Aviall Inc.: from failure to success with Information Technology

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Why do you think that Aviall failed in their implementation of an enterprise resource planning system? What could they have done differently?

951761 潘伊芳

Failed reason: • Integration of old system is not fineAviall couldn’t properly orderRelationship between supplier, Aviall and

customer

Aviall doesn’t try to measure the return on

investment the e-business website

Aviall couldn’t properly ship things

Integration of old system is not fine

• • •

Why Integration of old system is not fine

ERP software and stock operation system can not keep synchronized. Every system may be produced by different suppliers, and it’s hard to integrate.

Old system lacks of database system to integrate. (There are 380,000 air-flight components , if the database system is not completed, it may manage stock improperly.)

Integration of old system is not fine

Improvement method:

Purchase flawless database system and integrate all systems, and use the same database to do automated order schedule and stock management. It will be more instant and consistent, and it prevents from input error that different database causes.

Aviall couldn’t properly order

Why couldn’t properly order or ship things

• • • •

Stock management out of control

(problem happens when handle order, different quantity or item with order that affect revenue) Can’t estimate which product or how many (so that stock is too much or too less)

Can’t handle with price quoting and order making

(the cycle of sale managing becomes longer)

It makes error in financial accounting, and customer will lost patience.

Improvement method:

• • •

Faster order management

(reduce work quantity which staff are required to do → train them to own one professional skill → reduces the time of doing one task and convenient to mark off responsibility.)

Estimate the stock quantity

(use the information of last period or last season to estimate required stock → reduce the stock cost and the supply is unable to meet the demand)

Correctness of delivery product item and quantity

(before delivering product, check once more to reduce the delivery cost and return goods.)

Relationship between supplier, Aviall and customer

Between the supplier and the customer has not been connected, must penetrate the Aviall relation. The supplier is unable immediate knowing to produce how many components.

Cause Aviall to order to the supplier, the supplier actually does not have situation of the goods supplies.

Improvement method:

Make the relationship of supplier and

customer more closer

Automatic:create web server – make supplier check the prepaid order and price information Manuel:After staff finish the sale order, tell the supplier the required quantity right away.

Aviall doesn’t try to measure the return on investment the e-business website

Automated placing order system can be used by company staff, and it’s not online edition. If company invest e-commerce website, it must pay another set of online purchasing system.

Why doesn’t try to measure the return on

investment the e-business website: 1. Reduce cost and doesn’t do investment 2. Company doesn’t have professional information staff

Improvement method:

• Implement set of online purchasing system (make customers place order themselves to reduce human cost) • Train the staff about the e-commerce

Aviall couldn’t properly ship things

About the logistics, Aviall doesn’t have this kind of system, and they can’t plan the delivery route perfectly.

So that it may lost some customer’s product and increase the delivery cost.

Improvement method:

Implement → Warehouse Logistics System • • • The advantage to implement:

Accelerate frequency of component flow

(plan delivery route completely Example:How many routes do they require to reach the minimum cost. Arrange the product’s place in truck to save the waiting time.)

Reduce lots of stock quantity

(how many stock from every component can be recorded in database, and can research the updated stock quantity.)

Reduce operation staff

(there are specific position from different components, and that can reduce time and staff to manage stock.)

How has information technology brought new

business success to Aviall

941761 林承豐

Successful to make all systems cooperate together New Era Of Network E-Biz (Integration Server) Aviall uses different information systems to get ability to serve clients. Because every system’s data format may be different, to make them cooperate with each other, Aviall uses New Era of Network e-Biz to integrate server.

• E-commerce Aviall needs to be the best supply chain company which keep great relationship with clients, and to be ahead of competitors. Aviall implements comprehensive e-commerce which can handle all business in order to get out of difficult position.

• Customers can do all business through Internet Customers can do all business automatically with Aviall through Internet. Company provides a tool which can transfer the online component list for customers. The respond time of price reporting and order making reduces from 5 days to few minutes that clients use Web.

• Get information easier Customers can search information about component more convenient, and they can receive the component price and stock situation in 5 seconds.

• Customized order Aviall has special fixed price with many clients. They need to connect with Internet and ERP system, and create customized catalog automatically based on client’s login information, so that website can show agreement price.

How did IT change Aviall’s

business model

• Changed into an E-commerce system through Internet • Transfer the business into Internet • Reduce the cost of company Phone order: 9 dollars  Internet: 0.39 dollars • Newly purchase planning Reduce time which salesman search the order, and they can spend more time on clients.

How could other companyies use Aviall's approach to the use of IT to improve their business success? Give several examples

932509 王振羽 21

• For: – Outgoing Lunch restaurants • What’s going to do: – Using the internet technologies to change the traditional way for outgoing. • Why need to change: – Now customers want everything to be fast and convenient to get. Using internet technologies is able to fit customers’ needs.

• How to do: – 1. Set a website interface – 2. Build users system – 3. Build databases – 4. Set the flow path – 5. Make network interactive functions

Website interface

• Appearance design • Convenience • Security • Easy to use

User system

• User system – Certification For website security – Order list check Users could check, cancel, or modify their order list.

– Credit card • Database – Including User, Menu, Order List, Transaction Record, and Forum Record…etc.

Flow path

• 1. Users register(input users’ information) • 2. Users login(input ID and password) • 3. Users order their meals(menu on website) • 4. Users check order list • 5. Users input name, phone number, and address • 6. Deliver to users’ houses and get money

Network interactive functions

• 1. FAQ Area • 2. Forum • 3. Evaluation System

• Benefit: – 1. reduce human cost – 2. reduce human error – 3. Improve the efficiency of ordering

Descript what the “IS”/IT in the real case is about?

951738 劉慧慈 29

What are the IS in this real case?

• Broad-Vision online purchasing system • Siebel Systems sales force automation and order entry system • Lawson Software financial system • Catalyst Manufacturing Service inventory control and warehouse management system • Xelus product allocation, inventory management , and purchasing forecasting software • Database software form Sybase,Inc. 30

What the system do?

Broad-Vision online purchasing system

• E-catalog and search function • User-friendly click through process • Download spreadsheets of part lists from aviall.com for instant pricing • Instantly receive RFQs (Request For Quotes) infrequently • Certifications, warranty information, and MSDS 31

E-catalog

32

What the system do?

Siebel Systems sales force automation

• Customer relationship management (CRM) • Order processing • Information sharing • Inventory monitoring and control • Order tracking, customer management • Sales forecast analysis 33

What the system do?

Siebel Systems order entry system

• Customer relationship management (CRM) • Product catalog displayed both to the employee and customers • List of top 5 products displayed to the customers • Product information displayed for each product • Customer information displayed for each customer • Greeting message displayed to each user of the system • Shopping cart 34

What the system do?

Lawson Software financial system

• Enterprise Resource Planning (ERP) • Stores vendor and employee information • Information will be secured • Monitor key performance indicators • Easily create and manage multiple visual reports • Help validate and maintain employee data 35

Lawson and Siebel

One of the most important connections would be between the Lawson software and the Siebel software, enabling a sales representative to assure a customer that an order could be fulfilled. The Siebel customer-service software would have to draw information on the prices and availability of parts from Lawson.

36

What the system do?

Catalyst Manufacturing Service inventory control and warehouse management system

• Combines both flow-through functionality and traditional warehouse management features • Manages all aspects of the distribution center and manufacturing warehouse operations including receiving and put away to order selection, picking, loading and shipping.

• Make Better Decisions 37

What the system do?

Xelus product allocation, inventory management, and purchasing forecasting software

• Enterprise Service Management (ESM) • Maintain very minimal stocking levels • Multiple forecasting methods • All sales information can be easily downloaded to Excel • Make Better Decisions 38

Xelus and Catalyst

The combination of Xelus and Catalyst made sure that the right parts got to the right customers at the right time. No empty boxes 39

What the system do?

Sybase

Database pioneer Sybase of Dublin, California, created software “adapters” that would let the different pieces of software swap data .

Simply put, when two pieces of software call the same piece of data, an adapter figures out what has to be done. The adapter transfers that piece of data between the two programs, making sure it ends up in the right place. Then each program that receives it can process the data further.

40

Before Sybase Integration

Limited Functionality

AVIALL.COM

Isolated Silos of Information Isolated data Separate customer database Human interaction between systems required CATALYST

Warehouse Mgmt

LAWSON

General Ledger AR/AP HR/Payroll Order Entry Inventory Mgmt Inventory Control

XELUS

Purchasing/Forecasting 41

Core Systems

Order Entry Sales Force Automation Sales Force Integration

SIEBEL Business Process Improvement Real Time Integration Message Aggregation Exception Handling

On Line Web Purchase Web Customer Services Web Supplier Services

BROADVISION

Current Development

CATALYST

Inventory Control Warehouse Mgmt

LAWSON

General Ledger AR/AP HR/Payroll Current Development

XELUS

Product Allocation Inventory Mgmt Purchasing/Forecasting 42

What are the advantages and disadvantages of the IS/IT?

951763 吳浩瑋 43

Online Purchasing System

Advantage: Convenient (Everywhere and anytime can buy anything) Compare product price and features (It can compare each product in the system) product variety (It have many product in the system) Increases the efficiency 44

Online Purchasing System

Disadvantage: Privacy and security issues (Hacker maybe steal personal information) Access to the Internet (The Internet is so important) 45

Sales Force Automation

Advantage: Increases the productive (It can help the order quickly) Analyzing future sales patterns and behavior Screening and control of inventory Opportunity management (It can chose the best business chance) 46

Sales Force Automation

Advantage: The assistance Business agency locks the correct customer (It can chose the best customer) Enhances the sales predict accurate (Avoid the unnecessary mistake) 47

Sales Force Automation

Disadvantage: To sales personals pressurize (It can know the sale’s everything by the system) The system is expensive Needs to maintain and to renew (Because the system’s information must be new) 48

Order Entry Software

Advantage: Increase sales force efficiency (It can help SFA deal with order quickly) Avoid costly inventory shortages or overstocking (It can handle the stock) Reduces the human error (People sometimes key error word) 49

Order Entry Software

Disadvantage: Security and privacy (Hacker maybe steal personal information) 50

Inventory Control

Advantage: Guarantees the reserve Enhances the productive (It can be shipment quickly) Makes a better decision-making (It know how many stock can be sale) 51

Inventory Control

Disadvantage: Too dependence (It should moderate use) Does not suit the small company (The small doesn’t have many stock) 52

Warehouse Management System

Advantage: It can handle the stock Speeds up the order form disposal procedure (It can Increases the efficiency Provides the correct stock, the simplified warehousing work 53

Warehouse Management System

Disadvantage: The forecast possibly does not suit every company (Because every company ’s situation is different) 54

Product Allocation

Advantage: The sales direction is clear (The sales will know the stock) Increases the profit Reduced goods in stock quantity 55

Product Allocation

Disadvantage: Unsuitable the small company (It will cause waste the money) 56

Sybase Database Software

Advantage: System Integration (It integrate the different system ) 57

Sybase Database Software

Disadvantage: DBA is not easy to train (The DBA is so less and it’s not easy to train ) Expensive (The database is so expensive) 58

How does the IS / IT change the way new business operate now?

941762 林家駿 59

• Instant service • Stock management • Purchase cost • Human cost • Factory relationship • Estimate future supply/demand • Catalog • Sale position 60

Instant service

Traditional way

It requests 5 days’ respond time to report price of high requires order

Use IS/IT

The service of showing price and stock information through Internet 61

Stock management

Traditional way Use IS/IT

Asynchronous with order and stock and slow transfer speed will delay product distribution or miss order ERP software and warehouse information system keep orders synchronized and high efficiency of delivering products 62

Catalog

Traditional way Use IS/IT

Product catalog can only be updated by salesman Internet catalog can be updated anytime, prices are more clear and all items can be chosen 63

Purchase cost

Traditional way

Show product and requires of order through telephone 9 dollars per order

Use IS/IT

Use Excel sheet to transfer order 0.39 dollars per order 64

Human cost

Traditional way Use IS/IT

Request lots of people to check and track order Automated purchase schedule requests few people to maintain system 65

Factory relationship

Traditional way Use IS/IT

Simple business relationship between factory and customer High effectiveness of supply chain management, gain additional value, attracted by supplier and get the right to sell product 66

Estimate future supply/demand

Traditional way Use IS/IT

Estimate quantity base on making order before this month , and use passive way to supply product Estimate by order history and order quantity last period 67

Sale position

Traditional way Use IS/IT

Sale component as main business Whole production line of rear service factory 68

Question 4:

Besides those mentioned in the

casewhat other ways can a business

realize more benefits from IS/IT?

951723林正豪

Broad-Vision purchasing system

Add a function that subscribe for the E-paper When the user key the E-mail address and some personal information, the user can receive the E-paper about the component’s information about the price and inventory.

the user can choice what information he needs.

It can make the customer pay attention to our company more easily.

Siebel Systems sales and order entry system

Pay attention to the customer Pay attention to the customer have a lot of trade record, we can provide the good After-sales service every month. It can build up the good public praise for the enterprise.

Lawson Software financial system

1.Reward

According to the order, we can reward the employee that have the outstanding achievement. It will make the rewarded employee working harder.

2.estimate innovation plan Estimate the financial information whether the capital is enough to Implement the innovation plan (ex: cooperate with the people’s livelihood to develop the new component).

If the plan success, it will bring about a large profit!

Catalyst inventory control and warehouse management system

After the market estimate, set up the warehouse where is market center . It can reduce the transportation cost.

Xelus product allocation, inventory management , and purchasing forecasting software

Choice the better supplier We can know the different component’s brand from the inventory and find the supplier have a higher yield rate.

It will keep the product quality.

Database software form Sybase,Inc.

If the enterprise want to use the new software, it is easy to integrate new software into the information system.

Do some searches from the web and provide some historical background about the mentioned IS/IT?

951754 楊士緯

Adaptive Server Enterprise

history

• Originally created for UNIX platforms in 1987, Sybase Corporation's primary relational database management system product was initially marketed under the name Sybase SQL Server.

• In 1988, SQL Server for OS/2 was co-developed for the PC by Sybase, Microsoft, and Ashton-Tate. Ashton-Tate divested its interest and Microsoft became the lead partner after porting SQL Server to Windows NT.

• In 1995, Sybase released SQL Server 11.0. Starting with version 11.5, released in 1996, Sybase moved to differentiate its product from Microsoft SQL Server by renaming it to Adaptive Server Enterprise.

Adaptive Server Enterprise

history

• In 1998, ASE 11.9.2 was rolled out with support for row-level locking and distributed joins and improved SMP performance. • In 2001, ASE 12.5 was released providing features such as dynamic memory allocation and support for XML and SSL among others.

• In September 2005, Sybase released ASE 15. It includes a rewritten query optimizer

Sybase ASE 15─data management system New function

• Use computing field can design program easily • Function index improve efficacy of query and field treatment • Messaging services will allow developers to set up event-driven programs easily • Providing VLSS(Very large server support) to manage the large-scale database • The advanced XML technology stores up and process the XML document

Sybase ASE 15─data management system New function

• Updating the statistical data automatically to decline the burden of management • Providing company overview from a workstation to manage more servers • The work wizard suits the novice to manage • Plan viewer lets database manager and developer query and check plans easily。 • Scroll-type cursor can be set up easily to deal with the results of large-scale program。

Warehouse management system

• It designs primarily by the sales management or the production management information system • after 1975, starts to the warehousing systematization's understanding. The enterprise interior day after day consciousness to the warehousing management importance, is starts to seek the warehousing information processing system's equipment.

Warehouse management system

Material data communication technology progress, correspondence network's opening, with after large-scale computer union, sped up with remote or other enterprise's information exchange speed, then has disappeared the warehousing information original timeliness, the spatiality limit, regarding the warehousing management information system function's expansion and the universalization, has brought the enormous enhancement effect.

Inventory control and management

• In 1950, the cost is relatively low, enterprise by excess stock cushion material class three essential factors (purchase, manufacture and allocation) uncertainty and difference. But the condition of business change, the enterprise wanted to increase the superprofit in recent years. Reduced stores goods with allocates and dispatches is a only way.

• Inventory management's theory starts from “the economical order quantity” (EOQ), “the Material Requirement Planning ” (MRP), to the “Just In Time inventory management” (JIT), “the rapid reaction” (Quickly response), “the electronic monitoring system management” and “the retail goods saved the idea” in recent years, its makes the inventory management to have the efficiency

Describe who else may find the IS /IT useful. Give at least 5 examples.

And, why you think so?

941617 黃若靜 84

RT-Drive Online purchasing system Starbucks Product allocation inventory management and purchasing forecasting software Tkec Sales force automation and order entry system FedEx Inventory control and warehouse management Yahoo Financial system 85

RT-Drive.com(大潤發)

Online purchasing system • Classify products that can be easy searched.

• List commented and new products.

• Count how much you buy just in time.

86

Tkec.com(燦坤)

Sales force automation and order entry system • Record member’s purchased in the past.

• List hot-sell products to the customer.

• Order form can easy searched by employees.

87

Yahoo拍賣

Financial system • Create personal financial statement for seller.

88

FedEx

Inventory control and warehouse management system • Effective monitoring of stock levels with powerful inventory management and reporting systems.

• No matter where you are , you can search your package on line.

89

Starbucks

Product allocation , inventory management , and purchasing forecasting software • To calculate hot-sale products.

• Discount slow-selling goods.

90

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