PVF manufactures high-quality wood furniture and distributes it to retail stores throughout the United States. Its product lines include dinette sets, stereo cabinets, wall units, living room furniture, and bedroom furniture. In the early 1990s, PVFâ€™s founder, Alex Schuster, started to make and sell custom furniture in his garage. Alex managed invoices and kept track of customers by using file folders and a filing cabinet. By 1994, business expanded and Alex had to rent a warehouse and hire a part-time bookkeeper. PVFâ€™s product line had multiplied, sales volume had doubled, and staff had increased to 50 employees. By 2000, PVF moved into its third and present location. Due to the added complexity of the companyâ€™s operations, Alex reorganized the company into the following functional areas:
- Manufacturing, which was further subdivided into three separate functionsâ€”Fabrication, Assembling, and Finishing
Alex and the heads of the functional areas established manual information systems, such as accounting ledgers and file folders, which worked well for a time. Eventually, however, PVF selected and installed a network server to automate invoicing, accounts receivable, and inventory control applications.
When the applications were first computerized, each separate application had its own individual data files tailored to the needs of each functional area. As is typical in such situations, the applications closely resembled the manual systems on which they were based. Three computer applications at PVF are depicted in Figure 3-1: order filling, invoicing, and payroll. In the late 2000s, PVF formed a task force to study the possibility of moving to a database approach. After a preliminary study, management decided to convert its information systems to such an approach. The company upgraded its network server and implemented a centralized database management system. Today, PVF has successfully deployed an integrated, company-wide database and has converted its applications to work with the database. However, PVF is continuing to grow at a rapid rate, putting pressure on its current application systems.
The computer-based applications at PVF support its business processes. When customers order furniture, their orders must be processed appropriately: Furniture must be built and shipped to the right customer and the right invoice mailed to the right address. Employees have to be paid for their work. Given these tasks, most of PVFâ€™s computer-based applications are located in the accounting and financial areas. The applications include order filling, invoicing, accounts receivable, inventory control, accounts payable, payroll, and general ledger. At one time, each application had its own data files. For example, there was a customer master file, an inventory master file, a back-order file, an inventory pricing file, and an employee master file. The order filling system used data from three files: customer master, inventory master, and back order. Today, however, all systems are designed and integrated through a company-wide database in which data are organized around entities, or subjects, such as customers, invoices, and orders.
PVF, like many firms, decided to develop its application software in-house; that is, it hired staff and bought the computer hardware and software necessary to build application software suited to its own needs. (Other methods used to obtain application software were discussed in Chapter 2.) Although PVF continues to grow at a rapid rate, market conditions are becoming extremely competitive, especially with the advent of the Internet and the Web. Letâ€™s see how a project manager plays a key role in developing a new information system for PVF.