1 Enterprise e-business Systems
2 Learning 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
Customer Relationship Management (CRM): The Business Focus 3
4 Customer Relationship Management 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 4
Customer Relationship Management (continued) 5 CRM.. 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
Customer Relationship Management (continued) 6 6
Customer Relationship Management (continued) 7 7
Customer Relationship Management (continued) 8 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 8
Customer Relationship Management (continued) 9 Benefits and Challenges (continued) Enables a company to provide a consistent customer service experience Failures Due to lack of understanding & preparation. CRM is not a silver bullet 9
Customer Relationship Management (continued) 10 Trends Operational CRM Analytical CRM Collaborative CRM Portal-based CRM 10
Enterprise Resource Planning (ERP): The Business Backbone 11
12 Enterprise 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 12
Enterprise Resource Planning (continued) 13 Gives a company an integrated real-time view of its core business processes ERP software suites typically consist of integrated modules of Manufacturing Distribution Sales Accounting Human Resource Management 13
Enterprise Resource Planning (continued) 14 Benefits 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 14
Enterprise Resource Planning (continued) 15 Benefits 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
Enterprise Resource Planning (continued) 16 Challenges Costs of ERP The costs and risks of failure in implementing a new ERP system are substantial. 16
Enterprise Resource Planning (continued) 17 17
Enterprise Resource Planning (continued) 18 Causes of ERP failures Underestimating the complexity of the planning, development, and training required Trying to do too much, too fast Failure to involve affected employees in the planning & development phases and change management programs Insufficient training Believing everything the software vendors and/or consultants say 18
Enterprise Resource Planning (continued) 19 Trends Flexible ERP Web-enabled ERP Interenterprise ERP E-Business Suites 19
Supply Chain Management: The Business Network 20
21 Supply Chain Management A cross-functional interenterprise 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. 21
Supply Chain Management (continued) 22 22
What do supply chain management (SCM) tools do? 23 Supply Chain Management Definition Supply chain management tools enable managers to make informed business decisions about the operation of their supply chain Supply Chain Management Overview Supply chain management tools facilitate planning and production scheduling based on known business constraints 23
24 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 Managing a supply chain would be easy if we had unlimited resources -- OR -- Computer processing and storage capacity not infinite Supply Chain Manager 24
25 SCM Tools levels Supply Chain Elements Strategic Planning Tactical Planning SCM Service Offering Network Design Demand Planning Supply Planning Production Planning Warehouse Management Transportation Management Order Management Supply Chain Planning services configure operations to best meet projected demand levels The planning horizon ranges from developing a long term strategic outlook to developing a short term tactical production schedule Operational Planning Source: BAH Real time / Minutes Inventory Management Event Management Hours / Days Weeks / Months Supply Chain Planning Tools Quarters Years Supply Chain Execution Tools Supply Chain Execution services monitor and control production operations They provide real time tracking and alert notification 25
Supply Chain Planning Process 26 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 Anticipate demand based on historical trends and current conditions Perform what if analysis - highlight the impact of changing demand drivers Supply Planning Balances unconstrained demand against high level supply chain constraints Reflect order priority and due dates Production Planning 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 Planning Horizon Years Quarters Weeks / Months Hours / Days 26
Supply Chain Execution Process 27 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 Inventory Management Streamline information movement and provide tight inventory control Inventories replenished using kanban, min-max, or reorder point Warehouse Management Optimization and management of warehouse processes Transportation Management 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 27
I2 >master production schedule 28 Source: i2 Technologies 28
29 SCM vendors Although each of the vendors claim to provide an end to end solution, they actually fall into two distinct camps Leading SCM Vendors ERP Focused Oracle SCM Focused i2 First are the ERP vendors who provide a strong solution for integrating the data environment and providing visibility SAP JD Edwards Peoplesoft Invensys / Baan Manugistics Aspentech Logility Second are the SCM vendors who provide robust optimization solutions Source: Gartner 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 29
Supply Chain Management (continued) 30 Benefits and Challenges 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
Supply Chain Management (continued) 31 Problem causes 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
Supply Chain Management (continued) 32 Trends 32
33 Mitsubishi Motor Sales Multivendor CRM system Benefits to a business and its customers of a CRM system like Mitsubishi s Mitsubishi s modular approach to acquiring and installing CRM system Prevention of large scale failures 33
Agilent Technologies & Russ Berrie 34 Failures in implementing ERP systems Causes of the major failure of Agilent s ERP implementation Russ Berrie 34
TaylorMade Golf & HON Industries 35 Moving business information systems with suppliers and distributors to the Web resulted in dramatic business benefits 35
H-P, Eastman Chemical, & Others 36 What is the business value to Eastman Chemical and W.W. Grainger of their initiatives to help their suppliers and customers do business online? Why are many small suppliers reluctant to do business online with their large customers? What can be done to encourage small suppliers to get online? 36
37 Wal-Mart & Mattel Wal-Mart as the best supply chain operator of all time? What can other businesses learn from the experiences of Wal-Mart and Mattel that could improve their supply chain performance? 37