Today information technology is spreading through-out the value chain and is performing optimization and control functions as well as more judgmental executive functions. General Electric, for instance, uses a data base that includes the accumulated expe-rienceand(oftenintuitive)knowledgeofitsappliance service engineers to provide support to customers by phone.
Information technology is generating more data as a company performs its activities and is permitting it to collect or capture information that was not avail-able before. Such technology also makes room for a more comprehensive analysis and use of the ex-pandeddata. Thenumberofvariables thatacompany can analyze or control has grown dramatically. Hunt-Wesson, for example, developed a computer model to aid it in studying distribution-center expansion and relocation issues. The model enabled the company to evaluate many more different variables, scenarios, and alternative strategies than had been possible be-fore.Similarly, informationtechnologyhelpedSulzer Brothers’ engineers improve the design of diesel en-gines in ways that manual calculations could not.
Information technology is also transforming the physical processing component of activities. Com-puter-controlled machine tools are faster, more accu-rate, and more flexible in manufacturing than the older, manually operated machines. Schlumberger has developed an electronic device permitting engi-neers to measure the angle of a drill bit, the tempera-ture of a rock, and other variables while drilling oil wells. The result: drilling time is reduced and some well-loggingstepsareeliminated.OntheWestCoast, some fishermen now use weather satellite data on ocean temperatures to identify promising fishing grounds. This practice greatly reduces the fisher-men’s steaming time and fuel costs.
Information technology not only affects how indi-vidual activities are performed but, through new in-formation flows, it is also greatly enhancing a com-pany’s ability to exploit linkages between activities, both within and outside the company. The technol-ogy is creating new linkages between activities, and companies can now coordinate their actions more closely with those of their buyers and suppliers. For example, McKesson, the nation’s largest drug dis-tributor,providesitsdrugstorecustomerswithtermi-nals. The company makes it so easy for clients to order, receive, and prepare invoices that the custom-ers, in return, are willing to place larger orders. Atthe same time, McKesson has streamlined its order processing.
Finally, the new technology has a powerful effect on competitive scope. Information systems allow companies to coordinate value activities in far-flung geographic locations. (For example, Boeing engineers
Today information technology is spreading through-out the value chain and is performing optimization and control functions as well as more judgmental executive functions. General Electric, for instance, uses a data base that includes the accumulated expe-rienceand(oftenintuitive)knowledgeofitsappliance service engineers to provide support to customers by phone.
Information technology is generating more data as a company performs its activities and is permitting it to collect or capture information that was not avail-able before. Such technology also makes room for a more comprehensive analysis and use of the ex-pandeddata. Thenumberofvariables thatacompany can analyze or control has grown dramatically. Hunt-Wesson, for example, developed a computer model to aid it in studying distribution-center expansion and relocation issues. The model enabled the company to evaluate many more different variables, scenarios, and alternative strategies than had been possible be-fore.Similarly, informationtechnologyhelpedSulzer Brothers’ engineers improve the design of diesel en-gines in ways that manual calculations could not.
Information technology is also transforming the physical processing component of activities. Com-puter-controlled machine tools are faster, more accu-rate, and more flexible in manufacturing than the older, manually operated machines. Schlumberger has developed an electronic device permitting engi-neers to measure the angle of a drill bit, the tempera-ture of a rock, and other variables while drilling oil wells. The result: drilling time is reduced and some well-loggingstepsareeliminated.OntheWestCoast, some fishermen now use weather satellite data on ocean temperatures to identify promising fishing grounds. This practice greatly reduces the fisher-men’s steaming time and fuel costs.
Information technology not only affects how indi-vidual activities are performed but, through new in-formation flows, it is also greatly enhancing a com-pany’s ability to exploit linkages between activities, both within and outside the company. The technol-ogy is creating new linkages between activities, and companies can now coordinate their actions more closely with those of their buyers and suppliers. For example, McKesson, the nation’s largest drug dis-tributor,providesitsdrugstorecustomerswithtermi-nals. The company makes it so easy for clients to order, receive, and prepare invoices that the custom-ers, in return, are willing to place larger orders. Atthe same time, McKesson has streamlined its order processing.
Finally, the new technology has a powerful effect on competitive scope. Information systems allow companies to coordinate value activities in far-flung geographic locations. (For example, Boeing engineers
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Today information technology is spreading through-out the value chain and is performing optimization and control functions as well as more judgmental executive functions. General Electric, for instance, uses a data base that includes the accumulated expe-rienceand(oftenintuitive)knowledgeofitsappliance service engineers to provide support to customers by phone.
Information technology is generating more data as a company performs its activities and is permitting it to collect or capture information that was not avail-able before. Such technology also makes room for a more comprehensive analysis and use of the ex-pandeddata. Thenumberofvariables thatacompany can analyze or control has grown dramatically. Hunt-Wesson, for example, developed a computer model to aid it in studying distribution-center expansion and relocation issues. The model enabled the company to evaluate many more different variables, scenarios, and alternative strategies than had been possible be-fore.Similarly, informationtechnologyhelpedSulzer Brothers’ engineers improve the design of diesel en-gines in ways that manual calculations could not.
Information technology is also transforming the physical processing component of activities. Com-puter-controlled machine tools are faster, more accu-rate, and more flexible in manufacturing than the older, manually operated machines. Schlumberger has developed an electronic device permitting engi-neers to measure the angle of a drill bit, the tempera-ture of a rock, and other variables while drilling oil wells. The result: drilling time is reduced and some well-loggingstepsareeliminated.OntheWestCoast, some fishermen now use weather satellite data on ocean temperatures to identify promising fishing grounds. This practice greatly reduces the fisher-men’s steaming time and fuel costs.
Information technology not only affects how indi-vidual activities are performed but, through new in-formation flows, it is also greatly enhancing a com-pany’s ability to exploit linkages between activities, both within and outside the company. The technol-ogy is creating new linkages between activities, and companies can now coordinate their actions more closely with those of their buyers and suppliers. For example, McKesson, the nation’s largest drug dis-tributor,providesitsdrugstorecustomerswithtermi-nals. The company makes it so easy for clients to order, receive, and prepare invoices that the custom-ers, in return, are willing to place larger orders. Atthe same time, McKesson has streamlined its order processing.
Finally, the new technology has a powerful effect on competitive scope. Information systems allow companies to coordinate value activities in far-flung geographic locations. (For example, Boeing engineers
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