Prepared by: Jan Wong

ManagementInformation

Systemsin Organizations

ENTERPRISE SYS.:S.C. to ERP to CRM

The Learning Outcomes

At the end of this session you should be able to:

the essentials of enterprise systems and computerized supply chain management

The need for integrated software and how ERP does it

EXPLAIN

DISCUSS

The various types of Supply Chains, its major problems and innovative solutions

DESCRIBE

CRM and its support by IT

DISCUSS

ERP and Supply Chains

• 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– accounts payable and

receivable• It includes front-end

operations such as:– POS– Field Sales– Service

• Increases efficiency, improves quality, productivity, and profitability.

“ERP or enterprise systems control all major business processes with a single software architecture in real time”

ERP and Supply Chains

Supply Chains

• It includes:• Purchasing, payment flow,

materials handling, production planning & control, logistics & warehousing, inventory control, and distribution

• When it is managed electronically it is referred to as an e-supply chain

• Supply Chains contribute to increased profitability and competitiveness

• Supply Chain Flow types:• Materials flows• Information flows • Financial flows

“Flow of materials, information, payments, and services from raw material suppliers, through factories and warehouses (Value Chain), to the final consumer (Demand Chain)”

Supply ChainsAutomotive supply chain

SUPPLY CHAIN COMPONENTS

• The supply chain involves three segments: Upstream: where sourcing or procurement from external

suppliers occur Internal: where packaging, assembly, or manufacturing take

place Downstream: where distribution or dispersal take place,

frequently by external distributors.

• It also includes the movement of information and money and the procedures that support the movement of a product or a service.

• Organizations and individuals are also part of the chain

SUPPLY CHAIN PROBLEMS

• Demand forecasts are a major source of uncertainties

– Competition– Prices– Weather conditions– Technological development– Customer confidence

• Uncertainties exist in delivery times– Machine failures– Road conditions– Shipments

• Quality problems may also create production delays

SUPPLY CHAIN SOLUTIONS

• Optimal Inventory Levels• Supply Chain Coordination and

Collaboration• Supply Chain Teams• Various IT-Assisted Solutions

• Wireless technology (RFID)• Optimal shipping plans• Strategic partnerships with suppliers• Just-in-time

SUPPLY CHAIN SOLUTIONS

SUPPLY CHAIN COLLABOR-ATION MANAGEMENT

Communication, Collaboration, Relationship building & Management

Manual methods include: phone, fax, and mail

Why Integrate with E-Commerce? ERP is complex and

inflexible, deal with back-office processes

Why?

“Every company that has business partners has to manage the relationships with them. Information needs to flow between the firms and constantly updated and shared”

SUPPLY CHAIN COLLABORATION MANAGEMENT

• Integration allows collaboration and communication to take place.

• Usually corporate portals are used

SUPPLY CHAIN COLLABOR-ATION MANAGEMENT

Integration Examples: Electronic Data Interchange

(EDI) is typically used by large corporations Transfer business documents

EC Partner Relationship Management (PRM) functions include: partner profiles partner communications lead management (of clients) targeted information

distribution connecting the extended

enterprise partner planning centralized forecasting group planning e-mail price lists

Why?

“Every company that has business partners has to manage the relationships with them. Information needs to flow between the firms and constantly updated and shared”

GLOBALSUPPLY CHAINS

Companies go global (disperse the value chain) for a variety of reasons: Lower costs of materials,

products, services and labor Availability of products

that are unavailable domestically

The firm's global strategy Technology available in

other countries High quality of products Intensification of global

competition The need to develop a

foreign presence to increase sales

Fulfillment of counter trade

“Supply chains that involve suppliers and/or customers in other countries”

“Global supply chains are usually longer than domestic ones, and more complex therefore involves higher risks and uncertainties”

COMPUTER-IZEDSUPPLY CHAINS

Material requirements planning (MRP) essentially integrates production, purchasing, and inventory management of interrelated products.

Manufacturing resource planning (MRP II), enhanced MRP methodology by adding labor requirements and financial planning.

Enterprise resource planning (ERP) further integrates the transaction processing as well as other routine activities in the entire enterprise.

Integrations continues along several paths Functional areas Combining transaction processing

and decision support Business intelligence CRM software

“The supply chain process is intertwined with the computerization of its activities”

Why?

“People have wanted to automate the processes along the chain to reduce cost, expedite processing, and reduce errors”

COMPUTERIZED SUPPLY CHAINS

E-COMMERCE &SUPPLY CHAINS

Benefits: Can digitize some products Can replace all paper

documents Can replace faxes and

telephone calls with electronic messaging

Enhances collaboration and information sharing

Typically shortens the supply chain and minimizes inventories

Facilitates customer service Introduces efficiencies into

buying and selling Enables faster, cheaper, and

better communication, collaboration, and discovery of information

“Emerging as a superb tool for providing solutions to problems along the supply chain. Many supply chain activities, from taking customers' orders to procurement, can be conducted electronically”

E-COMMERCE & SUPPLY CHAINS

SUPPLY CHAIN

BENEFITS

Tangible benefits: Inventory reduction Personnel reduction IT cost reduction Transportation logistics cost

reduction Maintenance reduction Procurement cost reduction Productivity improvement Order management

improvement Financial-close cycle

improvements Cash management

improvements Revenue/profit increases On-time delivery

improvement

“Emerging as a superb tool for providing solutions to problems along the supply chain. Many supply chain activities, from taking customers' orders to procurement, can be conducted electronically”

SUPPLY CHAIN

BENEFITS

Intangible benefits: Standardization Flexibility Information visibility New/improved processes Rapid assimilation of

data into the organization

Reduction in duplication of entries

Customer responsiveness Business performance Controls and

reconciliation are enhanced

Globalization

“Systems can be integrated internally and externally.

Internal integration: Integration between applications inside a company

External integration: Refers to integration of applications among business partners.”

CUSTOMER RELATIONSHIP MANAGEMENT

CRM

3 Major Types of CRM:

Operational CRM Related to typical business

functions involving customer services, order management, invoice/billing, and sales/marketing automation and management.

Analytical CRM Involves activities that capture,

store, extract, process, interpret, and report customer data to a corporate user, who then analyzes them as needed.

Collaborative CRM Deals with all the necessary

communication, coordination, and collaboration between vendors and customers.

“Realizing that customers are vital to success, it focuses on building long–term and sustainable customer relationships that add value both for the customer and the company”

ELECTRONIC

CRM

The scope of e-CRM (3 Levels):

Foundational service This includes the minimum

necessary services such as Web site 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.

“Started in mid-1990s when customers began using web browsers”

CRMACTIVITIES

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

Tools for Customer Service Personalized Web Pages FAQs Chat Rooms E-Mail and Automated Response Call Centers Troubleshooting Tools Wireless CRM

“To form a better relationship and to create a pleasant experience with the customers ”

THE EVOLUTION

THINGS TO TAKE NOTE OFF

• What are supply chains and why is it important?

• Common problems and solutions for supply chains

• Types of supply chain collaborations and it’s benefits

• Understanding CRM – it’s scope and activities

E R P , S U P P L Y C H A I N S , C R M

IT’S TIME FOR SOME DISCUSSIONS!

• Define and list three (3) examples of enterprise systems

• Define supply chain and supply chain management (SCM). Describe the major components of a supply chains. List the benefits of effective SCM

• Describe MRP and MRP II

• Define ERP and describe its functionalities

• Define CRM. List the major types of CRM. What is e-CRM?

IT’S TIME FOR ANIN-CLASS ACTIVITY!

• Get into groups of 5-6 members

• Design a CRM system that applies to your company by: Utilizing a minimum of 3 tools Justifying how each tool is vital (i.e. how will it work) in your

CRM system

C o m i n g s o o n … n e x t c l a s sManagementInformation

Systemsin Organizations

IT STRATEGYLooking at various IT Strategies used in organizations

today!