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Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

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Title: Achieving Operational Excellence and Customer Intimacy: Enterprise Applications


1
11
Chapter
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications Enterprise and
Business Process Integration
2
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
LEARNING OBJECTIVES
  • Demonstrate how enterprise systems achieve
    operational excellence by integrating and
    coordinating diverse functions and business
    processes in the firm.
  • Demonstrate how supply chain management systems
    coordinate planning, production, and logistics
    with suppliers.
  • Demonstrate how customer relationship management
    systems achieve customer intimacy by integrating
    all customer information and making it available
    throughout the firm.

3
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
LEARNING OBJECTIVES (contd)
  • Assess the challenges posed by enterprise
    applications.
  • Describe how enterprise applications can be used
    in platforms for new cross-functional services.

4
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Whirlpool Fixes Its Supply Chain
  • Problem Uncontrollable supply chain, outdated
    systems.
  • Solutions Eliminate manual procedures and
    implement supply chain software suite to allocate
    inventory more accurately and forecast demand.
  • i2 Technologies forecasting software and SAP ERP
    software reduce inventory and increase sales.
  • Demonstrates ITs role in coordinating supply
    chains.
  • Illustrates digital technology as part of a
    solution that can benefit both a firm and its
    customers.

5
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Systems
  • What are enterprise systems?
  • Consulting Firms
  • Enterprise software Builds industry expertise
    working with many clients
  • Best practices
  • SAP-R3, Oracle (Peoplesoft), Microsoft (Dynamics
    Software Systems
  • Business value of enterprise systems increased
    operational efficiency and firm-wide information
    to help managers make better decisions.

6
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Systems
How Enterprise Systems Work
Enterprise systems feature a set of integrated
software modules and a central database that
enables data to be shared by many different
business processes and functional areas
throughout the enterprise.
Figure 9-1
7
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
  • The supply chain network of organizations and
    business processes for
  • - Procuring raw materials,
  • - Transforming them into intermediate finished
    product, and
  • - Distributing to customers
  • Information and Supply Chain (Flow of
    Information)
  • Upstream portion of supply chain that includes
    companys suppliers, the suppliers suppliers,
    and the processes for managing relationships.
  • Downstream organizations and processes for
    distributing and delivering products to the final
    customer.

8
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Nikes Supply Chain
This figure illustrates the major entities in
Nikes supply chain and the flow of information
upstream and downstream to coordinate the
activities involved in buying, making, and moving
a product. Shown here is a simplified supply
chain, with the upstream portion focusing only on
the suppliers for sneakers and sneaker soles.
Figure 9-2
9
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
  • Information and Supply Chain
  • Inefficiencies caused by inaccurate or untimely
    information (25 Operating costs)
  • Parts shortage
  • Underutilized plant capacity
  • Excessive inventory
  • Transportation Costs
  • Just-in-time strategy components would arrive
    when needed, finished goods would be shipped as
    they left assembly line (excess inventory is
    expensive, low fill rates are also costly order
    cancellation)
  • Uncertainties events cannot be foreseen
  • Product demand
  • Late shipments from suppliers
  • Defective parts or raw materials
  • Production Process Breakdown
  • Bullwhip Effect information about demand gets
    distorted along the supply chain (stockpile
    inventory)

10
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Nikes Supply Chain
This figure illustrates the major entities in
Nikes supply chain and the flow of information
upstream and downstream to coordinate the
activities involved in buying, making, and moving
a product. Shown here is a simplified supply
chain, with the upstream portion focusing only on
the suppliers for sneakers and sneaker soles.
Figure 9-2
11
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Supply Chain Management Applications enable
firms to generate demand forecasts for a product
and develop sourcing and manufacturing plans for
the product. Companies can make better operating
decisions (e.g How much of a specific product to
manufacture in a given time, determine inventory
levels of raw and intermediate as well as
finished products, transportation mode for
delivery). Impact of last minute order
(cancellation, modification, upscaling), Job
Scheduling, delivery reschedule (adjustments to
production and distribution) Demand Planning
determines how much product a business needs to
make to satisfy all of its customers
demands Supply Chain Execution Systems manage
flow of products through distribution centers and
warehouses to ensure that products are delivered
to the right locations in the most efficient
manner. They track the physical status of goods,
the management of materials, warehouse and
transportation operations, and financial
information involving all parties
12
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
  • Supply chain management and the Internet
  • Demand-driven supply chains From push to pull
    manufacturing and efficient customer response
  • Intranet and extranet
  • Supply Chain Models
  • - Push-based Model (build to stock)
  • - Pull-based Model (demand driven or build to
    order) Customer triggers supply chain,
    E-Business.

13
Push Vs Pull Model
14
Internet Driven Supply ChainDigital Logic
Nervous System
15
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
  • Business value of supply chain management systems
  • - Streamline Internal and External Supply Chain
    Processes
  • - Provide Management with more accurate
    information about what to produce, store and
    move.
  • - Companies match supply to demand
  • - Reduce Inventory Levels
  • - Improve delivery
  • - Speed product time to market
  • - Uses assets more effectively
  • - Helps increase sales

16
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Customer Relationship Management Systems
  • What is customer relationship management
  • Customer relationship management software
  • Sales force automation (SFA)
  • Customer service
  • Marketing
  • Operational and analytical CRM
  • Business value of customer relationship
    management sytems

17
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Customer Relationship Management (CRM)
CRM systems examine customers from a multifaceted
perspective. These systems use a set of
integrated applications to address all aspects of
the customer relationship, including customer
service, sales, and marketing.
Figure 9-7
18
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Customer Relationship Management Systems
IHOP Cooks Customer Data to Order
  • Read the Interactive Session Technology, and
    then discuss the following questions
  • How does knowledge of customers impact IHOPs
    business performance?
  • Why did IHOP have trouble getting to know its
    customers?
  • How has the company chosen to improve its
    knowledge of customers? Analyze the management,
    organization, and technology dimensions of the
    solution.
  • Did IHOP choose the best solution? Explain your
    answer.

19
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Applications New Opportunities and
Challenges
  • Enterprise application challenges
  • Extending enterprise software
  • Service platforms
  • Security outsourcing

20
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Applications New Opportunities and
Challenges
Invacare Struggles with Its Enterprise System
Implementation
  • Read the Interactive Session Organizations, and
    then discuss the following questions
  • How did problems implementing the Oracle
    enterprise software affect Invacares business
    performance?
  • What management, organization, and technology
    factors affected Invacares ERP implementation?
  • If you were Invacares management, what steps
    would you have taken to prevent these problems?
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