Information Systems Final Chapter 9

Enterprise systems

- Also called "enterprise resource planning (ERP) systems" - Suite of integrated software modules and a common central database - Collects data from many divisions of firm (manufacturing and production, finance and accounting, sales and marketing, human resources) for use in nearly all of firm's internal business activities - Information created by one process is immediately available for other processes

Pull-based model (demand-driven)

-Customer orders trigger events in supply chain -AKA build-to-order model -Help businesses move from sequential supply chains to concurrent supply chains

Business Intellegence

-Inclusion of BI with enterprise applications -Flexible reporting, ad hoc analysis, "what-if" scenarios, digital dashboards, data visualization

PRM

-Integrating lead generation, pricing, promotions, order configurations, and availability -Tools to assess partners' performances and enhance collaboration

CRM

-Knowing the customer -In large businesses, too many customers and too many ways customers interact with firm

ERM

-Setting objectives, employee performance management, performance-based compensation, employee training

Analytical CRM

Based on data warehouses populated by operational CRM systems and customer touch points

Safety stock

Buffer for lack of flexibility in supply chain

Internal Supply Chain Processes

Companies that manufacture, such as Nikes contract suppliers of sneakers, also manage their own _______________________ for transforming materials, components, and services their suppliers furnish into finished products or intermediate products (components or parts) for their customers and for managing materials and inventory.

How do CRM support marketing?

Customer relationship management software provides a single point for users to manage and evaluate marketing campaigns across multiple channels, including e-mail, direct mail, telephone, the Web, and wireless messages.

Operational CRM

Customer-facing applications such as sales force automation, call center and customer service support, and marketing automation

Explain and describe the concept of "demand planning."

Demand planning determines how much product a business needs to make to satisfy customer demand and is one of the most important and complex supply chain planning functions.

Supply chain planning systems

Enables the firm to model its existing supply chain, generate demand forecast for products, and develop optimal sourcing and manufacturing plans.

Business processes supported by enterprise systems are:

Finance/Accounting Human Resources Manufacturing/Production Sales/Marketing

Just-in-time strategy

If a manufacture had perfect information about exactly how many units of product that a customer wanted, when they wanted it, and when they could be produced, it would be possible to implement highly efficient J.I.T. strategy.

Leading enterprise software vendors are:

SAP, Oracle, IBM, Infor Global Solutions, and Microsoft.

How do supply chain management systems coordinate planning, production, and logistics with suppliers?

SCM

CRM packages typically include tools for:

SFA, Customer Service, and Marketing

Push-based model (build-to-stock)

Schedules based on forecast or best guesses of demand for products, and products are pushed to consumers.

CRM-

The concept of _________ is a key function of the business and the use of CRM systems to provide a single place to consolidate and analyze data about the customer.

Bullwhip Effect

a reoccurring problem, in which information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain. • A slight rise in demand for an item might cause members of the supply chain (distributors, manufactures, suppliers, secondary suppliers, and tertiary suppliers) to stockpile inventory so each has enough just in case. These minor fluctuations "ripple" through the supply chain, magnifying what was a small change from planned orders, creating excess inventory, production, warehousing, and shipping cost.

Global supply chain

companies entering international markets, outsourcing manufacturing operations, and obtaining supplies from other countries as well as selling abroad. Their supply chains extend across multiple countries and regions

(CRM) systems

examine customers from a multifaceted perspective. These systems use a set of integrated applications to address all aspects of the customer relationship, including customer service, sales, and marketing. -Capture and integrate customer data from all over the organization. -Consolidate and analyze customer data. -Distribute customer information to various systems and customer touch points across enterprise. -Provide single enterprise view of customers

How do enterprise systems work?

feature a set of integrated software modules and a central database by which business processes and functional areas throughout the enterprise can share data.

Finance/accounting

general ledger, accounts payable, fixed assets, cash management, tax accounting, credit management, financial reporting, etc.

finished

goods start out as raw materials and as they move through the supply chain, are transformed into intermediate products (also referred to as components or parts), and finally ________ products. The _________ products are shipped to distribution centers and from there to retailers and customers. returned items flow in the reverse direction from the buyer back to the seller.

Supply Chain

is a network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to its customers. It links suppliers, manufacturing plants, distribution centers, retail outlets and customers to supply goods and services from the source through consumption. Materials, information, and payments flow through this in both directions.

Supply chain management software

is a type of enterprise software for managing complicated supply chains that may include thousands of suppliers.

Cross-selling

is the marketing of complementary products to customers

Sales/marketing

order processing, billing, sales planning, contracts, credit checking, quotations, product configuration, etc.

Human resources

personnel administration, payroll, time accounting, benefits accounting, workforce planning, compensation, time management, etc.

Downstream

portion consists of the organizations and processes for distributing and delivering products to the final customers.

Upstream

portion of the supply chain includes the company's suppliers, the suppliers' suppliers, and the process for managing relationships with them.

Manufacturing/production

purchasing, shipping, inventory management, production planning, distribution, quality control, etc.

Because of uncertainties, manufacturers keep a safety stock. Why is this an inefficient result? Another effect of uncertainties is the bullwhip effect.

• Although excessive inventories are expensive, low fill rates are also costly because business may be lost from canceled orders. • Uncertainties arise because many events can not be foreseen: uncertain product demand, late shipments from supplier, defective parts, production process breakdowns. • To satisfy customers wants manufactures often keep a "safety stock" to deal with these unforeseen events by keeping an extra supply of materials.

If software doesn't support business processes:

• Businesses can rewrite some portions, but this can compromise information and process integration • Changing business processes to match software processes is better alternative

JIT Strategy

• Components arrive as they are needed • Finished goods shipped after leaving assembly line

why it is typically best to perform only minimal changes to enterprise software, and instead, change the way the firm works in order to conform to the software's business processes?

• Enterprise software is usually complex and extensive customization may degrade systems performance, compromising the information and process integration that are the main benefits of the system. • If companies want to reap maximum benefits from enterprise software, they must change the way they work to conform to the business process defined by the software.

What does it mean for the firm that enterprise systems enforce the use of common standardized definitions and formats for data by the entire organization?

• Enterprise systems allow senior management to: • find out easily at any moment how a particular organizational unit is performing, • determine which products are most/ least profitable, • and calculate cost for the company as a whole.

How do enterprise systems help businesses achieve operational excellence?

• Increase operational efficiency. (Standardize and coordinate business processes) • Provide firm wide information to support decision making. • Enable rapid responses to customer requests for information or products. • Include analytical tools to evaluate overall organizational performance • Because the system integrates order, manufacturing, and delivery data, manufacturing is better informed about producing only what customers have ordered, producing exactly the right amount of components to fill orders, staging production, and minimizing the time that components/ finished products are inventoried.

To implement enterprise software, firms:

• Select functions of system they wish to use. • Map business processes to software processes. • Use software's configuration tables for customizing.