CASES CHAP 13:
1. A customer purchasing a Machina appliance, such as a washing machine, can also purchase
a three-year service contract for an additional fee. The contract provides free repair service and
parts for the specified appliance using an authorized Machina service provider. When a person
with a Machina service contract needs an appliance repaired, such as a washing machine, he or
she calls the Machina Repairs & Parts department to schedule an appointment. The department
makes the appointment and gives the caller the date and approximate time of the appointment.
The repair technician arrives during the designated time frame and diagnoses the problem. If
the problem is caused by a faulty part, the technician either replaces the part if he is carrying
the part with him or orders the replacement part from Machina. If the part is not in stock at
Machina, Machina orders the part and gives the customer an approximate time when the part
will arrive. The part is shipped directly to the customer. After the part has arrived, the customer
must call Machina to schedule a second appointment for a repair technician to replace the
ordered part. This process is very lengthy. It may take two weeks for the first repair visit to
occur, another two weeks to receive the ordered part, and another week for the second repair
visit to occur in which the ordered part is installed.
• Diagram the existing process.
• What is the impact of the existing process on Machina’ operational efficiency and customer
relationships?
• What changes could be made to make this process more efficient? How could information
systems support these changes? Diagram the new improved process.
2. Management at your agricultural chemicals corporation has been dissatisfied with
production planning. Production plans are created using best guesses of demand for each
product, which are based on how much of each product has been ordered in the past. If a
customer places an unexpected order or requests a change to an existing order after it has been
placed, there is no way to adjust production plans. The company may have to tell customers it
can’t fill their orders, or it may run up extra costs maintaining additional inventory to prevent
stock-outs. At the end of each month, orders are totaled and manually keyed into the company’s
production planning system. Data from the past month’s production and inventory systems are
manually entered into the firm’s order management system. Analysts from the sales department
and from the production department analyze the data from their respective systems to determine
what the sales targets and production targets should be for the next month. These estimates are
usually different. The analysts then get together at a high-level planning meeting to revise the
production and sales targets to take into account senior management’s goals for market share,
revenues, and profits. The outcome of the meeting is a finalized production master schedule.
The entire production planning process takes 17 business days to complete. Nine of these days
are required to enter and validate the data. The remaining days are spent developing and
reconciling the production and sales targets and finalizing the production master schedule.
• Draw a diagram of the existing production planning process.
• Analyze the problems this process creates for the company.
• How could an enterprise system solve these problems? In what ways could it lower costs?
Diagram what the production planning process might look like if the company implemented
enterprise software.
