9-1 Copyright © 2013 Pearson Canada Inc. CHAPTER NINE Enterprise Applications to Manage Supply Chains and Respond to Customers Oleh : Kundang K Juman Enterprise Applications to Manage Supply Chains and Respond to Customers Oleh : Kundang K Juman

9-2 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers LEARNING OBJECTIVES Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers After reading this chapter, you will be able to answer the following questions: 1.How do enterprise systems help businesses achieve operational excellence? 2.How do supply chain management systems coordinate planning, production, and logistics with suppliers? 3.How do customer relationship management systems achieve customer intimacy? Continued …

9-3 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers LEARNING OBJECTIVES (continued) 4.What are the challenges posed by enterprise applications? 5.How are enterprise applications used in platforms for new cross-functional services?

9-4 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Allan Candy: How Sweet Independence Is! Problem: As an independent company, company needed to improve speed to market; needed to manage both its upstream and downstream production and distribution processes and have real- time access to inventory, production, financial, and distribution data. Solutions: Eliminate manual procedures and implement supply chain software suite to allocate inventory more accurately, forecast demand, and understand customer needs. Technology: outsourced development and hosting/storage to Metafore; implemented MS- Dynamic GP software, and ERP system that to manage inventory, including purchasing and invoicing Demonstrates IT’s role in improving inventory and distribution processes

9-5 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Enterprise Systems What are enterprise systems? Suite of integrated software modules and a common central database The database collects data from many different divisions and departments in a firm and from a large number of business processes Information collected from one process can be accessed and used by other processes in the firm

9-6 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Enterprise Systems

9-7 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Enterprise Software Built around thousands of predefined business processes that reflect best practices Finance/accounting: General ledger, accounts payable, etc. Human resources: Personnel administration, payroll, etc. Manufacturing/production: Purchasing, shipping, etc. Sales/marketing: Order processing, billing, sales planning, etc. To implement, firms: Select functions of system they wish to use Map business processes to software processes Use software’s configuration tables for customizing Enterprise Systems

9-8 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Business Value of Enterprise Software A more uniform organization More efficient operations and customer-driven business processes Firm-wide information for improved decision making Enterprise Systems

9-9 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Supply Chain Management Systems The supply chain A network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and

9-10 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Supply Chain Management Systems

9-11 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Information Systems and Supply Chain Management Inefficiencies cut into a company’s operating costs Can waste up to 25% of operating expenses Just-in-time strategy: Components arrive as they are needed Finished goods shipped after leaving assembly line Safety stock Buffer for lack of flexibility in supply chain Bullwhip effect Information about product demand gets distorted as it passes from one entity to next across supply chain Supply Chain Management Systems

9-12 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Supply Chain Management Systems

9-13 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Supply Chain Management Software Supply chain planning systems Model existing supply chain Demand planning Optimize sourcing, manufacturing plans Establish inventory levels Identifying transportation modes Supply chain execution systems Manage flow of products through distribution centers and warehouses Supply Chain Management Systems

9-14 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Case Study: Canada Post Automates Data Entry Read the Case Study and then discuss the following questions: 1.Why is it hard for Canada Post to automate data entry into its SAP systems? What business processes are involved? 2.Why were management, organization, and technology factors responsible for Canada Post’s problems with automating data entry? 3.How did implementing the Winshuttle software change the way Canada Post handled data entry? 4.Describe two processes that were improved by implementing the Winshuttle system. Supply Chain Management Systems

9-15 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Global Supply Chains and the Internet Before Internet, supply chain coordination hampered by difficulties of using disparate internal supply chain systems Enterprise systems supply some integration of internal supply chain processes but not designed to deal with external supply chain processes Demand-Driven Supply Chains: From Push to Pull Manufacturing and Efficient Customer Response Supply Chain Management Systems

9-16 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Business Value of Supply Chain Management Systems Match supply to demand Reduce inventory levels Improve delivery service Speed product time to market Use assets more effectively Reduced supply chain costs Increased sales Supply Chain Management Systems

9-17 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Supply Chain Management Systems

9-18 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Supply Chain Management Systems

9-19 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Customer Relationship Management Systems What is Customer Relationship Management? CRM systems Capture and integrate customer data from across the organization Consolidate the data Analyze the data Distribute the results to various systems and customer touch points across the enterprise Touch Point: a method of interaction with the customer

9-20 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Customer Relationship Management Systems

9-21 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers CRM Software More comprehensive packages have modules for: Partner relationship management (PRM) Employee relationship management (ERM ) Most packages have modules for Sales force automation (SFA): Sales prospect and contact information, and sales quote generation capabilities; etc. Customer service: Assigning and managing customer service requests; Web-based self-service capabilities; etc. Marketing: Capturing prospect and customer data, scheduling and tracking direct-marketing mailings or ; etc. Customer Relationship Management Systems

9-22 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Customer Relationship Management Systems

9-23 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Customer Relationship Management Systems

9-24 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Customer Relationship Management Systems

9-25 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Operational and Analytical CRM Operational CRM Customer-facing applications such as call centre and customer service support Analytical CRM Based on data warehouses that consolidate the data for data analysis Customer Relationship Management Systems

9-26 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Customer Relationship Management Systems

9-27 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Business Value of Customer Relationship Management Systems Increased customer satisfaction Reduced direct-marketing costs More effective marketing Lower costs for customer acquisition/retention Increased sales revenue Reduced churn rate Churn rate: Number of customers who stop using or purchasing products or services from a company. Indicator of growth or decline of firm’s customer base Customer Relationship Management Systems

9-28 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Enterprise Application Challenges Highly expensive to purchase and implement enterprise applications – total cost may be 4 to 5 times the price of software Requires fundamental changes Technology changes Business processes changes Organizational changes Incurs switching costs, dependence on software vendors Requires data standardization, management, cleansing Enterprise Applications: New Opportunities and Challenges

9-29 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Next generation enterprise applications Enterprise solutions / suites: Replacing stand-alone enterprise, CRM, SCM systems Make these applications more flexible, Web-enabled, integrated with other systems Open-source and on-demand applications SaaS, Salesforce.com Service platform: Integrates multiple applications to deliver a seamless experience for all parties Order-to-cash process Portals: Increasingly, new services delivered through portals Enterprise Applications: New Opportunities and Challenges

9-30 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Read the Window on Technology, and then discuss the following questions: 1.What types of companies are most likely to adopt cloud- based ERP and CRM software services? Why? What companies might not be well suited for this type of software? 2.What are the advantages and disadvantages of using cloud-based enterprise applications? 3.What management, organization, and technology issues should be addressed in deciding whether to use a conventional ERP or CRM system versus a cloud-based version? Enterprise Applications Move to the Cloud Enterprise Applications: New Opportunities and Challenges

9-31 Copyright © 2013 Pearson Canada Inc. Management Information Systems Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers Enterprise Applications: New Opportunities and Challenges

9-32 Copyright © 2013 Pearson Canada Inc. CHAPTER NINE Enterprise Applications to Manage Supply Chains and Respond to Customers