Chapter 1 - Introduction

Abstract

Information is an important asset in the management of industrial companies. An industrial firm is a web of activities or processes that interact with each other. At a particular level of abstraction, the interaction of this web of activities can be viewed as a process of creating and exchanging information. Information technology (IT) enables firms to integrate the decision functions that exist in the myriad of subsystems that are required to manufacture and distribute a product. Traditional categories of functions include planning functions, shop-floor-execution functions, and machine- and process-control functions. These functions are hierarchically linked because the upper-level-planning functions typically constrain the activities that are allowed at the lower levels. In firms with advanced enterprise integration, these levels are coupled through the network architecture and a set of common databases that hold the most current information and make it available to all the functions requiring it. An organization operates more efficiently and better manages its resources when activities are clearly coordinated among the subsystems of the organization.