of an organization.
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well as in manufacturing firms. As traditional barbershops and beauty parlors are
replaced by hair salons catering to both sexes, for example, the hybrid organizations
have to develop new methods for handling appointments and setting prices.
A change in work sequence may or may not accompany a change in equipment or a
change in work processes. Making a change in work sequence means altering the order
or sequence of the workstations involved in a particular manufacturing process. For
example, a manufacturer might have two parallel assembly lines producing two similar
sets of machine parts. The lines might converge at one central quality-control unit,
where inspectors verify tolerances. The manager, however, might decide to change to
periodic rather than final inspection. Under this arrangement, one or more inspections
are established farther up the line.
Work sequence changes can also be made in service organizations. The processing of
insurance claims, for example, could be changed. The sequence of logging and verifying
claims, requesting checks, getting countersignatures, and mailing checks could be altered in
several ways, such as combining the first two steps or routing the claims through one person
while another handles checks. Organizational control systems may also be targets of change.
For example, a firm attempting to improve the quality of its products might develop and
implement a set of more rigorous and comprehensive quality-control procedures.
Finally, many businesses have been working to implement technological and
operations change by installing and using complex and integrated software systems.
Such systems—called enterprise resource planning (ERP)—link virtually all facets of the
business, making it easier for managers to keep abreast of related developments.
ERP
is a
large-scale information system for integrating and synchronizing the many activities in
the extended enterprise. In most cases, these systems are purchased from external
vendors who then tailor their products to the client’s unique needs and requirements.
Companywide processes—such as materials management, production planning, order
management, and financial reporting—can all be managed through ERP. In effect, these
are the processes that cut across product lines, departments, and geographic locations.
Developing the ERP system starts by identifying the key processes that need critical
attention, such as supplier relationships, material flows, or customer order fulfillment.
The system could result, for instance, in sales processes being integrated with production
planning and then integrating both of these into the firm’s financial accounting system.
For example, a customer in Rome can place an order that is to be produced in Ireland,
schedule it to be shipped through air cargo to Rome, and then have it picked up by a
truck at the airport and delivered to the customer’s warehouse by a specified date. All
of these activities are synchronized by activities linkages in one massive database.
The ERP integrates all activities and information flows that relate to the firm’s critical
processes. It also keeps updated real-time information on their current status, reports recent
past transactions and upcoming planned transactions, and provides electronic notices that
action is required on some items if planned schedules are to be met. It coordinates internal
operations with activities by outside suppliers and notifies business partners and customers
of current status and upcoming deliveries and billings. It can integrate financial flows among
the firm, its suppliers, its customers, and commercial bank deposits for up-to-the-minute
status reports that can be used to create real-time financial reports at a moment’s
notice, rather than in the traditional one-month (or longer) time span for producing a
financial statement. ERP’s multilanguage capabilities also allow real-time correspondence
in various languages to facilitate international transactions.
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