Introduction to Enterprise Resource Systems
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Learning Objectives ¾
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
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Customer Relationship Management (CRM) – The Business Focus
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What Does CRM Do For An Organization?
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What 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 ¾ Provides the customer with a single, complete view of the company and its extended channels ¾ Integrates and automates many of the customer serving processes ¾ Creates an IT framework of Web‐enabled software & databases that integrates these processes with the rest of the company’s business operations ¾
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CRM Benefits And Challenges ¾ ¾
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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
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CRM Failures ¾ ¾
Due to lack of understanding & preparation. CRM is not a silver bullet
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Trends in CRM ¾ ¾ ¾ ¾
Operational CRM Analytical CRM Collaborative CRM Portal‐based CRM
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Enterprise Resource Planning (ERP): The Business Backbone
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How Does An ERP Help An Organization?
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Enterprise Resource Planning ¾
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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
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Enterprise Resource Planning (continued) ¾
ERP software suites typically consist of integrated modules of… – – – – –
Manufacturing Distribution Sales Accounting Human Resource Management
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Benefits of ERP Systems ¾
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
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Decreased Costs – Reductions in transaction processing costs and hardware, software, and IT support staff
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Decision support – Provides cross‐functional information on business performance to assist managers in making better decisions
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Enterprise agility – Results in more flexible organizational structures, managerial responsibilities, and work roles
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Biggest Challenge of ERP ¾
Costs of ERP – The costs and risks of failure in implementing a new ERP system are substantial.
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Causes of ERP Failures ¾
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Underestimating the complexity of the planning, development, and training required Failure to involve affected employees in the planning & development phases and change management programs
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Trying to do too much, too fast Insufficient training Believing everything the software vendors and/or consultants say
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Trends In Enterprise Resource Planning ¾ ¾ ¾ ¾
Flexible ERP Web‐enabled ERP Inter‐Enterprise ERP E‐Business Suites
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Supply Chain Management: The Business Network
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What Is Supply Chain Management?
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Supply Chain Management ¾
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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.
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What Do Supply Chain Management Tools Do?
Supply Chain Management Definition
Supply Chain Management Overview
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Supply chain management tools enable managers to make informed business decisions about the operation of their supply chain
Supply chain management tools facilitate planning and production scheduling based on known business constraints
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SCM Capacity Constraints “How do I decide what to do on 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
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SCM Tools levels SCM Service Offering
Strategic Planning
Network Design Demand Planning Supply Planning Production Planning
Tactical Planning Warehouse Management Transportation Management Order Management Operational Planning
Inventory Management Event Management
Real time / Minutes
Hours / Days
Weeks / Months
Supply Chain Planning Tools
Quarters
Years
Supply Chain Execution Tools
Source: BAH
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Supply Chain Planning Process Demand Planning
Network Design
Design where to place production facilities and optimize the end to end chain Construct alternate flow scenarios that incorporate associated constraints
Supply Planning
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Production Planning
Planning Years Horizon
Anticipate demand based on historical trends and current conditions Perform what if analysis - highlight the impact of changing demand drivers
Decompose the supply plan into sub assembly / production needs by site Balance production capacity across sites
Production Scheduling
Optimize processing flows, sequence, and timing Produce a finite capacity production schedule
Balances unconstrained demand against high level supply chain constraints Reflect order priority and due dates
Quarters
Weeks / Months
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Hours / Days
Supply Chain Execution Process Inventory Management
Order Management
Record customer orders and track status from receipt to final delivery Direct efficient response to orders with dynamic cost / benefit analysis of options
Streamline information movement and provide tight inventory control Inventories replenished using kanban, min-max, or reorder point
Warehouse
Transportation
Management
Management
Optimization and management of warehouse processes
Optimize and track outbound and inbound shipping
Event Management
Monitor and manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined business rules
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SCM Vendors ¾
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Although each of the vendors claim to provide an end to end solution, they actually fall into two distinct camps First are the ERP vendors who provide a strong solution for integrating the data environment and providing visibility Second are the SCM vendors who provide robust optimization solutions In combination, with an ERP vendor providing the data environment and a SCM vendor providing the optimization solution, you can achieve a very elegant solution
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Leading SCM Vendors ERP Focused
Oracle SAP JD Edwards Peoplesoft Invensys / Baan
SCM Focused
i2 Manugistics Aspentech Logility
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Benefits of Supply Chain Management ¾
Can provide faster, more accurate – – – – –
order processing reductions in inventory levels quicker time to market lower transaction and materials costs strategic relationships with suppliers
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Challenges of Supply Chain Management ¾
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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
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