Alpha Omega ElectrOnics
Although the new enterprise resource planning (ERP) system at Alpha Omega Electronics (AOE) has enabled the company to slash its costs associated with purchasing and accounts payable, Linda Spurgeon, AOE’s president, is convinced that additional improvements are needed. She is particularly concerned about issues recently raised by LeRoy Williams, vice president of manufacturing for AOE. LeRoy is upset because several production runs were
delayed at the Wichita plant because components that AOE’s inventory records indicated as being in stock actually were not on hand. There were also delays at the Dayton plant because suppliers either did not deliver components on time or delivered substandard products. Linda asked Elizabeth Venko, the controller, and Ann Brandt, AOE’s vice president of information systems, for some recommendations on how AOE’s new ERP system could help solve these problems. Specifically, she asked Elizabeth and Ann to address the following issues:
1. What must be done to ensure that AOE’s inventory records are current and accurate to avoid unexpected components shortages like those experienced at the Wichita plant?
2. How could the problems at the Dayton plant be avoided in the future? What can be
done to ensure timely delivery of quality components?
3. Is it possible to reduce AOE’s investment in materials inventories?
4. How could the information system provide better information to guide planning and production?
5. How could IT be used to further reengineer expenditure cycle activities? Integrat Ive Case
