ERP and Supply Chain Management - PowerPoint PPT Presentation

Loading...

PPT – ERP and Supply Chain Management PowerPoint presentation | free to view - id: d097d-ZDc1Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

ERP and Supply Chain Management

Description:

peak times, outsource rather than DIY 'Buy' 'make' production when appropriate. ... major SCM projects exploit advanced IT. We need to know that. we have the ... – PowerPoint PPT presentation

Number of Views:283
Avg rating:3.0/5.0
Slides: 32
Provided by: syst255
Category:
Tags: erp | chain | management | supply

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: ERP and Supply Chain Management


1
ERP and Supply Chain Management
2
Case Dell Reengineering Supply Chain
  • 1993, Compaq cuts prices to drive Dell out of
    market. Dell experiences 65 million loss.
  • business process reengineering
  • pioneered mail order approach to selling PCs
  • re-engineering strategies
  • mass customisation
  • JIT e-orders shipments
  • e-collaboration with major buyers
  • reduction in testing period
  • monitoring of productivity returns on
    investments

3
Dell and Reengineering Supply Chain
  • Results
  • 2001, gt 4 million in computer web sales/ day.
  • leader in Customer Relationship Management (CRM)
  • online tracking of orders shipments
  • user approved configurations pricing
  • customized home pages for clients
  • Intelligent Agents used in production process
  • increased communication with suppliers.
  • 1999, Dell becomes No. 2 PC seller

4
Lessons
  • new business model
  • change how business is done.
  • large scale implementation
  • improved logistics system along entire supply
    chain.
  • improved communications and customer service
  • CRM programme
  • B2B e-Comm with business partners

5
Aims of SCM
increased competitive advantage profitability
positive affect on inventory levels,
response/cycle times, business processes
customer service quality
collaborate, analyse, develop systems, reduce
uncertainty risks in supply chain.
6
Components of Supply Chain
7
The Supply Chain
  • life of a product from birth to death.
  • movement of tangible intangible inputs.
  • all shapes and sizes
  • can be
  • complex bi-directional i.e. return of products
    (reverse logistics)
  • flow of goods/services, info. investment must
    ? added-value
  • Michael Porter - value-added analysis
  • Problems with SCM ? military re-supply,
    litigation company losses e.g. ?????

8
Supply Chain Problems
  • UNCERTAINTY
  • in demand forecast
  • in delivery times production delays
  • POOR COORDINATION
  • with internal units business partners
  • poor customer service
  • high inventory costs,
  • loss of revenue
  • extra cost for expediting services.
  • Bull Whip Effect
  • persistent SCM problem.
  • erratic orders up/down supply chain.
  • distributor orders fluctuate poor demand
    forecast, price changes, order batching
    rationing e.g. Porter Gambles distortion in
    SCM for disposable diapers.
  • avoidable with Intranet/Extranet eComm groupware

9
Traditional Solutions
  • Vertical Integration
  • acquire own suppliers - the supply source
  • problem - not "sticking to the knitting"
  • Stock holding
  • Insurance against shortages.
  • difficult to determine inventory level for each
    product part
  • holdling costs and ordering costs

10
CASE Littlewoods improved its SCM
  • clothing retailer - 136 stores in UK Ireland.
  • overstocking problems in SCM
  • Solution
  • data-mining
  • WWW-based reporting system.
  • merchandising staff better stock, sales
    supplier decisions.
  • 1997 1.2 million saved with strategic price
    merchandising
  • Use IT for measuring working on e.g.
  • delivery on time
  • quality at unloading area
  • cost performance
  • lead time for procurement

11
Other Solutions
  • peak times, outsource rather than DIY
  • Buy gt make production when appropriate.
  • configure optimal shipping plans.
  • strategic partnerships with suppliers.
  • just-in-time approach to purchasing.
  • reduce the lead time for buying and selling.
  • fewer suppliers.
  • improve supplier-buyer relationships.
  • manufacture only after orders are in.
  • accurate demand - work closely with suppliers.

12
IT Systems SCM
  • 1950s - 60s the first software to support supply
    chain
  • 1970s
  • Material Requirement Protocol (MRP) enhanced to
    become MRP - Material Resource Planning
  • local area networks integrated systems sales
    order processing, stock control, purchase order
    processing etc
  • 1990s
  • systems interconnectivity through accessible
    databases
  • Enterprise Resource Planning (ERP) integrate
    transaction processing activities
  • WWW and eCommerce
  • Extended ERP/SCM software.

13
IT Systems SCM
14
Systems Integration - Sandoe Saharia (2001)
  • Other
  • unformation visibility
  • customer satisfaction
  • modularisation standardization
  • lean and flexibility
  • globalization business performance
  • Tangibles
  • reduced
  • inventory
  • staff
  • procurement cost
  • improved
  • productivity business processes
  • order mgt
  • financial cycle
  • innovation
  • IT cost? Increase?
  • Revenue/profit increases etc
  • sourcing of requirements

15
Value Chain Integration
16
Warner-Lambert - Integrated Supply Chain
  • Problem
  • WL needs to improve demand forecast of products.
  • How
  • bought a Demand Planning Information System
  • to analyse manufacturing, distribution, sales
    data.
  • anticipate seasonal or production line problems
  • increases shelf fill rate from 87 to 98
  • 8 million/year additional sales.

17
Enterprise Resource Planning
  • ERP Process of planning managing all
    resources their use in the entire enterprise.
  • Software producers
  • SAP, Oracle, J.D. Edwards, Computer Associates,
    People Soft
  • single interface for managing routine
    manufacturing logistics activities.
  • aid customer interaction manage supplier
    relationships
  • force business coordination discipline
  • support admin. activities.
  • ?
  • integrate all company departments functions
    onto one computer system with accessible,
    "mine-able" databases and reporting

18
2nd Generation ERP
  • late 1990s, some benefits of ERPs being
    exploited.
  • need for planning systems oriented towards
    decision-making.
  • SCM systems start to complement ERP systems.
  • intelligent decision support capabilities.
  • overlay existing system pull data from every
    step of supply chain.
  • break large ERP systems into individual
    components that work together.
  • easier for ERP vendors to enhance solutions and
    for customers to upgrade software.
  • vendors extend core ERP with supply chain, sales
    automation customer relationship management
    (CRM)

19
ERP Implementation
  • To avoid failure consider
  • customer expectations.
  • ERP product capabilities, and gaps.
  • level of change the customer has face to make the
    system fit.
  • level of commitment within customer organization
    to see the project thru
  • customer organization culture.
  • risks politics within customer organization
  • consultants capabilities, responsibilities and
    role

20
Application Service Providers ERP Outsourcing
  • option for businesses wanting ERP functions is to
    lease applications gt build
  • ASP software vendor that leases ERP-based
    applications to other businesses
  • ERP projects are
  • expensive to install
  • take long time to implement
  • staffing is a major problem

21
Global Supply Chains
  • Issues
  • legal regulation, customs fees, taxes
  • language cultural differences
  • exchange rates fluctuations
  • political instabilities
  • Global Supply Chains involve suppliers and/or
    customers in other countries.

22
LEGO Case
  • rushed to get its "e-product to market
  • Inexperience ? problems with
  • supporting distribution service system
  • merging offline online operations
  • warehouses could not handle distribution to
    individuals
  • handling returns from overseas
  • invoicing must comply "national" regulations
  • Outcome
  • Lego closed WWW site.
  • One year to solve global eComm-related issues

23
How EC contributes to SCM
  • digital products (software) - flow of materials
    is expedited
  • replaces paper documents with e-documents e.g.
    order copies, invoices
  • replaces fax, phone with e-messaging
  • support network organisations collaboration
    information sharing e.g. seller and distributor
  • nature and structure of supply chain moves from
    linear to hub.
  • shorter supply chain and minimum stock
  • aids sales response customer service
  • buying sales efficiencies thru. e-marketplaces.

24
Buying Selling along the Supply Chain
  • aim of eComm is to facilitate buying and selling
    along the supply chain. Activities are
  • upstream
  • internal SCM
  • downstream
  • combined upstream / downstream

25
Integration of eComm with ERP
  • most medium/large companies have ERP systems
  • eComm needs to interface with ERP so -
    interconnect them
  • extending existing ERP to support e-Comm means
  • more investment in ERP
  • rapid development of eComm applications.
  • but ERP software is complex to construct/modify
  • need expertise or to buy it in .... expensive
  • easy, smooth integration easily hits problems

26
Order Fulfillment in eComm
  • When selling direct to customers - note
  • pick pack the products to be shipped quickly
  • arrange for prompt and relable delivering to the
    door
  • process payment, in advance (money transfer), COD
    or invoice
  • handle returns - unwanted or defective goods
  • knotty operational activities that require
    effective, efficient systems. They bring problems
    to supply chains.

27
Online Order Fulfilment Logistics
  • order fulfillment is part of back-office
    operations but strongly related to front-office
    operations
  • e-Tailors faced problems in order fulfillment,
    especially at holiday periods
  • Amazon needed physical warehouses to expedite
    deliveries and reduce order fulfillment costs.
  • eComm relies on JIT pull operations - the order
    (even a customised order) pulls the stuff from
    the supply change
  • reliance on pull involves difficult
    forecasting and stocks to meet demand.
  • in B2C pull, goods need be delivered to
    customers door.

28
Innovation and Supply Chain
  • Galleryfurniture.com
  • Webcams to demonstrate product inventory
  • Garden.com proprietary software to
    collaborate with suppliers efficiently/effectively
    .

Porter - product differenitation and cost
leadeship
Mail Boxes Etc. Return.com logistics system
that determines whether a customer is entitled to
a return refund.
Rightfreight.com Manages a
marketplace. Helps companies with goods to find
"forwarders" who prepare goods for shipping.
29
Automated order processing and despatch
  • Traditional warehouses
  • deliver large quantities to a stores and plants.
  • B2C eComm
  • send small quantities to many individuals.
  • large-volume eComm fulfillment
  • needs special automated warehouses with robots
    "pick and pack" devices
  • Most B2C is shipped via
  • outsourcers who handle the logistics mail orders
    (incl. online orders).

30
Dealing with Returns
  • Return items to where they were bought
  • works for a small number of returns.
  • Customer returns go to an independent unit
    (within the company or outsourced) that handles
    matters separately
  • more efficient, but buyer still unhappy.
  • customer physically drops the returned items at
    collection points
  • e.g. a local shop/Post Office

31
Managerial Issues
  • Ethical SCM project may ? lay-offs transfers
    of work to other countries - matters of
    employment contracts. Are they ethical matters?
  • Data sharing data programs - intellectual
    property - may be shared - a matter of trust
  • Do we integrate or hold ourselves in reserve?
    Total integration thru. ERP, SCM, and
    e-commerce, makes us vulnerable to partner
    failure - big risk. Do we keeping matters under
    our own control?
  • IT complexity major SCM projects exploit
    advanced IT. We need to know that
  • we have the capability (expertise)
  • the systems are reliable and there is a fail-safe
  • we can sustain the systems and up-grade them
About PowerShow.com