An evaluation of information system of Alsons Auto Parts Private Limited for effective Supply Chain

Management

A Project report submitted

By

To

Department of Business Administration

In partial fulfillment of
The requirement for
The degree of
MASTER OF BUSINESS ADMINISTRATION

In

Supply Chain Management

This project has been

Accepted by the

FACULTY OF BUSINESS ADMINISTRATION

_________________________________________
Mr. Kashif Shafiq
Advisor
 Executive Summary

Alsons Auto Parts Private Limited is one of the leading manufacturer of automotive products to world leading
automobile brand. The company has Modern age is the Business Process Re-engineering and leading player in
automotive industry and are improving their Supply chain Management process specially information management
system. Companies today are unable to manage their supply chains effectively if they do not improve the
information management system. Infact information is the biggest driver of Supply Chain Management. Such
information system can be significantly important for supply chain profitability. The purpose of this research is to
analyze and evaluate information management system in Alsons Auto Parts Private Limited and provide
recommendations in this regard. The research findings revealed strength, weakness, opportunities and threat with
respect to information system in Alsons Auto Parts Private Limited. Some potential recommendations has provided
in this research which can improve the supply chain management in Alsons Auto Parts Private Limited. Single case
study methodology of qualitative nature was chosen for this research. Primary Data was collected with the help of
semi-structured interviews. Non-probability sampling method was chosen. Interviews were conducted for data
collection. The findings of the research indicated the information system that of Alsons Auto Parts Private Limited
has inadequate system to utilize its information through software which sometimes results in tedious efforts and
misleading information. The company should try to overcome these weaknesses. The company can use its present
information management system to explore opportunities. An increasing number of new companies and existing
competitors with better utilization of information system are becoming a threat.
Table of Contents
..........................................................................................................................................................................1
Executive Summary..........................................................................................................................................2
Chapter 1..........................................................................................................................................................4
Introduction..................................................................................................................................................4
1.1. Background.......................................................................................................................................4
1.2 Project research problem...................................................................................................................4
1.3 Purpose of research project................................................................................................................5
1.4 Research Question.............................................................................................................................5
1.5 Significance of the Project:................................................................................................................6
Chapter 2..........................................................................................................................................................7
Literature Review.........................................................................................................................................7
Chapter 3........................................................................................................................................................15
Planned Research Methodology.................................................................................................................15
3.1 Single case study..............................................................................................................................15
3.2 Approach..........................................................................................................................................15
3.3 Data collection:................................................................................................................................15
3.4 Ethical considerations......................................................................................................................17
3.4 Schedule for Completion.................................................................................................................17
Chapter 4........................................................................................................................................................19
Results & Findings.....................................................................................................................................19
4.1 Analyzing the data...........................................................................................................................19
4.2 Answering the research question.....................................................................................................19
Chapter 5........................................................................................................................................................24
Conclusion, Discussion, Implications, Limitations and Recommendations..............................................24
5.1 Conclusion.......................................................................................................................................24
5.2 Discussion........................................................................................................................................24
5.3 Implications.....................................................................................................................................25
5.4 Limitations.......................................................................................................................................26
5.5 Recommendations............................................................................................................................26
References......................................................................................................................................................28
ATTACH IP 1 DOCUMENT
 Chapter 4

Results & Findings

4.1 Analyzing the data

In this part the data will be analyzed from the findings of the interview which is done by the researcher and ensure

the findings that are enough to support the research.

4.2 Answering the research question

Current Information Management System of Alsons Auto Parts Private Limited

Alsons Auto Parts Private Limited is one of the leading companies in Auto sector with customers from both Four

Wheelers and Two Wheelers. Customer includes almost all automobile Original Equipment Manufacturer that are

producing parts currently in Pakistan. The vision statement of the company states that it wants to be part of global

Original Equipment Manufacturer supply chain with producing quality products. The objectives how ever need to be

laid down in order to meet such an enthusiastic vision. Company define its objectives as, creating value chain,

partners with progressive organizations with the focus to create value, laid down procedures and Standard Operating

Procedures to have best in class organization, maintain quality as a competitive advantage, and to manage

sophisticated automotive system through the acquisition of latest technology. For enthusiastic vision statement

where organization believes that it wants to be part of global Original Equipment Manufacturer supply chain, it

needs to have supply chain as its core competency. A session of interviews was conducted at Alsons Auto Parts

Private Limited to analyze how the information system works in order to achieve effective supply chain

management.

With the discussion regarding what information system is prevailing in the company it was revealed that software

with the name of Exact Alliance which is a tool only related to supply chain function is used in the organization.

There are more than 2500 Stock Keeping Units that company has at the moment. Inventory management is not that

easy task since inflow and outflow of the material is done on daily basis. More than hundred thousand parts or items

goes out of warehouse and are utilized in production centers. There are more than 700 transactions that are passed in
system and controlling of which is not favorable for the company. The management staffs that control the flow of

material and information are basically six people. This information system basically has the information related to

items with ordering rules associated to each of them. These ordering rules contain safety stock, order quantity,

minimum order quantity, lead time, yield factor, order multiple etc. Supply Chain management team basically used

all this information for the purpose of ordering their suppliers and internal customers that is production centers.

Management of Alsons Auto Parts is focused on the information related to inventory management and its inventory

consumptions.

Strength and Weaknesses of Information System of Alsons Auto Part Private Limited

Company’s competitiveness is based hugely on the effective use of the information technologies and information

systems especially. Information systems serve the main purpose of providing the right information to the right

people at the right time. This information is used to store, manipulate and distribute the information from the

collected data to the appropriate persons when required. Alsons Auto Parts information users are its supply chain

manager and senior management. Even though the company is blessed with a software for MRP, it still do

information reporting on Excel based sheets which are more time consuming and tedious to make and update. All

kind of information that are shared with the management are worked and done on Microsoft Excel which spoils the

whole point of having dedicated information system software.

With much larger focus on inventory management which is inventory flow within the organization, company has

much control over the flow of inventory. Company monitor this information by daily observing the transactions that

is put in the system via the help of monitoring team. The software that company is using is licensed from a British

Company. And it is one of the cheapest software available out there. Therefore having an MRP tool available for

cheap price is advantage for the company.

Opportunities and Threats associated with Information System of Alsons Auto Parts Private Limited

The information system has some constraints as per the requirement of the company. Company wants to see its

inventory which is work in progress but it does not provide the result in a correct manner. Since inventory is

consumed for production when the inventory is issued to them therefore this system like any other system treats it
like an expense. Though there are way around to calculate this requirement but Exact Alliance software does not

give results in correct manner.

One of the problems that Alsons Auto Parts Private Limited faces is that they don’t have good recruits for the IT

section. The human resource available there is only good for the troubleshooting. There is no expertise available in

the company that can work on report structure (example; crystal report, SQL etc.) that can take the data from the

system and convert it into something meaningful for the stakeholders. Most of the reports that are used are either

made by the pervious experts or they use default reports that are pre developed. This lack of available reports and

abundance of information available in the system put Alsons Auto Part behind even in the presence of good

management staff.

Improvement plan of Information System of Alsons Auto Parts Private Limited

After interviewing all relevant stakeholders in Alsons Auto Parts we are able to conclude that first thing that

company needs to focus is on its human resource. Organization is in serious deficit of people who can take care and

develop IT system because by just troubleshooting the daily routine problems will not help its center to grow by any

means. The importance of such person must be recognized by the management if they want to take full advantage of

the data base and information available to them. Such person or team can help the organization develop and designs

reporting structure as per the management need. Because having information available only leads to having to have

proper decision making.

Alsons Auto Parts also faces the problem from the current software where they overstate or understate the inventory

value because of misleading information from their Work in Progress report. Inventory on production floor is always

a question mark for the management. Because there is always variation what report states and what is actually there

on production floor. One of the reasons may be the actual variance that is there on production floor but there is a

proven reason to doubt the calculations that report of work in progress shows. For company like Alsons Auto Parts

consumption of raw material is a matter of concern. Company closely monitors its planned consumption and actual

consumption. But again this information is monitored by tedious working on Excel software whereas it could be

easily made via a report that reflects the data from the system.
 Chapter 5

Conclusion, Discussion, Implications, Limitations and Recommendations

5.1 Conclusion

With the information that is gathered in pervious chapter, we can conclude that Alsons Auto Parts Private Limited

even though having a module of Enterprise Resource Planner for its inventory and Material resource planning, face

problems because of software limitation and human capital who can make those information fruitful and useful.

With the current reputation of one of the most leading business partner for Automobile Original Equipment

Manufacturer, Alsons Auto Parts Private Limited also deals with the non-automotive companies. Because of this

diversified customer mix Alsons Auto Parts needs to have its resources in the right place. Since, there are different

software out available in market that can provide Alsons with what they need therefore this could be fix with having

the right tools. With the perfect suited software for information management Alsons Auto Parts can gain confidence

over their data and it can help them in making the right decisions.

5.2 Discussion

Alsons Auto Parts Private Limited is a growing organization which has several challenges to face but so far the

progress is better. Company is focused to improve its infrastructure as far as it concerns with the management of

information. The current software that is used for information management is favourable as per the previous needs

of the company but it needs to grow its vision to excel in future and compete among the fierce competition.

Company is using information for some decision making. They have adequate data to make raw data into

meaningful information.

The reporting system needs to get focused of initially. Lots of men hours are invested on something that can be easy

produced from any good software available in the market. Many reports that are presented to the management are

made on Excel software. These reports takes tedious efforts which can be invested on some decision making amd

other matters. Alsons Auto Parts Private Limited has enough data that can provide them with better results.

One mose concerning thing that is observed in the company is that there are very few computer literate people

working. Specially the information technology department lacks some experienced man power who can work on
such reports. The human capital development strategy is also lacking from the company objective. Company needs

to realize these shortcomings to make sure they can better utilize the available resources.

Managerial point of view company has some good people working but they are only good as the information is

presented to them. Therefore it was indicated by the company as well that they would focus on developing their

current human capital as well as they might switch to new software that can cater the needs of the management and

to make them focus on improving their overall supply chain decision making.

5.3 Implications

The present information management system looks to be below par for what company is looking for its

accomplishment of lean supply chain management and to provide results in just in time. These research open doors

for other automotive manufacturers to use information management tool for achievement of right information at the

right time for their supply chain management and to provide results in just in time.

5.4 Limitations

One thinkable limitation is that we have interviewed the Alsons Auto Parts Private Limited employees, supplier,

warehouse manager & supply chain manager however; thorough statement of research is required of their

information system management. The company’s core business is related to manufacturing and the company

officials only identifies the way they are currently managing information system for its supply chain. They haven’t

presented or announced their future plans as it is confidential. The technical information in this business and

working of software and vendors of their information management does not exposed also.

5.5 Recommendations

With the focus of manufacturing concerns on the information system that give them competitive edge by having
right information at the right time, Alsons Auto Parts are not far from achieving it. Although, company seems to
have limitations and constraints at the moment but with correct strategy that can be mitigated. As indicated earlier in
the research that company needs to develop its infrastructure of information management team who can provide
supply chain manager, top management and the teams with information that they require for decision making.
Instead of using tools like Microsoft Excel, company can focus in achieving with having the correct software and the
correct information management team. Their supply chain department has adequate knowledge but the bridge is
missing for converting raw data into meaningful information. By doing so they will also be reducing their cost of
producing information by tedious means and also they would be able to substitute the anchor of current software
with the one designed as per the requirement of the company.