Evaluation of materials management information system

Executive Summary

The intent of this study is to measure the effectivity of the bing Materials Management System ( MMS ) in “ABC Construction” , place the spreads in concern procedures and specify user demands and stakeholders outlooks refering the execution of new Information System ( IS ) proposed by the Modernization Committee of the Company.

Field survey and research through questionnaires showed that there were major failures in the bing MMS in the field of planning, tracking and stock list of stuffs and equipment. There was no incorporate automated control over the stuffs be aftering procedure. Sellers and Suppliers databases were hapless. Tracking of stuffs was processed through MS Excel spreadsheet doing the expediting of Suppliers entries inefficient as sometimes the information was merely lost which led to mismatch between the Company and Suppliers informations in the context of bringing position.

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The control and monitoring of the stuffs in stock was characterized by inefficient stock list paperwork. The overall MMS certification was non comprehensive plenty arousing heavy work load, manual confirmation of the informations and unsatisfactory coverage which accordingly caused failures to run into building completion deadlines.

The proposed IS SAP MM was critically evaluated as a possible solution for the mechanization of MMS in “ABC Construction” . Taking into consideration rule concern objectives the success of IS was diagnosed by agencies of IS Success Framework developed by DeLone and McLean ( see Appendix 1 ) .

The result of the analysis showed that IS proved to be applicable and could run into the outlooks of either Senior Management or Materials forces, and to aline with the Company ‘s scheme and concern aims. The chief procedures of Materials Management and the dealingss between “ABC Construction” and Vendors/Suppliers can be expeditiously managed and coordinated if proposed IS is implemented.

The recommendation to use the proposed SAP MM for efficient Material Management was supported. Professional MM IS and velocity of executing can supply the Company faster clip to market, possible growing as a long-run aim and therefore, sustainable hereafter of the concern. Further comprehensive fiscal analysis for IS execution undertaking will be conducted by the Financial Department and presented to stakeholders in order to do concluding investing determination.

Introduction

“ABC Construction” is a medium Russian Construction Company founded in 1995 specialising in general building, building direction, and design services. It is a material-intensive concern in which control over stuffs required for building has a major impact on the gross of the company.

In order to entree the current public presentation of Material Management System, place its inefficiency and specify user demands and outlooks of the stakeholders with respects to execution of new proposed Information System ( IS ) a field survey and research through questionnaires were conducted.

Based on the consequences of the interviews and informations from the questionnaires of 1 Project Director, 4 Undertaking Managers, 4 Contracts Managers, 5 Chief Engineers, 3 Material Directors and 10 Materials Coordinators the major drawbacks of the bing MMS were identified in the field of planning, tracking and stock list of stuffs and equipment.

The undermentioned deductions are summarized to depict the result of the research with respects to MMS utilised in the Company:

  • There is no efficient automated control over the stuffs be aftering procedure. Sellers and Suppliers database is hapless, non up-to-date, non all the needed information included. Vendor Data demands are non defined in footings of requisitions, bundle and purchase orders ( PO ) , no stuffs specifications available and bringings timelines indicated. No comprehensive pricing information available in the system.
  • Tracking procedure of position of stuffs and equipment bringings is done through MS Excel spreadsheets doing the expediting of Vendor entries inefficient. A figure of Materials Specialists and Coordinators are working on one spreadsheet at the same clip and due to human component while reassigning informations information may be lost. This causes the mismatch between the Company and the Contractors informations in footings of stuffs position.
  • Inefficient control over the stuffs in stock. Inventory studies are non detailed ; deficits of stuffs are non specified and can be depicted by agencies of PIVOT tables merely. Materials Coordinators working in assorted undertakings of the Company sometimes do non hold adequate clip for supervising the stock which can do such major jobs as failures to run into building completion deadlines and initial budget shortage due to incidental outgos caused by damaged/lost or undelivered stuffs which were non decently indicated in craftwork database.
  • The overall MMS certification is non comprehensive: procedure sheets, stock list records, material requisitions, material call-off agendas, deficit notes, batch tickets, bringing notes and quality trial sheets provide uncomplete information and you have to take clip and refer to another paperss and spreadsheets to happen the needed information. There are no processs on papers criterions between the Company and its vendors/suppliers. Contract Managers are non satisfied with the coverage system which is non crystalline plenty and is to be developed to better criterions.

Due to the Company ‘s Modernization Strategy and taking into history the spreads in the bing MMS a criterion integrated IS – SAP MM ( Materials Management ) was proposed for execution within the Company.

The chief aims of IS Implementation set by the Senior Management are as follows:

  • To guarantee that “ABC Construction” has the right stuff, in the right topographic point, at the right measure and monetary value.
  • To develop and unite stuffs related processs and do stuffs purchase, transportation and reception clear for all involved parties.
  • To remain competitory in building market and construct a sustainable hereafter.

Analysis and Deductions

In order to measure the built-in ERP solution SAP MM ( faculty that is used for Procurement Handling and Inventory Management ) was reviewed to measure the pertinence of IS to run into the demands of the stipulated concern aims. IS was inspected through the application of the success prosodies specified in Updated IS Success Model developed by DeLone and McLean.

SAP MM success rating based upon success prosodies aligned with stakeholders outlooks is indicated in the tabular array below.

#

IS Success Dimensions

Valued Qualities

Preliminary Assessment of SAP MM

1

Information Quality

Serviceability

Information is comprehensive and complete.

Consistent path of historical informations.

Availability / Reliability

Datas can be accessed from multiple geographical locations, IS stable and dependable.

Adaptability

IS flexible architecture with high scalability.

Response clip

Real-time application, response clip is short.

2

System Quality

Content Personalized

Clear definition of user entree rights.

Completeness

IS screens all phases from Planing to Procurement and Warehousing ( see Appendix 2 ) .

High integrating with other ERP systems.

Relevant

Single informations storage with the relevant information.

Secure

R/3, 3-tier architecture: database, application waiter and client, all informations shops on server side.

Encrypted client-server informations transportation.

3

Service Quality

Assurance

IS if to the full integrated and do non necessitate extra version.

Developer Support

24/7 help desk.

Easy distant disposal options.

4

Use

Simplicity of operation

Basic preparation normally takes 5-10 yearss.

User-friendly interface.

Quick Access to the most updated informations.

5

User satisfaction

Business purposesorientation

SAP MM is able to supply the needed graphs and analytics for planning, tracking and stock list ; coverage constructions are clear and easy to reconfigure.

6

Net benefits

Improved Cost Control

IS lowers entire cost of ownership with a scalable and flexible solution that enables to implement enterprise-wide alterations and deploy them globally.

IS improves efficiency with a solution that has the functionality to back up the concern processes.

Improved Strategic and Operational Procurement

IS optimizes seller base, improves stock list turnover and rhythm times, and reduces operational costs.

IS screens all undertakings within the supply concatenation, including consumption-based planning, planning, seller rating and bill confirmation. It besides includes stock list and warehouse direction to pull off stock until usage dictates the rhythm should get down once more.

Electronic Kanban/Just-in-Time bringing is supported.

Information transparence

IS enables direction inadvertence ; back up overall decision-making procedures.

IS facilitates clip salvaging.

One of the chief aims of the capablenesss of described IS is to better streamline coaction between the Materials Department and its providers while drastically diminishing procurance and stock list costs and maximising the value of relationships on both sides. Therefore, the provider engagement and mechanization of cross-company procedures are increasing which leads to heightening the supply concatenation visibleness, to increasing the overall velocity truth, and adaptability of Sellers which is critical for building field.

Proposed IS can better and simplify the stock list processs and control over stock in the Company. IS Supplier portal constituent is available. That eliminates manual informations entry, improves internal and external communications and reduces mistakes and procedure costs. IS provides the needed transparence of the Material Management procedures and Supplier/Vendor base visibleness enabling companies to supervise and measure providers with real-time public presentation feedback.

The undermentioned outlooks of the Company can be met if proposed IS is implemented:

  • Automation, simplification and acceleration of Material Management processes.
  • Less mismatching between Supplier/Vendor and the Company ‘s position certification
  • Accurate and detailed information on Supplier/Vendor abilities and rates.
  • Improved coverage system and constellation of the studies per demands of Senior Management, Materials Staff and Financial Dept.
  • Lowered procurance and stock list costs ; improved plus use.
  • Reduced hazard of supply and holds through the efficient IS electronic trailing.
  • Reduced downtime & A ; overtime ; paperwork, accommodation and digest of the signifiers.

Recommendations

Based on the consequences of SAP MM critical rating the IS proves to be applicable in order to develop or replace the bing MMS in “ABC Construction” and to run into the outlooks of either Senior Management or Materials forces, and to aline with the Company ‘s scheme and concern aims. The chief procedures of Materials Management can be to the full monitored and controlled if proposed IS is implemented.

Therefore, the recommendation to use the proposed SAP MM for efficient Material Management is supported. To construct a sustainable hereafter and to stay competitory in building market the stuffs and equipment every bit good as dealingss of “ABC Construction” with Vendors/Suppliers can be expeditiously managed and coordinated through proposed SAP MM. Professional MM IS and velocity of executing can supply the Company with faster clip to market and possible growing of concern as a long-run aim.

Further comprehensive fiscal appraisal in footings of costs and commercial value, benefits and hazards of the IS execution undertaking is to be conducted by the Financial Department and presented to stakeholders in order to do concluding investing determination. Microsoft Rapid Economic Justification ( REJ ) Model can be recommended for farther mention see Figure below.

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