2. ESSENTIALS OF ENTERPRISE SYSTEMS AND SUPPLY
CHAINS
• ERP or enterprise systems control all major
business processes with a single software
architecture in real time.
• ERP are systems or processes that involve the
entire enterprise or major portions of it.
• Contrasts the functional systems that are
confined to one department/function.
Chapter 8 2
7. What is a Supply Chain?
• Defined as a set of relationships among
suppliers, manufacturers, distributors, and
retailers that facilitate the transformation of
raw materials into final products.
Chapter 8 7
12. ERP and Supply Chains
ERP or enterprise systems control all major business processes with a single software
architecture in real time.
It is comprised of a set of applications that
automate routine back-end operations such
as:
financial management
inventory management
scheduling
order fulfillment
cost control Chapter 8 12
13. ERP & Supply Chain
• It includes front-end operations such as:
– POS
– Field Sales
– Service
• It also increases efficiency, improves quality,
productivity, and profitability.
Chapter 8 13
14. Supply Chain Problems
Adding value along the chain is essential for
competitiveness, however, problems exist
especially in complex or long chains and in
cases where many business partners are
involved.
These problems are due to uncertainties and
the need to coordinate several activities,
internal units, and business partners.
Chapter 8 14
15. -cont…
• Demand forecasts are a major source of
uncertainties
– Competition
– Prices
– Weather conditions
– Technological development
– Customer confidence
Chapter 8 15
16. -cont…
• Uncertainties exist in delivery times
– Machine failures
– Road conditions
– Shipments
• Quality problems may also create
production delays
Chapter 8 16
17. Supply Chain Problems (Continued)
•The bullwhip effect refers to erratic shifts in
orders up and down the supply chain
because of poor demand forecasting, price
fluctuation, order batching, and rationing
within the chain.
•Even slight demand uncertainties and
variability become magnified if each distinct
entity, on the chain, makes ordering and
inventory decisions with respect to its own
interest above those of the chain.
Chapter 8 17
18. -cont..
• Distorted information can lead to tremendous
inefficiencies, excessive inventories, poor
customer service, lost revenues, ineffective
shipments, and missed production schedules.
Chapter 8 18
19. Supply Chain Challenges List
• Trust and collaboration
• Global SCM issues
• Outsourcing : Make-Buy Decision
• Man-supplier strategy
• Vendor selection
• Difficulty in forecasting demand
• Cost or reverse logistics
Chapter 8 19
20. Reverse Logistics
• Process of continuously taking back products
and/or packaging materials to avoid waste.
• Costly
• Create difficulties
Chapter 8 20
21. Supply Chain Opportunities
• Managing:
– Information
– E-business
– Logistics
– Inventory
– E-procurement
– collaboration
– Other IT assisted solutions
Chapter 8 21
22. Supply Chain Solutions
Information sharing among supply chain partners (c-commerce)
sometimes referred to as the collaboration supply chain is one
method to overcome problems in the flow.
Others are:
Chapter 8 22
25. Supply Chain Collaboration
Management
Every company that has business partners has to
manage the relationships with them. Information
needs to flow between the firms and must be
constantly updated and shared.
Chapter 8 25
26. Global Supply Chains
Supply chains that involve suppliers and/or
customers in other countries are referred to as
global supply chains.
Global supply chains are usually longer than
domestic ones, and more complex. Therefore,
additional uncertainties are likely.
Chapter 8 26
28. Supply Chains Benefits (Continued)
Intangible benefits:
Information visibility
New/improved processes
Customer responsiveness
Standardization
Flexibility
Globalization
Business performance
Reduction in duplication of entries
Controls and reconciliation are enhanced
Rapid assimilation of data into the organization
Chapter 8 28
29. Enterprise Resource Planning
• ERP is an integrated software solution that
integrates:
– Planning
– Management
– Use of all resources in the entire enterprise.
Chapter 8 29
30. ERP
• ERP is comprised of sets of applications that:
– Automate routine back-end operations
• Objectives
– To integrate all departments and functional
information flows across a company onto a single
computer system that can serve all of the
enterprise’s needs.
Chapter 8 30
31. Capabilities of ERP
• Combining logistics across business units with
neighboring facilities.
• Combining distribution centers and less than
truckloads to fill trucks, reduce pick-
up/delivery lanes and eliminate un-needed
facilities.
• Dynamically sourcing products from different
manufacturing & distribution facilities.
Chapter 8 31
32. -cont..
• Shared services for manufacturing
• Global order management
• Consolidation of global operations
• Co-ordination of procurements
• Creating supplier portals
Chapter 8 32
33. Issues
• ERP system selection
• ERP and processes
• ERP development & implementation
• Open source ERP5
• Switching ERP systems
• Value from ERP systems
Chapter 8 33
34. Business Process Management
• BPM refers to activities performed by
businesses to optimize and adapt their
processes.
– A business process is a collection of related
activities that produce something of value to the
organization, its stakeholders, or its customers.
– Cuts across departments of business.
Chapter 8 34
35. -cont…
• A process has both inputs and outputs with
activities and tasks that can be measured.
– Cuts across functional areas of the enterprise.
– Can be broken down into lower-level processes,
has goals, and feedback.
Chapter 8 35
36. The need to Re-engineer BPs
• To achieve quality improvement in business
processes.
• Improved productivity
• Improved efficiency
Chapter 8 36
37. Why use BPM?
• Reduce product design time by 50%.
• Result in faster time-to-market of competitive
products.
• Reduce order fulfillment time by 80%.
• Improve customer satisfaction with ordering
process.
• Help organizations achieve efficiency gains of
60% in call centers.
Chapter 8 37
38. Process modeling
• Business process modeling includes
techniques and activities used as part of of the
larger BPM discipline.
• It’s a blueprint.
Chapter 8 38
39. Re-engineering
• Re-engineering: the radical redesign of an
organization’s business.
• Takes the current process model and makes
changes to processes to increase efficiency
and create new process models.
Chapter 8 39
41. Re-engineering Principles
• Add a new process
• Delete a process
• Expand a process
• Reduce a process
• Combine a process
• Split a process
Chapter 8 41
42. IT support for BPM
• Case Tools: Computer-aided software
engineering.
• BPM software
Chapter 8 42
43. Business Value of BPM
• Improve:
– Processes
– Process flow
– Productivity
– Efficiency
Chapter 8 43
46. PLM
• A business strategy that enables
manufacturers to control and share product-
related data as part of product design and
development efforts and to support supply
chain operations.
Chapter 8 46
49. Business value of PLM
• Significant beneficial impact on:
– Engineering change
– Cycle time
– Design reuse
– Engineering productivity
– Reduce costs
– Speedy sharing of information
Chapter 8 49
50. Customer Relationship Management
(CRM)
•CRM recognizes that customers are the core of a
business and that a company’s success depends on
effectively managing relationships with them.
• It focuses on building long–term and sustainable
customer relationships that add value both for the
customer and the company.
•An enterprise wide effort to acquire and retain
profitable customers.
Chapter 8 50
51. Types of CRM
• Operational CRM: related to typical business
functions involving customer services, management,
invoice/billing & sales/marketing automation &
management.
• Analytical CRM: involves activities that capture,
store, extract, process, interpret & report customer
data to a corporate user for analysis.
• Collaborative CRM: deals with all the necessary
communication, co-ordination and collaboration
between vendors & customers.
Chapter 8 51
54. THE SCOPE OF E-CRM
Foundational service. This includes the minimum
necessary services such as Website responsiveness (e.g.,
how quickly and accurately the service is provided), site
effectiveness, and order fulfillment.
Customer-centered services. These services include order
tracking, product configuration and customization, and
security/trust. These are the services that matter the most
to customers.
Value-added services. These are extra services such as
online auctions and online training and education.
Chapter 8 54
55. Customer Relationship Management CRM
Activities
• Customer Service on the Web
– Search and Comparison Capabilities
– Free Products and Services
– Technical and Other Information and Service
– Allowing Customers to Order Products and
Services Online
– Letting Customers Track Accounts or Order
Status
Chapter 8 55
56. Tools for Customer Service
– Personalized Web Pages
– FAQs
– Chat Rooms
– E-Mail and Automated Response
– Call Centers
– Troubleshooting Tools
– Wireless CRM
Chapter 8 56
57. CRM Failures
• Measurement difficulty
• Failure in identification of business problems
• Lack of management support
• Poor user acceptance
• Automating poorly defined process
Chapter 8 57
