Operations Management

Operations Management



Operations Management

Globalization has resulted in increasing competitiveness in today's operations. Such an environment called for greater integration to coordinate with national and international business partners. The term extended enterprise (ERPII) was a new concept introduced by the Gartner Group in 2000 to label the latest extensions to the enterprise resource planning (ERP) system (Classe, 2001), which includes integration and sharing of accurate information about orders and inventory across the operations , enabled by the newly emerged Internet technologies. However, the ERP acronym has persisted as the most widely used term to describe this wide phenomenon (Sarpola, 2003).

This chapter explores the value of a new form of enterprise, namely, the extended enterprise to improve operations information velocity, merchandise customization, and cost. To become an extended enterprise, an enterprise with a traditional system will need to upgrade or modify the existing system, and/or to introduce extended enterprise applications (EEA) into the system. This leads to the enquiry on the potential advantages of utilising EEA. The results of the Loh, Koh, and Simpson (2006) study indicate that EEA and ERP vendors and users have benefited from the concepts of an extended enterprise, which include the following: (a) Manual operational tasks will be automatically managed by the EEA, and the system will even warn the enterprise if certain events did not occur or need to occur; (b) as operations s become more integrated and business processes are automated, the operations wsick require less day-to-day management, and (b) the operations will be driven to manage exceptions and the system will handle much of the “traditional operations.” This will mean more time to focus on improving the way the operations fits together, to develop strategic alliances, to reduce inventories, and to improve productivity.

The overall conclusion is that the use of EEA is expected to increase the operations information velocity, increase product customization, and lower cost of doing business. However, some concerns have been identified, such as identity theft when handling the confidential information (Ghahremani, 2003) and operations failures—that is, outdated data and unclear responsibility for controls over the information flowing across to the operations partners (Taylor, 2003; Ernst & Young, 2004). Nevertheless, Loh et al.'s (2006) findings suggest that the avenue of becoming an extended enterprise is worth pursuing, after considering the potential value obtained from using EEA.

In most enterprises, a critical dimension of competition is the speed of an enterprise in responding to customer demands. Therefore, having real-time information delivered between internal departments and external business partners is a vital advantage for management in undertaking any important decision making. Many researchers have looked into this aspect in manufacturing environments where fast response to product manufacture often relates to the term concurrent engineering (CE). CE has also been referred to as simultaneous engineering (SE; Zhang & Atling, 1992), life-cycle engineering, concurrent product and process design, design for production, design for manufacture and assembly (DFMA; Hartley & Mortimer, 1990), integrated and cooperative design, design fusion, producibility ]engineering, and system ...