The Integration of Business Intelligence Technologies in the Running and Management of Montgomery Transport Group
Advancement in Information and Communication Technologies has led to major improvements in business operations. The improvement in these operations has been a result of better monitoring and cost control measures that has subsequently led to the improvement in business performance. With some sectors such as the manufacturing industries gearing themselves towards full automation of their operations, the contribution of technology in business operations cannot be ignored. More and more businesses are benefiting from the development of intelligent business systems that are capable of monitoring business operations and various functions, analysing the data obtained and providing accurate reports to the necessary personnel.
This paper investigates the incorporation of an intelligent business system into the operations of Montgomery Transport Group a transport, logistics and supply chain management company. The paper was able to establish various factors that make the development of an intelligent management system for such a company a necessity for effective management of its activities and finances. Such businesses face challenges in managing their assets, monitoring and managing human resources as well as accurate monitoring of cash flows. It is therefore necessary that an integrated intelligent business system be developed to assist in monitoring and managing these aspects of the business. Manhattan Associates Supply Chain Intelligence is an integrated system that will incorporate all aspects of the business under one roof and will act as a tool for monitoring and analysing performance as well as provision of security for the assets of the business and its premises. Although full integration of the tool in all operations will take an estimated six months and cost substantial amounts of money, the benefits derived for Montgomery Transport Group once it is operational are numerous. The system will monitor the physical assets of the company by monitoring the location, speed, tonnage, and direction of its vehicles. In addition, the system maintains a log for all access within the business premises thus preventing unauthorised access. Furthermore, the system will prevent financial fraud and misappropriation by tracking all expenditure and authorisation for these expenditures. Other than preventing fraud, the integrated business intelligence system will also assist in the generation of accurate financial reports that will assist in planning, decision making and strategy development.
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Table of Contents
Logistics is the management of goods moving from one point to another for consumption or disposal through transportation, management of inventory, and warehousing facilities. It is therefore concerned with the management of physical resources such as goods, material, equipment, facilities and fleets as well as intangible resources such as time, energy, information and expenses (DHL, 2004). Logistics is therefore an important and integral part of many activities including economic, humanitarian and military strategies since it is concerned with the supply of the right goods at the right time and in the right quantity. Delays, inefficiencies and ineffectiveness in the management of logistics and supply chains results in increased costs for businesses and other organisations, losses, and decline in profitability or effectiveness in executing its functions. An effective logistics system is therefore an essential component in the operations of profitable and non-profitable organisations as well as militaries and humanitarian organisations (DHL, 2004).
According to Stackowiak et al (2007), business intelligence is the gathering of large amounts of unprocessed raw data, filtering, classifying and analysing it to produce highly informative reports on various business processes thereby facilitating the management of businesses by assisting personnel in making daily business decisions. Business intelligence is primarily concerned with the increase in efficiencies or business operations. Business information technologies are therefore information and communication programs capable of gathering data from heterogeneous sources and applying various methodologies in analysis to provide reports and information that is applicable to the need of multiple users. The successful integration of business intelligence technologies can be used as a tool that can facilitate efficiency in management through various processes.
Logistics and Supply Chain Management is one of the most dynamic areas in business. Constant monitoring and control is necessary to keep tabs on the ever changing parameters in the industry. This dynamic nature of the industry makes it one of the most challenging to effectively manage in terms of minimising costs and maximising profitability (Blecker et al, 2014). The challenges faced by Montgomery Transport Group are usually caused by difficulties in fleet and batch management, difficulties in tracking costs and accountability, unscrupulous personnel and difficulties in generating accurate financial reports to aid decision making.
Fleet management: Fleet management is the monitoring and control of various functions and parameters such as vehicle tracking and diagnostics, driver monitoring, speed monitoring, fuel management, as well as vehicle security management. Fleet management is a function that allows businesses that are concerned or heavily reliant on transportation to minimise or eliminate operational risks (Blecker et al, 2014). This is done by improving efficiency and productivity by reducing operational costs and ensuring compliance with regulatory and legislation requirements. Montgomery Transport Group encounters challenges in monitoring performance associated with its fleet of vehicles and ends up incurring higher costs that negatively affect profitability hence affecting the performance of the company.
Fraud and tracking costs: The successful management of Montgomery Transport Group can be adversely affected by inability to monitor costs associated with different functions. Inability to keep track of costs associated with transportation and driver behaviour such as fuel consumption and driver expenditure also pose major challenges in the performance and profitability of the company. It leads to unprofessional behaviour such as siphoning fuel, misuse of vehicles and manipulation of claims from drivers and other employees (Blecker et al, 2014). As a result, logistics and freight companies incur unnecessary costs that usually affect profitability.
Generating accurate financial reports: Difficulties encountered by Montgomery Transport Group in the generation of accurate financial reports and information is a result of two challenges. Firstly with the inadequacy in tracking costs as discussed above and secondly inaccuracies in valuation of assets. Accurately tracking costs leads to inaccuracies in profit and loss statements while the inability to accurately value its assets leads to inaccuracies in the company’s balance sheet or statement of financial position (Blecker et al, 2014). Inaccuracies could greatly affect the company’s operations especially if it is reliant on external financing such as public shareholding contribution or loans from financial institutions.
An effective business intelligence system will therefore incorporate the management of vehicle and human resources and monitoring of cash inflows and outflows. The system should produce on demand and sequential reports on the performance of a particular vehicle or driver in terms of costs and expenses incurred, distance driven and income generated. The system should also produce financial information based on the data gathered from performance of vehicles and drivers as well as data fed in by other departments on overhead, administration and other costs. The generated financial reports can then be easily summarised to produce more accurate reports representing a true and fair position of the company at that time.
The Manhattan Associates Supply Chain Intelligence system incorporates all aspects of the logistics and supply chain management system into one software that can link, receive data from different sources and produce reports for management. The program assists management by monitoring and analysing data concerned with fleet, human resources, accounting and financial management.
Fleet management: To effectively manage fleet, the system will create a database containing all vehicles owned by the company and assign unique identities to each vehicle. These vehicles will be fitted with an automated management system that will track the vehicle using global satellite system technology as well as monitoring fuel consumption and condition of the vehicle.
The global positioning system will assist management in determining the position of all vehicles at any given time, monitor the speed at which it is driven and monitor detours and deviations from designated routes. In doing so, the system will prevent misuse of vehicles by company employees by monitoring reasons for stoppages and deviations from routes set out for the vehicle fuel consumption and compliance with road regulations such as speed limits. Also, the real time monitoring of the vehicle will prevent the occurrence of practices such as fuel monitoring since unwarranted spikes or declines in fuel levels are captured and flagged instantly. Constant monitoring will also produce condition reports of vehicles, document vehicles’ service history and costs associated with running each vehicle. Reports will assist in determining variance between vehicles and identifying unusual expenses arising in the operation of a particular vehicle either as a result of vehicle condition or driver behaviour.
The fleet management system will therefore monitor the following aspects of the vehicles:
- Location of the vehicle
- Speed the vehicle is travelling at
- Fuel consumption
- Condition of the vehicle
- Driver assigned the vehicle
- Service history
- Tonnage and
- Historical data associated with the vehicle
Human resources management: Human resources form an integral part in any logistics company (Ranjan, 2014). The Manhattan Associates Supply Chain Intelligence system will assist in management of not only drivers but also other personnel in charge of key areas such as warehousing and finance. The human resources management provided by the system is based on unique identities assigned to all employees. The unique identities are reinforced by use of chipped cards required for the performance of all functions and as access badges into the company’s systems. The unique identities and the use of access badges are essential for accountability as personnel cannot access areas beyond their job descriptions and responsibilities. As a result, the cards will be instrumental in monitoring the behaviour of drivers by monitoring driving patterns and costs associated with different drivers. The human resource system will aid in identifying personnel on duty in various departments and provide historical data on who accessed what and when as well as authorisation of transactions.
Accounting and financial management: The success of any economic activity is based on the effectiveness of financial management and ability of the organisation to maintain accounting records and accurately analyse its financial position. The business intelligence system will require all expenditure to be electronically authorised by use of the unique job identity for the authorising officer as well as designated codes for various expenses. In doing so, the system will constantly monitor the expenditure cash inflows from business activities. By keeping track of all cash inflows and outflows, the business intelligence system is capable of providing accurate financial information and reports such as income statements, statement of cash flows and balance sheets on demand. The Manhattan Associates Supply Chain Intelligence tool is also capable of assigning costs to various cost units such as vehicles, employees, departments or functions thus facilitating short term decision making through analysing variances in actual performance against budgeted or projected performance. The tool not only facilitates the generation of accurate financial information but also prevents instances of fraud and misappropriation of financial resources by employees.
The integrated business intelligence system presents numerous benefits to the business as outlined below:
Centralised system: The primary benefit of the integrated system is the provision of a centralised control and management tool (Ranjan, 2014). Centralised monitoring is essential for decision making since it speeds up the process of acquiring and using data to make business decisions. The central system also provides management with a wide range of manipulated information free from bias that has not been manipulated thus enhancing decision making and improving the quality of decisions made concerning the company.
Real time monitoring: Timely information is vital in the management of operations for a logistics company. Real time data from operations allows management to contain situations early and address variances before they can negatively influence the performance of the company. Real time data provided by the system also enables management to have absolute control over all activities of the company thus providing the opportunity for better management.
Effective management of resources: The integrated business management system provides management of the company with all necessary resources for monitoring and decision making in terms of resources allocation (Ranjan, 2014). The system is capable of producing reports on availability of vehicles and drivers as well as making projections on future availability of the same thus facilitating quick and easy decision making in terms of resources allocation and utilisation. Since the system monitors and tracks use of resources, it prevents misappropriation and fraud thus making more resources available for company functions and improving the overall performance by minimising unnecessary costs and enhancing profitability.
Provision of accurate financial reports: The generation of accurate financial reports has been a major challenge in the logistics industry. The constant monitoring and documentation of cash flows provides for easy analysis of expenditure and income as well as generation of accurate financial reports (Blecker et al, 2014). The accuracy will facilitate long term planning and strategy development for better performance of the business.
The advantages associated with the integrated business intelligence technology will consequently not only aid in efficiency in the business but will also improve decision making and micro management of business processes. As a result, cost factors can be accurately identified and performance can be linked to specific aspects of the business’s organisation.
The implementation of such an elaborate system into the operation of the business will require significant amounts of resources in terms of finances, time and personnel. This is due to the implementation of the integrated business management system requiring complete overhaul of the businesses systems and operations. The implementation is therefore best effected in phases, as this will help manage system failures and interruptions in operations.
The first phase of the implementation is the installation of real time tracking systems into the vehicles of the company. This will provide a benchmark on the effectiveness of the system as well as provide information on needed improvement in the system. The tracking systems will also incorporate fuel management systems and will therefore effect the automated management of all vehicles. Following the successful implementation of the first phase, the system will then be modified to incorporate human resources management.
Human resources management will be performed by use of unique chipped cards for employees as states earlier. The cards will assist the management of the company in keeping track of attendance tendencies for employees as well as areas accessed within the company. Scanners will be installed on all areas of the business’s premises and trucks to constantly monitor access to these areas. The cards will prevent unauthorised access to certain areas as the system will contain programmed data on who can access where. Furthermore, the cards will help in monitoring driver behaviour as the company can constantly and accurately monitor persons assigned to vehicles and hence prevent inappropriate of illegal behaviour such as speeding.
The final phase of the implementation will be the incorporation of financial systems into the system. They will facilitate digital management and authorisation of expenditure as well as reporting on revenues from business activities.
The implementation of the whole system is expected to take six months with costs dependent on the size of the fleet being managed, business premises and number of personnel. Montgomery Transport will require upgrading its information technology department to enhance data storage capacity and technologies associated with the system. All staff will also require different degrees of training depending on their roles and responsibilities in the company. Drivers will require training on accessing navigation systems while the dispatcher needs training in feeding route and navigation information into the systems of each vehicle for each job. Warehouse personnel will require training on using the system for inventory management while top level management will be trained on using the system for monitoring and obtaining the required reports.
The Manhattan Associates Supply Chain Intelligence system provides a solution for most challenges faced by Montgomery Transport Group in most of its operations. Successful implementation of the system will help the company eliminate risks associated with fleet management, manage and track all its costs as well as generate accurate financial reports regarding the position of the company for decision making and strategy development.
As a result, the management of the company will become more effective in both minimising operational costs as well as decision making hence improving the performance of the company.
Electronic systems raise various ethical issues especially in security of information and the privacy of employees (Hammonds, 2003). The integrated system may create an uncomfortable working environment for employees through constant and persistent monitoring. However, monitoring of employee activity during working hours is permitted by law and presents no legal challenges for the company.
The company is however tasked with the responsibility of protecting the information related to its employees. The company should therefore ensure the safety and security of information gathered on employees and liable can be taken on failure to secure such information (Russell, 2008).
The Manhattan Associates Supply Chain Intelligence systems offer a wholesome solution to the challenges facing the group and although implementation of the entire system in the company’s mobile and immobile assets will be an additional cost for the company, the benefits of the system indicate that it is a worthwhile investment for the company.
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