Management Support Systems
Management Support Systems
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Introduction
Management support systems (MSS) are currently being used in many industries in the world.
According to Sharda, Delen and Turban (2014), the rapid growth of the industry made the business
more complex (p. 32). Cabrera (2012) reveals the new trend of introducing MSS in the milk
industry. In the last twenty years of time, information systems have been used by New Zealand
farmers for fertilizer management, fleet management, feeding, breeding, herd structure
management and in many other areas. However, Leaman (2016) points out, the industry is
undergoing a crucial time and New Zealand farmers know how important it is to protect the
industry. This essay analyses the implementation of Systems, Applications and Products (SAP)
platform for real-time decision making, its advantages and disadvantages to the dairy industry
expansion and further implications. Furthermore, it analyses and evaluates the decision-making
theory being used on the particular platform.
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Fonterra had recently made an $11 million investment to upgrade its lactoferrin plant in Hautapu
(see figure 2). Though they analysed the information and planned to produce the expensive
formula, not only for the current market but for the market in the year 2025. According to Piddock
(2016), Fonterra predicts one-third of Japans population would be over 65 in 2025 and lactoferrin
could be potentially used for health products.
Figure 2: Panning for pink gold: Fonterra expands lactoferrin capacity. (Source: Foodworks, 2015)
There are various advantages of producing lactoferrin. Scoop Media (2013) reports, the price of
this protein is over US$500 per kilogram. Unlike the milk powder, lactoferrin was not sold in an
auction system, but through a partnership with customers. In addition, Fox (2010) shows the
demand for this protein formula is high because only 100 tons make in the whole world per year.
The financial risk of this product is low in the market whilst the market potential is medium for
infant formula and a bit higher for dairy products (see figure 3).
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Figure 3: The world lactoferrin and lactoperoxidase market. (Source: UBIC Consulting, 2015)
However, some disadvantages found in manufacturing this formula. The technology being used is
yet to reveal. To produce one kilogram of lactoferrin it needs about 10,000 litres of milk and the
remaining acid whey liquid need to be disposed.
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business at risk. They have been using Excel to manage and manipulate information which needs
to put significant additional effort. Inconsistent information had breached the trust in results.
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to their distributors to analyse the market trend and minimise the conflicts in distribution areas.
However, the main disadvantage of SAP platform is high implementation cost.
Figure 6: Analysis of the profitability with SAP HANA. (Source: ASUG Webcast, 2011, p. 10)
SAP Solutions (2016) reveals their platforms for real-time decision making. SAP HANA Cloud
Platform is recognised for effective and timely decision-making processes. SAP HANA Live is
designed to provide real-time analysis and operational reports. SAP strategic workforce planning
application allows managers to generate complex reports (see figure 7). In addition, their range of
applications helps organisations to analyse Big Data in real-time and make strategic management
decisions. Furthermore, SAP (n.d.) states, by a combination of the in-memory processing power
of SAP HANA with Hadoop open-source software framework it is possible to extract maximum
value from Big Data.
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planning. SAP (n.d.) remarks, web-based data analysis as part of an integrated BI platform
solution.
Figure 9: Iterative decision modeling cycle. (Source: Object Management Group, 2014, p. 4)
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SAP NW DSM (NetWeaver Decision Service Management) combined with DecisionsFirst Modeler
to create decision requirements diagrams (see figure 10). DecisionsFirst Modeler is an application
for decision modeling, based on the Decision Model and Notation (DMN) standard. DMNs
common notation is easy to understand for both technical and business users. Some decisions can
be automated using SAP NW DSM. Taylor (2012) illustrates repeatable, non-trivial and measurable
business impact decisions can be automated in NW DSM (p. 2). To calculate return on investment
(ROI), an effective method is to compare the cost of a traditional development effort with rulesbased development cost and then to factor in the additional maintenance projects to balance the
system over time value (p. 3). Advantages of using SAP NW DSM in decision modeling are it
increase business value, development efficiency and maintenance efficiency.
Figure 10: Decision requirements dagram. (Source: Taylor & Ziegler, 2013)
The concept in SAP HANA decision table is columns represent the operations and definition of the
rules and rows describe the value associated with the operations and definition. IF, ELSE and THEN
conditions are being used to model the decisions. For example: IF MODEL= Y1 AND
MANUFACTURER = XYZ AND QUANTITY > 10 THEN set DISCOUNT = 18 (see figure 11). Another
example: IF Customer.ID = CUST_120000 AND Customer.CurrentBalance <= 2000000 THEN set
Customer.Type = Silver ELSE set Customer.Type = Gold (see figure 12). These decision tables can
be exported as Microsoft Excel worksheets to use to manage the business rules.
Fonterra could use these mathematical logics to analyses their employee structure, production
data, stock data, distribution processes and various trends in the market. Moreover, they can
evaluate the facts and drive their future business to the right direction.
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Figure 12: A decision table to set the customer type in credit card department.
(Source: Shukla, 2013)
Portougal & Sundaram (2005) points out, intelligence density (ID) is the key concept to
understand the role of an enterprise DSS (p. 140). According to them, ID can be measured using
the utility concept, which is initially introduced in decision theory and game theory. Utilities of
decision-making power extracted should be divided by the units of analytic time spent by the
decision maker to calculate the ID. In addition, DSS with integrated databases provides large
amount information within the organisation, hence help to maintain lower levels of the ID
pyramid (see figure 13).
Figure 13: ERP and DSS support for increasing intelligence density.
(Source: Portougal & Sundaram, 2005, p. 141)
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Conclusion
The significance of the factory expansion is to upgrade the processes to manufacture various new
products. The demand for the products such as lactoferrin are open up the opportunities to
ensure the business profitability and increase the milk price. This essay critically analysed the
immense contribution of MSS within the industry to make managerial decisions. Moreover, the
essay evaluated the theory and the model being used in SAP platform by analyzing its decisionmaking processes. The study gained the knowledge of the decision modelling concept and how it
can be used in actual environments to make real-time decisions. A further implication of the study
is; the application platform can be customized according to results analysed and the data can be
used to model the management decisions.
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