Introduction to Enterprise Resource Planning

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Lecture 1 of my Enterprise Resource Planning course - an introduction to enterprise resource systems.

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Introduction to Enterprise Resource Planning

  1. 1. Introduction
to
Enterprise
Resource
Systems

  2. 2. 2Learning
Objectives
  Identify
the
following
aspects
of
customer
 relationship
management
(CRM),
enterprise
resource
 management
(ERP),
and
supply
chain
(SCM)
mgt
 systems:
   Business
processes
supported
   Customer
and
business
value
provided
   Potential
challenges
and
trends
 2
  3. 3. Customer
Relationship
Management
(CRM)
 –
The
Business
Focus

  4. 4. What
Does
CRM
Do
For
An
Organization?
 4
  5. 5. 5What
Does
CRM
Do
For
An
Organization?
  Provides
customer‐facing
employees
with
a
single,
 complete
view
of
every
customer
at
every
touch
 point
and
across
all
channels
  Provides
the
customer
with
a
single,
complete
view
 of
the
company
and
its
extended
channels
  Integrates
and
automates
many
of
the
customer
 serving
processes
  Creates
an
IT
framework
of
Web‐enabled
software
&
 databases
that
integrates
these
processes
with
the
 rest
of
the
company’s
business
operations
 5
  6. 6. 66
  7. 7. 77
  8. 8. 8CRM
Benefits
And
Challenges
  Allows
a
business
to
identify
its
best
customers
  Makes
possible
real‐time
customization
&
 personalization
of
products
&
services
based
on
 customer
wants,
needs,
buying
habits,
&
life
cycles
  Enables
a
company
to
provide
consistent
customer
 service
experience
across
the
organization
 8
  9. 9. 9CRM
Failures
  Due
to
lack
of
understanding
&
preparation.
  CRM
is
not
a
silver
bullet
 9
  10. 10. 10Trends
in
CRM
  Operational
CRM
  Analytical
CRM
  Collaborative
CRM
  Portal‐based
CRM
 10
  11. 11. Enterprise
Resource
Planning
(ERP):
 The
Business
Backbone

  12. 12. How
Does
An
ERP
Help
An
Organization?
 12
  13. 13. 13Enterprise
Resource
Planning
  Serves
as
a
cross‐functional
enterprise
backbone
 that
integrates
&
automates
many
internal
business
 processes
and
information
systems
  Helps
companies
gain
the
efficiency,
agility,
&
 responsiveness
needed
to
succeed
today
  Gives
a
company
an
integrated
real‐time
view
of
its
 core
business
processes
 13
  14. 14. 14Enterprise
Resource
Planning
(continued)
  ERP
software
suites
typically
consist
of
integrated
 modules
of…
   Manufacturing
   Distribution
   Sales
   Accounting
   Human
Resource
Management
 14
  15. 15. 15Benefits
of
ERP
Systems
  Quality
and
efficiency
   Helps
improve
the
quality
and
efficiency
of
customer
service,
 production,
&
distribution
by
creating
a
framework
for
integrating
 and
improving
internal
business
processes
  Decreased
Costs
   Reductions
in
transaction
processing
costs
and
hardware,
software,
 and
IT
support
staff
  Decision
support
   Provides
cross‐functional
information
on
business
performance
to
 assist
managers
in
making
better
decisions
  Enterprise
agility
   Results
in
more
flexible
organizational
structures,
managerial
 responsibilities,
and
work
roles
 15
  16. 16. 16Biggest
Challenge
of
ERP
  Costs
of
ERP
   The
costs
and
risks
of
failure
in
implementing
a
new
ERP
 system
are
substantial.
 16
  17. 17. 17
  18. 18. 18Causes
of
ERP
Failures
  Underestimating
the
   Trying
to
do
too
much,
too
 complexity
of
the
planning,
 fast
 development,
and
training
   Insufficient
training
 required
   Believing
everything
the
  Failure
to
involve
affected
 software
vendors
and/or
 employees
in
the
planning
&
 consultants
say
 development
phases
and
 change
management
 programs
 18
  19. 19. 19Trends
In
Enterprise
Resource
Planning
  Flexible
ERP
  Web‐enabled
ERP
  Inter‐Enterprise
ERP
  E‐Business
Suites
 19
  20. 20. Supply
Chain
Management:
 The
Business
Network

  21. 21. What
Is
Supply
Chain
Management?

  22. 22. 22Supply
Chain
Management
  A
cross‐functional
inter‐enterprise
system
that
uses
 IT
to
help
support
&
manage
the
links
between
some
 of
a
company’s
key
business
processes
and
those
of
 its
suppliers,
customers,
&
business
partners.
  Goal
is
to
create
a
fast,
efficient,
&
low‐cost
network
 of
business
relationships.
 22
  23. 23. 2323
  24. 24. 24 What
Do
Supply
Chain
Management
Tools
Do?
 Supply chain management tools enable managers to make informed business Supply ChainManagement Definition decisions about the operation of their supply chain Supply chain management tools facilitate Supply Chain planning and production scheduling Management based on known business constraints Overview 24
  25. 25. 25SCM
Capacity
Constraints
 Managing a supply chain would be easy if we had unlimited resources “How do I decide what to doon which piece of equipment, and when?” Can only drill one piece of metal at a time -- OR -- Computer processing and storage capacity not infinite Supply Chain Manager 25
  26. 26. 26SCM
Tools
levels
 SCM Service Offering Strategic Planning Network Design Demand Planning Supply Planning Production Planning Tactical Planning Warehouse Management Transportation Management Order Management Inventory Management Operational Planning Event Management Real time / Hours / Weeks / Quarters Years Minutes Days Months Supply Chain Planning Tools Supply Chain Execution Tools Source: BAH 26
  27. 27. 27 Supply
Chain
Planning
Process
 Demand Planning  Anticipate demand based on historical trends and current conditions Network Design  Perform what if analysis  Design where to place - highlight the impact Production Planning Production Scheduling production facilities of changing demand drivers  Decompose the supply  Optimize processing and optimize the end plan into sub flows, sequence, and to end chain assembly / production timing  Construct alternate flow needs by site  Produce a finite scenarios that  Balance production capacity production incorporate Supply Planning capacity across sites schedule associated constraints  Balances unconstrained demand against high level supply chain constraints  Reflect order priority and due datesPlanning Weeks / Hours / Years QuartersHorizon Months Days 27
  28. 28. 28Supply
Chain
Execution
Process
 Inventory Warehouse TransportationOrder Management Management Management Management Record customer  Streamline information  Optimization  Optimize and orders and track movement and status from receipt provide tight and track outbound to final delivery inventory control Direct efficient  Inventories management of and inbound response to orders replenished using warehouse shipping with dynamic cost / kanban, min-max, or benefit analysis of reorder point processes options Event Management Monitorand manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined business rules 28
  29. 29. 29SCM
Vendors
  Although
each
of
the
vendors
claim
to
 provide
an
end
to
end
solution,
they
 actually
fall
into
two
distinct
camps
 Leading SCM Vendors  First
are
the
ERP
vendors
who
provide
a
 ERP Focused SCM Focused strong
solution
for
integrating
the
data
 environment
and
providing
visibility
  Oracle  i2  Second
are
the
SCM
vendors
who
  SAP  Manugistics provide
robust
optimization
solutions

  JD Edwards  Aspentech  In
combination,
with
an
ERP
vendor
  Peoplesoft  Logility providing
the
data
environment
and
a
  Invensys / Baan SCM
vendor
providing
the
optimization
 solution,
you
can
achieve
a
very
elegant
 solution
 29
  30. 30. 30Benefits
of
Supply
Chain
Management
  Can
provide
faster,
more
accurate

   order
processing

   reductions
in
inventory
levels

   quicker
time
to
market

   lower
transaction
and
materials
costs

   strategic
relationships
with
suppliers
 30
  31. 31. 31Challenges
of
Supply
Chain
Management
  Lack
of
proper
demand
planning
knowledge,
tools,
and
 guidelines
  Inaccurate
or
overoptimistic
demand
forecasts
  Inaccurate
production,
inventory,
and
other
business
 data
  Lack
of
adequate
collaboration
 31
  32. 32. 32

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