Sample Answer
Feasibility Study and Use Case
Introduction
Information Systems (IS) play a vital role in enhancing operational efficiency, data accuracy, and decision-making within manufacturing environments. With growing competition and the increasing complexity of production processes, manufacturers are relying heavily on digital solutions to streamline workflows and reduce human error. One such solution is the implementation of a barcode system for data collection and inventory management. This report explores the economic feasibility of introducing a barcode system at a hypothetical medium-sized company, “Hatfield XYZSmart Components Ltd.”, and provides a Use Case diagram to illustrate system functionality and relationships.
The Role of Feasibility Studies in Manufacturing Information Systems
Before introducing any information system, it is critical to conduct a feasibility study to ensure the project’s viability. In manufacturing, feasibility studies assess not only the financial benefits but also the technical readiness, organisational fit, and risk factors associated with system integration.
According to Laudon and Laudon (2022), an economic feasibility study helps decision-makers determine whether the expected benefits of a new system outweigh the costs of development, deployment, and maintenance. It provides a systematic framework to evaluate investment efficiency, opportunity costs, and potential operational gains. For manufacturers, this is essential since technology adoption often involves significant upfront costs and temporary disruptions to existing workflows.
Factors to Consider When Determining Economic Feasibility
When evaluating the economic feasibility of an information system such as a barcode implementation, several factors must be considered:
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Initial Costs: Includes hardware (barcode scanners, printers, and labels), software acquisition, installation, and employee training.
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Operating Costs: Ongoing expenses like maintenance, software updates, consumables (labels), and technical support.
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Tangible Benefits: Measurable outcomes such as reduced data entry errors, lower labour costs, improved inventory tracking, and faster production reporting.
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Intangible Benefits: Non-quantifiable improvements like enhanced employee productivity, better customer satisfaction, and improved decision-making.
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Payback Period: The time required to recover initial investments through cost savings and efficiency gains.
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Risk Assessment: Evaluation of possible failures, technological obsolescence, or resistance to change.
A well-executed feasibility study integrates both financial and non-financial evaluations to ensure a balanced, realistic assessment of project potential.
Hypothetical Economic Feasibility Study for Hatfield XYZSmart Components Ltd.
Company Overview and Operations Scenario
Hatfield XYZSmart Components Ltd. is a medium-sized manufacturer producing precision-engineered parts for the automotive and electronics industries. The company employs 250 staff and operates a three-shift production system. Currently, data on production quantities, material use, and work orders are collected manually using paper-based forms. This system often results in delayed reporting, transcription errors, and inefficiencies in inventory control.
Proposed Solution
The company proposes adopting a barcode system to automate data collection on the shop floor. Each work order, raw material, and finished product will be tagged with a barcode label. Shop floor operators will scan items at various stages of production to update real-time information into a central database integrated with the company’s Enterprise Resource Planning (ERP) system.
