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Enterprise systems, which link by computer several functional organizations within a firm, are becoming sources of competitive advantage as companies seek to coordinate cross-functional decisions. A well-implemented enterprise system provides the same invisible hand economic guidance that cost centers do while avoiding the disadvantages -- isolation, zero-sum competition -- of cost centers. With appropriate computing tools, the traditional opposition between sales personnel, who wish to accept every customer order, and operations personnel, who fiercely protect their production schedules, can now be managed in a cost-efficient, integrated manner. In addition to managing large information databases, enterprise systems also allow for integrated management decisions that determine, for example, the effect of buying new equipment on sales quotes as well as on shop floor performance. Clearly a firm would seek to make scheduling and batchsize decisions so as to minimize job costs, since this would increase the profit bottom line.
Unfortunately, many companies are hesitant to invest in large-scale enterprise systems that may require over six months of development time and cost over $100,000 for complete installation and consulting fees. We have found that a spreadsheet-based prototype enterprise system can serve as an effective tool for project engineers trying to sell an enterprise system to cautious managers. In some applications, it is capable of demonstrating the basic functionality of the large-scale system, such as scheduling and job costing, but without a large time and financial investment. This was certainly true for Video Copy Services Inc. (VCS),Atlanta, Ga., a medium-sized video duplication firm with over 20 employees and a thriving continuous improvement program. In response to their need for a system that could integrate management, sales and operational decisions, a team led by the authors developed a prototype decision methodology and implemented it on a personal computer spreadsheet system (Excel for Macintosh, version 4.0). The company received two major benefits from our spreadsheet-based prototype. They are using the prototype system in a limited manner (For example, to provide a more consistent pricing policy, insight into daily job scheduling and one-time studies of labor-force size policy and potential equipment acquisitions), and they have begun the development of a large-scale enterprise system employing our spreadsheets as a major part of the requirements definitions.
ADVANTAGES AND DISADVANTAGES
Our project with VCS...