Company Case Study

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Company Case Study

• Junling Gao
• Lisa Laurila
• Aqdas Malik
• Shehryar Ilahi Piracha
• Jiang Zhu
• 02-12-2002

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Outline for the company case presentation

• Goal of the company case
• The company chosen for the study
• Introduction to the company
• Process model used in the company
• AIS in use in the company
• User questionnaire findings

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Goal of the Company Case

• To study a real world company using a real
  life accounting information system
• which departments or sections of the company
  are affected by the information system and how?
• how the system is implemented?
• what are the major parts of the systems?
• what if any improvements should be considered?
• This is accomplished with this short report
  including
• Background information on the company
• Processes of the company
• AIS in use
• Real life user questionnaire

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Why Alko?

• The largest direct retailer of alcohol in
  Finland
• Plays a central role in the Finnish alcohol
  system
• Offers us an opportunity to study the logistics
  and billing system of the company

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Introduction of Alko

• State-owned company
• The only company noted in the Alcohol Act
• A trading chain of alcoholic beverages
• A monopoly on the retail of alcoholic beverages.
  
• Key figures for the year 2001
• Shops at the end of 2001 284 in 202
  municipalities, complemented by some 138 order
  points
• Brands in shops 1850
• Personnel 2399
• Sales accounted for 51 of all retail
  consumption measured in 100 alcohol.

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Introduction of Alko
Operating environment

• Financial performance
• (2001)
• Sales including Vat and excise duty 1256 m
• Net Sales 1030 m
• Operating profit 33 m
• Profit before extraordinary items 36 m

Products

• Selection process
• Standard range and the sale-to-order range
• Bougth from 400 foreign suppliers and a few
  dozen Finnish producers and importers.
• The shops ordering process is handled almost
  entirely electronically.

• Economic growth in Finland in 2001 slow
• Income levels in consumption potential
• remained strong. Alcoholic beverages
• consumption increases 4.5.
• Alkos status as part of the Finnish
• alcohol system now has wider acceptance

• Services
• 138 order points, offering short delivery
  times for customer
• Particular strictness in sales supervision

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Organization Chart
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Process model used in the company

• Following a transaction through the system
• Replenishment needed
• Order placed
• Order recorded
• Order forwarded to the parties fulfilling
• Order noticed by those fulfilling the order
• Order confirmed and invoiced
• Order delivered
• Delivery reported
• Goods invoiced

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Introduction of the process model in use


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Departments using AIS

• As the AIS we studied is a logistics system for
  the alcohol retailer in Finland, Alko Oy. The
  procurement, purchasing, and materials management
  departments mainly use the system. It also serves
  the finance and control department, enabling them
  to monitor those cycles generating revenue in
  real time. The financial services use the system
  via the reporting tool that is integrated to the
  system.

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Modules in the AIS

• KAP
• Everything the shops need ranging from shift list
  to ordering functions.
• TIVA
• Logistics system
• Eflow
• Invoice handling integrated to TIVA
• Intime
• Covers sales and purchasing, internal and
  external accounting,and budgeting
• Analyste
• Payment transfers between different parties
  involved
• Syncron
• Order replenishment system
• SAS
• Reporting tool integrated to the system

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Main features of the Information System

• The system in place
• The system is a highly customized product
  developed specifically for the alcohol market in
  Finland by Industri Matematic, which is a leading
  supplier of customer-driven supply chain
  management solutions for manufacturers,
  distributors and third-party logistics providers
  of fast-moving, high-volume products. Therefore
  it is very dificult to add on extensions to the
  system or extend teh functionaloty by adding
  additional modules.

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Main features of the Information System

• Users of the system
• The system is used the following departments
  purchasing, materials handling, and control.
• The system is also being used by the shops via
  the integration of the shop end system KAP and
  TIVA.
• In order to communicate with remote interfaces of
  the distributors information systems the system
  makes use of EDI software as middleware.
• Each part of the system has its own system
  administrator who coordinates the cooperation
  between the different parts of the system.

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Main features of the Information System

• The main inputs to the system
• - Order Transactions (Order Requisition Form)
• - Invoices (Bills)

The main output from the system - Bill of
lading - Confirmation faxes and email
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System Architecture

• The system is based on client-server
  architecture. The following diagram shows the
  basic modules comprised in the system

TIVA
EDI
KAP
Distributors IS
Inventory Management Process
Purchase Invoice Process
InTime
Eflow
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Technical issues related to the AIS
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Potential Benefits of the System

• Purchase order management
• Increased productivity and efficiency with
  regards to order processing
• Better usage of available warehouse resources
• Increased utilization of space (in stores
  warehouses)
• Improved delivery reliability
• Increased visibility of in- and out-going flows
• Increased visibility of goods in stock
• Stock management
• Retailers achieve better in-store availability,
  shorter re-order times, and less back-room
  inventory.
• Store in-bound transports are managed with fewer
  emergency orders.
• Suppliers gain increased visibility with better
  turnover.
• Consistently fewer out-of-stocks in Alko retail
  stores
• Backroom inventory minimized, extra selling space
  freed up
• Reduced time and effort in negotiations with
  supplier
• Self-running system with minimal human
  intervention

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Questions for the user questionnaire

• Does TIVA take into account all the things needed
  in your day-to-day work?
• What would you like to see being integrated to
  the TIVA system?
• What are the main advantages and disadvantages of
  the TIVA system?
• What is the usability and availability of TIVA
  like
• Is TIVA a user-friendly system?
• What would change in the system if you could?
• Were you specifically trained to use the system?

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User Questionnaire Findings
Benefits mentioned
Disadvantages

• Language translations sometime illogical
• Lots of tables to be used for different
  operations
• Product information and invoicing information
  separated and spread over several tables

• everything in one place/system