areas of technology are important to
opera-
tions managers. The first type is product technology, which is any new technology
devel-
oped by a firm that relates to new product features or characteristics. An example
of
this would include Teflon, the material used in non-stick fry pans. Teflon became
an
emerging technology in the 1970s and is currently used in numerous applications.
Other
examples include CDs and flat-screened monitors. Product technology is important as
companies must regularly update their processes to produce the latest types of
products.
A second type of technology is process technology—the technology used to improve
the
process of creating goods and services. Examples of this include computer-aided
design
(CAD) and computer-aided manufacturing (CAM). These technologies use computers
to assist engineers in the way they design and manufacture products. Another
example
is an emerging technology of 3D printing. Process technologies are important to
com-
panies, as they enable tasks to be accomplished more efficiently. We learn more
about
these technologies later in this chapter.
The last type of technology is information technology, which enables communication,
processing, and storage of information. Information technology has grown rapidly
over
recent years and has had a profound impact on business. Just consider the changes
that
have occurred due to the Internet. The Internet has enabled electronic commerce and
the
creation of the virtual marketplace and has linked customers and buyers. Another
exam-
ple of information technology is enterprise resource planning (ERP), which
functions
via large software programs used for planning and coordinating all resources
throughout
the entire enterprise. ERP systems have enabled companies to reduce costs and
improve
responsiveness but are expensive to purchase and implement. Consequently, just like
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with the purchase of any technological investment, investing in an ERP system needs
to
be a strategic decision.
Enterprise Resource Planning (ERP)
Enterprise resource planning (ERP) is a cross-functional enterprise system driven
by an
integrated suite of software modules that support the basic internal business
processes
of a company. ERP gives a company an integrated real-time view of its core business
processes such as production, order processing, and inventory management—all
critical
elements of operations management. These business processes are further tied
together
by ERP applications software and a common database maintained by a database man-
agement system. This database is then accessible across the organization enabling
the
company to work from the same set of numbers. ERP systems track business resources
(such as cash, raw materials, and production capacity) and the status of
commitments
made by the business (such as customer orders, purchase orders, and employee
payroll),
no matter which department (manufacturing, purchasing, sales, accounting, and so
on)
has entered the data into the system.
ERP facilitates information flow between all business functions inside the
organization,
and manages connections to outside stakeholders. These enterprise systems are
complex
software packages that offer the potential of integrating data and processes across
func-
tions in an enterprise. These software systems are expensive yet powerful and can
change
the operations function. Enterprise system software is a multibillion dollar
industry that
produces components that support a variety of business functions. IT investments
have
become the largest category of capital expenditure in United States-based
businesses over
the past decade. Although the initial ERP systems focused on large enterprises,
there
has been a shift toward smaller enterprises also using ERP systems. This has
provided
small and medium-sized firms—with typically less financial capability—access to ERP
software.
Organizations consider the ERP system a vital organizational tool because it
integrates
varied organizational systems and enables flawless transactions and production.
How-
ever, an ERP system is radically different from traditional systems development.
ERP
systems can run on a variety of computer hardware systems and network
configurations,
typically employing a database as a repository for information that is accessible
by all
processes. Organizational responsiveness and performance required by today's
business
environment cannot typically be achieved without this type of software enabling
coor-
dinated performance.
Before there were ERP systems companies relied on batch processing, which is a
system
where data is stored for a period of time until it is ready to be processed. This
made a lot
of sense in the earlier years of computer technology, but as technology advanced
newer
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methods were needed. Software developers at a company called Systems, Applications,

and Products in Data Processing (SAP) created one of the earliest improvements to
batch
processing. They created a software that was based on real-time processing, meaning
that
users now didn't have to wait for batches to run but could instead update
information
immediately after entry. The technological advancement led to modern ERP systems.
Basically, modern ERP systems seek to integrate all functional areas of a company
within
one database. The software performs core corporate activities such as purchasing,
sup-
plier and inventory management, engineering and production usually on a
client/server
network and consists of different software modules that all link together. Benefits
of
ERP software include increased customer service, more efficient business processes,
and
increased competitive advantages. However it is worth noting that there are
disadvan-
tages to implementing ERP software, the first being the actual cost of the system.
Com-
panies should do a detailed cost-analysis to see whether implementing a new system
will
provide an acceptable return on investment. If a gain of 30 percent to 50 percent
isn't
expected, experts suggest not going through with the implementation because there
is
too much risk involved. If a company does decide to proceed with the implementation
of an ERP system it should proceed cautiously, developing a detailed and well-
thought-
out plan to help mitigate risk. If everything is planned out and monitored closely
dur-
ing the implementation phase, significant gains and improvements can be achieved by
implementing an ERP system. Later in this chapter we discuss specific steps to ERP
implementation and the typical costs that are incurred by companies during this
process.
Evolution of ERP
Initial ERP systems focused on automating back office functions that did not
directly
affect customers and the general public. These early ERP systems addressed
traditional
operations management problems, such as material shortages, productivity enhance-
ments, inventory problems, operations scheduling, and quality issues. However, as
tech-
nology developed they quickly moved into front office functions. When the Internet
simplified communicating with external parties the newer ERP systems tied both the
upstream and downstream parts of the supply chain with the organization. On the
down-
stream side this includes customer relationship management (CRM), dealing directly
with customers, and business systems such as e-commerce, e-government, e-telecom,
and e-finance. On the upstream side it includes supplier relationship management
(SRM), which later became integrated with other parts of the system.
ERP systems experienced rapid growth in the 1990s fueled by the potential of
anticipated
problems with the turn of the century, which was known as the Y2K problem. Many
companies took this opportunity to replace their current systems with ERP. ERP II
was
coined in the early 2000s. This was the new generation of ERP. It describes Web-
based
software that provides employees and partners (such as suppliers and customers)
with
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real-time access to ERP systems. The ERP II role expands traditional ERP's resource
optimization and transaction processing. Rather than just managing functions such
as
buying and selling, ERP II leverages information in the resources under its
management
to help the enterprise collaborate with other enterprises. ERP II is more flexible
than
first generation ERR Rather than confine ERP system capabilities within the
organiza-
tion, it goes beyond the corporate walls to interact with other systems. Another
name for
this system is Enterprise Application Suite to suggest that it is an entire suite
of software
capabilities.
Pre-Enterprise Resource Planning Software
Prior to the development of ERP software the only type of processing was batch
process-
ing. In this type of processing the data was accumulated or stored until it was
ready to
be periodically processed. As discussed previously, this was a cumbersome process.
For
example, the first step in batch processing required gathering source documents,
which
were originated by business transactions, such as sales orders and invoices. This
data
was then grouped into batches and recorded on some type of input medium, such as
magnetic disks or magnetic tape. These transactions were then sorted in a
transaction
file in the same sequence as the records in a sequential master file. The
transaction data
was then processed and updated on to a master file. This included documents such as
customer invoices, paychecks, and various reports. These batches of transaction
data
were then transmitted periodically to a central computer for processing. This is
known as
remote job entry (RJE). When you consider all the operations plans discussed in
Chap-
ter 2, "Key Elements and Processes," and their relationships, you can only imagine
how
cumbersome this was and how difficult it was to coordinate these processes.
The idea around batch processing is that the data could be grouped and then
periodically
processed. This made a lot of sense in the earlier years of computer technology
when
mainframe computers were extensively used. However there were some real disadvan-
tages with this type of processing, in addition to simply being cumbersome. For
example,
the master files were frequently out of date between scheduled processing, as were
the
periodic scheduled reports that were produced causing employees to wait for the
batches
to finish running. Then the employees had to manually update the financial data.
This
process was inefficient since the information was not available on an immediate
basis
in addition to creating a large potential for errors. These inefficiencies led to
the earliest
development of ERP software, real-time processing.
Real-Time Processing
One of the earliest inventors of real-time processing was Systems, Applications,
and
Products in Data Processing (SAP). SAP was a young German software firm at the
time,
started in 1972, and was the first to develop real-time processing software for its
clients.
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Real-time processing meant that users didn't have to wait for batches to run but
could
instead update information immediately after entry. The initial software developed
by
SAP focused on accounting applications and was designed to be a technically
superior
alternative to batch processing. Instead of having to wait for sequential processes
of
inputting data, storing it, and processing it, the real-time software made it
possible to
communicate directly with the computer. Thus for example, financial accounting data
could be checked for plausibility at the time of entry and the data was available
immedi-
ately to the users. Some of the main benefits of real-time processing are that
transaction
data is processed and verified as it is generated. Databases are updated as the
transactions
are being processed. Also, data is available only a few seconds after each
transaction is
captured. This immediacy of data to all parties has served to substantially change
the
speed of operations.
These new benefits in real-time processing led to sweeping changes in the business
industry. Many other software developers saw the potential in these advancements
and
developed their own products to compete with SAP. These competitions led to other
processing enhancements resulting in better business processes, which is the whole
idea
behind ERP software. The software pioneers at SAP believed that important data
should
be collected only once, at the source, and they sought to improve on this business
pro-
cess by automating the process of data collection within their first software
package. The
result was that SAP has been a leader in the ERP software industry.
Focus of Systems
Recall that ERP systems are a type of management information system (MIS) that
inte-
grates and automates many of the business practices associated with the operations
management and distribution aspects of a company engaged in manufacturing products
or services. There are many differences between systems including cost. One key
differ-
ence is that different packages have their main focus on the needs of different
industry
segments. The three most common segments that ERP systems focus on are production,
distribution, and finance.
Typically there is a strong link between the production and distribution focuses.
ERP sys-
tems are often owned by companies that have a specific origin. Therefore, ERP
systems
focused on production most of the time also deliver strong logistical modules, but
their
expertise is production. For example, a production company such as Boeing or
Philips
may find that its needs to control resources to manufacture a product while at the
same
time its distribution company needs to control the resources that are to be
transported.
Information about this transport is often a critical factor that links these
together. There-
fore, ERP systems strong in one area typically deliver in another.
The third type of ERP, however, is different from the previous two. Both the
produc-
tion and the logistics focus of an ERP supplier share the fact that they
concentrate on
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primary business processes. The third type of an ERP system excels not in
production,
nor in logistics, but in finance. Finance is the area where both logistics and
manufactur-
ing meet, but it is not part of the primary process. ERP systems that focus on
finance may
be more useful in organizations that are more service intensive, such as
healthcare, and
have lower manufacturing requirements.
Benefits of ERP
ERP software solutions address the needs of the entire enterprise. ERP takes the
process
view of an organization and meets the organizational goals, while tightly
integrating
all functions in an enterprise. ERP software allows companies to achieve a
seamless,
accurate flow of data among functions and facilitates companywide integration of
infor-
mation systems covering all the functional areas within the company. ERP software
per-
forms core corporate activities, such as purchasing, supplier and inventory
management,
engineering, and production, usually on client/server networks and consists of
different
software modules that all link together. ERP software seeks to increase customer
service
while augmenting the corporate image. These systems are particularly useful to
manu-
facturers with geographically dispersed operations because they tie operations
together
with a common data source.
This total integration of the enterprise's systems improves organizational
functionality.
ERP software allows corporations to provide better customer service, while focusing
on
the supply chain processes instead of the information processing requirements of
busi-
ness functions. ERP systems also serve as expert systems capturing the knowledge of
an expert group. This allows corporations to significantly improve the efficiency
of its
business processes. These improvements help produce new knowledge-based products
or services.
Some important reasons that drive businesses to switch to ERP are increased
customer
responsiveness, better tracking of inventories and costs, the development of new
prod-
ucts and services, and the capability to enter new product areas. A technology
solu-
tion like ERP helps push the company to the next level as it integrates the
organization
both vertically—as discussed in the planning hierarchy—as well as horizontally
across
different functions. This enables the company to have a competitive advantage.
Often
competitors are using older legacy systems that are difficult to maintain and
contain
obsolete hardware and software. Businesses find that by implementing ERP systems
they can gain a competitive business advantage by leveraging the strength of the
high
technology software. Further, ERP users can gain advantages from the way that their
new systems implement and exploit data. Users often find that the ERP systems make
them more efficient in the marketplace compared to businesses that are still
utilizing
the older legacy systems. ERP is a boon to the production process because it
eliminates
the need for paper blueprints and other manual means of sharing information.
Instead
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Chapter 4 Role of Technology in Managing Operations
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users—such as production managers—simply use PCs to retrieve real-time product and

assembly information.
Another significant benefit of ERP systems is that they come in prepackaged
applica-
tions. These applications force companies to use a proven set of business
processes, so
that they are not reinventing the wheel each time they introduce a new product or
ser-
vice. The users can concentrate on the business needs at hand, while the ERP
software
vendors keep the users updated with the latest technology and software. These
prepack-
aged applications can be a huge benefit to companies but can also create problems
due
to lack of flexibility. We discuss this later in the section "Shortcomings of ERP
Software."
Most ERP systems allow users to turn on and off functionalities, as they are
needed; this
allows companies to adapt to changes in their business. These features save
valuable time
by preventing companies from developing their own custom built applications. ERP
also
makes it easy to alter product designs or assembly instructions as well as update
those
changes immediately and universally, thereby increasing production accuracy because
everyone has access to the updated and correct information. ERP systems allow for
the
free flow of information, while helping companies reduce the costs of sharing
informa-
tion among pertinent parties such as engineers, production people, and suppliers.
The
systems also track all production stages, allowing production managers or other
senior
management to pinpoint where bottlenecks and breakdowns occur in the production
system.
The Planning Capabilities of ERP
Recall our discussions in Chapters 2 and 3 that in manufacturing operations
information
starts at the top of the organization and drives lower level decisions. The
business strat-
egy drives the lower level plans. However, data originates at the machines, the
process,
and the workers. Sensors, controls, and operators collect the data. The data
indicates
what is being made, how and where, when it will be done, why it won't be on time,
and
helps pinpoint where the problems are.
The capability for higher level plans to view data at the lower levels is a large
ERP benefit.
Applications such as the MRP system, which we discussed in Chapter 3, take the data
and
create the information, passing it up the chain to the planners, product
developers, and
senior management. Some of the primary features of this type of information
sharing,
which ERP enables, include the very planning levels we discussed in Chapters 2 and
3.
Here we look at the steps in this planning hierarchy and discuss how ERP enables
these
plans to develop.
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Step 1: Strategic Business Planning

Recall that the strategic plan of the organization reflects the company vision and
strategy.
It also articulates and quantifies products, markets, customers and associated
revenue,
cost, profit objectives, and other financial projections and resource requirements
and
plans at a high level. The company's business risk management process and resulting
strategies are designed to fully support the execution of the business plans and
strategies
of the company.
The strategic business plan feeds into sales and operations planning, which then
feeds
into production planning and back into business planning to make readjustments if
needed, and the ERP facilitates this process. In ERP the strategic plan is
articulated
through numbers in the sales and operations planning system as a more detailed set
of
time-phased plans or statements of anticipated orders for products or services. It
is stated
in terms of dollars and in terms of level of detail required by the company to
support
the business plan. In an ERP system, this information is formally reviewed and
updated
monthly. In ERP the plans and forecasts feed directly from the sales operations
planning
system into the master production scheduling system as changes occur to those
forecasts.
Step 2: Production Planning
ERP enables articulation of production planning objectives with reliance on sales
plans
and forecasts. The plan includes product families, production groups, or product
levels
to support the company's services, costs, inventories, operations and risk
management
goals and strategies. Also resource requirement planning is carried out as part of
the
production planning activity, and capacity planning for the product families is
used to
ensure the plan is obtainable. Once the production plan becomes approved or
accepted
it is used to help reconcile various plans or major functions such as sales and
mar-
keting, engineering, finance, supply chain management, manufacturing, and human
resources to leverage opportunities and mitigate risks. The plan is continually
reviewed
and updated on a monthly basis. ERP enables integration of all these processes.
Step 3: Master Production Schedule (MPS)
The master production schedule (MPS) is the anticipated build or buy schedule for
the
company's end products or services. The MPS is typically the top-level plan entered
into
an ERP system, and it directly reflects the plan established by the senior
management in
the sales and operations planning system, and the production plan. The MPS
integrates
the customer's actual orders and provides detailed product/item forecasts,
inventories,
management policies, and goals, helping to manage risk as the schedule is produced.
Senior management also uses the MPS to establish order promising, using the
available
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Chapter 4 Role of Technology in Managing Operations
91
to promise technique (ATP establishes exactly how much can be promised to custom-
ers) and rough cut capacity planning (RCCP). The RCCP process is carried out during
the developing and maintaining of the MPS. If the schedule is not viable for any
reason,
the information is immediately updated and sent to the sales and operations
planning
system. The sales plan or possibly even the business plan may need to be adjusted
accord-
ingly. The MPS generally employs what-if scenarios and analysis techniques to
simulate
scheduling choices and impacts. The MPS is approved, reviewed, and maintained on a
weekly basis, and it drives the material requirements and capacity requirements in
an
ERP system.
Step 4: Materials Requirements Planning (MRP)
Recall that materials requirements planning is a set of techniques using data from
bills
of materials, inventory records, and the MPS to calculate time-phased material
require-
ments. Just imagine how difficult it would be to do this manually or in batches.
This is
where ERP comes in. The ERP system enables MRP to recommend the release of orders,
the reschedule of orders, and the cancellation of orders when needs and dates are
not in
sync with the MPS. Data quality and integrity are critical to the MRP. If the MRP
can-
not be met or is not in line with the agreed plan or policies, the master scheduler
will be
informed. A review of the higher level plans and schedules will be conducted until
the
MRP can be synchronized with the MPS, which helps mitigate risks. ERP was
originally
rooted in these types of inventory computations.
Step 5: Capacity Requirements Planning (CRP)
CRP is a more detailed look than the RCCP discussed in Chapter 2. CRP looks at
capacity
requirements to achieve the MPS. Open and in-process work orders in the MRP system
are input in the CRP system. These orders use parts routings and time standards to
trans-
late the orders into work hours by work center, people, or machines. The work hours
are defined by the required time periods, and data integrity is important for the
CRP to
function properly. Even if the RCCP was carried out when the MPS was developed, the
CRP may reflect sufficient capacities in work centers is unavailable for a specific
time
period, and the MPS will require adjustment. ERP coordinates all these activities.
Step 6: Operations Execution and Control
Earlier chapters discussed the hierarchy of planning processes. One aspect not
discussed
is the execution, control, and reporting of day-to-day operations. This is called
produc-
tion activity control. The production activity control refers to the day-to-day
execution of
the MRP for items manufactured within the company/plant. The MRP system recognizes
the routing, work centers, standard hours required, and lead times for the
production of
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items or assemblies. Production activity control includes priority planning and
schedul-
ing of work. If serious capacity or other constraints cannot be remedied, the
planning
and scheduling system must be adjusted immediately to maintain the integrity of the
system. If the corporation employs the Lean and TQM techniques, the company or
plant
schedule must be adjusted to meet these requirements.
Another aspect of operations control is financial activity control. Financial
activity
control generally refers to the set of reports that are generated from the planning
and
scheduling system. This information is invaluable to the operations management as
it
provides an exact picture of costs, particularly inventories. The reports provide
informa-
tion on activities such as budgeting, planning, cost accounting, and risk
measurement
and control. The system also creates a critical interface to the general ledger,
fixed assets,
accounts payable, accounts receivable, and payroll. Reports cover projected and
actual
inventory balances, projected and actual production costs, projected and actual
purchase
order commitments and variances. Product profitability analysis, margin
contribution
analysis, and comparisons from product line to product line, and by product and by
customer, are among the many applications or uses of the financial activity control
sys-
tem. The quality of data and integrity of the information is completely dependent
on the
validity of the plans and schedules from the other systems. This data must be keep
up to
date to help mitigate risk and ensure that the financial goals of the corporation
are met.
Two-Tier ERP
Two-tier ERP is the practice of running two ERP systems at once—one larger system
at
the corporate level and one smaller system at the plant, division, or subsidiary
level. This
is a common practice given global organizational structures that we need to
mention.
A company may choose to run two-tier ERP for a variety of reasons. For example, it
allows an existing legacy ERP system to remain functional across the organization,
which
reduces the costs associated with replacing the system, while letting individual
business
units deploy ERP systems that may be better suited to their needs.
A two-tier ERP model may also be adopted by organizations that operate globally and
must respond to location-specific business requirements in multiple countries. Two-
tier
ERP may be deployed through in-house systems or through cloud-based ERP. Two-tier
ERP software and hardware lets companies run the equivalent of two ERP systems at
once: one at the corporate level and one at the division or subsidiary level. For
example,
a manufacturing company uses an ERP system to manage across the organization. This
company uses independent global or regional distribution, production or sales
centers,
and service providers to support the main company's customers. Each independent
cen-
ter or subsidiary may have their own business model, workflows, and business
processes.
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Given the realities of globalization, enterprises continuously evaluate how to

optimize
their regional, divisional, and product or manufacturing strategies to support
strategic
goals and reduce time-to-market while increasing profitability and delivering
value.
With two-tier ERP, the regional distribution, production, or sales centers and
service
providers continue operating under their own business models—separate from the main
company, using their own ERP systems. Since these smaller companies' processes and
workflows are not tied to main company's processes and workflows, they can respond
to
local business requirements in multiple locations.
Factors affecting enterprises adopting two-tier ERP systems are the globalization
of
manufacturing or the economics of sourcing in emerging economies, the potential for
quicker and less costly ERP implementations at subsidiaries based on selecting a
software
product more suited to smaller companies, and any extra effort required where data
must pass between the two ERP systems. Two-tier ERP strategies give enterprises
agility
in responding to market demands and in aligning IT systems at a corporate level
while
inevitably resulting in more systems as compared to one ERP system used throughout
the entire organization.
Shortcomings of ERP Software
ERP systems are excellent at handling day-to-day, normal running of operations.
How-
ever, they do encounter problems during crisis situations. In the real world,
machines
break down, suppliers fail to deliver, and customers change their minds. Under
these
types of crisis scenarios ERP software is often lacking in the capability to
respond. Most
often the results of these shortcomings can be disappointing, and managers need to
be
prepared. Often the technology fails to deliver under these circumstances or fails
to pro-
vide support to the users. To prevent these shortcomings users still need to
remember
special instructions, or need to install parallel or backup paper systems to tell
them what
is actually happening to work around the limitations in the ERP systems.
Further, there is often a problem with ERP implementation users should be aware of.
Recall that ERP vendors try to provide a prepackaged product with the software
designed
for all companies. This is an advantage of current ERP software. However, this pre-
packaged or generic software does not always meet the needs of every company. This
leads to customization problems. Usually a company's in-house IT personnel or
outside
consultants have to design or redesign the software to meet the company's needs.
These
implementation and customization problems have actually become a business of their
own. There are estimates that a large part of the ERP market size relates to
programming
and consulting services designed to correct these problems.
Another shortcoming is the actual cost of implementing an ERP system. ERP systems
are not cheap, and companies should look at the return on investment when deciding
to
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implement a new ERP system. It is suggested that if the expected return on

investment is
not at least 30 percent to 50 percent, implementing an ERP system is not advisable.
With
this in mind the top five underestimated costs of an ERP implementation are
1. User training—The time and cost of training personnel to use the system is often
staggering.
2. Integration and testing—Often costs exceed budgets as testing extends beyond
expectations.
3. Data conversion—Converting from legacy systems can take more time than
expected.
4. Data analysis—The efforts in understanding data analysis are often underesti-
mated.
5. Getting rid of consultants too early—Companies often want to go on their own
too soon without fully understanding the system.
Therefore, underestimating the cost of ERP implementation is common. Companies
need to be aware of the areas where this happens and be prepared. Underestimation
of time and cost of implementation can negatively impact a company's success if not
closely watched or planned in the beginning. This can lead to a major shortcoming
in
the success of the implementation. Let's look at some characteristics of successful
ERP
implementation.
Successful ERP Implementation
Making dramatic changes to a company's business processes is a risky venture, but
if
done successfully, changes can increase efficiency and effectiveness. Companies can
gain
a valuable competitive advantage in the marketplace, but if precautions are not
taken or
an effective plan is not developed, failure is possible. Prior to implementing ERP
a com-
pany should first conduct an in-depth business process reengineering study. This
study
brings out any deficiencies in the existing systems and attempts to maximize
productiv-
ity through restructuring and reorganizing all the divisions within the company.
The
senior management should lead the effort and clearly understand why the effort is
being
undertaken. This is the most important part of the effort. If management is not
sold on
the idea of change, the implementation will not be a success.
The senior management should develop a plan and set the company's core business
objectives. Management must determine whether implementation is going to be a good
return on investment and whether the necessary funds are available. A detailed
cost-
benefit analysis should be conducted to determine financial benefit of the
implementa-
tion. Once the company decides that change is needed, a more detailed
implementation
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plan should be created. The company then needs to identify a core project team and
establish a project manager. The project manager takes ownership of the entire
project
and ensures that the team meets all its milestones.
The project manager also needs to designate a cross-functional team that includes
both
IT staff and business users and external consultants to work full time on the
implementa-
tion. Successful companies recognize the importance of having both IT staff and
business
users on the implementation team and find a way to release them from their day-to-
day
responsibilities so that they can devote all their time to implementation. The
business
users are critical to the success of the project, because a number of business
decisions
have to be made along the way. This includes operations and production planners and
purchasing managers who will extensively use the system.
The selection of a software product should be done carefully as implementation is
often
difficult. The team should choose a proven ERP product as few vendors seem able to
release a "bug free" version. Implementation of ERP can be difficult and can slow
down
a company, especially in the early stages if the company cannot differentiate
between a
"bug" in the system and a "feature" of the software. Also the team should fully
under-
stand the ERP vendor's approach to implementation and the vendor's ability to meet
deadlines for software releases. The team should also consider the customer support
provided in the contract by the vendor. The team and partners should work together
to create an implementation plan, and once the plan has been established the team
can
present it to the management committee for approval. They may also involve employee
focus groups for feedback as well. Once the team has a final commitment from the
senior
managers, then implementation steps should begin.
The steps in the implementation process are discussed in the following sections.
Step 1: Determine Technical Requirements
The first step in implementation is to determine the hardware and technical
require-
ments of the new system. It is critical to determine the company's hardware needs
since
ERP software will be linking all the company's business operations together in one
sys-
tem. One problem with the hardware or software could bring operations to a halt.
Since
software is highly comprehensive—ERP makes extensive use of system resources—the
potential for problems is great. Typical systems incorporate leading edge
technologies.
With this in mind the team should review the company's current system and see what
upgrades are needed to the current system to provide a technical environment that
is
stable and has room for growth.
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Step 2: Software Installation

The next step is the installation and configuration of the software. It is
suggested that
the implementation team should treat the software implementation as a phased
project.
Treating implementation as a single project often leads to implementation problems.
Few companies today use what is known as the "big bang" approach to implementation,
which means implementing it all at once. Instead, leading companies divide the
imple-
mentation into measurable chunks to chart the progress and deal with problems as
they
occur. This phased implementation allows the team to make informed decisions about
the benefits, costs, and risks during the course of the project. For example,
companies
often implement ERP applications in phases at all the different company locations.
Each
site implements the first phase together and then moves through the phases in a
sched-
uled manner.
Step 3: Data Cleaning
Once the product has been installed and configured the team has to make modifica-
tions and perform data conversion. Often the data must be overhauled to match the
process modifications necessary by the ERP system. Leading companies cleanse the
data
to ensure data integrity; this process is called scrubbing. The old records are
updated
making sure the information is in place and is accurate.
Many times a company has multiple records for the same customer based on different
versions of that customer's name in the company's files. As mentioned earlier,
scrubbing
often takes more time for companies than originally planned and can extend
implemen-
tation timing.
Step 4: Testing
Once the data has been cleaned it is entered into the new system, and it has been
sug-
gested that even clean data may need some modifications during the conversion
process.
The best way to check the data is through testing. Companies often simulate testing
by using an actual completed sale or purchase order, to put the system through
real-
world test scenarios. The companies then look to see whether the data and reports
came
through the system properly and further testing might involve "if-then" and crisis
situa-
tions to determine whether modifications are needed or recommended.
Step 5: Employee Training
In addition to testing the system, training of the employees that will be using the
system
is important. Leading companies take time to train their employees. While most
compa-
nies underestimate the time and cost involved in training, experts suggest that
extensive
Chapter 4 Role of Technology in Managing Operations
97

training is needed if the system is going to be a success. The employees will be

learning a
new software interface, and employees at all levels will have to accept new and
different
responsibilities. This means change, and change management should appear on the
bud-
get training line. Often a large part of the project budget goes to training. For
example,
companies may find that 10 percent, and possibly 15 percent, of the entire project
budget
goes toward training. The result of inadequate training could lead to serious
repercus-
sions. Just consider the consequences of a purchasing manager making a mistake
while
keying in inventory information directly into a live system where any mistake could
immediately affect the company's financial information.
Step 6: Run Pilot
Once the employees have been trained the team should run a pilot for the management
committee to get its final approval. If everything has been approved and the
project
manager has kept a close eye on the budget and ensured that the project is on time,
then
the final steps of the implementation should begin. This is important to remember.
If the
project manager cannot keep within budget and time constraints the benefits from
ERP
are lost. It is critical to enforce responsibility through rewards and discipline
throughout
the entire plan. The implementation team must know that time is critical for
success.
As mentioned earlier a final implementation should be introduced in phases, with
post
implementation audit and review for each phase. This ensures that no major problems
occur in the go-live phase or production runs. With these steps in mind many
companies
risk implementing an ERP system, because if completed correctly and on course they
can
expect to gain a return on investment.
Other Information Technologies
In addition to the aforementioned supply chain enterprise level technologies, many
other
applications are available and in use for execution purposes.
Global Positioning Systems (GPS)
Although ERP is an important information technology for operations managers, there
are other important technologies. Another type of information technology is
wireless
technology that uses satellite transmission to communicate exact locations. These
are
global positioning systems (GPS). GPS was originally developed by the Department of
Defense in 1978 to help coordinate U.S. military operations. We are all used to
GPS.
However, GPS is a space-based satellite navigation system that provides location
and
time information in all weather conditions, anywhere on or near the Earth where
there is
an unobstructed line of sight to four or more GPS satellites. The system provides
critical
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capabilities to military, civil, and commercial users around the world. It is

maintained
by the United States government and is freely accessible to anyone with a GPS
receiver.
Today GPS has numerous business and individual applications. Large trucking com-
panies use GPS technology to identify the exact locations of their vehicles.
Farmers use
GPS while riding on tractors to identify their exact location and apply the proper
mix
of nutrients to the correct plot of land. GPS capability is also available for
personal use
in handheld computers and smartphones, and many of us have used this to identify a
person's location and plot a route to a destination.
GPS has even found its use in advertising. For example, Nielsen Media Research, the
f
i rm known for rating television shows, is using GPS to test billboard
advertising. The
company has recruited a sample of adults with known demographic characteristics and
is using GPS to monitor their minute-by-minute movements. This information then is
used to determine the best placement for particular billboard advertisements
targeted to
a particular demographic group.
Radio Frequency Identification (RFID)
Radio frequency identification (RFID) is another wireless technology that promises
to
dramatically change business operations. RFID uses memory chips equipped with tiny
radio antennas that can be attached to objects to transmit streams of data about
the
object. For example, RFID can be used to identify any product movement, reveal a
miss-
ing product's location, or have a shipment of products "announce" their arrival.
Empty
store shelves can signal that it is time for replenishment using RFID, or low
inventories
can signal the vendor that it is time to ship more products. RFID can also be used
in the
service environment enabling innovative applications in locating and tracking
people
and assets. In fact, RFID has the potential to become the backbone of an
infrastructure
that can identify and track billions of individual objects all over the world in
real-time.
Today's RFIDs are lower in cost and smaller in size than their predecessors. As
such,
they are easy to conceal or incorporate into other items. For example, in 2009
researchers
at Bristol University successfully glued RFID micro-transponders to live ants to
study
their behavior. This trend toward increasingly miniaturized RFIDs is likely to
continue
as technology advances.
All kinds of companies are using RFID technology to track inventories and manage
operations. Dairy Queen in conjunction with ViVOtech has also begun using RFIDs on
mobile phones as part of its new loyalty and rewards program. Patrons can ask to
receive
an RFID tag to place on their phone. After activation, the phone can receive
promotions
and coupons, which can be read by ViVOtech's specialized near-field communication
(NFC) devices.
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Similarly, 7-Eleven has been working alongside MasterCard to promote a new touch-
free payment system. Those joining the trial are given a complimentary Nokia 3220
cell
phone, which, after activation, can be used as an RFID-capable MasterCard credit
card
at any of 7-Eleven's worldwide chains.
Nokia's 2008 device, the 6212, has RFID capabilities also. Credit card information
can
be stored, and bank accounts can be directly accessed using the enabled handset.
The
phone, if used as a vector for mobile payment, has added security in that users
would be
required to enter a passcode or PIN before payment is authorized.
Another big adopter of RFID is Walmart, which has been investing heavily in RFID
tags for its warehouses over a number of years. Walmart went live with RFID in
Janu-
ary 2005 after pilot testing them at distribution centers in Dallas. The company
quickly
saw a return on its investment. For example, out of stock items that are RFID
tagged are
replenished three times faster than before using the tags. The company is also
experi-
menting with adding sensor tags to perishable items. This way, for example, the
company
can track how long a crate of bananas has been in transit and how fresh it is.
Advantages and Disadvantages of Automation
An important operations design decision concerns the use of automation in
operations
processes. Technological advancements have significantly changed and enhanced the
ways in which we can produce products. We can use technology to do much of the work
for us, such as using robotics. This enhances processing speed through
mechanization,
provides greater accuracy, and enables safer handling of dangerous and difficult
tasks.
Automation also reduces the need for human involvement and decision making. Con-
sider a company like UPS that sorts millions of packages per day for various
destinations.
UPS does this through a completely automated process that uses bar codes and
readers to
sort packages efficiently and accurately. Repetitive assembly line processes—the
types we
discussed in Chapter 3—rely heavily on automation. Automation enables repetition to
occur without worker fatigue, such as for tasks that need picking and sorting. It
improves
consistency and accuracy of processes. Automation also enables the use of robots
for
hazardous tasks, such as welding.
An important decision in designing processes is whether the firm should automate
and
to what degree and what type of automation should be used. Automation does not have
to be along the entire process. It can range from the use of machinery enabling
work to
be performed without any human operators, or it can involve a single machine.
Although
there are tremendous advantages to automation, there are also disadvantages. Compa-
nies need to consider these carefully before making the final decision as they move
into
automation to change their operations.
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Automation has the advantage of product and performance consistency and the
capabil-
ity to efficiently produce large volumes of product. With automated equipment, the
last
part made in the day will be exactly like the first one made. Because automation
brings
consistency, quality tends to be higher and easier to monitor. Production can flow
unin-
terrupted throughout the day without breaks for lunch, and there is no fatigue
factor.
However, automation does have its disadvantages. First, automation is typically
very
costly. These costs can be justified only when a company has a high volume of
produc-
tion. Second, automation is typically not flexible in accommodating product and
process
changes. Therefore, automation would probably not be good for products in the early
stages of their life cycle or for products with short life cycles. Automation needs
to be
viewed as another capital investment decision. The financial payback is critical.
For these
reasons automation is typically less present in intermittent than in repetitive
operations.
Automated Material Handling
In the past the primary method of moving products was the conveyor in the form of
belts
or chains. Today's material handling devices can read bar codes that tell them
which
location to go to and which are capable of moving in many directions. One such
device
is an automated guided vehicle (AGV), a small battery-driven truck that moves
materi-
als from one location to the other. The AGV is not operated by a human and takes
its
directions from either an on-board or central computer. Even AGVs have become more
sophisticated over time. The older models followed a cable that was installed under
the
f
l oor. The newer models follow optical paths and can go anywhere there is aisle
space,
even avoiding piles of inventory in their way. One of the biggest advantages of
AGVs
is that they can pretty much go anywhere, as compared to traditional conveyor
belts.
Managers can use them to move materials wherever they are needed.
Another type of automated material handling includes automated storage and
retrieval
systems (AS/RS), which are basically automated warehouses. AS/RS use AGVs to move
material and also computer-controlled tracks and storage bins. The storage bins can
typi-
cally rotate like a carousel, so that the desired storage bin is available for
either storage or
retrieval. All this is controlled by a computer that keeps track of the exact
location and
quantity of each item and controls how much is stored or retrieved in a particular
area.
AS/RSs can have great advantages over traditional warehouses. Though they are much
more costly to operate, they are also much more efficient and accurate.
Flexible Manufacturing Systems (FMS)
A flexible manufacturing system (FMS) is a type of automation system that combines
the flexibility of intermittent operations with the efficiency of repetitive
operations. As
Chapter 4 Role of Technology in Managing Operations
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you can see by the definition, this is a system of automated machines, not just a
single
machine. An FMS consists of groups of computer-controlled machines and/or robots;
automated handling devices for moving, loading, and unloading; and a computer
control
center.
Based on the instructions from the computer control center, parts and materials are
automatically moved to appropriate machines or robots. The machines perform their
tasks and then the parts are moved to the next set of machines, where the parts
automati-
cally are loaded and unloaded. The routes taken by each product are determined with
the goal of maximizing the efficiency of the operation. Also, the FMS "knows" when
one
machine is down due to maintenance or if there is a backlog of work on a machine,
and
it automatically routes the materials to an available machine.
FMSs are still fairly limited in the variety of products that they handle. Usually
they can
only produce similar products from the same family. For this reason, and because of
their high cost, use of FMSs is not very widespread. A decision to use an FMS needs
to
be long-term and strategic, requiring a sizable financial outlay.
Robotics
Technological advancements have significantly changed and enhanced the ways in
which
we can actually produce products. We can use technology to do much of the work, and
a great example of this is using robotics. A robot in manufacturing is usually
nothing
more than a mechanical arm with a power supply and a computer-control mechanism
that controls the movements of the arm. The arm can be used for many tasks, such as
painting, welding, assembly, and loading and unloading of machines. This enhances
pro-
cessing speed through mechanization, provides greater accuracy, and enables
handling
of dangerous and difficult tasks. Robots are excellent for physically dangerous
jobs such
as working with radioactive or toxic materials. Also, robots can work 24 hours a
day to
produce a highly consistent product.
Robots vary in their degree of sophistication. Some robots are fairly simple and
follow
a repetitive set of instructions. Other robots follow complex instructions, and
some
can be programmed to recognize objects and even make simple decisions. One type of
automation similar to simple robotics is the numerically controlled (NC) machine.
NC
machines are controlled by a computer and can do a variety of tasks such as
drilling, bor-
ing, or turning parts of different sizes and shapes. Factories of the future will
most likely
be composed of a number of robots and NC machines working together.
The use of robots has not been very widespread in U.S. firms. However, this is an
area
that can provide a competitive advantage for a company. Cost justification should
not
only consider reduction in labor costs but also the increased flexibility of
operations and
improvements in quality. The cost of robots can vary greatly and depends on the
robots'
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size and capabilities. Generally, it is best for a company to consider purchasing

multiple
robots or forms of automation to spread the costs of maintenance and software
support.
Also the decision to purchase automation such as robotics needs to be a long-term
stra-
tegic one that considers the totality of the production process. Otherwise, the
company
may have one robot working 24 hours a day and piling up inventory while it waits
for
other processes to catch up.
E-Manufacturing
Several computerized applications also are available for assisting or improving the
manu-
facturing process. Among the most prevalent are computer-aided design and computer-
integrated manufacturing.
Computer-Aided Design (CAD)
Computer-aided design (CAD) is a system that uses computer graphics to design new
products. Gone are the days of drafting designs by hand. Today's powerful desktop
computers combined with graphics software allow the designer to create drawings on
the
computer screen and then manipulate them geometrically to be viewed from any angle.
With CAD the designer can rotate the object, split it to view the inside, and
magnify
certain sections for closer view.
CAD can also perform other functions. Engineering design calculations can be per-
formed to test the reactions of the design to stress and to evaluate strength of
materials.
This is called computer-aided engineering (CAE). For example, the designer can test
how different dimensions, tolerances, and materials respond to different conditions
such as rough handling or high temperatures. The designer can use the computer to
compare alternative designs and determine the best design for a given set of
conditions.
The designer can also perform cost analysis on the design, evaluating the
advantages of
different types of materials.
Another advantage of CAD is that it can be linked to manufacturing. We have already
discussed the importance of linking product design to process selection. Through
CAD
this integration is made easy. Computer-aided manufacturing (CAM) is the process of
controlling manufacturing through computers. Since the product designs are stored
in
the computer database, the equipment and tools needed can easily be simulated to
match
up with the processing needs. Efficiencies of various machine choices and different
pro-
cess alternatives can be computed.
CAD can dramatically increase the speed and flexibility of the design process.
Designs
can be made on the computer screen and printed out when desired. Electronic
versions
can be shared by many members of the organization for their input. Also electronic
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versions can be archived and compared to future versions. The designer can catalog
features based on their characteristics—a valuable feature. As future product
designs are
considered, the designer can quickly retrieve certain features from past designs
and test
them for inclusion in the design currently being developed. Also by using
collaborative
product commerce (CPC) software, sharing designs with suppliers is possible.
Computer-Integrated Manufacturing (CIM)
Computer-integrated manufacturing (CIM) is a term used to describe the integration
of
product design, process planning, and manufacturing using an integrated computer
sys-
tem. CIM systems vary greatly in their complexity. Simple systems might integrate
CAD
with some numerically controlled machines (NC machines). A complex system, on the
other hand, might integrate purchasing, scheduling, inventory control, and
distribution,
in addition to the other areas of product design.
The key element of CIM is the integration of different parts of the operation
process to
achieve greater responsiveness and flexibility. The purpose of CIM is to improve
how
quickly the company can respond to customer needs in terms of product design and
availability, as well as quality and productivity, and to improve overall
efficiency.
Emerging Technologies
A number of new and exciting technological developments are also occurring in the
manufacturing and service operations field. Applications such as 3D printing,
responsive
design, and "small data" technologies represent the current "bridge to the future"
for
companies seeking to augment their current offerings or develop new ones.
3D Printing
Many emerging technologies promise to change operations management as we know it
today. One such technology is 3D printing. 3D printing, also called additive
manufactur-
ing, is a new digital technology that is rapidly changing manufacturing. 3D
printing is a
process of making a three-dimensional solid object of virtually any shape from a
digital
model. 3D printing is achieved using what is known as an additive process, where
succes-
sive layers of material are laid down in different shapes. 3D printing is also
considered
distinct from traditional machining techniques, which mostly rely on the removal of
material by methods such as cutting or drilling (subtractive processes).
A materials printer usually performs 3D printing processes using digital
technology. The
technique itself is not new. The first working 3D printer was created in 1984 by
Chuck
Hull of 3D Systems Corp. Since the start of the twenty-first century there has been
large
104 THE DEFINITIVE GUIDE TO MANUFACTURING AND SERVICE OPERATIONS

growth in the sales of these machines, and their price has dropped substantially.
3D
printing is like having a small-scale manufacturing device right in your home or
office
and is going to change manufacturing, especially the ability to quickly develop a
proto-
type.
It is hard to imagine but 3D printers are simply devices that can create three-
dimensional
objects. Most 3D printers create objects in plastic. Some use ceramic, metal, or
other
materials. There's even a 3D printer that forms items out of chocolate or cheese.
The 3D
printing technology is used for both prototyping and distributed manufacturing with
applications in architecture, construction, industrial design, automotive,
aerospace, mili-
tary, engineering, civil engineering, dental and medical industries, biotech (human
tissue
replacement), fashion, footwear, jewelry, eyewear, education, geographic
information
systems, food, and many other fields.
3D printing can be used to create prototypes of new products. It can be used for
indus-
trial design and even small-scale manufacturing operations. For inventors and small
business manufacturers, developing product prototypes can be a laborious and
expensive
process. 3D printing can simplify prototyping by allowing creators to make digital
files of
their new designs and then simply print them on-premise. For certain items, this
could
prove easier than fabricating prototypes by hand. It can be less expensive than
finding an
outside facility to produce prototypes. In certain cases, 3D printers can even be
used for
the manufacturing production process itself. This is certainly an emerging
technology
that promises to change traditional manufacturing.
Responsive Web Design
The rise of the mobile Web means fewer and fewer people are accessing corporate Web
sites from their desktop. That mobility also means companies need to design for a
wide
range of smartphones and tablets, each requiring its own app and Web content
manage-
ment system.
A better solution is one design that adjusts to the device on which it is being
viewed. This
is called responsive Web design (RWD). RWD is a Web design approach aimed at craft-
ing sites to provide an optimal viewing experience—easy reading and navigation with
a minimum of resizing, panning, and scrolling—across a wide range of devices (from
mobile phones to desktop computer monitors). This is important as it enables
capturing
and keeping a broad base of customers.
A site designed with RWD adapts the layout to the viewing environment by using
fluid,
proportion-based grids and flexible images. Flexible images are also sized in
relative
units, so as to prevent them from displaying outside their containing element. Just
think
about how many times you have viewed a site on your smartphone and part of the
images
were cut off. Competitive organizations cannot afford that. With RWD media queries
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allow the page to automatically adapt based on the characteristics of the device
the site is
being displayed on, most commonly the width of the browser. Server-side components
in conjunction with client-side ones such as media queries can produce faster-
loading
sites for access over cellular networks and also deliver richer functionality and
usability
avoiding some of the pitfalls of device-side-only solutions.
Small Data
There has been much discussion about big data. With big data customers allow com-
panies to surreptitiously collect information on their Web activities in return for
free
service and applications on Google, Bing, Facebook, and others. This data is
shared, sold,
and used in a variety of ways.
In contrast to big data, small data is the amount of data you can conveniently
store and
process on a single machine, and in particular, a high-end laptop or server. What
is
interesting and new is the democratization of data and the associated possibility
of large-
scale distributed communities of data wranglers working collaboratively. What
matters
with small data is the amount of data that an average data "geek" can handle on his
own
machine, say a laptop. A key point is that the dramatic advances in computing,
storage,
and bandwidth have far bigger implications for small data than for big data. This
is where
the new capability is going.
How can this technology be used? For example, patients and consumers can access the
data that service providers have about them. They can then use this data to fuel
apps to
which they subscribe. Imagine an app that helps a doctor determine whether the new
medication dosage given to a patient for the last two weeks is better than the
previous
dosage; the app could create a comparative picture of the patient's daily function
this
month relative to last month, by automatically analyzing motion, location, and
vocabu-
lary data plucked from a patient's digital traces. This broad but highly
personalized data
set can be analyzed to draw powerful inferences about each individual from the
person's
digital behavior. The ways this small data can be used are endless, and new
applications
and technologies will be rapidly developed in this area.
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Discussion Questions
1. What kinds of technologies have the biggest impact on operations? What are these
specific impacts?
2. Define enterprise resource planning (ERP). What value do ERP systems provide?
3. Document the history of ERP systems, particularly as it relates to modern ERP
systems.
4. How are the production, distribution, and finance focuses interrelated? Which
focus is not typically concentrated on primary business functions? Why is this?
5. Discuss the benefits of ERP.
6. What does the financial activity control aspect create a critical interface to?
What
are the uses of this control system?
7. Why would an organization choose to run two ERP systems at once (two-tier
ERP)?
8. Explain how prepackaged software can lead to ERP implementation problems.
9. When implementing an ERP software system, why is it important for an organiza-
tion to do so as a phased project?
10. Differentiate between GPS and RFID. Why do companies choose to utilize one
over the other?
11. Address the disadvantages of using automation. When is it inappropriate to
auto-
mate a process?
12. Robotics provide what kind of advantages for companies willing to invest in
them?
13. Discuss the potential associated with emerging technologies such as 3D
printing,
responsive Web design, and small data.
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Chapter 4 Role of Technology in Managing Operations
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