Do Women Lust

Do Women Lust? I think that all women lust because every female has a hormone that comes out when they see a hot guy. They begin to start thinking about the guy and what he looks like with his clothes off. Some women even go as far as telling their friend that’s around them what they would do to the dude. Most people don’t really realize or notice when a lady lust after something. Most females don’t show there expressions on their face but on the inside her mind is running wild about the person whether it’s a male or another female.Most women won’t typically show that their lusting like men try to do. Sometimes the ladies eyes can tell you if they might be lusting or see a man that has caught their eye and they will probably watch them until they leave their sight. Women thoughts are just like men because they have their thoughts and ideas of how they can please the guy. Women know exactly how to turn on a man. They know how to turn them on by manip ulating this hardwired â€Å"quirk† that absolves them of the need to actually know anything about a woman.This means that the women start acting sexy but acting distant at the same time. They do things that they know will make the man want to see what they really can do once they are able to take the woman’s clothes. The women know what they be doing when the start teasing the guy by slowly taking off her clothes and a sexy dance with it. The women know most of the times that they don’t really want to have sex with the man so she will play with his emotions until she gets tired of doing that or until she take it too far and wants to have sex for real with him.

Del monte VPN architecture suggestion for assignment

Del Monte Organization Structure Diagram. Source: Dolente. Co. Z The business halogens: Provide role-based access to network resources for employees and business partners Reduce administrative and network costs Provide high-confidentiality for business information on the network Network requirements: Flexible and adaptive security appliance provides a variety of secure remote access Pre-configured telethon solution provides convenient voice and data networking for home workers VPN solution integrates with existing network systems to enforce access policies Del Monte Diagram VPN protocols and technologies VPN generally can handle three of these scenarios such as Remote access network, ranch office connection network, also business partner/supplier network or can be called as Extranet. Some of the VPN technologies are MILS, Pipes and GREG. Pipes is an evolve form from the IPPP development and is shorted of being finalized by the IETF. It is an open architecture for IP packet encryption and authentication, thus it is located in the network layer. One of the VPN authentications that have been around for some time is Generic Routing Encapsulation (GREG). â€Å"It was first developed by Cisco as a mean to carry other routed protocols across a predominantly IP network.Some outwork administrators tried to reduce the administrative overhead in the core of their networks by removing all protocols except IP as a transport. † (Pearson, n. D. ) Multiprocessor Label Switching (MILS) is a standard-based technology used to speed up the delivery of network packets over multiple protocols such as ‘P, ATM and Frame Relay network protocols. It would allow us some significant improvements, not the least of which was an increase in speed. Perhaps the most important to us at the time, though, was that each branch could directly connect to both WHQL locations without the need for an additional PVC. It also allows every branch to communicate directly with every other branc h without traversing the WHQL locations.This is important as if we were looking to implement a Poi solution. VPN service provider must have a network infrastructure that can support of integrating remote access directly into an MILS VPN network in order for it to provide a good scalable and complete end-to-end VPN service. The customers can be Sips or large enterprises that want to provide access to remote users but avoid the need for maintaining their own separate and expensive access network. Virtual Private Network (VPN) uses hared public telecoms infrastructure, such as the internet, to provide secure access to remote offices and users in a cheaper way than an owned or leased line.VPN are secure because they use tunneling protocols and procedures such as Layer 2 Tunneling Protocol (LOTT) and Point-to-Point Tunneling Protocol (PPTP). For this case in this assignment, I would suggest Pipes as the VPN technologies and authentication. This is the same as a basic concept that is bein g introduced by Security Association. The Job of AS is to make sure two or more entities secure when they are communicating with each other. Pipes itself has many options in providing security which includes encryption, integrity, and authenticity. For determining the Pipes security in details, both of Pipes peers must determine exactly which algorithm to use (e. : DES or DES for encryption, MAD or SHAH for integrity). Then continue with exchanging and sharing session keys. â€Å"An Pipes transform in Cisco ISO specifies either an AH or an ESP. protocol and its corresponding algorithms and mode. The Cisco Secure VPN Client uses the concept of security policies to specify the same parameters. † (Cisco Press, n. D. ) Network Solutions for Del Monte Major and required equipment and their significance Some important equipment that needed by the office are: Cisco AS 5500 series Adaptive Security Appliance Cisco MAC Appliance The Cisco MAC Appliance is a turnkey solution that conde nses the four MAC functions into one appliance.Some of MAC components are: Cisco NAS, Cisco NAME, Cisco ANA and Rule-set updates. MAC helps maintain network stability by providing authentication and authorization, posture assessment, quarantining of noncompliance systems and remediation of noncompliance systems. Cisco Secure ACS Cisco AS 5500 Series Adaptive Security Appliance is the best suit for Del Monte. This series provide advance firewall, compatible with the VPN architecture, Intrusion Prevention and content security all in single platform. It is also an industry-leading secure mobility technology for an organization. With its Suspect VPN edition, Del Monte offers employees a wide range of remote access options.An offside worker can set up a clientà ¨les VPN connection using a web browser without pre-installed software. And also, SSL technology that delivers secured access to network by establishing an encrypted tunnel across the internet. Some of the specific details of Cis co AS sass's features: Cisco Easy VPN This feature centralized the management of VPN deployments and helps reduce their complexity. Centralized the management is done by managing Pipes policies and push to the client device by the server. It also allows a remote end user to communicate using IP security with any Cisco ISO VPN gateway. VPN authentication The authentication is done with Cisco Secure Access Control Server (ACS).ACS is an access policy control platform that helps you comply with growing regulatory and corporate requirements. It is utilized for wireless infrastructure. This ACS helps improve productivity and contain costs. ACS works with VPN and other remote outwork access devices to enforce access policies. It also supports administrators' authentications, authorizes commands and provides an audit trail. Cisco Anecdote VPN Client LANA-like users can use it for the network connection optimization in a full tunnel client mode on a variety of end-user platforms. Customizab le SSL VPN and Pipes Services for Any Deployment Scenario Depending on the series of the AS 5500, PIPS SSP is built-in to help preventing the intrusion.The Cisco AS 5500 Series helps businesses increase effectiveness and efficiency in protecting their networks and applications while delivering exceptional investment retention through the Market-proven security capabilities, Extensible integrated service architecture, Reduced-deployment and operations costs also Comprehensive management interface. Company's ERP and CRM Cisco VPN actually integrates smoothly with Del Mote's existing network to give employees access only to the resources that they need. This meaner that VPN will make sure only the authorizes users can access to the certain parts of the network and company resources. ERP integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise-wide sessions by viewing enterprise-wide information on all business ope rations.Enterprise System Automate business process ERP systems collect data from across an organization and correlate the data generating an enterprise-wide view to help run the business. Measuring ERP success There are several different departments in the company. Example, sales representative might need to access to Del Mote's data warehouse system (CRM) application to track a shipment. While finance organization need to access to ERP system, file sharing and administrative tools from their portal. So Cisco VPN makes ere that each department can only access to their own but not others. And yet IT professional might need access to everything on the network for troubleshooting or monitoring.Security To provide additional network security for remote employees, Del Monte can use the Cisco MAC appliance to enforce security policy compliance. It identifies the security policies before permitting those devices access to the network. Cisco MAC appliance is a network admission control tha t is designed by Cisco to produce a secure and clean network environment. Two Pipes Peers Using Active Directory-based Pipes Policy, Source: techno. Microsoft. Mom Pipes packet filtering Pipes has an ability to provide limited firewall capabilities for end systems by performing host-based packet filtering. It also can be configured to permit or block specific types of incase IP traffic based on source and destination address combinations and specific protocols and specific ports.While the security can be strengthen by using Pipes packet filtering to control exactly the type of communication that is allowed between systems. Filtering Packets by Using Pipes, Source: techno. Microsoft. Com Types of attacks Some of the possible attacks that can happen to VPN are: Brute force attacks and cautionary attacks. STEP attacks An STEP attack typically involves the creation of bogus root bridge. This can be accomplished using available software from the internet such as broccoli or step- packet. In this attack, Buds sent by the attacking host announce a lower bridge priority in an attempt to be elected as the root bridge, then the topology change Buds to force spanning-tree recalculations.If successful, the attacking host becomes the root bridge and sees a variety of frames that otherwise are not accessible. STEP attacks Brute force attack A cryptanalytic type of attack that is used against any encrypted data to guess the seer's surname and password. It is simply because this attack has a dictionary of commonly used passwords and cycle through those words until it gains access to the account. Brute force attack takes different variety times to complete as it is depending on the number of encryption size (64-bit, 128-bit or 256-bit). The higher number of the encryption, the longer time it is needed by Brute force to accomplish its attack.Dictionary attack A technique which is used by hacker to determine the decryption key of the authentication mechanism by trying it repeate dly until the real possibility is come UT. Basically, it is acting like a person who searches a keyword from a dictionary. Yet this attack only tries the best possibilities that are most likely to success. References: J. Charged and J. Pacer, MILS and VPN Architectures, 1st deed. Indianapolis, IN: Cisco System, Inc. , 2003. G. A. Donahue, Network Warrior, 2nd deed. Soapstone, CA: Reilly Media, 2011. J. Afraid and O. Santos, Cisco AS, 2nd deed. Indianapolis, IN: Cisco System, Inc. , 2010. O. Santos, End-to-end network security, USA-landslips, IN: Cisco System, Inc. , 2008. Pipes security. Retrieved from http://techno. Microsoft. Com

Online Reservation for Catering Services Essay

The Apple II became an instant success when released in 1977 with its printed circuit motherboard, switching power supply, keyboard, case assembly, manual, game paddles, A/C powercord, and cassette tape with the computer game â€Å"Breakout.† When hooked up to a color television set, the Apple II produced brilliant color graphics. The Kenbak-1, the first personal computer, advertised for $750 in Scientific American. Designed by John V. Blankenbaker using standard medium-scale and small-scale integrated circuits, the Kenbak-1 relied on switches for input and lights for output from its 256-byte memory. In 1973, after selling only 40 machines, Kenbak Corp. closed its doors. The Commodore PET (Personal Electronic Transactor) — the first of several personal computers released in 1977 — came fully assembled and was straightforward to operate, with either 4 or 8 kilobytes of memory, two built-in cassette drives, and a membrane â€Å"chiclet† keyboard. The abacus was an early aid for mathematical computations. Its only value is that it aids the memory of the human performing the calculation. A skilled abacus operator can work on addition and subtraction problems at the speed of a person equipped with a hand calculator (multiplication and division are slower). The abacus is often wrongly attributed to China. In fact, the oldest surviving abacus was used in 300 B.C. by the Babylonians. The abacus is still in use today, principally in the far east. A modern abacus consists of rings that slide over rods, but the older one pictured below dates from the time when pebbles were used for counting (the word â€Å"calculus† comes from the Latin word for pebble).

International Security Essay Example | Topics and Well Written Essays - 3000 words

International Security - Essay Example Protection is also provided by PMCs nationally and internationally. They also give their services to supplement those services given by armed forces. They provide these services in places where there are no security details that are personal are involved. This means that the state actor is not involved in this case. 1 The PMCs work in conjunction with states. This is in line with providing training in military matters and national defence issues. They tend to be located where the conflict intensity is quite low. In these places it is usually risky to deploy armed forces to them. This is in terms of economics, diplomatic and politics. At Guantamano Bay, they help in setting up camps for detention. The Afghani president has benefited by getting bodyguards supplied to him from the PMCs. Colombia has in the past been given helicopter gunships which assisted in destroying coca crops. George H. W. Bush really influenced the privatization of these enterprises. The PMCs can be grouped generally to mean contractors of defence. Tactical skills and specialised operations are provided by PMCs to their personnel. Combat experience is also included in this. This is unlike what the other contactors of defence do. The PMCs provide their services to state forces, business corporations and non-governmental organizations that are internationally based. The difference between PMCs and defence contractors is not recognized by (GCIII) The Geneva Convention. They term them as supply contractors. They are termed as war prisoners when issued with identity card that is valid. They are termed as mercenary when they engage in combat. Demand of private military companies There is a likely hood that there will be an increase in the demand for the private military companies. Governments usually employ the private military companies to help solve conflicts. This has been done by Angola. These companies are contracted to give logistical help. Most of the states that contract the private military companies cannot afford to sustain big militaries. For example private military companies were employed to do recruitment in Balkans. International organisations also highly demand the services of private military companies. The PMCs are also contracted or employed by the UN to provide security. Once a private military company is reputable and strong, it normally has very high demand. The UN usually compares the costs incurred in having armed forces and that of employing the PMCs. It is usually very cheaper to employ the PMCs than to have the armed forces in the nation. It is estimated that there are many private military companies that operating in Africa. This is even up to 100 private military companies in operation. The African countries that have benefited from this include Indonesia and Colombia. The PMCs are mostly contracted by countries that are in very remote areas. Such places are usually very dangerous. The PMCs are mostly from the UK and the United States. Recruitment Many private military corporations are recently attracting people and the entire personnel from Special Forces. This is because the private military companies pay the employees well compared to the salaries paid by Special Forces.2 UK private military companies There are many private military companies in the United Kingdom. They include Adson Holdings, registered in Guernsey. Aegis Defence Services, AKE Group and

The Effect of Social Media on the Lives of People Essay

The Effect of Social Media on the Lives of People - Essay Example Qualitative interviews have been defined and categorized in many ways. The three most common types of such interviews are structured, semi-structured and unstructured interviews (Merriam, 2009). Structured interviews more often result in penetrating quantitative data and so the focus of this study would be on either semi-structured or unstructured interview. Unstructured interviews are concerned with collecting observational data leaving semi-structured interviews as the only reliable source for qualitative research. Semresulttured interviews are focused around already constructed open-ended questions (Tracy, 2013). More questions could follow relating o the previous one, and the whole perspective could be brought into light. Semi structured interview would suit the type of research that is being conducted in this study. As the topic is ‘The effect of social media on the lives of people,’ it would always be a better idea to gain a deep insight into how people have changed the way they communicate and live in the present generation. Semi structured interview would give the interviewee a chance to know just the right and detailed response instead of just a yes or no for an answer. It would help to know the ‘why this and why that’ factor in all the aspects relating to social media (Tracy, 2013). The interviewee selected must be a student who finds ample time to surf over the Internet. He must be a socially accepted and friendly person who spends 3 hours or more over social media websites like Facebook and Twitter. Only a person who spends more time on social media website would be familiar with its usage and would be able to explain how it is changing his life and the lives of people around him.

Stakeholder Analysis for the Democratic-Republican National Convention Essay

Stakeholder Analysis for the Democratic-Republican National Convention (DRNC) - Essay Example Apart from presenting information on the strategy that the department will employ, it will also come up with recommendations that will assist the department as it seeks to satisfy the needs of its stakeholders. The Miami-Dade PD is a county police department that serves Miami-Dade County which includes some of the unincorporated area in Florida even though they possess light mutual aid arrangements with the incorporated municipalities like the Miami city PD. This police department represents the largest department in the South-eastern part of the country with an estimated workforce of about five thousand workers. People still refer to this department by its previous title which is Metro-Dade Police or a more simple term Metro. Identification officers who work for the Miami-Dade PD can be done easily through their brown coloured uniforms while driving green and white livery vehicles. The department runs nine district locations all over the County as well as a number of dedicated bureaus. Presently, J D Patterson who replaced James Loftus is the department’s director and the department’s head offices are situated in Doral, Florida. The mission statement of the MDPD states that the department seeks to promote a secure and safe environment, which is not riddled by crime as well as the fear of crime. It also seeks to maintain order while providing traffic that flows expeditiously in the country. The main values associated with this police department are integrity, service and respect, along with fairness. On the other hand, the MDPD’s vision is to become the ideal law enforcement agency in the country through combining strategic planning with the concerns of the community (Miami- Dade Services, 2014). In this analysis, internal and external stakeholders with an influence on the organization and are affected by the decisions that are associated with the department have been identified. The internal

International HRM (comparing between 2 cantries) Essay

International HRM (comparing between 2 cantries) - Essay Example Another determinant of human resources function is the culture of the nation. Culture encompasses language, norms, customs and beliefs. Policy development needs to take into consideration the values of the country such as individualism or collectivism. Many in the field of HRM argue that the function depends on organizational structure while proponents believe it is dependent on national culture. This paper presents a critique of the significance of national culture as an explanation for the difference in HRM practice between Australia and Korea based on individualism and uncertainty avoidance, which are contrasting national approaches to HRM. National culture is a significant determinant of the nature of workplace relations and the human resource management practices. In Australia, the culture of individualism is deeply rooted and people usually focus on personal accomplishments rather than working to accomplish tasks as a group. A person ascends the management hierarchy through working hard to become the leader in terms of performance. This is different in Korea where individualism is minimal, and people tend to focus on teamwork to accomplish their workplace tasks. Holbeche (2001) suggests that the determinant of the level of individualism is the economic well being of a country. This suggestion is supported by Vance & Paik (2006) who view teamwork as the response to the need for people sharing a common problem trying to establish a solution. An example is when a country is confronted by a disaster. The government and stakeholders as well as individuals cooperate to ensure that they acquire the desired strength to cope with the disaster. When it is solved, people find no reason to remain together and each party attends to other matters independently. In essence, Australia is one of the countries that have a thriving economy and therefore people may

Theoritical Questions Assignment Example | Topics and Well Written Essays - 1250 words

Theoritical Questions - Assignment Example The key determinants to be considered in valuing convertible bonds are, the coupon rate offered, the time when the convertibility option can be exercised and the exercise price of the stock (Choudhry, 359). A bond warrant gives the holder of the instrument the right to â€Å"call† or â€Å"put† the bond whenever it wants. Moreover, unlike a convertible bond-wherein the underlying debt is repaid in cash or an equivalent amount of company stock--the warrant contract component of a warrant-bond can be sold separately to third parties while the original investor retains the straight bond component (Choudhry, 396). Dividends are usually paid by corporations after the taxes have been deducted from the overall earnings of the company. However, in many countries, the investors may get taxed on the dividend payments that they receive. Therefore, the companies may plough back some of the earnings to avoid these taxes. Taxes decrease the cost of capital as the tax benefit comes with respect to coupon payments to bond holders. It helps to decrease the overall weighted average cost of debt (Ehrhardt and Brigham, 519). Rationality is the key towards investing in the financial markets. Most investors are more often rational in their behavior while investing than not. However, there are many instances in which irrational behavior and repeated errors in judgment have been documented or witnessed in the financial markets. Irrational behavior can be exploited by finding out the overvalued and undervalued stocks, and investing accordingly. Trade credits, Bank over Drafts and Commercial Papers are few examples of short term financing sources that can be used by companies to pay salaries, coupon payments or other miscellaneous expenses (Shim and Siegel, 133). Depending too much on some of these short term sources finance often give a wrong signal and may

Marketing report Essay Example | Topics and Well Written Essays - 1000 words

Marketing report - Essay Example In this kind of distributorship arrangement, the company cannot be an importer nor act as a commercial agent unless it is 100% Egyptian owned and managed. Second option is the Limited Liability Company wherein company has no limit on the percentage of ownership, provided that there is at least one or more Egyptian managers in the company, there are at least two shareholders or partners in the company and the capital should not be less than $9,000. Again, in this set up, the company cannot be an importer nor act as a commercial agent. Third option is a joint stock company that requires 49% of shares of stocks to be offered to Egyptians upon formation. Eventually, foreign stockholders may own 100% of the company provided majority of the board of directors is Egyptians and capitalization should not be lower than LE 250,000, with at least three Egyptian shareholders. Again, this type of distributorship may not import or act as commercial agent unless it is 100% Egyptian owned and managed . Another alternative is for foreign firms to register and sell direct to Egyptian consumers. They can do this by establishing their own subsidiary in Egypt or put up its own manufacturing assembly operation in Egypt. Foreign firms can use free zones areas or bonded warehouses to store goods and hire their own employees to sell their own goods. Foreign firms can also rely on Egyptian companies for wholesale and retail distribution who are specialized on wholesale and retail distribution. Besides, according to USCS (March 2011) Egyptian commercial agents are required for foreign firms to bid on most government tenders. Statistics from USCS provides the following data: As of 2007, there are 5,800 registered importers in Egypt, 9,600 exporters, 4,330 commercial agents representing 106,200 firms and 4,250 factories licensed to import components. Most of these firms are privately owned, but the government sector includes some 279 separate companies affiliated with 16 holding companies; n early 30 military factories that also make civilian products; and 1,500 companies owned by one of the 26 provincial authorities. Â   Trade Guide for Egypt considers U.S., Germany, UK, France and Italy as main suppliers. An important regulation that pertains to export regulations for foodstuffs is the quality inspection upon entrance to Egypt. Packaged items must be labeled in Arabic and should contain the name of the product, its trademark, its bran name, the product’s technical data and mode of operation, international marks and information that should be observed during transportation and handling, country of origin, production and expiry dates and manufacturer’s name. Exporters should also observe the international shipping and handling symbols, but should specify any special handling instructions in English and in Arabic. One channel of distribution that is getting to be popular in the internet is the B2B websites. B2B is the exchange of products and services or i nformation between business rather than business to consumers. Growth of B2B is estimated to be worth $7.29 trillion dollars in 2004 (Jones, Paula, 2000). Retailers and businesses in Egypt has its own B2B websites wherein business can view offers to buy, post offer to sell, view company directories, request shipping quotations and other details for trading business (Tradenetwork.com). B2B transactions have made trade faster and a reliable means of distribution. 2.

Causes of Ww1 Essay Example for Free

Causes of Ww1 Essay * WW1 is known as the great war * There were preexisting tensions between France and Germany * 1 of the main causes of WW1 Nationalism, Nationalism is defined as the desire of people with similar cultures to have their own independent countries it is identified by intense devotion to one’s culture or nation. Do not confuse nationalism with patriotism. * Militarism, Militarism means the development of armed forces and using them as a tool of diplomacy * 1914 protest broke out in bosnia archduke franz Ferdinand was shot and killed * Alliances were another cause of WW1. Serbia went to Russia Austria went to Germany Russia ran to france then france went to Britain and the U.S was neutral * Germany used unrestricted submarine warfare the Lusitania was sunk by submarine over 1000 was killed, 128 americans were killed and the U.S became involved in WW1. * Germany tried to stop the U.S by sending a letter to Mexico to have a war with the U.S * April 2 1917 Congress declared war on Germany * 2 million American men lept on the continent confident fresh and ready to attack the german army November 11 1918 a cease fire was signed * Versailles treaty said nine new nations were established in Europe including Poland Czechoslovakia and Yugoslavia * Germany was not aloud to have an army * Germany had to give Alsace and Lorraine back to france and pay them a huge amount of reperations money paid to repair war damage * The war guilt clause forced Germany to admit that WW1 was their fault and only their fault humiliating and angering the german people. * 22 million people were killed * The war cost the nations involed and estimated 338 billion * An entire generation of europian young men were dead or destroyed * An angry and humiliated Germany would start WW2 about 20 years later * The league of nations was started as a world police force it failed * With men gone woman took factory jobs In return for their contribution they would receive the right to vote in 1920 * America became the dominant industrial power of the world * Contributed to the movement of African Americans in the North the great migration * Intrnsified anti immigrant and anti communist sentiments among some americans * Newtechnology * Machine guns * Tanks * Gas warfare * Poison gas

The Business Environment And Strategic Analysis Marketing Essay

The Business Environment And Strategic Analysis Marketing Essay ITC is one of Indias foremost private sector companies with a market capitalization of nearly US $ 19 billion and a turnover of over US $ 5 billion.* ITC is rated among the Worlds Best Big Companies, Asias Fab 50 and the Worlds Most Reputable Companies by Forbes magazine, among Indias Most Respected Companies by Business World and among Indias Most Valuable Companies by Business Today. ITC ranks among Indias `10 Most Valuable (Company) Brands. SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities and Threats that are strategic factors for a specific company. SWOT analysis should not only result in the identification of a companys distinctive competencies, the particular capabilities and resources that a firm possess but also in the identification of opportunities that the firm is currently able to take advantage of due to lack of appropriate resources. SWOT analysis is an analytical technique used in strategic management BCG MATRIX The Boston Consulting Group (BCG) reflects the companys portfolio of investments. Each of the companys product lines are plotted in a matrix according to its growth rate of the industry and its relative market share The BCG matrix results in four types of decisions they are Question marks, Stars, Cash Cows and Dogs. PEST ANALYSIS Pest term is used to describe macro environmental factors namely political (legal), economic, social and technological. It helps the firm in understanding market growth or decline, its market position, its potential and its direction PORTERS 5 FORCES MODEL Michael Porters famous Five Forces of Competitive Position model provides a simple perspective for assessing and analyzing the competitive strength and position of a corporation or business organization ITC- INTRODUCTION ITC is one of Indias foremost private sector companies with a market capitalization of over US $ 19 billion and a turnover of US $ 5 billion. Rated among the Worlds Best Big Companies, Asias Fab 50 and the Worlds Most Reputable Companies by Forbes magazine, among Indias Most Respected Companies by Business World and among Indias Most Valuable Companies by Business Today, ITC ranks third in pre-tax profit among Indias private sector corporations. As one of Indias most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y.C. Deveshwar calls this source of inspiration a commitment beyond the market. In his own words: ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part. HISTORY EVOLUTION The story of the Imperial Tobacco Company of India Ltd. extraordinarily though it may sound, starts long before the company was established, or even thought of. It starts not in India, but in the US. It was started by James Buchaman Duke in 1881. W. Duke Sons Company was doing a flourishing business around 1889 merged with other four players in the market and set up the American Tobacco Company ( ATC ). ATC looked at the British market along with Imperial Tobacco Company Ltd. floated a new company, the British American Tobacco Company Ltd.( BAT ) which was to handle trade outside USA and Britain. With India having centuries old tradition of tobacco, BAT looked into this market. ITC was incorporated on August 24, 1910 under the name of Imperial Tobacco Company of India Limited. Its beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Companys existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into Indias future. The Companys headquarter building, Virginia House, which came up on that plot of land two years later, has become Kolkatas most venerated landmarks. The Companys ownership progressively indianised, and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Companys multi-business portfolio encompassing a wide range of businesses Cigarettes Tobacco, Hotels, Information Technology, Packaging, Paperboards Specialty Papers, Agri-Exports, Foods, Lifestyle Retailing and Greeting Gifting Stationery the full stops in the Companys name were removed effective September 18, 2001. The Company now stands rechristened ITC Limited. ITC- MISSION STATEMENT An organizations mission is the purpose or reason for the organizations existence. it tells what the company is providing for the society. A well conceived mission statement defines the fundamental, unique purpose that sets the company apart from other firms of its type and identifies the scope of the companys operations in terms of product, services offered and market served. SUSTAIN ITCS AS ONE OF INDIAS MOST VALUABLE CORPORATIONS THROUGH WORLD CLASS PERFOMANCE, CREATING GROWING VALUE FOR THE INDIAN ECONOMY AND THE COMPANYS STAKEHOLDERS ITC-VISION A vision statement describes wat the organization would like to become in the future. It helps in creating a sense of direction for the company and its employees and leads them towards attaining the goals. TO ENHANCE THE WEALYH GENERATING CAPABILITY OF THE ENTERPRISE IN A GLOBALISING ENVIRONMENT DELIVERING SUPERIOR AND SUSTAINABLE STAKEHOLDER VALUE ITC LEADERSHIP- CORPORATE GOVERNANCE The governance framework determines whom the organization is there to serve and how the purposes and priorities of the organization should be decided. It is concerned with both the functioning of the organization and the distribution of power among different stake holders. Governance chain- the governance chain identifies all those groups that have a legitimate influence on the organizations purposes. There are likely to be several conflicts of interest both between different stake holder groups and for individual managers of directors as they try to balance these various interests. The role of the governing bodies- the primary statutory responsibility of the governing body of an organization is to ensure that the organization actually fulfills the wishes and purposes of the owners. THE ITC WAY ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, ITC believes that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations. ITC has won the National Award for Excellence in Corporate Governance 2006 from the Institute of Company Secretaries of India. Leadership within ITC is exercised at three levels. The board of directors Corporate management committee Divisional management committee The Board of Directors at the apex, as trustee of shareholders, carries the responsibility for strategic supervision of the Company. The strategic management of the Company rests with the Corporate Management Committee comprising the whole time Directors and members drawn from senior management. The executive management of each business division is vested with the Divisional Management Committee (DMC), headed by the Chief Executive. Each DMC is responsible for and totally focused on the management of its assigned business. This three-tiered interlinked leadership process creates a wholesome balance between the need for focus and executive freedom, and the need for supervision and control. Since the commencement of the liberalization process, Indias economic scenario has begun to alter radically. Globalization will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance. Equally, in the resu ltant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors. ITCs governance policy recognizes the challenge of this new business reality in India. CORE PRINCIPLES ITCs Corporate Governance initiative is based on two core principles: Management must have the executive freedom to drive the enterprise forward without undue restraints This freedom of management should be exercised within a framework of effective accountability ITC believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a mechanism of checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations. CORNERSTONES From the above definition and core principles of Corporate Governance emerge the cornerstones of ITCs governance philosophy, namely trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. ITC believes that the practice of each of these leads to the creation of the right corporate culture in which the company is managed in a manner that fulfils the purpose of Corporate Governance. The governance structure of ITC, Strategic supervision by Board of Directors Strategic management by Corporate Management Committee Executive management by the Divisional Chief Executive assisted by the Divisional Management Committee The 3-tier governance structure thus ensures that: Strategic supervision (on behalf of the shareholders), being free from involvement in the task of strategic management of the Company, can be conducted by the Board with objectivity, thereby sharpening accountability of management. Strategic management of the Company, uncluttered by the day-to-day tasks of executive management, remains focused and energized. Executive management of the divisional business, free from collective strategic responsibilities for ITC as a whole, gets focused on enhancing the quality, efficiency and effectiveness of its business. CORPORATE SOCIAL RESPONSIBILITY Corporate social responsibility is the detailed issues on which an organization exceeds its minimum required obligations to stake holders. It has been noted that companies increased their awareness of and level of activity in some aspects of social responsibility but they seemed to limit their involvement to a relatively narrow range of issues. It was also indicated that most organizations failed to seek out best practice elsewhere and this they suggested, indicated that social responsibility considerations were not pursued as keenly as commercial activities. ITC believes that an effective growth strategy for our nation must address the needs of rural India, home to 75% of our poor. It is imperative to ensure that Indias economic growth is inclusive, embracing its villages, so as to free millions of our disadvantaged citizens from the indignity of poverty. It is ITCs belief that Indias rural transformation cannot be brought about by the government alone. Nor can the efforts of a few enterprises make a decisive difference. Only an inspired public-private partnership can transform lives and landscapes in rural India. ITCs humble endeavors have demonstrated that it is possible to create and sustain a model that can harmonize the need for shareholder value creation with making a substantial contribution to society. For ITC, these are expressions of a commitment beyond the market. Of a conviction that country must come before corporation of a true pride in being Citizen First. E-CHOUPAL The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others. E-Choupal, launched in June 2000 unshackles the potential of Indian farmer who has been trapped in a vicious cycle of , Low risk taking ability Low investment Low productivity Weak market orientation Low value addition Low margin Low risk taking ability This made Indian farmers and Indian agribusiness sector globally uncompetitive, despiterich abundant natural resources. The Model in Action: Appreciating the imperative of intermediaries in the Indian context, e-Choupal leverages Information Technology to virtually cluster all the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA. With a judicious blend of click mortar capabilities, village internet kiosks managed by farmers called sanchalaks themselves, enable the agricultural community access ready information in their local language on the weather market prices, disseminate knowledge on scientific farm practices risk management, facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce from the farmers doorsteps (decision making is now information-based). Real-time information and customized knowledge provided by e-Choupal enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality productivity. The aggregation of the demand for farm inputs from individual farmers gives them access to high quality inputs from established and reputed manufacturers at fair prices. As a direct marketing channel, virtually linked to the mandi system for price discovery, e-Choupal eliminates wasteful intermediation and multiple handling. Thereby it significantly reduces transaction costs. e-Choupal ensures world-class quality in delivering all these goods services through several product / service specific partnerships with the leaders in the respective fields, in addition to ITCs own expertise. While the farmers benefit through enhanced farm productivity and higher farm gate prices, ITC benefits from the lower net cost of procurement (despite offering better prices to the farmer) having eliminated costs in the supply chain that do not add value. ITC has taken care to involve farmers in the designing and management of the entire e- Choupal initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers. They see the e-Choupal as the new age cooperative for all practical purposes. This enthusiastic response from farmers has encouraged ITC to plan for the extension of the e-Choupal initiative to altogether 15 states across India over the next few years. On the anvil are plans to channelise other services related to micro-credit, health and education through the same e-Choupal infrastructure. CAUSE OF UNDERPRIVILEGED CHILDREN ITC launched its notebooks brand Classmates, deliberately pricing itself 10-15 per cent higher than the competition, between Rs 10 and Rs 40. This ensured that it created an affordable-yet-aspirational image and also send a hidden message of being a superior product (60 gsm paper, bleached without using chlorine). Then, ITC focused on the design elements of notebooks: each Classmate notebook has a theme on the cover and related information inside. Then, the last two pages of the notebook have trivia and the back cover highlights the corporate social responsibility initiatives of the company Re 1 from each notebook sold is set aside for the cause of underprivileged children ITC supports 60,000 children in rural India. Providing uniforms and books, improving school buildings, adding electricity connections, lights and fans and running over 674 Supplementary Learning Centers, helping rural children aspire to a better tomorrow. This is one of the many ways in which ITC expresses its belief that country must come before corporation. WOMEN ENTREPRENEURS The need of the hour is to diversify rural livelihoods. Towards this end, ITC has forged an empowering partnership with rural women the most effective development workers. ITCs intervention leverages micro-credit and skills training to generate alternate employment opportunities. Increased income in the hands of rural women means better nutrition, health care and education for their children. Working with NGOs, ITC has organized village women into micro-credit groups. Group members make monthly contributions to create a savings corpus. The corpus is used to extend soft loans to group members, thereby eliminating the stranglehold of the moneylender. ITC provides training to group members to handle bank accounts and understand the nuances of government development programs. Empowered groups function autonomously and take their own decisions, including sanction of loans to fellow-members and collection of repayments. Well-managed micro- credit groups with no default records receive further support from ITC in the form of seed money for self-employment activities. Venture funds provided by ITC have already spawned hundreds of women entrepreneurs. Their earnings, ranging from Rs 70 to Rs 150 per day, not only supplement household incomes but also significantly enhance their self-esteem. ITC also conducts skills training to enhance employability. Pickle-making, fish- processing, vermicomposting, spice processing and agarbatti-rolling in rural areas and chikankari, garment-sewing, driving and computer-aided secretarial training in semi- urban areas are some of the examples. ITC goes a step further to help find employment for these trained women in areas related to its operations. This program is helping women across Andhra Pradesh, Karnataka, Madhya Pradesh, Uttar Pradesh and Bihar. Through its various initiatives, ITC touches the lives of 4 million villagers and has proved that it is socially responsible ITC STRATEGIES ITCs diversified status originates from its corporate strategy aimed at creating multiple drivers of growth, anchored on its above mentioned time-tested core competencies. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. CONGLOMERATE DIVERSIFICATION When the management feels that the firms outstanding capabilities or skills can be better utilized and transferred into other industries, though unrelated to the current one, the firm then adopts conglomerate diversification strategy. ITC has adopted Conglomerate (Unrelated) Diversification strategy and accordingly has entered into an array of business apart from its traditional tobacco industry that includes stationery, FMCG, branded apparel, agri-business and packaging and paperboards. STRATEGIC BUSINESS UNIT It is that part of the organization which is a cruicial unit for implementing its strategies. It is also that part which fetches largest revenues. In ITC, tobacco industry is its SBU, as it fetches largest revenue and is its first business which has given the conglomerate a national identity. Also it has empowered ITC with an excellent distribution network which is vital for its success. This network is shared by all other business units of ITC. BACKWARD INTEGRATION ITCs Packaging Printing Business Division was set up in 1925 as a strategic backward integration for ITCs Cigarettes business. It is today Indias most sophisticated packaging house. State-of-the-art technology, world-class quality and a highly skilled and dedicated team have combined to position ITC as the first-choice supplier of high value added packaging. ITCs Packaging Printing Business is the countrys largest convertor of paperboard into packaging. It converts over 35,000 tonnes of paper and paperboard per annum into a variety of value-added packaging solutions for the food beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. It has also entered the Flexibles and Corrugated Cartons business. The Division supplies value-added packaging to the Companys Cigarettes business. Its client list includes several well-known national and international companies like British American Tobacco, Surya Nepal Private Limited, VST Industries, , UB Group, Shaw Wallace, Seagrams, Allied Domecq, Whyte Mackay, Hindustan Lever, Tata Tetley and Nestle, Reckitt Benkiser India Limited, etc. STRATEGIC BUSINESS UNIT It is that part of the organization which is a cruicial unit for implementing its strategies. It is also that part which fetches largest revenues. In ITC, tobacco industry is its SBU, as it fetches largest revenue and is its first business which has given the conglomerate a national identity. Also it has empowered ITC with an excellent distribution network which is vital for its success. This network is shared by all other business units of ITC. FORWARD INTEGRATION ITC Limited, the tobacco-cum-hotels major which has been fast transforming itself into a FMCG company, is targeting students by customizing notebooks for schools under the Classmate brand name and this is a part of the companys diversification plans to foray into the other sectors. Classmate notebooks, a sub-brand of Expressions has been customized for schools and is available at retail stores across the country. For this purpose, ITC has entered into arrangements with 150 renowned ICSE schools across the country. A portion of the money coming from the sale of the notebooks would be contributed to some social. The division is targeting the revenue of 100 crore. The business division of ITC is primarily a forward integration of the companys paper manufacturing activity. With ITC having a state of the art paper manufacturing plant at Bhadrachalam in Andhra Pradesh the division has been using the high quality ECF paper for its notebook to make it more eco friendly. MARKETING STRATEGY The marketing logic by which business unit hopes to achieve its marketing objectives. PROMOTION STRATEGY Promotion strategy is the strategy used to communicate the merits of the products and to persuade the target customers to buy it. Wills Lifestyle offers a complete lifestyle wardrobe for the premium consumers incorporating the latest fashion trends. Their clothing is not only the latest in fashion but they also come out with clothing for different seasons. They are very active in promoting their products by conducting fashion shows in national and international levels and sponsoring many fashion shows like India Fashion Week etc. PUSH STRATEGY THE MYSTERY SHOPPER A push strategy involves pushing the product through distribution channels to the final consumer. The firm directs its marketing activities (primarily personal selling and trade promotions) towards channel members to induce them to carry the product and to promote it to final consumers. Companies spend a large amount of money on trade promotion in order to gain or hold shelf space in retail outlets. Trade promotion includes discounts, in-store special offers designed to push products through the distribution system. As a part of its promotional strategy, ITC put up posters in the kiranas and used the concept of mystery shopping in case of the tobacco industry. Promoters were sent to the kiranas in town to inform the kirana owners of the mystery shopper, who will visit them at any time, any day and ask for a cigarette. The shop owner has to offer him only an ITC brand cigarette first, even if he requests for another brand. If he insists on another brand, then the shop owner can give h im the requested brand. If he does so, he will be rewarded with gifts like lighters. He will then be qualified to enter into a lucky draw and if he becomes lucky will get a fan or radio set. Also a bumper prize comprising of a trip to Mumbai or Singapore was offered. ITC adopted this strategy to increase its sales and awareness and to gain favoritism from the kirana owners. In anticipation of the mystery shopper, the kirana owners kept offering ITC cigarettes to all customers first and only upon a request or insistence they sold the requested brand. This increased the awareness and sales, while the prizes gathered the favoritism of mystery shoppers. PULL STRATEGY The Pull strategy is where the producer directs its marketing activities (primarily advertising and consumer promotion) towards final consumers to induce them to buy the product. If the pull strategy is effective, consumers will then demand the product from channel members, who will in turn demand it from producers. Thus under a pull strategy, consumer demand pulls the product through the channels. The sunfeast Ready to Eat Pasta came into the market recently. They have been able to establish its presence with 6 per cent in volumes of the branded noodles market and they come number two behind MTR foods in the ready-to-eat market. This has been achieved by excessive advertising which pulls the products through the distribution channels. The strategy adopted is to spend more money on consumer advertising designed to build brand awareness so that shoppers will ask for the products. COMPETITIVE TACTICS PIONEER FIRST MOVER Timing tactic- The first company to manufacture and sell a new product or service is called first mover or pioneer. The advantage of being a first mover is that the company is able to establish a reputation as industry leader, gain cost leadership, and achieve high profits from buyers. The first mover can also set standards for all subsequent products. The first mover has sufficient resources to both exploit the new markets and defend its position against its late rivals. ITC-Welcomgroup pioneered a holistic concept of branded accommodation in the hospitality industry. It was the first to launch the powerful idea of a Hotel within a Hotel by segmenting and branding the hotel services. It created exclusives hotels and executive clubs each catering to the needs of the global business traveler with unmatched quality and a range of services. ITC-Welcomgroup was also the first to brand its cuisine. The Bukhara, the Dakshin and the Dum Pukht are today powerful cuisine brands, which delight connoisseurs in restaurants in several ITC-Welcomgroup hotels. LATE MOVER Late Movers are those who are able to imitate the technological advance of others, keep risks down by waiting until a new market is established and take advantage of the first movers inclination to ignore market segments. ITC entered the biscuit business very late when the two major players Britannia and Parle were busy biting of chunks of the national market among themselves, with a host of smaller brands in various regions. The strategy that the company followed was to find loopholes in the industry into which they can tap. Therefore before entering the segment, ITC dug into market research. Research revealed that the category had gaps which ITC could settle into. Findings revealed that consumers wished to taste new and innovative products. That was precisely what the competition had not done in a big way. ITC launched Sunfeast with six ranges. But it was a calculated risk. ITC stuck to category favorites like Glucose, Marie and Bourbon cream. Along with that, it also launched innovations such as orange-flavored Marie, Marie light and butterscotch-flavored cream biscuits. Sunfeast followed this up with the launch of Sunfeast Milky Magic. More recently, it also has launched the Sunfeast Snacky and Su nfeast In August 2003, a month after its launch, the company undertook a major sampling exercise to promote the product. For two years then, the brand did all the usual rounds riding behind buses, blocking television spots, booking that corner space in your favorite newspaper and so on. Well differentiated advertisements, some which showed a complete cream world with cream rivers, cream mountains and cream trees, were targeted at kids watching cartoon channels. At the same time, on general entertainment channels, mothers received information on the importance of glucose, the wholeness of wheat and so on. Also, the company tied up with Bey Blades, the popular television series that was a rage among children, to promote itself. PRICING MODEL TWO PRONGED STRATEGY The biscuits industry is very competitive and the players fight for market shares. One way of gaining market share is by pricing the products attractively. The industry now has two clear models. Parle products play the low price game at all varieties of biscuits from glucose to cream. Sunfeast looks at a two-pronged strategy where it looks for high margins in cream variants and volumes from the Marie and Glucose segments. It does this as it cannot expect volumes of sales in the cream variant business and so they have a higher margin of profit. In the marie and glucose segment there is heavy competition and the biscuits hardly have any differentiation like the cream biscuit market and the consumers dont pay extra if there is no innovation in the product, so they look for having a lower margin of profit and more volume of sales. The strategy adopted by them is very profitable for the company. FUNCTIONAL STRATEGY Outsourcing is purchasing from someone else a product or service instead of provided it internally. The key to outsourcing is to purchase from outside only those activities that are key to the companys distinctive competencies. ITCs agarbatti SBU and Cottage Industries, Aurobindo Ashram, Pondicherry, which makes the Spriha brand of handmade incense sticks have a strategic tie-up The agarbatti SBU, which recently launched the Mangal Deep range of agarbattis through 100 per cent outsourcing from the small, medium and cottage sector, has launched an assorted Spriha gift pack product. The gift packs, designed and developed in-house by ITC and specially created (with handpicked materials) by Cottage Industries, Aurobindo Ashram, will be in two sizes, and will contain items like high quality incense sticks in two fragrances, a perfumed designer candle, a collection of choice dhoops and a handy ceramic agarbatti/dhoop holder (all hand-made) in a compact box pack. Priced at Rs 100 and Rs 150 (two sizes), the gift packs have been launched in Bangalore as part of a test marketing exercise through outlets stocking ITCs Greetings Cards (Expressions). Planned as a stand-alone gift item, especially for festive occasions, the plan is to utilize the available in-house greeting cards distribution channel to position the product, and gradually scale up visibility at various gift shops through a national roll-out. Cottage Industries, Pondicherry, produces half-a-million packs of handmade Spriha agarbattis per month for ITC under a contractual agreement. ITC follows strict quality parameters in all its sectors and in this sector has expressly stated that it will buy from any cottage industry that agrees to adhere to their quality standards. GROWTH STRATEGIES Growth strategies are defined to achieve growth in sales, assets profits or

Manufacturing Resource Planning Models

Manufacturing Resource Planning Models Manufacturing Resource Planning Models under Uncertainty and Commonality for Multi-products Multi-period Multistage Production Environment Chapter 3: Literature Review In this chapter, the following areas of research are investigated to lay the foundation for the intended mathematical models: manufacturing resources planning background, benefits and limitations; manufacturing resources planning models under different uncertainties; and commonality in manufacturing resources planning models. 3.1 Evolution of manufacturing environment The field of production planning and control has undergone tremendous change in the last 50 years. Prior to the 1960s, inventory was controlled by a manual system, utilizing various techniques: stock replenishment, reorder points, EOQ (economic order quantity) (McGarrie, 1998), and ABC classifications, to name a few (Ptak, 1991). Gilbert and Schonberger (1983) provide a history of production control, while Lee (1993) comments that by the mid-1970s, enough experience of material requirements planning (MRP) had been gained and the importance of the master production schedule (MPS) was realized. In the 1950s, MRP were the first off-the-shelf business applications to support the creation and maintenance of material master data and bill-of-materials (demand-based 14 planning) across all products and parts in one or more plants. These early packages were able to process mass data but only with limited processing depth (Klaus et al., 2000). From the 1940s to the early 1960s, material control consisted of basic ‘order point formulae used to maintain a level average inventory balance. In 1965, Joseph Orlicky of the J. I. Case Company devised a new approach to material management, called material requirement planning (MRP) to serve as a platform to answer four questions, known as the ‘Universal Manufacturing Equation (Towers et al., 2005): What are we going to make, What does it take to make, What do we have and What do we have to get. The respective answer of the first three questions lie in the blueprint of production plan: the master production schedule (MPS), the bill of material (BOM) and the physical inventory records themselves. While MRP was certainly a vast improvement over simple manual method, the potential to stretch its boundary even further was soon recognized. A companys production is constrained by not only its inventory need but also by equipment and personnel capacity, facet of the plant not considered in the Universal Manufacturing Equation. MRP at its core is a time phased order release system that schedules and releases manufacturing work orders and purchase orders, so that sub-assemblies and components arrive at the assembly station just as they are required. As competitive pressures increased and users became more sophisticated, MRP evolved and expanded to include more business functions such as product costing and marketing. In 1975 the next generation system, Closed-Loop MRP, integrated capacity factors into the MRP structure and used feedback on production status to maintain the validity of planning decisions as requirements changed. One crucial link in the manufacturing decision chain was still missing- the financial point of view. With advent of computer system in the early 1980s the development of effective shop-floor scheduling tools had at that time been dominated by the top down approach of manufacturing resource planning known as MRP II for controlling production operations (Towers et al., 2005). The introduction of MRP II five years later served to bridge the gap. The operational Closed-Loop MRP plan, presented in material units such as pieces and pounds, was translated into financial dollar terms, enabling the entire organization to work off a single set of data. Simulation capability was also developed to answer ‘what if planning questions with action oriented replies. A major purpose of MRP II is to integrate primary functions (i.e. production, marketing and finance) and other functions such as personnel, engineering and purchasing into the planning process to improve the efficiency of the manufacturing enterprise (Chen, 2001, Chung and Snyder, 2000, Mabert et al., 2001). MRP II has certain extensions like rough cut capacity planning and capacity requirements planning for production scheduling on the shop floor as well as feedback from manufacturing shops on the progress of fabrication. Since the 1980s, the number of MRP II installations has continued to increase, as MRP II applications became available on mini and micro computers (Siriginidi, 2000). Like MRP, MRP II focused on the manufacturing process. Then MRP II was extended towards the more technical areas that cover the product development and production processes. Computer Integrated Manufacturing (CIM) supplied the entire conceptual framework for the integration of all business administrative and technical functions of a company, such as finance, sales and distribution, and human resources (Klaus et al., 2000). The next stage of MRP II evolution was just-in-time (JIT) methodology that combined with the plummeting price of computing to create the islands of automation in late 1980s. Over the last 60 years, many PPC systems and philosophies have been developed. These include material requirements planning (MRP), manufacturing resource planning (MRP II), enterprise resource planning (ERP), just in time (JIT), optimized production technology (OPT), advanced production scheduling (APS), supply chain management (SCM) and customer relationship management (CRM), either used individually or jointly (Koh, 2004). 3.1.1 Material requirement planning (MRP) Kulonda (2000) descried the evolution of MRP, dividing it in three different worlds. In the first world, MPS items typically are finished end items made to stock; MPS is stated in terms of forecast item demand converted to a series of production lots via time-phased order points or other rules. In the second world, the MPS could conceivably be stated as end items built entirely to order. If response time were not an issue, this approach would work quite well. Competitive force, however, often require shorter response times and inevitably some stocking of at least the longest lead time items occur. A relatively large number of different components are assembled to complete an end product that may have many specific variants. The third world of MRP has all the complexity of the second world with the additional complication that relatively numerous end items are built from relatively few raw materials. This can be visualized in part level count charts shown in 3.1. Within the MRP system a number of rules need to be specified. They include: acceptable lot sizes, safety stocks and reject allowances. There are three principles of MRP. They are: dependent on demand for the final product; netting of inventory with expected deliveries and open orders to give a balance on-hand; and time phasing by using information on lead times and needs. Three basic MRP inputs to the system are: master production schedule (MPS); the structured BOM for the MPS; and information on inventories, open orders and lead times. The aim of MRP systems is to minimize cost of inventories and maintain customer service levels. MRP benefits include the ability to rapidly re-plan and re-schedule in response to changes in a dynamic environment. It is flexible and responsive to the customer needs (Hines, 2004). The successes and disappointments of MRP as well as the key shortcomings of MRP (material requirement planning) are studied by Plenert (1999). He investigates consequences of the deficiencies means if they are not corrected. The difficulties encountered by firms in the implementation process of MRP may be traced back to a number of factors. The complexity of MRP systems, which, of course, is a relative concept varying according to the level of knowledge and experience available inside the firm prior to implementation (Wortmann, 1998, Wilson et al., 1994, Luscombe, 1994). There are usually several parameters to be initiated when implementing standard software. A considerable amount of intensive training is required. In fact, even though end-users are usually trained on a limited amount of functionality, key users need to acquire considerable technical competence. The organizations simply under-estimate the extent to which they have to change in order to accommodate their purchase. The effective management of technological change requires transformational leadership (Brown, 1994). One of the issues largely felt as critical concerns the resistance of managers and personnel to the organizational change that is induced by the adoption of new technologies. To this regard, several authors have underlined the importance of a sound involvement of shop-floor workers (Sommer, 1998, Weill et al., 1991). Valuable relevance has also been placed in the referring literature to technological problems, such as the unsuitability of MRP systems to optimize the internal workflow. In fact, frequent changes in schedules, a problem referred to as production nervousness, is an obstacle to successful implementation of MRP systems (Duchessi et al., 1998). Material Requirements Planning (MRP) has fallen into disfavor in 1980s, as demonstrated by the extensive literature and conference material coming out of organizations like the American Production and Inventory Control Society (APICS) which discuss its shortcomings (Berger, 1987). MRP has received strong challenges of its effectiveness from Japan. It is believed that the only thing which is still keeping so many manufacturers with MRP is the difficulty in converting to other (Plenert, 1999). Looking at MRPs basic philosophy, we should be able to focus our scheduling only on what materials are needed, and when they are needed (Plenert, 1990b, Ritzman et al., 1984, Chase and Aquilano, 1995, Lee and Schniederjans, 1994, Nahmias, 1997, Schroder et al., 1981). MRP allows greater flexibility in product customization. The most obvious shortcoming in MRP usage is its focus on labor efficiency. Labor is not the resource that we need to be efficient at, especially since it causes inefficiencies in our most critical resource, materials. We need to minimize our routings, shortening lead times as much as possible. We need to do our buffering using safety capacity (labor and machine capacity buffers), not safety stock (materials capacity buffers) (Plenert, 1999). We should minimize the non-value-added steps to make them as efficient as possible. The other big builders of inventory are time and the large batch size. 3.1.2 Manufacturing Resource Planning (MRP II) The theory of MRPII has been well discussed in the literature and focuses are normally put on concept, methodology, application and future development (Ip and Yam, 1998). MRP II (Manufacturing Resource Planning) is a hierarchically structured information system which is based on the idea of controlling all flows of materials and goods by integrating the plans of sales, finance and operations. The levels in an MRP II concept as outlined are applied to two plans in particular (Zapfel, 1996): Business Planning including Resource Requirements Planning (RRP) and Master Production Scheduling (MPS) including Rough-cut Capacity Planning (RCCP). Business planning level of a company identifies its objectives. The business plan integrates the plans from sales, finance and operations. The planned aggregate sales income, the planned cost of sales and operations, and all other expenses per planning period provide a basis for calculating the planned net income of the firm. The planning horizon is often a year or longer and a planning period a month or longer. To be feasible, the production plan is examined by the so-called resource requirements planning (RRP); that is, the resources required by a given aggregate production plan can be calculated. MRP II offers simulation capabilities and marries the operating system with the financial system so that what-if questions can be answered using the software system. If the business plan leads to resource requirements which are not feasible or which are unsatisfactory, the user can change the plan and a new simulation run is started to calculate the modified resource requirements. These s teps can be repeated until a feasible and satisfactory business plan is achieved. The aggregate production plan, accepted by the user, forms an important basis for master production scheduling. MRP II tends to link manufacturing, engineering, marketing, finance and management (Yusuf and Little, 1998); production operations-inventory production control, purchasing with production planning, Capacity Planning and Master Scheduling (Turbide, 1990); sales, logistics, production, engineering and supporting functions, the broad ingredients of almost all Manufacturing organization (Ip and Yam, 1998). It may also include costumer service- order entry, sales analysis, forecasting- with financial applications. The total is a single information control system that shares data among the various applications for the mutual benefit (Turbide, 1990). MRP II operates in a â€Å"pull† manner at the planning level. It is used for high-level planning of demand and inventory functions and preliminary capacity evaluations. Ip and Yam (1998) afford a master plan which integrates the technology and management of the strategic elements, problem definition, MRP II solutions, technical and procedural design, and implementation management in order to minimize the frustration and conflicts universally found in MRP II implementation process as well as to reduce disconnection amongst different stages of the implementation process. Ideally MRP II addresses operational planning in units; financial planning in money terms, and has simulation capability to answer â€Å"what-if† questions. It is made up of a variety of functions, each linked together: business planning, production planning, master production scheduling, material requirements planning, capacity requirements planning and the execution systems for capacity and priority. Outputs from these systems would be integrated with financial reports, such as the business plan, purchase commitment report, chipping budget, inventory production in money terms, etc. Manufacturing Resource Planning is a direct outgrowth and extension of a Material Resource Planning (MRP) (Higgins et al., 1998). 3.1.2.1 MRP II definitions: ‘If I had to sum up MRP II in one word, the word I would choose is discipline. Allowed three words, they would be discipline/performance measurement Sheldon (1991). He detailed the total implementation process, from inception to completion and divided the process into six steps, namely, education, common goal, fitness for use, accountability, performance measurement and systems/tools. In Table 3.1, the definition of MRP II is summarized. Table 3.1: Definition of MRP II Definition Reference MRP II is a well-defined process or set of calculations that is used to develop plans for the acquisition of the materials needed for production. (Turbide, 1990) MRP II is an information control philosophy that is often translated into software products containing, among other capabilities the MRP calculation function. MRP II is a system designed for managing all the resources of a manufacturing company. It consists of a comprehensive set of planning tools and techniques which integrate all functional areas of an organization (Tremblay, 1991) MRP II is a method for the effective planning of all resources of a manufacturing company. (Dougherty and Wallace, 1992) Manufacturing resource planning (MRP II) is a long promising method that simplifies all the complex tasks of manufacturing management. (Chambers, 1996) MRP II is a hierarchically structured information system which is based on the idea of controlling all flows of materials and goods by integrating the plans of sales, finance and operations. (Zapfel, 1996) Manufacturing Resource Planning (MRP II) is a structured approach to optimize a companys internal Supply Chain. (Higgins et al., 1998) MRP II is a method for the effective planning of all resources of the manufacturing company. MRP II is an effective management system that has excellent planning and scheduling capability which can offer dramatic increases in customer service, significant gains in productivity, much higher inventory turns, and greater reduction in material costs. (Ip and Yam, 1998) MRP II system is a proactive materials strategy. It is a dynamic system and can adapt to change as it reflects upon the latest information in its planned order releases. (Towers et al., 2005) 3.1.2.2 MRP II benefits: The potential benefits those may receive from the MRP II are summarized below: Empirical research suggests that companies able to implement MRP II successfully report enhanced competitive positions, improved customer service levels, a better financial position, increased plant efficiency, heightened morale in production, more effective co-ordination with marketing and finance, more efficient production scheduling and reduced inventory levels, fewer component shortages, reduced manufacturing costs and lead times and improvements in inventory turnover (Humphreys et al., 2001, Brown and Roberts, 1992, Roberts and Barrar, 1992). When customers and suppliers (internal or external) request information that have been fully integrated throughout the Supply Chain or when executives require integrated strategies and tactics in areas such as manufacturing, inventory, procurement and accounting, MRP II systems collate the data for analysis and transform the data into useful information that companies can use to support business decision-making (Broatch, 2001). MRP II systems, if implemented successfully, enhance and redesign business processes to eliminate non-value-added activities and allow companies to focus on core and truly value-added activities (Broatch, 2001). The focus of MRP II computer systems is on the efficiency and effectiveness of the internal processes. It offers a way to streamline and align business processes, increase operational and manufacturing efficiencies and bring order out of chaos (Nah, 2002). MRP II systems minimize the time and effort required to process business data and maximizes the application of that information. By facilitating data exchange throughout the organization, a MRP II system enables to coordinate such crucial activities as production planning, material planning, capacity planning and shop floor control (Plenert, 1999). MRP II is concerned mainly with scheduling of activities and the management of inventories. It is particularly useful where there is a need to produce components, items or sub-assemblies, which themselves are later used in the production of a final product. Organizations can improve their overall customer service through consistently meeting delivery promises, shortening delivery times and having products on hand when customer orders are received. MRP II can provide the necessary management information to ensure delivery promises can be kept. Where there is volatility in demand with unpredictable customer requirements and complex product structures, the information management capability of MRP II is particularly relevant (Towers et al., 2005). A well implemented MRP II system can: provide an organization with reliable lead times; meet its service delivery performance requirements; contribute to stable and consistent lead times and well informed decision-making; maintain lower level of safety stock; reduce the average inventory level and reduce inventory investments to a minimum (Towers et al., 2005). The uncertainty of demand can be minimized due to the fact that MRP II can provide an organization with a clear picture of the demand for a particular item and when organizations know their future needs they can negotiate their purchase agreements with suppliers and receive quantity discounts improving their financial position (Towers et al., 2005). Successful MRP II users have typically reported as much as 15 percent gain in manufacturing productivity, 50 percent reduction in overtime, 33 percent reduction in inventory investment and 80 percent reduction in inventory shortages (Towers et al., 2005). MRP II provides better control over the quantity and timing of deliveries of raw materials, parts, sub-assemblies and assemblies to production operations. 3.1.2.3 Pitfalls of MRP II: The main pitfalls of MRP II from various authenticated literature are listed below: Impressive though the benefits are, there is evidence suggesting that, as with so many similar technologies, few companies are able to maximize them. White et al. (1982) consider that 50 per cent of organizations do not achieve their objectives. Archer (1991) has said that 70 per cent of systems may be regarded as failures. Ho et al. (1992) has stated that ‘few firms have been able to realize the full potential offered by MRP II. While relative percentages of successful and unsuccessful implementations differ from study to study, each demonstrates a surprisingly high failure rate. Implementation of MRP II system requires major managerial innovations and organizational changes in addition to the installation of computer hardware and software (Lau et al., 2002). The heart of an MRP II system is MRP. MRP II does consider resource capacity level when generating the POR schedule. If an overload is identified, it will flag and recommend the user to reschedule. The question is how frequent should the user reschedule? Both Ho et al. (1995) and Sridharan and LaForge (1989) showed that rescheduling induces system nervousness, which leads to further underperformance. MRP II has been criticized by a number of authors on the grounds that few benefits accrue for high implementation costs (Burns et al., 1991, Sum and Yang, 1993). Unsuccessful MRP II implementation not only deprives companies of potentially huge benefits but also results in financial losses and disruptions in operations (Towers et al., 2005). MRP II concept is only partially suited to production planning in the case of uncertain demand. There is little help with the necessary aggregation and disaggregation process, especially when demand uncertainty exists. It is difficult for the user of MRP II to find a robust aggregate plan for master production schedule (Zapfel, 1996). Critics of MRP II points to the rigidity of the process: the logic that demands batches and multiple; the fixed lead time which takes no account of current capacity; the standard queue concept in front of a work center etc. Increasing competitive pressure, manifested by reduced lead times, smaller batch sizes, lower stocks and ever more demanding customers have pushed MRP II to its limits (Porter et al., 1996). 3.1.2.4 Reasons for failure: One of the principal reasons for the failure of MRP II and other large technologically sophisticated systems is that organizations simply underestimate the extent to which they have to change in order to assimilate what is in reality a new way of running the company (Humphreys et al., 2001). MRP II failure have embraced technical problems; the difficulties involved in selecting and evaluating cost effective MRP II packages and a host of historical, cultural, structural and managerial issues (White, 1980, Kinnie et al., 1992, Wight, 1990, Wilson et al., 1994); expertise needed to implement and use effective MRP II systems; lead times management; design of the production environment, routing and quality information; Infinite capacity availability; batch and lot sizing (Higgins et al., 1998). An accurate demand forecast is an essential foundation for the successful operation of an MRP II system. Poor sales forecasting had been identified by senior management as one of the main reasons for the MRP II implementation failure (Humphreys et al., 2001). 3.1.3 Enterprise Resource Planning (ERP) The Gartner Group of Stamford, CT, USA, coined the term ERP in the early 1970s to describe the business software system. The name ERP was derived from the terms material requirements planning (MRP) and manufacturing resource planning (MRP II). The maturity stage of ERP occurred in the mid-1990s. ERP is the third generation of planning software. Material requirements planning (MRP) was the first generation, manufacturing resource planning (MRP II) the second and ERP the third. The primary purpose of ERP is to create a seamless integration of interrelated information throughout the business organization. A system of software programs is used to develop the necessary links between the various business functions so that needed information is readily available. There are 8 (eight) major functions and 33 (thirty three) sub-functions, as well as 22 (twenty two) primary modules and several sub-modules (Umble et al., 2001). A typical ERP implementation takes anywhere from one to five years (M abert et al., 2003). ERP system is not just a pure software package to be tailored to an organization but an organizational infrastructure that affects how people work and that it â€Å"imposes its own logic on a companys strategy, organization, and culture† (Shehab et al., 2004, Davenport, 1998, Lee and Lee, 2000). 3.1.3.1 Definition of ERP When customers and suppliers request information that have been fully integrated throughout the value chain or when executives require integrated strategies and tactics in areas such as manufacturing, inventory, procurement and accounting, ERP systems collect the data for analysis and transform the data into useful information that companies can use to support business decision-making. They allow companies to focus on core and truly value-added activities (Nah, 2002). These activities cover accounting and financial management, human resources management, manufacturing and logistics, sales and marketing, and customer relationship management. Table 3.2 shows definitions of ERP, cited in different literatures. Table 3.2: Definition of ERP Definition Reference ERP systems are enterprise-wide on-line interactive systems that support cross-functional processes using a common database. ERP systems are designed to provide, at least in theory, seamless integration of processes across functional areas with improved workflow, standardization of various business practices, and access to real-time up-to-date data. (Davenport, 1998) ERP systems are complex and implementing one can be a challenging, time consuming and expensive project for any company. ERP is not only an IT solution, but also a strategic business solution. As an IT solution, ERP system, if implemented fully across an entire enterprise, connects various components of the enterprise through a logical transmission and sharing of data. (Norris et al., 2000) ERP is a commodity, a product in the form of computer software. (Klaus et al., 2000) ERP is a development objective of mapping all processes and data of an enterprise into a comprehensive integrative structure. ERP is a key element of an infrastructure that delivers a solution to business. ERP a method for the effective planning and controlling of all the resources needed to take, make, ship and account for customer orders in a manufacturing, distribution or service company. (Nah, 2002) ERP system is a packaged business software system that allows a company to automate and integrate the majority of its business processes, and share common data and practices across the entire enterprise. (Seddon et al., 2003) ERP is a â€Å"do it all† system that performs everything from entry of sales orders to customer service. It attempts to integrate the suppliers and customers with the manufacturing environment of the organization. (Shehab et al., 2004) 3.1.3.2 Benefits of ERP ERP systems have certain advantages such as low operating cost and improving customer service (Shehab et al., 2004). In implementing an ERP solution, an organization can quickly upgrade its business processes to industry standards, taking advantage of the many years of business systems reengineering and integration experience of the major ERP vendors (Myerson, 2002). The practical benefits of ERP are divided into five aspects by Seddon et al. (2003): operational, managerial, strategic, IT infrastructure, and organizational (Table 3.3). Table 3.3: Benefits of ERP Operational benefits: By automating business processes and enabling process changes, they can offer benefits in terms of cost reduction, cycle term reduction, productivity improvement, quality improvement, and improved customer service. Managerial benefits: With centralized database and built-in data analysis capabilities, they can help an organization achieve better resource management, improved decision making and planning, and performance improvement. Strategic benefits: With large-scale business involvement and internal/external integration capabilities, they can assist in business growth, alliance, innovation, cost, differentiation, and external linkages. IT infrastructure benefits: With integrated and standard application architecture, they support business flexibility, reduced IT cost and marginal cost of business units IT, and increased capability for quick implementation of new applications. Organizational benefits: They affect the growth of organizational capabilities by supporting organization structure change, facilitating employee learning, empowering workers, and building common visions. 3.1.3.3 Disadvantages of ERP: ERP systems have some disadvantages due to the tight integration of application modules and data. Huge storage needs, networking requirements and training overheads are frequently mentioned ERP problems. However, the scale of business process re-engineering (BPR) and customizations tasks involved in the software implementation process are the major reasons for ERP dissatisfaction. ERP projects are large, costly and difficult and that they require large investment in capital and staff and management time (Adam and ODoherty, 2000). Yen et al. (2002) identified the following disadvantages of ERP: Its high cost prevents small businesses from setting up an ERP system The privacy concern within an ERP system Lack of trained people may affect ERPs efficiency Implementation of an ERP project is painful Customization is costly and time-consuming. Some of these shortcomings have been discussed by OConnor and Dodd (2000). Implementation of an ERP system is an extensive, lengthy and costly process, typically measured in millions of dollars. An ERP implementation can take many years to be completed and cost tens of millions of dollars for a moderate size firm and upwards of $100 million for large international organizations (Mabert et al., 2000). Even with significant investments in time and resources, there is no guarantee of a successful outcome (Mabert et al., 2003). According to Shehab et al. (2004), the ERP systems are complex and implementing one can be difficult, time-consuming and expensive project for a company. It costs tens of millions of dollar for a medium sized company and $300-500 million for large international corporations. There are also some possible hidden costs that may include losing some very intelligent employees after the initial implementation is done, continual imp Manufacturing Resource Planning Models Manufacturing Resource Planning Models Manufacturing Resource Planning Models under Uncertainty and Commonality for Multi-products Multi-period Multistage Production Environment Chapter 3: Literature Review In this chapter, the following areas of research are investigated to lay the foundation for the intended mathematical models: manufacturing resources planning background, benefits and limitations; manufacturing resources planning models under different uncertainties; and commonality in manufacturing resources planning models. 3.1 Evolution of manufacturing environment The field of production planning and control has undergone tremendous change in the last 50 years. Prior to the 1960s, inventory was controlled by a manual system, utilizing various techniques: stock replenishment, reorder points, EOQ (economic order quantity) (McGarrie, 1998), and ABC classifications, to name a few (Ptak, 1991). Gilbert and Schonberger (1983) provide a history of production control, while Lee (1993) comments that by the mid-1970s, enough experience of material requirements planning (MRP) had been gained and the importance of the master production schedule (MPS) was realized. In the 1950s, MRP were the first off-the-shelf business applications to support the creation and maintenance of material master data and bill-of-materials (demand-based 14 planning) across all products and parts in one or more plants. These early packages were able to process mass data but only with limited processing depth (Klaus et al., 2000). From the 1940s to the early 1960s, material control consisted of basic ‘order point formulae used to maintain a level average inventory balance. In 1965, Joseph Orlicky of the J. I. Case Company devised a new approach to material management, called material requirement planning (MRP) to serve as a platform to answer four questions, known as the ‘Universal Manufacturing Equation (Towers et al., 2005): What are we going to make, What does it take to make, What do we have and What do we have to get. The respective answer of the first three questions lie in the blueprint of production plan: the master production schedule (MPS), the bill of material (BOM) and the physical inventory records themselves. While MRP was certainly a vast improvement over simple manual method, the potential to stretch its boundary even further was soon recognized. A companys production is constrained by not only its inventory need but also by equipment and personnel capacity, facet of the plant not considered in the Universal Manufacturing Equation. MRP at its core is a time phased order release system that schedules and releases manufacturing work orders and purchase orders, so that sub-assemblies and components arrive at the assembly station just as they are required. As competitive pressures increased and users became more sophisticated, MRP evolved and expanded to include more business functions such as product costing and marketing. In 1975 the next generation system, Closed-Loop MRP, integrated capacity factors into the MRP structure and used feedback on production status to maintain the validity of planning decisions as requirements changed. One crucial link in the manufacturing decision chain was still missing- the financial point of view. With advent of computer system in the early 1980s the development of effective shop-floor scheduling tools had at that time been dominated by the top down approach of manufacturing resource planning known as MRP II for controlling production operations (Towers et al., 2005). The introduction of MRP II five years later served to bridge the gap. The operational Closed-Loop MRP plan, presented in material units such as pieces and pounds, was translated into financial dollar terms, enabling the entire organization to work off a single set of data. Simulation capability was also developed to answer ‘what if planning questions with action oriented replies. A major purpose of MRP II is to integrate primary functions (i.e. production, marketing and finance) and other functions such as personnel, engineering and purchasing into the planning process to improve the efficiency of the manufacturing enterprise (Chen, 2001, Chung and Snyder, 2000, Mabert et al., 2001). MRP II has certain extensions like rough cut capacity planning and capacity requirements planning for production scheduling on the shop floor as well as feedback from manufacturing shops on the progress of fabrication. Since the 1980s, the number of MRP II installations has continued to increase, as MRP II applications became available on mini and micro computers (Siriginidi, 2000). Like MRP, MRP II focused on the manufacturing process. Then MRP II was extended towards the more technical areas that cover the product development and production processes. Computer Integrated Manufacturing (CIM) supplied the entire conceptual framework for the integration of all business administrative and technical functions of a company, such as finance, sales and distribution, and human resources (Klaus et al., 2000). The next stage of MRP II evolution was just-in-time (JIT) methodology that combined with the plummeting price of computing to create the islands of automation in late 1980s. Over the last 60 years, many PPC systems and philosophies have been developed. These include material requirements planning (MRP), manufacturing resource planning (MRP II), enterprise resource planning (ERP), just in time (JIT), optimized production technology (OPT), advanced production scheduling (APS), supply chain management (SCM) and customer relationship management (CRM), either used individually or jointly (Koh, 2004). 3.1.1 Material requirement planning (MRP) Kulonda (2000) descried the evolution of MRP, dividing it in three different worlds. In the first world, MPS items typically are finished end items made to stock; MPS is stated in terms of forecast item demand converted to a series of production lots via time-phased order points or other rules. In the second world, the MPS could conceivably be stated as end items built entirely to order. If response time were not an issue, this approach would work quite well. Competitive force, however, often require shorter response times and inevitably some stocking of at least the longest lead time items occur. A relatively large number of different components are assembled to complete an end product that may have many specific variants. The third world of MRP has all the complexity of the second world with the additional complication that relatively numerous end items are built from relatively few raw materials. This can be visualized in part level count charts shown in 3.1. Within the MRP system a number of rules need to be specified. They include: acceptable lot sizes, safety stocks and reject allowances. There are three principles of MRP. They are: dependent on demand for the final product; netting of inventory with expected deliveries and open orders to give a balance on-hand; and time phasing by using information on lead times and needs. Three basic MRP inputs to the system are: master production schedule (MPS); the structured BOM for the MPS; and information on inventories, open orders and lead times. The aim of MRP systems is to minimize cost of inventories and maintain customer service levels. MRP benefits include the ability to rapidly re-plan and re-schedule in response to changes in a dynamic environment. It is flexible and responsive to the customer needs (Hines, 2004). The successes and disappointments of MRP as well as the key shortcomings of MRP (material requirement planning) are studied by Plenert (1999). He investigates consequences of the deficiencies means if they are not corrected. The difficulties encountered by firms in the implementation process of MRP may be traced back to a number of factors. The complexity of MRP systems, which, of course, is a relative concept varying according to the level of knowledge and experience available inside the firm prior to implementation (Wortmann, 1998, Wilson et al., 1994, Luscombe, 1994). There are usually several parameters to be initiated when implementing standard software. A considerable amount of intensive training is required. In fact, even though end-users are usually trained on a limited amount of functionality, key users need to acquire considerable technical competence. The organizations simply under-estimate the extent to which they have to change in order to accommodate their purchase. The effective management of technological change requires transformational leadership (Brown, 1994). One of the issues largely felt as critical concerns the resistance of managers and personnel to the organizational change that is induced by the adoption of new technologies. To this regard, several authors have underlined the importance of a sound involvement of shop-floor workers (Sommer, 1998, Weill et al., 1991). Valuable relevance has also been placed in the referring literature to technological problems, such as the unsuitability of MRP systems to optimize the internal workflow. In fact, frequent changes in schedules, a problem referred to as production nervousness, is an obstacle to successful implementation of MRP systems (Duchessi et al., 1998). Material Requirements Planning (MRP) has fallen into disfavor in 1980s, as demonstrated by the extensive literature and conference material coming out of organizations like the American Production and Inventory Control Society (APICS) which discuss its shortcomings (Berger, 1987). MRP has received strong challenges of its effectiveness from Japan. It is believed that the only thing which is still keeping so many manufacturers with MRP is the difficulty in converting to other (Plenert, 1999). Looking at MRPs basic philosophy, we should be able to focus our scheduling only on what materials are needed, and when they are needed (Plenert, 1990b, Ritzman et al., 1984, Chase and Aquilano, 1995, Lee and Schniederjans, 1994, Nahmias, 1997, Schroder et al., 1981). MRP allows greater flexibility in product customization. The most obvious shortcoming in MRP usage is its focus on labor efficiency. Labor is not the resource that we need to be efficient at, especially since it causes inefficiencies in our most critical resource, materials. We need to minimize our routings, shortening lead times as much as possible. We need to do our buffering using safety capacity (labor and machine capacity buffers), not safety stock (materials capacity buffers) (Plenert, 1999). We should minimize the non-value-added steps to make them as efficient as possible. The other big builders of inventory are time and the large batch size. 3.1.2 Manufacturing Resource Planning (MRP II) The theory of MRPII has been well discussed in the literature and focuses are normally put on concept, methodology, application and future development (Ip and Yam, 1998). MRP II (Manufacturing Resource Planning) is a hierarchically structured information system which is based on the idea of controlling all flows of materials and goods by integrating the plans of sales, finance and operations. The levels in an MRP II concept as outlined are applied to two plans in particular (Zapfel, 1996): Business Planning including Resource Requirements Planning (RRP) and Master Production Scheduling (MPS) including Rough-cut Capacity Planning (RCCP). Business planning level of a company identifies its objectives. The business plan integrates the plans from sales, finance and operations. The planned aggregate sales income, the planned cost of sales and operations, and all other expenses per planning period provide a basis for calculating the planned net income of the firm. The planning horizon is often a year or longer and a planning period a month or longer. To be feasible, the production plan is examined by the so-called resource requirements planning (RRP); that is, the resources required by a given aggregate production plan can be calculated. MRP II offers simulation capabilities and marries the operating system with the financial system so that what-if questions can be answered using the software system. If the business plan leads to resource requirements which are not feasible or which are unsatisfactory, the user can change the plan and a new simulation run is started to calculate the modified resource requirements. These s teps can be repeated until a feasible and satisfactory business plan is achieved. The aggregate production plan, accepted by the user, forms an important basis for master production scheduling. MRP II tends to link manufacturing, engineering, marketing, finance and management (Yusuf and Little, 1998); production operations-inventory production control, purchasing with production planning, Capacity Planning and Master Scheduling (Turbide, 1990); sales, logistics, production, engineering and supporting functions, the broad ingredients of almost all Manufacturing organization (Ip and Yam, 1998). It may also include costumer service- order entry, sales analysis, forecasting- with financial applications. The total is a single information control system that shares data among the various applications for the mutual benefit (Turbide, 1990). MRP II operates in a â€Å"pull† manner at the planning level. It is used for high-level planning of demand and inventory functions and preliminary capacity evaluations. Ip and Yam (1998) afford a master plan which integrates the technology and management of the strategic elements, problem definition, MRP II solutions, technical and procedural design, and implementation management in order to minimize the frustration and conflicts universally found in MRP II implementation process as well as to reduce disconnection amongst different stages of the implementation process. Ideally MRP II addresses operational planning in units; financial planning in money terms, and has simulation capability to answer â€Å"what-if† questions. It is made up of a variety of functions, each linked together: business planning, production planning, master production scheduling, material requirements planning, capacity requirements planning and the execution systems for capacity and priority. Outputs from these systems would be integrated with financial reports, such as the business plan, purchase commitment report, chipping budget, inventory production in money terms, etc. Manufacturing Resource Planning is a direct outgrowth and extension of a Material Resource Planning (MRP) (Higgins et al., 1998). 3.1.2.1 MRP II definitions: ‘If I had to sum up MRP II in one word, the word I would choose is discipline. Allowed three words, they would be discipline/performance measurement Sheldon (1991). He detailed the total implementation process, from inception to completion and divided the process into six steps, namely, education, common goal, fitness for use, accountability, performance measurement and systems/tools. In Table 3.1, the definition of MRP II is summarized. Table 3.1: Definition of MRP II Definition Reference MRP II is a well-defined process or set of calculations that is used to develop plans for the acquisition of the materials needed for production. (Turbide, 1990) MRP II is an information control philosophy that is often translated into software products containing, among other capabilities the MRP calculation function. MRP II is a system designed for managing all the resources of a manufacturing company. It consists of a comprehensive set of planning tools and techniques which integrate all functional areas of an organization (Tremblay, 1991) MRP II is a method for the effective planning of all resources of a manufacturing company. (Dougherty and Wallace, 1992) Manufacturing resource planning (MRP II) is a long promising method that simplifies all the complex tasks of manufacturing management. (Chambers, 1996) MRP II is a hierarchically structured information system which is based on the idea of controlling all flows of materials and goods by integrating the plans of sales, finance and operations. (Zapfel, 1996) Manufacturing Resource Planning (MRP II) is a structured approach to optimize a companys internal Supply Chain. (Higgins et al., 1998) MRP II is a method for the effective planning of all resources of the manufacturing company. MRP II is an effective management system that has excellent planning and scheduling capability which can offer dramatic increases in customer service, significant gains in productivity, much higher inventory turns, and greater reduction in material costs. (Ip and Yam, 1998) MRP II system is a proactive materials strategy. It is a dynamic system and can adapt to change as it reflects upon the latest information in its planned order releases. (Towers et al., 2005) 3.1.2.2 MRP II benefits: The potential benefits those may receive from the MRP II are summarized below: Empirical research suggests that companies able to implement MRP II successfully report enhanced competitive positions, improved customer service levels, a better financial position, increased plant efficiency, heightened morale in production, more effective co-ordination with marketing and finance, more efficient production scheduling and reduced inventory levels, fewer component shortages, reduced manufacturing costs and lead times and improvements in inventory turnover (Humphreys et al., 2001, Brown and Roberts, 1992, Roberts and Barrar, 1992). When customers and suppliers (internal or external) request information that have been fully integrated throughout the Supply Chain or when executives require integrated strategies and tactics in areas such as manufacturing, inventory, procurement and accounting, MRP II systems collate the data for analysis and transform the data into useful information that companies can use to support business decision-making (Broatch, 2001). MRP II systems, if implemented successfully, enhance and redesign business processes to eliminate non-value-added activities and allow companies to focus on core and truly value-added activities (Broatch, 2001). The focus of MRP II computer systems is on the efficiency and effectiveness of the internal processes. It offers a way to streamline and align business processes, increase operational and manufacturing efficiencies and bring order out of chaos (Nah, 2002). MRP II systems minimize the time and effort required to process business data and maximizes the application of that information. By facilitating data exchange throughout the organization, a MRP II system enables to coordinate such crucial activities as production planning, material planning, capacity planning and shop floor control (Plenert, 1999). MRP II is concerned mainly with scheduling of activities and the management of inventories. It is particularly useful where there is a need to produce components, items or sub-assemblies, which themselves are later used in the production of a final product. Organizations can improve their overall customer service through consistently meeting delivery promises, shortening delivery times and having products on hand when customer orders are received. MRP II can provide the necessary management information to ensure delivery promises can be kept. Where there is volatility in demand with unpredictable customer requirements and complex product structures, the information management capability of MRP II is particularly relevant (Towers et al., 2005). A well implemented MRP II system can: provide an organization with reliable lead times; meet its service delivery performance requirements; contribute to stable and consistent lead times and well informed decision-making; maintain lower level of safety stock; reduce the average inventory level and reduce inventory investments to a minimum (Towers et al., 2005). The uncertainty of demand can be minimized due to the fact that MRP II can provide an organization with a clear picture of the demand for a particular item and when organizations know their future needs they can negotiate their purchase agreements with suppliers and receive quantity discounts improving their financial position (Towers et al., 2005). Successful MRP II users have typically reported as much as 15 percent gain in manufacturing productivity, 50 percent reduction in overtime, 33 percent reduction in inventory investment and 80 percent reduction in inventory shortages (Towers et al., 2005). MRP II provides better control over the quantity and timing of deliveries of raw materials, parts, sub-assemblies and assemblies to production operations. 3.1.2.3 Pitfalls of MRP II: The main pitfalls of MRP II from various authenticated literature are listed below: Impressive though the benefits are, there is evidence suggesting that, as with so many similar technologies, few companies are able to maximize them. White et al. (1982) consider that 50 per cent of organizations do not achieve their objectives. Archer (1991) has said that 70 per cent of systems may be regarded as failures. Ho et al. (1992) has stated that ‘few firms have been able to realize the full potential offered by MRP II. While relative percentages of successful and unsuccessful implementations differ from study to study, each demonstrates a surprisingly high failure rate. Implementation of MRP II system requires major managerial innovations and organizational changes in addition to the installation of computer hardware and software (Lau et al., 2002). The heart of an MRP II system is MRP. MRP II does consider resource capacity level when generating the POR schedule. If an overload is identified, it will flag and recommend the user to reschedule. The question is how frequent should the user reschedule? Both Ho et al. (1995) and Sridharan and LaForge (1989) showed that rescheduling induces system nervousness, which leads to further underperformance. MRP II has been criticized by a number of authors on the grounds that few benefits accrue for high implementation costs (Burns et al., 1991, Sum and Yang, 1993). Unsuccessful MRP II implementation not only deprives companies of potentially huge benefits but also results in financial losses and disruptions in operations (Towers et al., 2005). MRP II concept is only partially suited to production planning in the case of uncertain demand. There is little help with the necessary aggregation and disaggregation process, especially when demand uncertainty exists. It is difficult for the user of MRP II to find a robust aggregate plan for master production schedule (Zapfel, 1996). Critics of MRP II points to the rigidity of the process: the logic that demands batches and multiple; the fixed lead time which takes no account of current capacity; the standard queue concept in front of a work center etc. Increasing competitive pressure, manifested by reduced lead times, smaller batch sizes, lower stocks and ever more demanding customers have pushed MRP II to its limits (Porter et al., 1996). 3.1.2.4 Reasons for failure: One of the principal reasons for the failure of MRP II and other large technologically sophisticated systems is that organizations simply underestimate the extent to which they have to change in order to assimilate what is in reality a new way of running the company (Humphreys et al., 2001). MRP II failure have embraced technical problems; the difficulties involved in selecting and evaluating cost effective MRP II packages and a host of historical, cultural, structural and managerial issues (White, 1980, Kinnie et al., 1992, Wight, 1990, Wilson et al., 1994); expertise needed to implement and use effective MRP II systems; lead times management; design of the production environment, routing and quality information; Infinite capacity availability; batch and lot sizing (Higgins et al., 1998). An accurate demand forecast is an essential foundation for the successful operation of an MRP II system. Poor sales forecasting had been identified by senior management as one of the main reasons for the MRP II implementation failure (Humphreys et al., 2001). 3.1.3 Enterprise Resource Planning (ERP) The Gartner Group of Stamford, CT, USA, coined the term ERP in the early 1970s to describe the business software system. The name ERP was derived from the terms material requirements planning (MRP) and manufacturing resource planning (MRP II). The maturity stage of ERP occurred in the mid-1990s. ERP is the third generation of planning software. Material requirements planning (MRP) was the first generation, manufacturing resource planning (MRP II) the second and ERP the third. The primary purpose of ERP is to create a seamless integration of interrelated information throughout the business organization. A system of software programs is used to develop the necessary links between the various business functions so that needed information is readily available. There are 8 (eight) major functions and 33 (thirty three) sub-functions, as well as 22 (twenty two) primary modules and several sub-modules (Umble et al., 2001). A typical ERP implementation takes anywhere from one to five years (M abert et al., 2003). ERP system is not just a pure software package to be tailored to an organization but an organizational infrastructure that affects how people work and that it â€Å"imposes its own logic on a companys strategy, organization, and culture† (Shehab et al., 2004, Davenport, 1998, Lee and Lee, 2000). 3.1.3.1 Definition of ERP When customers and suppliers request information that have been fully integrated throughout the value chain or when executives require integrated strategies and tactics in areas such as manufacturing, inventory, procurement and accounting, ERP systems collect the data for analysis and transform the data into useful information that companies can use to support business decision-making. They allow companies to focus on core and truly value-added activities (Nah, 2002). These activities cover accounting and financial management, human resources management, manufacturing and logistics, sales and marketing, and customer relationship management. Table 3.2 shows definitions of ERP, cited in different literatures. Table 3.2: Definition of ERP Definition Reference ERP systems are enterprise-wide on-line interactive systems that support cross-functional processes using a common database. ERP systems are designed to provide, at least in theory, seamless integration of processes across functional areas with improved workflow, standardization of various business practices, and access to real-time up-to-date data. (Davenport, 1998) ERP systems are complex and implementing one can be a challenging, time consuming and expensive project for any company. ERP is not only an IT solution, but also a strategic business solution. As an IT solution, ERP system, if implemented fully across an entire enterprise, connects various components of the enterprise through a logical transmission and sharing of data. (Norris et al., 2000) ERP is a commodity, a product in the form of computer software. (Klaus et al., 2000) ERP is a development objective of mapping all processes and data of an enterprise into a comprehensive integrative structure. ERP is a key element of an infrastructure that delivers a solution to business. ERP a method for the effective planning and controlling of all the resources needed to take, make, ship and account for customer orders in a manufacturing, distribution or service company. (Nah, 2002) ERP system is a packaged business software system that allows a company to automate and integrate the majority of its business processes, and share common data and practices across the entire enterprise. (Seddon et al., 2003) ERP is a â€Å"do it all† system that performs everything from entry of sales orders to customer service. It attempts to integrate the suppliers and customers with the manufacturing environment of the organization. (Shehab et al., 2004) 3.1.3.2 Benefits of ERP ERP systems have certain advantages such as low operating cost and improving customer service (Shehab et al., 2004). In implementing an ERP solution, an organization can quickly upgrade its business processes to industry standards, taking advantage of the many years of business systems reengineering and integration experience of the major ERP vendors (Myerson, 2002). The practical benefits of ERP are divided into five aspects by Seddon et al. (2003): operational, managerial, strategic, IT infrastructure, and organizational (Table 3.3). Table 3.3: Benefits of ERP Operational benefits: By automating business processes and enabling process changes, they can offer benefits in terms of cost reduction, cycle term reduction, productivity improvement, quality improvement, and improved customer service. Managerial benefits: With centralized database and built-in data analysis capabilities, they can help an organization achieve better resource management, improved decision making and planning, and performance improvement. Strategic benefits: With large-scale business involvement and internal/external integration capabilities, they can assist in business growth, alliance, innovation, cost, differentiation, and external linkages. IT infrastructure benefits: With integrated and standard application architecture, they support business flexibility, reduced IT cost and marginal cost of business units IT, and increased capability for quick implementation of new applications. Organizational benefits: They affect the growth of organizational capabilities by supporting organization structure change, facilitating employee learning, empowering workers, and building common visions. 3.1.3.3 Disadvantages of ERP: ERP systems have some disadvantages due to the tight integration of application modules and data. Huge storage needs, networking requirements and training overheads are frequently mentioned ERP problems. However, the scale of business process re-engineering (BPR) and customizations tasks involved in the software implementation process are the major reasons for ERP dissatisfaction. ERP projects are large, costly and difficult and that they require large investment in capital and staff and management time (Adam and ODoherty, 2000). Yen et al. (2002) identified the following disadvantages of ERP: Its high cost prevents small businesses from setting up an ERP system The privacy concern within an ERP system Lack of trained people may affect ERPs efficiency Implementation of an ERP project is painful Customization is costly and time-consuming. Some of these shortcomings have been discussed by OConnor and Dodd (2000). Implementation of an ERP system is an extensive, lengthy and costly process, typically measured in millions of dollars. An ERP implementation can take many years to be completed and cost tens of millions of dollars for a moderate size firm and upwards of $100 million for large international organizations (Mabert et al., 2000). Even with significant investments in time and resources, there is no guarantee of a successful outcome (Mabert et al., 2003). According to Shehab et al. (2004), the ERP systems are complex and implementing one can be difficult, time-consuming and expensive project for a company. It costs tens of millions of dollar for a medium sized company and $300-500 million for large international corporations. There are also some possible hidden costs that may include losing some very intelligent employees after the initial implementation is done, continual imp