Chapter 10 ITC 429
10.2.2 Briefly describe the latest ERP features and add-ons?
-order processing, payments, signatures -customer service from anywhere -marketing can manage all customer relations -production to access real-time info to reduce stockouts and excess inventory -customers can access pay, view invoices
10.3.7 What are the top two strategic priorities of SCM executives?
-reduce uncertainty and variability to improve the accuracy of forecasting -to. increase control over processes to achieve optimal inventory levels, cycle time, and customer service The top two strategic priorities of executives are supply chain analytics and multichannel fulfillment.
10.3.9 What are the top innovative digital technologies impacting SCM
-robotics and automation -inventory and network optimization tools -sensors and automatic identification -predictive analytics -wearables and mobile technology -driverless vehicles and drones -inventory and network optimization tools -cloud computing and storage - 3D printing
eight technologies that can either increase competitive advantage or disrupt an organization are as follows
-robotics and automation -inventory and network optimization tools -sensors and automatic identification -predictive analytics -wearables and mobile technology -driverless vehicles and drones -inventory and network optimization tools -cloud computing and storage - 3D printing
Diagram of the Supply chain
-supplier; focuses on raw materials supplied to distributors -manufacturer or assembler; converts raw materials into finished product -distributor; ensures products reach point of sale -retailer; offers products for sale -order fulfillment and logistics; focuses on delivery of products to the customer -customer; recieves purchased products
enterprise systems fall in three categories
1. Enterprise resource planning (ERP) 2. supply chain management (SCM) 3. Customer relationship management (CRM) 4. Enterprise Social Platforms (ESPs) (newer) -integrated by their connection to central data repositories that enable them to stay synchronized and share corporate data
10.2.5 List and briefly describe three of the ERP implementation success factors
1. Focus on business processes and requirements (once these are defined, IT can intelligently choose the software, modules, and vendor that fit their unique business needs) 2. Focus on achieving a measurable ROI (establish key performance measures which will be proof of how well the ERP is meeting the needs) 3. Use a strong project management approach and secure commitment of resources (there must be people put in charge of managing the ERP) Students may give the inverse of success factors; i.e., failure to have strong program management, executive support, and buy-in, sufficient change management and training, realistic expectations, focus on business processes. The success of an ERP depends on organizational and technological factors that occur prior to, during, and after its implementation. Knowing what to do and what not to do are important.
Six factors needed for ERP success:
1. Focus on business processes and requirements (once these are defined, IT can intelligently choose the software, modules, and vendor that fit their unique business needs) 2. Focus on achieving a measurable ROI (establish key performance measures which will be proof of how well the ERP is meeting the needs) 3. Use a strong project management approach and secure commitment of resources (there must be people put in charge of managing the ERP) 4. Obtain strong and continuing commitment from senior executives (must have support or it will fail) 5. Take sufficient time to plan and. prepare before starting the project (measure twice and cut once when choosing vendors) 6. Invest in training and change management (when you design an ERP you are redesigning the organization across the board)
10.1.5 What are two challenges of legacy systems?
1. High maintenance costs (too expensive to update legacy systems) 2. Inflexibility (legacy systems cannot be easily. redesigned to fit with new applications) Legacy systems (older business systems that may be still in use) are difficult and expensive to maintain, update, and interface securely with leading-edge business apps.
Major reasons why companies replace parts of their legacy systems or supplement them with enterprise systems:
1. High maintenance costs (too expensive to update legacy systems) 2. Inflexibility (legacy systems cannot be easily. redesigned to fit with new applications) 3. Integration obstacles (cannot integrate with new systems) 4. Lack of Staff (hard to hire staff qualified to write languages and work on applications) 5. Cloud (using this lowers up-front costs, can be a good fit for companies facing upgrades)
Steps in the Order Fulfillment Process:
1. Make sure that the customer will pay (verify and make sure they agree to terms) 2. Check in-stock availability and reorder as necessary 3. Arrange shipments (both the packaging/shipping department and internal shippers or outside transporters may be involved) 4. Insurance (finance and insurance company may be involved and the information needed to be produced or procured. Production is done in-house or outsourced) 5. Replenishment 6. In-house production (this needs to be planned and scheduled and may involve people, materials, components, machines, financial resources, suppliers, subcontractors) 7. Use suppliers 8. Contacts with customers 9. Returns
These situations are well changes are needed when. adapting to a new enterprise system
1. Redesign of business processes (they need to be simplified/redesigned/automated partially or totally) 2. Changes in how people perform their jobs (new processes and retraining) 3. Integration of many types of information systems (so data can flow which is essential to productivity improvements)
10.2.4 What types of situations are best suited to investing in an ERP?
1. Select- an ERP solution that targets the company's requirements 2. Evaluate- potential ERP vendors' strengths and weaknesses 3. Meet- with each vendor and get a hands-on demo of its ERP solutions 4. Calculate- ERP's total cost of ownership (TCO)
Four Rules for Selecting an ERP
1. Select- an ERP solution that targets the company's requirements 2. Evaluate- potential ERP vendors' strengths and weaknesses 3. Meet- with each vendor and get a hands-on demo of its ERP solutions 4. Calculate- ERP's total cost of ownership (TCO)
10.1.2 Describe the three types of enterprise systems
1. enterprise resource platform (Integrates an enterprise's internal applications, supports its external business processes, and links to its external business partners.) 2. customer relationship management (Helps create a total view of customers to maximize share-of-wallet and profitability. A business strategy to segment and manage customers to potimize customer lifetime value (CLV)) 3. Supply Chain Management (is the efficient management of the flows of material, data, and payments among the companies in the supply chain) Four types of enterprise systems are: ERP: Enterprise Resource Planning SCM: Supply Chain Management CRM: Customer Relationship Management Enterprise Social Platforms
Supply chains involve the flow of materials, data, and money. Descriptions of these three main flows are as follows:
1. material or product flow: the movement of materials and goods from a supplier to its consumer. Ex. Ford suppliers dealerships that, in turn, sell to end-users. Products that are returned make up the reverse supply chain 2. Information flow: Movement of detailed data among members of the supply chain, EX. Order information, customer information, order fulfillment, delivery status, and proof-of-delivery confirmation. Most information flows are done electronically, although paper invoices or receipts are still common for noncommercial customers 3. Financial flow: Transfer of payments and financial arrangements Ex. billing payment schedules, credit terms, and payment via electronic funds transfer (EFT). This provides for electronic payments and collections. It is safe, secure, efficient, and less expensive than. paper check payments
10.2 Questions: What % of the time do ERP implementations fail?
50-70% of the time
3D Printing
Additive manufacturing could revolutionize production processes and have far-reaching future implications for product. supply chains. This can reduce costs for production components
ERP failures are common and costly
Because an ERP implementation is so complex...
10.1.8 Explain the three types of changes needed when an enterprise system is implemented
Best practices for implementing an enterprise system involves changes in the management of processes, people, and existing systems. Three required changes are as follows: 1. Redesign of business process (simplified and automated either totally or partially) 2. Changes in how people perform their jobs (retraining) 3. Integration of many types of info systems (so data can flow seamlessly)
10.1.6 Why do companies migrate to enterprise systems
Companies tend to migrate to an enterprise solution when they need to consolidate their disparate systems, such as when limitations caused by their existing legacy systems interfere with performance or the ability to compete. Here are major reasons why companies replace parts of their legacy systems or supplement them with enterprise systems. It is important to realize that many companies do not have the resources to replace all their legacy systems. High maintenance costs. Maintaining and upgrading legacy systems are some of the most difficult challenges facing CIOs (chief information officers) and IT departments. Business value deterioration. Technological change weakens the business value of legacy systems that have been implemented over many years and at huge cost. Inflexibility. Legacy architectures were not designed for flexibility. These huge systems cannot be easily redesigned to share data with newer systems, unlike modern architectures. Integration obstacles. Legacy systems execute business processes that are hardwired by rigid, predefined process flows. Their hardwiring makes integration with other systems such as CRM and Web-based applications difficult and sometimes impossible. Lack of staff. IT departments find it increasingly difficult to hire staff who are qualified to work on mainframes and applications written in languages no longer used by the latest technologies. Cloud. The cloud has lowered upfront costs. Cloud-based enterprise systems can be a good fit for companies facing upgrades to their legacy ERP and other enterprise systems.
10.2.1 What are the three ways ERP can be deployed?
Enterprise Resource Planning (ERP) is the software infrastructure that integrates an enterprise's internal applications, supports its external business processes, and links to its external business partners. ERP systems are commercial software packages that integrate business processes, including supply chains, manufacturing, financial, human resources, budgeting, sales, and customer service. ERPs have migrated from early client-server architectures to a Web-based architecture. ERPs were devised to help managers run a business, whether a manufacturing, distribution, retail, or service organization. Ideally, each business function would access a centralized database instead of data silos. Departments stay informed about what is ongoing in other departments that impact its operations or performance.
10.1.1 Explain the purpose of enterprise system?
Enterprise systems integrate internal core business processes by their connection to central data repositories that enable them to synch and share the latest data and they link the enterprise with suppliers, business partners, and customers.
Customer Relationship Management (CRM)
Helps create a total view of customers to maximize share-of-wallet and profitability. A business strategy to segment and manage customers to potimize customer lifetime value (CLV)
10.1 Questions: All of the following are examples of enterprises systems typically implemented to improve business processes and functions through integration, EXCEPT:
Human Resource managment
Enterprise Resource Planning (ERP)
Integrates an enterprise's internal applications, supports its external business processes, and links to its external business partners. Integrate business processes, including supply chains, manufacturing, financial, human resoources, budgeting, sales, and customer service.
10.1 Questions: Much of the complexity in implementing an enterprise system is due. to getting new apps or system modules to ____ with legacy systems
Interace
10.2 Questions: _________ is a key factor in lower costs
Inventory managment
10.1.7 Explain the challenges of enterprise system implementation
It is expensive, a long process, requires retraining of employees; new systems to be formed enterprise systems are complex and a lot of the struggle comes from getting new apps or systems to interface with existing legacy systems Enterprise systems require data transfers-- often to mainframes (these are the workhorse of the systems that run the majority of the business transactions some enterprises to not integrate with their old technology and solely just create a new system entirely
Four Rules for Selecting an ERP: Calculate
Make sure you understand the TCO that includes not only the monthly SaaS fee but also implementation, customization, management services, training, additional hardware and networks, additional bandwidth for a web-based product, and IT staff
10.2.6 Describe causes or factors that contribute to ERP failure
Not listening and paying attention to the success factors; they are complex machines that will not just integrate with the company by themselves
Top CRM vendors include;
OnContact, Salesforce, SalesNexus, NetSuite, TeamWox, and worksbooks.com
10.3 Questions: A set of complex processes involved in providing customers what they ordered on-time and all customer services related to on-time delivery of a product is referred to as:
Order fulfillment
Four CRM critical success factors
People 38% Technology 35% Processes 33% Strategy 33%
10.1 Questions: Best practices for implementing ERP involve changes in the management of
People, processes, existing systems
Predictive Analytics
Predicting patterns associated with consumer behavior; this allows managers to manage inventory better, plan more reliable transportation networks, and reduce. variability in lead times. This can enhance service levels, lower costs, and improve the bottom line
10.2 Questions: To succeed, an ERP depends on organizational and technological factors that occur
Prior to, During and after
Inventory and network optimization tools
Route planning, product flow path analysis, and asset optimization help companies streamline operations, improve inventory control, gain visibility, manage risk, and reduce cost
Differences between ERP and CRM
Similar technology wise. offered on site or cloud, must share data -ERPs require tight business rulres and user practices and comply with principles in industry -CRM primary users are sales and marketing and are accustomed to creativity and closing the deal
10.3.4 Describe SCM
Supply chain management (SCM) is the efficient management of the flows of material, data, and payments along the companies in the supply chain, from suppliers to consumers. SCM systems are configured to achieve the following business goals: To reduce uncertainty and variability in order to improve the accuracy of forecasting To increase control over the processes in order to achieve optimal inventory levels, cycle time, and customer service.
10.3.1 What is a supply chain?
Supply chains involve the flow of materials, data, and money. The journey that a product travels, starting with raw material suppliers, to manufacturers or assemblers, then distributors and retail sales shelves, and ultimately to customers is its supply chain. Supply chain starts with the acquisition of raw materials or the procurement (purchase) of products and proceeds through manufacture, transport, and delivery—and the disposal or recycling of products.
10.3.8 What are the two major barriers preventing innovation in the supply chain
The two major barriers preventing innovation in the supply chain are a talent shortage and a continuing focus on cost reduction.
SAP and Oracle
Two largest vendors of ERPs are
one-back and one-up from them in the supply chain
a company will manage only partners who are ______-
10.3 Questions: A digitalized, 24/7 supply chain is referred to as being:
always-on
Robotics and automation
as technology becomes smarter, faster, and cheaper, it is being called upon to do more
expensive activities
attracting and acquiring new customers are expensive activities
back-office operations
back-office operations support the fulfillment of orders
Best practices for implementing enterprise systems involve
changes in the management processes, people, and existing systems
Four Rules for Selecting an ERP: Evaluate
check the financial health of the vendor and if its customers are satisfied
10.2 Questions: Early ERPs ran out an architecture known as a:
client-server architecture
enterprise system
cross-functional and inter-organizational systems that support the business strategy -offer seamless data handling between all the different types. of systems and are easier to secure
Value-added reseller (VAR)
customizes or adds features to a vendor's software or equipment and resells the enhanced product
10.1.4 What is a value-added reseller?
customizes or adds features to a vendor's software or equipment and resells the enhanced product A value-added reseller (VAR) is company that customizes or adds features to a vendor's software or equipment and resells the enhanced product.
enterprise social platform (ESP)
designed to facilitate collaboration and communication among employees of an organization -Enhances social networks, both within the enterprise and across key members of the enterprise's supply and distribution chains. An important method for enhancing communication, coordination, and collaboration for business purposes.
3D printing
destined to transform every. major industry and change the way we live, work, and play in the future -1 of 8 technologies that will rethink how businesses do things; a disruptive technology -additive manufacturing, builds objects layer by layer to create real-world objects -used in consumer-product designers, automotive manufacturing engineers, medical and dental labs, replacement parts, customized products on demand; reduces research and development costs
10.3.6 Explain logistics
entails all the processes and information needed to move products from origin to destination efficiently. The order fulfillment process is part of this
logistics
entails all the processes and information needed to move products from origin to destination efficiently. The order fulfillment process is part of this
10.1 Questions: An ______________ is a large-scale application software package that supports business processes, information flows, reporting, data analytics in complex organization
enterprise system
Four Rules for Selecting an ERP: Meet
experience a demo to see the usability of each module and how it would work in the business
important challenge for business leaders
how to integrate their data existing in the many different types of info systems (ISs), such as TPS, MIS, DSS, EIS to better meet the needs of the customers and achieve business objectives
ERP originated
in the 1990s as a means to integrate accounting, finance, HR, marketing, and other critical business functions. Made to help managers run a business
core business processes
including accounting., finance, sales, marketing, human resources, inventory, productions, and manufacturing -enterprise systems allow for these to be automated for consistency and efficiency
CRM
is a widely used and mature technology that can be deployed on-premises or on-demand as a service or Saas; with a lot of competition from the four big CRM producers, the product has transformed and it can provide managers with a 360-degree view of the customer relationship, enable real-time responses, and improve sales productivity and predictability -but CRM cannot do anything alone
always-on supply chain
is an integrated set of supply networks characterized by a continuous, high-velocity flow of information and analytics creating predictive, actionable decisions to better serve the customer 24/7
supply chain management (SCM)
is the efficient management of the flows of material, data, and payments among the companies in the supply chain -supports the steps in the supply chain-- procurement, sourcing, manufacturing, storage, inventory control, scheduling, order fulfillment, and distribution. Improves decision making, forecasting, optimization, and analysis
supply chain management (SCM)
is the efficient management of the flows of material, data, and payments among the companies in the supply chain, from suppliers to consumers. SCM systems are configured to achieve the following business goals: -reduce uncertainty and variability to improve the accuracy of forecasting -to. increase control over processes to achieve optimal inventory levels, cycle time, and customer service
3D bioprinting
is the medical application of 3D printing to produce living tissue and organs. Biotech firms are using 3D printing for tissue engineering applications where organs and body parts are built using inkjet techniques. Layers of living cells are. deposited onto a gel medium and slowly built up to form three-dimensional structures
order fulfillment
is the set of complex processes involved in providing customers with what they ordered on time and all customer services related to on-time delivery of a product -depends on the type of product/service and purchase method (online, in-store, catalog) -this is part of back-office operations and is closely related to front-office operations -key aspects: delivery of materials/products at the right time, to the right place, and at the right cost
10.1 Questions: ____________ systems are older information systems that have been maintained over several decades because they fulfill critical needs
legacy systems
10.3 Questions: A supply chain involves the flow of:
materials, data, moneu
ERP today
mature technology, but now it is deployed differently (on cloud, or managed service). Newer ones are designed with a focus on social collaboration, deployment flexibility, faster response, and accessibility from mobile devices. New adds ons and apps allow: -order processing, payments, signatures -customer service from anywhere -marketing can manage all customer relations -production to access real-time info to reduce stockouts and excess inventory -customers can access pay, view invoices
interface
means to connect to and exchange data with apps and systems
10.3.2 List four functions carried out by companies in a supply chain
my answer: -supplier; focuses on raw materials supplied to distributors -manufacturer or assembler; converts raw materials into finished product -distributor; ensures products reach point of sale -retailer; offers products for sale -order fulfillment and logistics; focuses on delivery of products to the customer -customer; recieves purchased products The supply chain is like a pipeline composed of multiple suppliers, distributors, manufacturers, retailers, and logistics providers that: purchase (procurement) raw materials or products transform materials (i.e., manufacture, service) into intermediate or finished products transport and deliver finished products to retailers or customers, and dispose or recycle product
10.3.5 What are steps in the order fulfillment
my answer: 1. Make sure that the customer will pay (verify and make sure they agree to terms) 2. Check in-stock availability and reorder as necessary 3. Arrange shipments (both the packaging/shipping department and internal shippers or outside transporters may be involved) 4. Insurance (finance and insurance company may be involved and the information needed to be produced or procured. Production is done in-house or outsourced) 5. Replenishment 6. In-house production (this needs to be planned and scheduled and may involve people, materials, components, machines, financial resources, suppliers, subcontractors) 7. Use suppliers 8. Contacts with customers 9. Returns
10.3.3 List and describe the three main flows being managed in a supply chain
my answer: 1. material or product flow: the movement of materials and goods from a supplier to its consumer. Ex. Ford suppliers dealerships that, in turn, sell to end-users. Products that are returned make up the reverse supply chain 2. Information flow: Movement of detailed data among members of the supply chain, EX. Order information, customer information, order fulfillment, delivery status, and proof-of-delivery confirmation. Most information flows are done electronically, although paper invoices or receipts are still common for noncommercial customers 3. Financial flow: Transfer of payments and financial arrangements Ex. billing payment schedules, credit terms, and payment via electronic funds transfer (EFT). This provides for electronic payments and collections. It is safe, secure, efficient, and less expensive than. paper check payments
10.1.3 What is customer lifetime value (CLV)
my answer: It is how loyal a customer is going to be over the years and how valueable they are to the company
SCM help companies
organize and manage supply chains, vendor relationships, and distribution channels to better manage resources and improve efficiency
ERPs are acquired by
purchasing or leasing in a Software-as-a-Service (SaaS) arrangement; these must be customized to the company's specifications. Two examples of how they can be customized: 1. Boers & Co Fine Metalworking- specific companies have different needs and the value placed at each need is unique and different 2. Peters Ice Cream-a certain portion of a company may have different needs and those can be customized
CRM technology wise
refers to the methodologies and software tools to leverage customer data in order to achieve the following: -identify the appropriate CX for customers -predict and prevent attrition of a customer, unless he or she is not worth retaining -acquire new customers who are most likely to become profitable -up-sell or cross-sell to unprofitable customers to mvoe them to a profit possition -reduce inefficiencies that waste advertising dollars
cross-sell
sell additional products/services
up-sell
sell more profitable products/services
10.2 Questions: The central feature of all ERP systems is referred to as a:
shared database
central feature of ERP software is
shared database that supports multimple functions used by different business units so that employees in different divisions, such as accounting and sales, can rely on the same information for their different purposes
10.2.3 Describe ERP from a technology perspective?
software infrastructure that links an enterprise's internal applications and supports its external business processes
supply chain
starts with the acquisition of raw materaisl or the procurement (purchase) of products and proceeds through manufacture, transport, and delivery-- and the disposal or recycle of products the journey a product travels; a network of raw materials suppliers, distributors, manufacturers or assemblers, order fulfillment and logistic providers, and retailers that participate in the production, delivery, and sale of a product to the customer -pipeline composed of multiple companies that coordinate activities to differentiate themselves from their competitors
front-office operations
such as sales and advertising are visible to customers
10.3 Questions: The journey that a product travels is known as a:
supply chain
Sensors and automatic identification
the. data these generate can lead to better business models and increased visibility in supply chains. Sensors help users reach decisions about how to make, move, or change those objects
legacy systems
these are older information systems (ISs) that have been maintained over several decades because they fulfill critical needs
Four Rules for Selecting an ERP: Select
these packages are tailored for organizations based on their size and industry; important for it to support critical functions of the organization, such as accounting or inventory management
CLoud Computing and Storage
these play a critical role in the improvement of SCM by supporting an enterprise's efforts to share data with multiple, geographic dispersed partners. Benefits of this include improvement of collaboration among supply chain partners, cost-effective use of staff resources, and ability to adapt to changing business needs quickly
Driverless Vehicles and Drones
these things use a variety of technologies, including sensors, cameras, and advanced diver associated systems, to handle some or all functions of operating a vehicle
Wearable and Mobile Technology
these things within the supply chain are improving worker safety and increasing transparency within the supply chain and avoid potential bottlenecks
three bonuses of enterprise systems
they enable employees to access, use, and understand data; allow companies to see their customer loyalty; improve communication globally
companies move to enterprise solutions when
they need to consolidate their disparate systems and there are limitations with legacy systems
CRM matters because
they play a major role in customer experience (CX) and good CX helps to retain customers (the ones worth retaining), intelligently managing relationships with customers can increase revenues and net profits significantly -effective ___ is data-driven, complex, and continuously changing, this also helps to integrate departments customer relations efforts
implementing an enterprise system
this is complex, time-consuming, and typically requires the help of a consulting firm, vendor, or vanue-added reseller (VAR)
enterprise application integration (EAI)
this layer enables the ERP to interface with legacy apps, and it is a middleware that connects and acts as a go-between for applications and their business processes
10.3 Questions: Front office operations such as sales and advertising are _________ to customers
visible
