QUESTION 1 [40 MARKS]

GAF Materials Corp. (GAFMC) began modestly in 1886 as the Standard Paint Company, with 18 people working in a remodeled sawmill. Today it is one of the most fully-integrated roofing manufacturers in the U.S. with sales over $1 billion and 3,300 employees working in 26 plants across the country (its plants are dispersed because of the high cost of shipping shingles). GAFMC markets its diverse building materials products to contractors and distributors throughout the U.S. and in selected areas of the world. Its professional customer service representatives are trained to assist customers and coordinate a range of services. GAFMC has built its success on the diverse range of its building materials products along with key corporate acquisitions, research and development, and customer service. Its integrated operations and self-sufficiency are the mainstay of the Company's future growth. Until recently, GAFMC lacked a financial management information system. It was unable to obtain a consistent view of key financial measures such as production rates and labor utilization across its 26 plants. The problem was a lack of consistent standards for capturing and reporting data. Instead, GAFMC had 26 different ways of measuring production. As a result, plant managers and executives at the companys headquarters were unable to compare the manufacturing operations. When a new chief financial officer came on board, he led an effort to standardize GAFs plant production data. The new financial system is based on the use of a database using enterprise software and was implemented at a cost of $2 million. The database ties the reporting systems of all the plants to one another and to the corporate offices in Wayne, New Jersey. The financial database receives input from many sources. Cost data is captured from various accounting systems including payroll (labor hours and costs), accounts payable (cost of raw materials and services), inventory control (stock counts and usage data). In addition, factory floor supervisors enter production statistics into workstations at the end of each shift. Each plants data is kept on a Windows server running the enterprise software, and the data is copied weekly to a central workstation computer. With the new consistent data and improved data reporting capabilities, plant managers can view shift-by-shift manufacturing efficiency, costs, machine downtime, Page 3 of 4 and other key indicators of plant operations. This enables them to see why another plant is doing something well and theyre not. Production managers can view shiftby-shift production data broken down to the machine level. This enables them to determine which machines are responsible for production downtime and enable them to take action to fix the problems. Buyers can review the cost of raw materials used in the shingles, insulation, vents, and other roofing products made by GAFMC. They can quickly determine whether materials cost less in different regions. The company expected that the full cost to develop the system will be recovered within 18 months. Sources: adapted from Craig Stedman, 26 Plants Under One Roof Discussion Questions:

(a) Describe the main issues GAFMC had and how these were resolved by the implementation of a financial management information system. (6 marks)

(b) Technology has enhanced connectivity and accessibility in such ways that it is now possible to look for information anywhere, anytime, and through any chosen way. Explain four ways though which management information systems have facilitated integration around an organisation. (8 marks)

(c) The financial management system implemented supported the business strategy of GAFMC. Outline the six key elements for the Strategic Information Systems (SISP) process. (12 marks)

(d) Explain Supply Chain Management concepts. Outline with brief explanation, any six benefits that GAFMC could benefit from implementing such a system? (14 marks)