The goods receipt process is an intrinsic element in many organizations – it controls the flow of goods and materials into the organization. However as with any business process its not usually without problems - a poorly performing goods in process can result in various issues some of which can be significant and can affect both cost and production time Typical problems include
1/ Poor prioritization – inability to process key materials at the right time – where the goods receipt team does not have sufficient capacity it can become a real bottleneck.
2/ Failure to stop poor quality materials entering the organization – perhaps insignificant at the time of processing but further down the line – during the manufacturing process – it can be a killer!
3/ Ineffective management of early deliveries – one of the roles of the goods receipt process is to control cost entering the organization – allowing deliveries of materials that are not yet required (delivered early against Purchase order required date) can add significant and unnecessary cost to the organization. For more information on the process check out our article on the goods receipt process
To monitor performance - many organizations utilize Key Performance Indicators (KPI's) but its widely recognized that monitoring performance alone does not go far enough. In a world where material shortages can result in multi-
million dollar costs closer monitoring and a deeper level of diagnostics is required.
KPI's within supply chain tend to be fairly standard and are focused primarily on traditional QCD measures (quality, cost and delivery) for example on time delivery or cost of inventory.
However reporting on the performance of KPI's isn't' enough and a robust route cause analysis should accompany any traditional measures.
Route cause analysis is the process whereby the key contributing factors relating to performance are captured and analyzed.
For example understanding your supplier delivery performance should be taken to the next step by reviewing those suppliers contributing significant negative results.
This level of analysis facilitates improvement activity by focusing on the key elements that cause the result - remedial activity can then be instigated.
Ideally Performance Management should be considered as a 3 stage process.
1 Maintaining a top level Key Performance Indicator
2 Pareto of contributing factors
3 Action plan to improve the situation with an estimate of the improvement when the plan is complete
Without a doubt KPI's are required but they are not the total answer. Just reporting the problem will not fix it!
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It is often tempting to just roll up your sleeves and start bringing the project into being. But time taken to plan and create a project plan will actually ensure that you don't rush into something and make foolish mistakes because you didn't plan for something. The old saying 'Act in haste, repent at leisure' is certainly very true, but with a good project plan, you simply will not have to repent, because everything will be fine.
What Does The Project Plan Contain?
There is a lot of information required in a project plan. To some extent what the plan contains will be strongly influenced by the nature and scope of the project; so it is a good idea to start off by defining the nature of the project and its scope.
You also need to identify all the 'stakeholders' in the project, since a project will only be successful if all the stakeholders are satisfied with the project once it has been completed. This task sounds far easier than it is because a stakeholder is anyone who will be affected by the project, so identifying them can take some time.
Once you have identified all the stakeholders, then you need to engage with them to ascertain what they want and need from this project and you will need to start to draw up a list of project goals, so that you are fully aware of just how these needs and wishes can be met.
A budget is integral to the successful completion of any project and the budget needs to be firmly entrenched in the project plan because you need to ensure that you stay within budget, but still manage to deliver all the goals that you are setting.
Resources are about not just money but skills required and 'things' that are required, to enable the project to be successfully delivered.
Risks to the project or things that could go wrong or pose a threat to the successful completion of the course should also be identified, so that they can be managed and responsibility allocated for effective management of risk.
Tasks, duties and responsibilities are all very important, because there has to be a clear strategy for what needs to be done and who is responsible for doing what and when these things will be done. It is really important that these are identified very early on in the process. It may well be that the individuals who will be team members have not even been finally agreed, but the job titles or areas can be used, so IT can be identified as being responsible for delivering a certain level of service.
Often these duties and tasks are contained in a Gantt chart, which is effectively a bar chart that lists duties and shows responsibility for delivering these duties against the agreed timeframe. The beauty of the Gantt chart is that it shows the evolution of the project and how each duty and task flows into the completion process.
Although there are a whole host of other elements to be contained in a project plan, the final key element has to be quality. Quality is vital because there is no point in delivering a project where quality has been left behind. So your project plan needs to be able to define quality, describe how you will implement the quality standards that are expected and ensure that your project is as good as it possibly can be. Otherwise you are in severe danger of producing a project that fails to deliver what was expected.
However one thing that you should always bear in mind is that no matter what your project plan contains it needs to be regularly updated and the deliverables delivered!
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One key aspect of process mapping is that it needs to involve those people who are actually involved in the process itself. There are several reasons for this. Firstly it helps to give people a sense of ownership, they feel involved and so are more likely to endorse the mapping exercise. Secondly the mapping is dependent on those involved being able to identify difficulties that already exist within the process. Thirdly those who are already involved should be more able to suggest more efficient ways to actually carry out the process.
How Is Process Mapping Carried Out?
The process that is going to be mapped out needs to be clearly identified before the exercise begins and everyone needs to be aware that a specific process only will be discussed, otherwise the meeting will not be productive.
Team members then gather to look at the process and draw a map of how work is done. Often this is done by using diagrams or a flow chart.
Problems with the process should also be identified. For example if there are delays caused by any internal procedures, then these need to be highlighted.
Ideas or suggestions for improvements should also be identified so that the process can become speedier and more efficient.
Next action steps need to be written down and members of the team will have a specific action step that they are responsible for executing.
A date can then be set for the next meeting where each action step can be discussed and action can be take.
The Importance Of Taking A Slow Approach
It may seem as if this exercise is just another excuse to have more and more meetings but in fact it is really important that all problems and suggestions for improvement as well as action steps are taken away and given further examination.
This is because any process mapping exercise has to be able to take account of the differing needs of other sections of the company. Thus an idea may be to have the Finance Section less involved in a certain process. However an idea like this cannot be implemented without the agreement of the Finance Section and there may in fact some very good reasons why this Section need to be involved.
It is therefore a really good idea to make sure that people realise that the suggestions put forward cannot be implemented in isolation, they need to be implemented in conjunction with the overall strategy and aims of the company.
Importance Of Process Mapping
The importance of Process Mapping cannot be over emphasised. Although any process can start off being very efficient as time goes on and other processes change and personnel change as well, a process can end up being quite inefficient and new personnel may not even be fully aware of all the different stages of a given process.
So involving personnel is fundamental because those who operate on the front line are very much aware of where any problems are hidden. They can provide invaluable advice as to what will work and what won't.
The analysis of any process will also lead to greater efficiency, better teamwork and a more robust set of processes, so the importance of Process Mapping is simply invaluable to any company who strives to ensure the most effective processes are used within its business' practices.
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MIS are actually quite different from other information systems. This is because the MIS are used primarily to analyse other information systems that are used in the operational activities of any particular organisation.
So MIS is not a true information system in the sense of technology, but nor is it a true business function. In fact it straddles both these disciplines and is a way in which technology can be harnessed along with business so that people can function more effectively.
Within any given organisation there may well be MIS professionals, but they are actually employed as systems analysts or even project managers. They often will act as a means of communication between management and the staff on the ground and they are actually a very valuable asset to any firm, since MIS professionals have the ability to analyse vast amounts of data.
This is the real beauty of Management Information Systems, they allow personnel to effectively and efficiently analyse huge amounts of data that would otherwise be too enormous to be analysed by humans. This means that trends can be spotted or patterns start to emerge. The MIS systems can also show dips or peaks in performance that may not be readily available when using other information systems, so they are incredibly important.
Origins Of Management Information Systems
Initially computers were used to keep finances up to date word processing and in many cases accounting. But then more and more applications were invented all of which were geared towards providing management with useful and relevant information that would help them to manage their business and due to the nature of the information they contained, these applications became known as Management Information Systems.
Aim of Management Information Systems
The main aim of MIS systems is to inform management and help them make informed decisions about management and the way the business is run. This highlights the difference between an MIS and other types of information systems that do not necessarily contain information that will help managers make managerial decisions.
Further MIS Applications
One very interesting aspect of MIS systems is that they can be used to 'predict' the future. This means that a business can test out any differences that it may be planning to an existing strategy by running a Decision Support System, which is a programme that will run a simulation and look at the 'what if?' type scenario.
So if a company is thinking about putting its prices up then it can run a DSS to see what impact this would have on business. Obviously there can be no guarantees that this would be 100% accurate, since no one can predict the future, but what this can do is to let managers know the potential outcome.
The Decision Support System will have to look at, analyse, collate and interpret huge amounts of data to achieve this, but the important thing is that it can be done and the benefits that systems such as this can bring are indeed spectacular.
So if you think that someone who works in MIS is someone who is dealing with computers and IT support, then you are really only seeing a tiny part of the role. MIS systems, when used properly will actually help to shape and influence a company.
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Here's Ten reasons why you shouldn't allow your spreadsheet applications to dominate your business!
1 - They are don't follow business logic and don't know about business processes - "what do you mean whenever we receive an order from Company ABC I have to record a reference number, check our stock and validate their account with the Finance dept? - My list doesn't do that!".
2 - They are not integrated - unless you come up with some whizzy code most spreadsheets are stand alone and focus specifically on the process they are setup to record "what do you mean you want my list of deliveries, from our goods receipt process, that I have in my spreadsheet to go and update my purchase order file and tell finance they can pay the supplier invoice?????
3 - While Excel has some great validation tools - most spreadsheets (unless configured to do so) are not built with this enabled - for example want to enter your date as 1 January 200010 - fire away!
4 - MACRO's - Macro's require a level of expertise to build and maintain - they should always be documented to describe how they work - what inputs are required and what outputs are generated - For example - Joe Bloggs who wrote that fantastic macro to format and process the sales of super-widgets ABC has left the organization and nobody knows how it's configured - and guess what...business rules have changed and we need to update the macro! Argh! Business process stops and we can't get ship product - the spreadsheet dies and we have to do it manually.
5 - Its really really REALLY (get the point?) easy to delete or amend data (and in my experience excel files often have a slightly less robust disaster recovery plan than an ERP system.) While this might seem great at the outset - "look how easy my order intake file is to edit". It can soon become a nightmare!
6 - They require man hours and effort to keep data aligned to the company ERP. And seriously once the two get out of synch (which they will!) your doomed!
7 - When used for management information they often give a completely different impression to reports generated from the company ERP.
8 - Most spreadsheets are not "shared" so one spreadsheet can only be used by one user at a time. Instant bottleneck.
9 - They become personalised and don't follow standards - "I decided to invent my own numbering system for my x list - what do you mean I need the PO number to track back to the customer order?". Let two people create two separate spreadsheets to do the same task and your guaranteed they'll look completely different!
10 - They do not have the right security! ERP system usually come equipped with security features that allow you access to what your allowed to see and don't grant access to what your not! - If you look at Excel it has some great security and protection features but they are not anywhere near as granular as to those found on an ERP. So you want someone to see your list of Purchase Orders but not the prices? Or you want them to see the prices but not the suppliers?..mmmm. Also spreadsheets are HIGHLY transportable!
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