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  • Sam Walton David Glass – CEO for twelve years, and took Wal-Mart from 16 billion to 165 billion. Was involved in the implementation of the Electronic Data Interchange, and the expansion of Wal-Mart (supercenters) into the supermarket segment. Lee Scott – still early to see exactly what is going to happen to Wal-Mart under Scott. Randy Mott – Advanced the EDI from 44 terabytes to 101 terabytes, allowing 104 weeks of sales information from the Wal-Mart stores. This lets suppliers see all of the information from buyers, the day before, by 4:00 AM .
  • Transcript

    • 1. What’s Happening?! Cisco and Ericsson have announced a new partnership to focus on selling to the telecom service companies. Comcast had dropped its bid to buy Disney. Nortel has fired its CEO. GM has produced its last Oldsmobile.
    • 2. Database Project
      • Tuesday, May 4 – Access orientation and interview BIS Market Research boss.
      • May 13 – Submit survey form at beginning of class.
      • May 18 – PC Lab to prepare Access database.
      • May 25 – Project is due.
      Database project team assignments are on the next two slides.
    • 3. Liao, Jimmy Wooley, Stacey Query, Mike Winicki, Elliott Nerenberg, Lewis Wells-Garcia, Guisselle Lee, Wayne Vu, Quan Perez, Johathan Moreno, Hannah Cooper, Charles Moon, Christopher Stallons, Chad Meneely, Claire Freebairn, Sean Magallanes, Piper Isabel, Thanya Legeny, Stephan Leow, Christopher Kwok, Ka Marangone, Fred Espino, Maniya Belliss, Jonathan Ditmars, Ivan Lin, Emerson Diep, David Pease, Eric Chiu, Chester Kelly, Maitland Allessio, Benjamin
    • 4. Stallons, Chad Meneely, Claire Query, Mike Winicki, Elliott Perez, Johathan Moreno, Hannah Pease, Eric Chiu, Chester Nerenberg, Lewis Wells-Garcia, Guisselle Marangone, Fred Espino, Maniya Lin, Emerson Diep, David Liao, Jimmy Wooley, Stacey Leow, Christopher Kwok, Ka Lee, Wayne Vu, Quan Kelly, Maitland Allessio, Benjamin Isabel, Thanya Legeny, Stephan Freebairn, Sean Magallanes, Piper Cooper, Charles Moon, Christopher Belliss, Jonathan Ditmars, Ivan
    • 5. Database Project BIS Market Research has been hired by a Venture Capital firm to do an analysis to determine the better business model for a company to pursue to be successful selling to consumers using the Internet. Some of the people who have been money sources for the VC are very upset that they have lost a significant amount of money on companies that have gone bankrupt. The VC wants data to support their contention that there are valid business models that can be successful selling products to consumers over the Internet. The focus of this analysis should be on consumers and not business to business.
    • 6. Database Project It would make sense to break the analysis into four consumer groups: 1) teens, 2) young adults, 3) mid-range adults and 4) seniors. This assignment will concentrate on the young adult category. The final results of this project will provide a statistical profile of factors that support a better business model for a company to be successful selling to consumers using the Internet and a list of survey respondents that will be contacted to be part of a focus group based on the fact that they have a high potential to buy things using the Internet.
    • 7.
      • To complete the database project, it will be necessary to accomplish the following:
      • Determine appropriate questions to generate the necessary data and design the questionnaire form (source document).
      • 2. Edit the data in the source documents.
      • 3. Input the data to create a database using Access database software.
      • 4. Do an analysis of the data collected.
      • 5. Prepare reports for the client summarizing the market analysis.
      • Prepare a report for BIS Market Research that summarizes the key learning points of the assignment.
      • When in doubt regarding any part of this assignment, do as you
      • would in a real world situation.
    • 8. Advice
      • Never forget that the client is paying a very large fee for the market survey and results that should assist them in their business.
      • If you collected the data, give it to the client. All of it!
      • How long of a survey would you be willing to complete?
    • 9.  
    • 10.  
    • 11.  
    • 12.  
    • 13.  
    • 14. Presentation Assignments
      • Ch. 6 Summary – Eric Pease
      • Ch. 7 Introduction – Chad Stallons
      • Ch. 7 Summary – Claire Meneely
      • Ch. 8 Introduction – Ivan Ditmars
      • Ch. 8 Summary – Jonathan Belliss
      • Ch. 9 Introduction – Chester Chiu
      • Ch. 9 Summary – David Diep
      • Ch. 10 Introduction – Charles Cooper
      • Ch. 10 Summary – Thanya Isabel
      • Ch. 11 Introduction – Maitland Kelly
      • Ch. 11 Summary – Ka Kwok
      • Ch. 12 Introduction – Emerson Lin
    • 15. Question! Name five companies that represent the best IS management jobs in the US.
    • 16. 5 Best IS Management Jobs
      • Wal-Mart
      • Dell
      • Schwab
      • Cisco
      • eBay
    • 17. Chapter 6 Introduction Enterprise e-Business Systems Applications in Business and Management
    • 18. Plan for the Day
      • Successful e-Business company examples
      • With a continuing eye on business benefits,
      • challenges and trends
      • B2B versus B2C (e-Business/e-Commerce)
      • The significance of e-Business communities
    • 19. What is e-Business? Electronic business not only deals with buying and selling online but also encompasses the entire online processes of developing, marketing, selling, delivering, servicing, and caring for products and services transacted on inter-networked, global market place of customers.
    • 20. E-Commerce Versus E-Business E-Commerce is the front end of a web-based approach. E-Business is positioning the entire organization to function in the most effective way possible in support of an E-Commerce approach.
    • 21. Scope of e-Business
      • Business to Consumer (B2C)
      • Business to Business (B2B)
      • Consumer to Consumer (C2C)
    • 22. Company Examples
      • Colgate-Palmolive – ERP success.
      • Cisco Systems – ERP success
      • Agilent Technologies – ERP problems.
      • Wal-Mart – SCM success
      • Solectron Corp. – SCM problems
      • McKesson – Web-based SCM integration
      • Mitsubishi Motors – CRM success.
      • Dell, Inc. – Direct Business Model (online everything)
    • 23. Cross Functional Integrated Systems
      • ERP – Enterprise Resource Planning
      • SCM – Supply Chain Management
      • CRM – Customer Relationship
      • Management
    • 24. Customers are in charge!
      • It is easier than ever for customers to comparison
      • shop and with a click of the mouse to switch
      • companies.
      • For this reason, customer relationships have become
      • a company’s most valued asset.
      • Every company strategy should address how to find
      • and retain the most profitable customers possible.
      It is significantly cheaper to retain existing customers than to gain new ones.
    • 25. Internet Communities Considered an important dimension in pursuing B2C opportunities via the Internet. “ Has there ever been an Internet buzzword that has been more abused or confused than community?”
    • 26. Success in e-Business Selection & Value Performance & Service Look & Feel Advertising & Incentives Personal Attention Community Relationships Security & Reliability Some Key Factors for Success in B2C
    • 27. The Future B2C, e-tailing, e-commerce, online retailing, online merchandising—whatever it is called—is here to stay. Yet, it’s got a ways to go until it hits the maturity curve. The latest trends to watch are online customer service, permission-based e-mail marketing and affiliate networks.
    • 28. Chapter 6 Enterprise e-Business Systems
    • 29. Plan for the Day
      • More on ERP, SCM and CRM
      • Successful e-Business company examples
      • Keys to e-Business success
    • 30. Chapter 6 Section I – Customer Relationship Management: The Business Focus Section II – Enterprise Resource Planning: The Business Backbone Section III – Supply Chain Management: The Business Network
    • 31. What is e-Business? E-Business not only deals with buying and selling online but also encompasses the entire online business processes of planning, developing, marketing, selling, delivering, servicing, and caring for products and services transacted on inter- Networked systems for a national and in many cases a global market place of customers.
    • 32. e-Commerce Versus e-Business
      • Jack Callon says that e-Commerce is the systems front end of e-Business. It is primarily the web page and the closely related functions and activities.
      • E-Business is posturing the organization so that business strategies, processes and systems are all prioritized and positioned to support such an approach.
    • 33. Scope of e-Business
      • Business to Consumer (B2C)
      • Business to Business (B2B)
      • Consumer to Consumer (C2C)
    • 34. Terms
      • e-Commerce
      • e-Business
      • Virtual Corporation
        • Partnerships
        • Outsourcing
      • Internet
      • Intranet
      • Extranet
      • Electronic Data Integration (EDI)
    • 35. Company Examples
      • Colgate-Palmolive – ERP success.
      • Cisco Systems – ERP success
      • Agilent Technologies – ERP problems.
      • Wal-Mart – SCM success
      • Solectron Corp. – SCM problems
      • McKesson – Web-based SCM integration
      • Mitsubishi Motors – CRM success.
      • Dell, Inc. – Direct Business Model (online everything)
    • 36. Accounting and Financial Information Systems What are they? Who uses them? How are they used?
    • 37. Types of Accounting Systems
      • Operational
      • Management
    • 38. Why do company use computers for their accounting systems? Repetitive Clearly defined procedures Must do it! Frequently meets all three of the common criteria: volumes, complexity and timing. Accounting is a combination of multiple sub-systems
    • 39. Basic IS Premise: BICARSA Customer Purchase Order Order Processing System System Database Accounts Receivable System Inventory Control Systems Sales Analysis
    • 40. Basic Business Premise
      • You can’t sell from an empty wagon.
      • Inventories are the graveyard of a business.
      Inventory carrying costs: Cost of money tied up in the manufactured or purchased inventory item. Direct inventory costs: warehouse, logistical equipment, utilities, employees, security, physical inventory and record keeping. Other inventory costs: obsolescence, damage, theft, lost, etc.
    • 41. Inventory Control Criteria 1. What balance is desired between inventory investment and customer service? 2. What balance is desired between inventory investment and costs associated with changes in the production line? 3. What balance is desired between inventory investment and the cost of placing inventory replenishment orders? 4. What balance is desired between inventory investment and transportation costs?
    • 42. Three Typical Objectives 1. Maximize customer service. 2. Minimize inventory investment. 3. Efficient, low-cost manufacturing operation.
    • 43. Next Business Premise
      • Three kinds of manufacturing companies:
      • Vertically integrated.
      • Vendor emphasis for components—assemble and test.
      • Outsource.
      • A company can do combinations of 2 and 3.
      How many companies do vertically integrated manufacturing?
    • 44. Therefore
      • An emphasis on just-in-time manufacturing and shipping direct to customers.
      • This can mean inventorying at the assembly level.
      The basic issues are lead-time to customer and related operating costs.
    • 45. Why Automate Manufacturing?
      • Consistency
      • Repetitiveness
      • Precision
      • Quality
      • Cost
      • Worker Safety
      • Eliminate Worker Boredom
    • 46. ERP
      • The cross functional enterprise system that integrates and automates many of the internal business processes of a company.
      • This includes manufacturing planning and operations, logistics, distribution, accounting, finance and human resources.
      • Serves as a vital backbone of the enterprise to achieve efficiency, agility and responsiveness required to succeed in a dynamic business environment.
    • 47. Business Processes and Functions Supported by ERP
      • Purchasing
      • and
      • Accounts
      • Payable
      • MRP
      • Inbound
      • Inventory
      • Plant
      • Management
      • Manufactur-
      • ing and
      • Production
      • Scheduling
      • Inventory Control
      • Distribution
      • and
      • Accounts
      • Receivable
      Customers Suppliers Finance and Accounting Human Resources Enterprise Resource Planning Demand Planning Manufacturing Planning Logistical Planning Distribution Planning Order Entry Fig. 6.9
    • 48. ERP Benefits and Challenges
      • Quality and Efficiency through integration of business processes.
      • Decreased Costs in both business and IT operations.
      • Decision Support based on more complete and timely information.
      • Enterprise Agility through more flexible organizational structures, managerial responsibilities and work roles.
    • 49. Colgate-Palmolive Implemented SAP to access more timely and accurate data, get the most out of working capital and reduce manufacturing costs. It needed the ability to coordinate globally and act locally. Expanded to all divisions worldwide during 2001.
    • 50. Costs to Implement ERP
      • Reengineering business processes 43%
      • Training and change management 15%
      • Software 15%
      • Data conversion 15%
      • Hardware 12%
    • 51. Colgate-Palmolive Before After Acquire an order 1-5 days 4 hours Process an order 1-2 days Distribution planning and picking up to 4 days 14 hours On-time deliveries 91.5% 97.5% Order to delivery time -50% Total delivery cost per case -10% Domestic inventories -1/3 Working capital (% of sales) 11.3% 6.3%
    • 52. Cisco Problems
      • Financial Justification of IS
      • Backend Infrastructure
      • Caliber of customer support decreasing
    • 53. Cisco Solution
    • 54. CFP Model
      • Client Funded Project Model
      • “Necessary Overhead” to “Strategic Partner”
      • Utilize IT as a Competitive Resource
      • Foundation of future small, large-scale projects
    • 55. Cisco ERP
      • $15 million dollar project
      • Management Support
        • Annual Goal
        • Functional Management
      • Foundation of Cisco integrated systems
    • 56. Agilent Technologies
      • The good news: “The ERP system is stable.”
      • The bad news: It involved a rocky migration that cost the company $105 million in revenue and $70 million in profit.
      • The Oracle e-Business software froze production for a week.
      • The Oracle systems handles half of the company’s worldwide production and almost all of its financial operations including order entry and shipping.
    • 57. Agilent Technologies
      • Agilent brought 2,000 legacy systems from HP when they were spun off as a separate company.
      • Part of the migration was moving 6,000 orders to the new system which resulted in problems.
      • “ Disruptions to the business after implementing the ERP system were more extensive that we expected.”
      • The issue wasn’t the quality of the Oracle software but the very complex nature of the ERP implementation.
    • 58. Agilent Technologies
      • Agilent comments based on this experience:
      • “ ERP implementations are a fundamental transformation of a company’s business processes.”
      • “ People, processes, policies and the company’s culture are all factors that should be taken into consideration when implementing such a system.”
      A consultant’s perspective: Ninety-nine percent of such rollout fiascoes are caused by management’s inability to spec out their own requirements and the implementer’s inability to implement those specs.
    • 59. SCM
      • Supply chain management is a cross-
      • functional inter-enterprise system that
      • integrates and automates the network of
      • business processes and relationships between
      • a company and its suppliers, customers,
      • distributors and other business partners.
    • 60. SCM Goal
      • The goal of SCM is to enable a company to achieve
      • agility and responsiveness in meeting the demands
      • of its customers and the needs of its suppliers by
      • enabling it to design, build and sell its products
      • using a network-based approach involving
      • business partners and processes within the supply
      • chain.
    • 61. SCM Functions
      • Planning:
        • Supply Chain Design
        • Collaborative Demand and Supply Planning
      • Execution:
        • Materials Management
        • Collaborative Manufacturing
        • Collaborative Fulfillment
        • Supply Chain Event Management
        • Supply Chain Performance Management
    • 62. Supply Chain Life Cycle Commit Schedule Make Deliver See Fig. 6.14 for complete diagram
    • 63. Wal-Mart Stores
      • 2004 FY Revenue $259 Billion
      • 2004 FY Profit $55 Billion
      • Cash position $5.2 Billion
      • 3,200 stores in the US
      • 1,100 stores in nine foreign countries
      • 1.3 million associates
      • Largest corporation in the world
      • Ranked No. 1 in Fortune Most Admired
      • Founded in 1962 in Rogers, Ark.
    • 64. Impressive Profile
      • Timely basic business strategy
      • Strong, effective customer focus.
      • Strong culture (at least traditionally under Sam)
      • Phenomenal growth (stores, revenue and profit)
      • Outstanding distribution system.
      • Good Information Systems organization.
      • Good business leaders.
      • Execute, execute, execute!
    • 65. Business Leaders
      • Sam Walton
        • Store founder and CEO until 1988
        • Died in 1992
      • David Glass
        • Replaced Sam and was CEO for twelve years
        • Took Wal-Mart sales from $16 billion to $165 billion
      • Lee Scott
        • Replaced David Glass as CEO in 2000
        • Started working for Wal-Mart in 1989
        • Served as Director of Transportation and President of Wal-Mart stores
      • Kevin Turner
        • Current CIO and Senior Vice President
      • Randy Mott
        • Former CIO and Senior Vice President
        • Advanced the EDI
    • 66. Wal-Mart and Mattel
      • Being a supplier to Wal-Mart is a two-edged sword. They are a phenomenal but tough customer as they demand excellence.
      • Wal-Mart invested early and heavily in a system to identify and track sales on an individual item level.
      • This made its IT infrastructure a key competitive resource that has been studied and copied by companies around the world.
      • “ Wal-Mart changed the face of business.”
      • First major company to share sales and inventory data with suppliers.
    • 67. Wal-Mart
      • Treats its suppliers as business partners.
      • Implemented a collaborative planning, forecasting and replenishment system.
      • Results in lower inventory carrying costs for both Wal-Mart and its suppliers.
      • Wal-Mart’s margins can be far lower than other retailers’ because they have such an efficient supply chain.
      • Key to Wal-Mart’s success is that it gets buy-in from its suppliers to an incredible degree.
    • 68. Mattel Perspective
      • Having sales data on a specific toy dictates ramping up or shutting down manufacturing.
      • Having data on a daily or hourly basis is necessary to figure out what is selling best and where to tailor manufacturing.
      • The greatest efficiencies will appear when the kind of trusting mutually beneficial relationship that Mattel has with Wal-Mart is duplicated with the rest of the company’s retail customers.
    • 69. McKesson and CVS
      • McKesson is the largest US distributor of pharmaceuticals, heath care products and medical/surgical supplies.
      • CVS is a leading drug retail chain who wants better integration with McKesson’s systems.
      • This dictates a much closer relationship between the two companies with McKesson even taking responsibility form CVS stock levels.
      • This requires seamless business process integration between the two companies and new applications that link CVS to McKesson’s operations department.
    • 70. Solectron Corp.
      • SCM theory contends that technologically driven improvements in inventory management especially through “just-in-time” production, direct online sales and supply chain management will result in increased efficiency and tailored output to match demand.
      • Because of these benefits a company will gain increased working capital, boost profit margins and level business cycles.
    • 71. Solectron Corp.
      • Killer applications cannot compensate for old-fashioned business judgment.
      • SCM cannot synchronize every party in the product chain by providing a transparent view of supply and demand.
      • Forecasts are still provided by people who can be overly optimistic or pessimistic.
    • 72. Solectron Corp.
      • In the fall of 2000, company management felt that there was a glut of telecom equipment supply.
      • It’s major customers: Cisco, Ericsson and Lucent was experiencing explosive growth and told Solectron to produce massive product volumes.
      • Solectron ended up with $4.7 billion in inventory that it obtained from its 4,000 suppliers.
    • 73. CRM
      • Customer relationship management is a cross-
      • functional enterprise system that integrates and
      • automates many of the customer serving processes in
      • sales, marketing and customer services that interact
      • with a company’s customers.
    • 74. Customers are in charge!
      • It is easier than ever for customers to comparison shop and
      • with little more than a click of a mouse to switch companies.
      • For this reason, customer relationships have become
      • a company’s most valued asset.
      • Every company strategy needs to address how to find and
      • retain the most profitable customers possible.
    • 75.
      • Sales
      • Cross Sell
      • Up Sell
      Marketing and Fulfillment Customer Service and Support Retention and Loyalty Programs Contact and Account Management Prospects or Customers Fax e-Mail Telephone Web CRM Applications
    • 76. Mitsubishi Motor Sales Implementing CRM Systems
      • Traditionally was primarily about (selling) cars.
      • Had 18 toll free customer service numbers for customers to find information ranging from sales to repair service.
      • Concluded that they lacked a cohesive customer focus.
      • Company shifted to an increased focus on customers in 1999.
    • 77. Approach Criteria
      • The Three S Test:
      • Is it simple?
      • Does it satisfy?
      • Is it scalable?
    • 78. CRM Implementation
      • Centralized to one call center.
      • Outsourced to a service center for basic calls.
      • Gained flexible skills-based call routing.
      • Half of calls received information from an interactive voice response unit.
      • Consolidated 11 screens of customer data into one.
      • Call center handled 38% more calls in 2000 with no more staff.
      • Customer satisfaction rose 8%.
    • 79. Project Team
      • Included people from sales, marketing, finance and the IT department.
      • Obviously had the backing of senior management.
      • Emphasized the selection of the best-of-bred CRM software.
      • Decided to implement changes slowly based on employee use of previous new approaches.
    • 80. Major Vendor: Siebel Systems
      • Call center software.
      • Customer-centric database.
      “ Dirty data was a major stumbling block.”
    • 81. Digital Phone Switch
      • Flexible call routing.
      • Half of callers got answers from a voice response unit.
      • GUI enabled 11 screens’ worth of information to be put on one screen of a call agent.
      • Siebel software provided agents with decision-tree scripts and automated customer correspondence.
      • Added ability to monitor outsourced service calls.
      • Added software to hourly forecast call center coverage.
      • Added software to record agent voice and screen activity for quality assurance and training.
    • 82. Impact on Agents
      • Career growth and higher pay.
      • Agents can handle broader product calls.
      • Can be trained during slack time.
      • Reduced turnover of agents.
    • 83. Company Benefits
      • Better feel for customer concerns.
      • Helps drive marketing decisions.
      • Accelerated earlier results.
    • 84.
      • Sales
      • Cross Sell
      • Up Sell
      Marketing and Fulfillment Customer Service and Support Retention and Loyalty Programs Contact and Account Management Prospects or Customers Fax e-Mail Telephone Web CRM Applications
    • 85. SCM Stages
      • Information Sharing
      • Product/Sales Data
      • Sourcing Help
      • Logistics
      • Order Fulfillment
      • Stage 1
      • Current supply
      • chain improvement
      • Supply chain,
      • e-commerce loosely
      • coupled
      • Stage 2
      • Intranet/extranet
      • links to trading
      • partners
      • Supplier network
      • expansion
      • Order Management
      • Inventory
      • Management
      • Resource Allocation
      • Systems Use and
      • Integration
      • Stage 3
      • Collaborative
      • Planning/fulfillment
      • Extranet and
      • exchange-based
      • collaboration
      • Collaborative
      • Marketing
      • Sales and Service
      • SCM Optimization
      • Collaborative
      • Design and Delivery