Page 539 - Using MIS

Q3 How Do Inter-enterprise IS Facilitate Global Supply Chain Management? 507
Problems of Inherent Processes

Processes inherent in ERP and other applications are even more problematic. Each software
product assumes that the software will be used by people filling particular roles and perform-
ing their actions in a certain way. ERP vendors justify this standardization by saying that their
procedures are based on industry-wide best practices and that the organization will benefit by
following these standard processes. That statement may be true, but some inherent processes
may conflict with cultural norms. If they do, it will be very difficult for management to convince
the employees to follow those processes. Or at least it will be difficult in some cultures to do so.
Differences in language, culture, norms, and expectations compound the difficulties of
international process management. Just creating an accurate as-is model is difficult and ex-
pensive; developing alternative international processes and evaluating them can be incredibly
challenging. With cultural differences, it can be difficult just to determine what criteria should
be used for evaluating the alternatives, let alone performing the evaluation.
Because of these challenges, in the future it is likely that international business processes
will be developed more like inter-enterprise business processes. A high-level process will be de-
fined to document the service responsibilities of each international unit. Then Web services will
be used to connect those services into an integrated, enterprise, international system. Because
of encapsulation, the only obligation of an international unit will be to deliver its defined ser-
vice. One service can be delivered using procedures based on autocratic management policies,
and another can be delivered using procedures based on collaborative management policies.
The differences will not matter in a Web service–based enterprise system.

Q3 How Do Inter-enterprise IS Facilitate Global

Supply Chain Management?

A supply chain is a network of organizations and facilities that transforms raw materials into
products delivered to customers. Figure ID-4 shows a generic supply chain. Customers order
from retailers, who in turn order from distributors, who order from manufacturers, who order
from suppliers. In addition to the organizations shown here, the supply chain also includes
transportation companies, warehouses, and inventories and some means for transmitting mes-
sages and information among the organizations involved.
Because of disintermediation, not every supply chain has all of these organizations. Some
companies sell directly to the customer. Both the distributor and retailer organizations are omit-
ted from their supply chains. In other supply chains, manufacturers sell directly to retailers and
omit the distribution level.
The term chain is misleading. Chain implies that each organization is connected to just one
company up the chain (toward the supplier) and down the chain (toward the customer). That is

Manufacturer 1
Supplier 1 Retailer 1
Manufacturer 2 Distributor 1 Customer 1
Supplier 2 Retailer 2
Manufacturer 3 Distributor 2 Customer 2
Supplier 3 Retailer 3
Manufacturer 4 Distributor 3 Customer 3
Supplier 4 Retailer 4
Figure ID-4 Manufacturer
Supply Chain Relationships 5