Strategic Information System Making Connections

Question: Describe about the Report about Strategic Information System for Making Connections. Answer: Introduction The Company Citizen Gas is stated as one of the largest distributing and domestic gas supplies organization in the country United State. They are also in the business operation activities of providing commercial and industrial gas supply process. This company is also facing several difficulties during their business operations due to fluctuation in the market regarding demand and supply of gas services in United State. As per the above mentioned scenarios, Citizen Gas Company is working on their service improvement activities in terms of providing better gas supply and enhances the demand in the domestic market by considering different market conditions and scenarios. The overall business analysis of the company is showing that gas consumption of consumers in United State has been increases in the winter season whereas companys total supply of gas is lowest at that point of time, which is creating difficulties in supply chain management and their distribution cycle (Citizensenergygro up.com 2016). The company Citizen Gas basically outsource their gas product from the different pipeline enterprises on the basis of contractual basis. Also as per the demand of consumers in the market, they keep their gas storage in their factory storage. This supply chain management process handle by the company majorly influence the gas pipeline planning need to be considered by the Citizen Gas Company in future period of time. The company is also planning to reduce the constraints between products demand and their supply within a specified period of time. According to the situation analysis, it is found that if company is able to handle the process of their demand and supply of gas products in domestic market will create the beneficial scenario in the economy. Due to mismanagement in the supply chain management of the organization is showing that when demand of consumers are high in market, the supply of gas product is low, so company is unable to fulfil the appropriate demand of products for industrial and commercial consumers at the same, which is leading the company towards losses. Company has been appointed a director, who is responsible for all kind of corporate planning to meet the demand and supply of their gas product in the market of United State (Citizensenergygroup.com 2016). The main aim and objective behind this particular project report is to recognise and measure the level of problems and also provide appropriate solution to manage and enhance their business processes. The business report will be mainly focus on new demand and supply system introduces by the company in terms of preparation of appropriate monthly sheet with the support of systematic decision making process within a specified period of time. Company background Citizen Gas Company is one of the largest Gas supplies company in United States producing natural gas has been established in the financial year 1887. This company was initially operated by public charitable trust for the benefits of market consumers and society. The main business activity of the company is engaged with domestic consumers, who are utilizes natural gas for their household activities, industrial usage and commercial purposes as well. As per the given database, it is showing that company is holding maximum number of market share due to day by day enhancement in their household consumer supplies. This Gas service supplies companys database is showing that they are having more than 2 lakh customer base, in which 1 lakh, 60 thousand consumers are domestic and household user of their gas supplies. There are also 2,000 industrial and 38,000 commercial customer base holds by the Citizen Gas Company in the recent period of time. The consumption level of gas supplies is measure d highest for the household consumers. The actual vision of the company is shown that fulfil the promise of the Trust to serve our customers and communities with unparalleled excellence and integrity (Citizensenergygroup.com 2016). The overall supply chain management activities of the company is providing reliable services to their target consumers with proper management scenario. Structure of the company The overall organizational structure of the company is highly synchronized and structure for enhancement of business processes by focusing on the functional aspects retain by the company. The company is under maintenance of charitable trust and there is no such interference for the business functions operated by the company with a specified period of time. The appointed Chief Executive Officer of the company is also handling processes of some other organization at the same time with Citizen Gas Company, who is handling the entire operational activities and business processes of the company (Citizensenergygroup.com 2016). There are different department which is comes under operational department of the company Citizen Gas Company are sales and distribution, marketing and PR department, Human resource department and finance and accounts department. There are different department directors are hired to report the Chief Executive Officer of the company regarding all the business operatio ns performed by company within a specified financial period. The organizational structure of the company is organized in simple structure and proper organizational hierarchy (Citizensenergygroup.com 2016). The appointed managers in each department of the company is efficiently manage the responsibility towards their team performance as per the managing the operations of different departments. Figure 1: Organizational Structure of Citizen Gas Company(Source: Citizensenergygroup.com 2016) Business scope for CGC Citizen Gas Company is basically associate with business operation of natural gas segment and their customer service activities is popular enough in the local market. They have higher number of residential gas supply services but on the other hand, they are not capable enough to capture enough commercial and industrial segments for their customer segments. Citizen Gas Company is getting supplies from 5 pipeline companies for natural gas products. There are not such production activities done by the company to fulfil their customer services rather than gas supplies from other merchant companies. They are also facing huge problem while fulfilling demand of customers within particular period of time. Due to no production and less supply chain from merchant pipeline companies Citizen Gas Company is unable to supply commercial and industrial segment of customers, which is created huge losses for business operation activities. They are not capable enough to generate desired revenue from th e supply activities (Attaran and Attaran 2012). According to overall business analysis of the company, it is showing that company Citizen Gas is having higher scope of growth in economy by establishing their own gas pipeline and resource storage for instant natural gas supply to their potential and active customers. Citizen Gas Company is capable enough to properly plan and organize the storage facilities to properly handle the business operations by compensating the forecasted demand and supplies of their targeted customers. Figure 2: Current operational system of CGC for gas supplies Current Pipeline system of Citizen Gas Company (CGC) The recent gas pipeline system of the company Citizen Gas is divided into three different supply levels; purchasing gas from merchant companies, keeping storage services and also direct supply of natural gas to their targeted customers. The level one is followed by the company regarding purchase of gas products. They have also made contracts with another 5 gas pipeline company for next 5 to 15 years period of time. These supplies companies are also bound with contract to provide their gas storage facilities to Citizen Gas Company for contracted period of time. Some of the merchant companies are also bound with contract to provide fixed amount of gas production, if company will pay proper amount of money to their merchant companies (Poompipatpong and Ho 2013). These payment activities of company are causes losses for Citizen Gas Company at the time, when demand for gas is less and supply is huge from the contracted merchant companies. The second level of collection of resource for the company Citizen Gas is to keep their own storage facilities for supplying gas to their potential and active customers. This company is also facing problem while maintaining the product stock for fulfilment of their customers demand. Citizen gas can keep the gas products in storage by collecting natural gas products from their merchant companies. The third level is providing supplies of natural gas products to their targeted customers (Chen and Baldick 2011). Company is always planning their supply of products from different pipeline companies on the basis of actual demand of the consumers. On the basis of supply of natural gas products, Citizen gas company mostly providing services to residential customers on priority basis rather than industrial and commercial customer segments. Business performance of CGC The recent business operation of Citizen Gas The current business performance of the company is good according to their customer base. There are also some problems faced by the company due to lack of infrastructure and not capable enough to keep proper storage for fulfilment of forecasted demand of their customers. The revenue generating performance of the company on the basis of their operational activities will be measured on the basis of total sales budget, expense budget, tax rate paid and total sales order from customers. Sales order received from customers The total sales order received by the Citizen Gas Company is based on the total demand on the basis of various customer segments like residential, industrial and commercial consumers. They have provided individual consumer ID to provide natural gas services and also forecasting their future consumer demand on the basis counting these attributes. The consumers can easily login on recommended websites and book their natural gas product as per their requirement (Chen and Baldick 2011). On the basis of booking of products, merchant companies are supplying gas to the Citizen Gas Company as per the contract basis. The industrial and commercial consumers are also having similar kind of procedure for booking their gas required to the Citizen Gas Company for fulfilling their long term demand and supply processes. Sales budget The sales budget has been forecasted for the company on the basis of total demand of the potential and actual customers of the company. The company needs this forecast to achieve accurate number of revenue from their sales and distribution activities. Company do not have proper knowledge and plan to forecast future sales as per the operational activities of current gas pipeline system. The recent established system of the company will be recognised enough to plan the accurate demand and storage capability of the organization (Monczka et al. 2015). Month Sales figures residential (2015) in $ Budgeted residential figure 2016 in $ Sales commercial 2015 in $ Budget commercial in 2016 $ Sales industrial in 2015 $ Budget industrial in 2016 $ Jan 18,000,000 19,000,000 2,000,000 2,000,000 3,000,000 3,500,000 Feb 16,000,000 16,000,000 1,000,000 1,500,000 4,000,000 4,500,000 Mar 14,000,000 15,000,000 1,000,000 1,500,000 6,000,000 7,000,000 Apr 13,000,000 13,000,000 2,000,000 2,500,000 7,000,000 7,000,000 May 11,000,000 11,000,000 3,000,000 3,000,000 9,000,000 9,000,000 Jun 11,000,000 11,000,000 3,000,000 3,500,000 9,000,000 10,000,000 Jul 9,000,000 10,000,000 3,000,000 4,000,000 9,000,000 9,000,000 Aug 10,000,000 10,000,000 3,000,000 3,500,000 7,000,000 8,000,000 Sep 12,000,000 13,000,000 1,000,000 1,500,000 4,000,000 5,000,000 Oct 14,000,000 14,000,000 1,000,000 20,00,000 3,000,000 3,5000,000 Nov 15,000,000 16,000,000 2,000,000 20,00,000 2,000,000 2,5000,000 Dec 17,000,000 18,000,000 3,000,000 30,00,000 2,000,000 2,000,000 Total 160,000,000 166,00,000 25,000,000 30,000,000 65,000,000 71,000,000 Total 267,000,000 Table 1: Forecasted Sales budget for 2016 (Source: Created by author) Purchase budget The forecasted purchase budget of the company Citizen Gas is totally depends upon their selling and distribution activities. The purchase budget of the company will be totally based on total forecasted sales budget of the company as per the customers demand in the market. Due to contracted suppliers merchants are fixed with certain amount, which is showing that at the time of low demand of customers and budget for purchase gas products become higher in the organization (Joskow and Kahn 2012). Month Purchase budget of 2015 ($) Actual sale of 2015 ($) Purchase budget of 2016 ($) Jan 16,000,000 23,000,000 18,000,000 Feb 13,000,000 21,000,000 15,000,000 Mar 13,000,000 21,000,000 15,000,000 Apr 16,000,000 22,000,000 16,000,000 May 17,000,000 23,000,000 18,000,000 Jun 16,000,000 23,000,000 18,000,000 Jul 13,000,000 21,000,000 15,000,000 Aug 12,000,000 20,000,000 14,000,000 Sep 14,000,000 17,000,000 12,000,000 Oct 14,000,000 18,000,000 13,000,000 Nov 13,000,000 19,000,000 14,000,000 Dec 14,000,000 22,000,000 16,000,000 Total 171,000,000 250,000,000 184,000,000 Table 2: Forecasted purchase budget for 2016 (Source: Created by author) Expense budget The allocated expense budget of the company is generally covers all the fixed and variable expenses within a specified period of time. Fixed expenses are related to salary and depreciation value of acquired assets. On the other hand, variable expenses are regarding purchase of gas in different quantity (Winter and Knemeyer 2013). Company has been planned to fix the amount for keeping storage services to their customers. Operating Expenses Actual Expense 2015 ($) Budget expenses 2016 ($) Difference Accounting and Legal 800,000 600000 200000 Advertising 1600000 200000 -400000 Depreciation 2200000 240000 -200000 Dues and Subscriptions 1300000 900000 400000 Insurance 2900000 250000 400000 Interest Expense 3900000 280000 110000 Maintenance and Repairs 7900000 830000 -40000 Office Supplies 50000 30000 20000 Payroll Expenses 30000 30000 0 Rent 700000 800000 62000 Salaries and Wages 1530000 1580000 -50000 Taxes and Licenses 1120000 1140000 -20000 Web Hosting and Domains 200000 20000 0 Other 800000 100,000 70000 Total Operating Expenses 486100000 46888000 17220000 Table 3: Total forecasted Expense budget 2016 (Source: Created by author) Tax rate The taxation rate bear by the company CGC cannot be control by the government regulations and policies. The government of that particular economy become fluctuating which is become calculated as variable cost for the company within specified operational period of time (Zhu and Sarkis 2014). Future planning for their supply chain management activities The Citizen Gas Company is planning for organizing better gas supplies pipeline process for all targeted customer segments within that specific period. CGC is also planning for creating storage facilities for their potential customers which need to maintain by the different merchant companies within given period of time. Companys higher database for demand and supplies required to be manage on monthly basis also they are planning for incremental and expanding business plans (Seuring 2013). As per the new appointed director of the company has been planned new supply chain management design to fulfil customers demand within next few years. These incredible initiatives of the company create profitability and efficiency. The future planning of the organization is basically related to the storage planning within coming financial years and also enhances the financial scenario in future. New structure and system characteristics of CGCs current system Figure 3: New system provides storage facility and uninterrupted supply to customer(Source: Created by author) The overall new structure and characteristics of CGC has been totally changes due to enhancement of demand and supply facilities of the company. They have created different pipeline system and make their production system more complex in nature because of involvement of information system. The uneven supply chain management of the company will be affecting the total demand of the potential and active customers of the company. The Citizen Gas Company is facing problems due to fluctuation in storage units of the company due to uneven demand and supply (Winter and Knemeyer 2013). The new storage facility of the company will be supportive to manage continuous supplies in industrial, commercial with the residential customer segments. Identification of data for adequate planning capability of Citizen Gas Company The database collected and restore by the company are essential in terms of their monthly sales and purchase data in terms of supply ratio of 5 different pipeline system to manage the demand of customers within future period of time. There are three different kind of functional area which is properly maintaining the correlation between various attributes as per their forecasted data to structure the pipeline system. The operational activities of the company is making easier for their operational activities by following total consumption level of gas products (Chandrakar 2012). The primary customers line of the CGC is residential with higher supply level. The new structure of information system is properly managing the total demand and supply of gas products required to keep in the storage of the company. Conclusion The overall project report is showing that Due to lack of proper storage planning and facilities of Citizen Gas Company is unable to capture the market. They are also unable to fulfil the demand of customers and also supply of gas products creating problematic situations for the organization. The company is also contracted with various merchant companies to provide gas products which uneven and also not matching with expected demand of potential and active consumers of the company. Company has been appointed new director for their operational system, which is basically focusing on the total demand and supply of the organization in future period. 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