COURSE CODE BCO 216COURSE NAME Management Information Systems Mid term Make-up Task brief & rubrics
Task – Case with 5 questions
Each question is worth 20%.
Case:
Read the following case and answer the questions at the end.
When stock becomes a liability
South African company New Era solutions is helping its clients to reduce stock. Working with their partners Epicor Software Corporation, New Era offers warehouse management systems to control the movement and storage of materials in a warehouse and process goods coming into the warehouse and leaving it. Warehouse management software, part of an ERP System, allows a company to manage its inventory and minimize so called “dead stock”.
A manufacturing company buys raw materials and turns them into finished products. Each of these (materials and products) is stock. Stock includes the materials coming in, products at all stages of being finished, and the final products ready to be shipped. Stock is a major company asset and is usually that main source of a company’s revenue. However, there are times when stock can become a liability. Stock can generate revenue but it is also a cost. It costs money to keep it, as the warehouse needs security guards, electricity, there may be rent to pay, or payments on a building loan.
IT online explains how stock can be a liability. “As a distributor, the process of making money on goods does not begin when goods enter your warehouse; it only generates income when it leaves. Will stock is waiting to be sold, it costs money to store it. The longer it stays in a warehouse, the less likely it is that it will be sold”. Eventually stock that sits long enough can be considered to be ‘dead’. At that point it becomes a liability. There are various ways of getting rid of dead stock. A company could sell it off cheaply, donate it to charity, try and return it to their supplier, bundle it with a new product to trying to sell old and new together, or simply dump it. There are other gimmicks that could be used like ‘a free gift with every purchase’.
According to New Era, the best way to deal with dead stock is to avoid it altogether. One cause of dead stock is in mishandling customer orders. Let’s say a customer wants a customised product – it could be as simple as wanting it to be blue when it is usually red. Then the company buys in blue raw materials, manufactures and ships the finished product to the customer, but they bought in too much material. Now they have blue stuff lying around in the warehouse, unable to use it to create a product, as only one customer wanted blue. The best way to avoid this is to use ERP software with warehouse management capabilities to accurately forecast exactly the materials that will be needed.
‘Best in class companies perform better as they are able to make more informed decisions based on accurate data’, says Stuart Scanlon, sales and marketing director at New Era. Recent research into small manufacturing enterprises in South Africa found that small businesses only want to implement ERP if they think it will integrate easily with existing systems with a quick implementation time. This isn’t usually what you get with ERP, which attempt to bring with them great upheaval and change. Mr. Scanlon says ‘implementing a new ERP System is one of the most disruptive exercises a business can undertake and often emotions cloud what should be a logical decision’.
Excerpt from: Stair, R., Reynolds, G. & Chesney, T. (2018) Principles of Business information systems, 3rd edition.
Question 1: How does ERP software help reduce dead stock?
Question 2: What challenges might have been faced by the company when choosing software?
Question 3: What challenges might have been faced by the company when implementing the software
Question 4: The case states that ERP implementations are disruptive. State why you think this is so.
Exceptional
90-100
Good
80-89
Fair
70-79
Marginal fail
60-69
Fail
<60
Knowledge
(30%)
Student correctly defines and describes the topics of each at all levels demonstrating a full understanding of the essay theme.
Student defines and describes the topics of each key stage, demonstrating a good understanding of the essay theme (may lack a key aspect).
Student makes a fair attempt at defining and describing the topics however details regarding the business in question are missing.
Student makes an attempt at defining and describing the topics, however important details regarding analysis of the business in question are missing
Student fails to correctly define or describe the key elements of the business in question, demonstrating a lack of understanding of the topic.
Critical evaluation
(30%)
There is very good evidence of critical appraisal of ideas and concepts, the insights are outstanding.
Evidence of critical appraisal of ideas and evaluation is good.
There is some evidence of critical appraisal of ideas and concepts, but the analysis and insights are rudimentary for this level of study.
There is limited evidence of critical appraisal of ideas and concepts and/or those that are offered are weak
There is no critical appraisal of ideas and concepts and/or those that are offered are weak
Application
(30%)
Applies knowledge and skills in familiar contexts with a high degree of effectiveness, providing relevant examples that support points.
Applies knowledge and skills in familiar contexts with considerable effectiveness, providing some relevant examples that make a good attempt at supporting points.
Applies knowledge and skills in familiar contexts with limited effectiveness, few/ irrelevant examples provided.
Applies knowledge, but does so incorrectly with very weak examples.
No application of knowledge. No examples are provided.
Communication
(10%)
Uses conventions, vocabulary, and terminology of the discipline with a high effectiveness.
Uses conventions, vocabulary, and terminology of the discipline with considerable effectiveness.
Uses conventions, vocabulary, and terminology of the discipline with some effectiveness.
Uses conventions, vocabulary, and terminology of the discipline with limited effectiveness.
Work is poorly written and/or difficult to understand.