Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

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Chapter
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications Enterprise and
Business Process Integration
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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.

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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.

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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• Problem Uncontrollable supply chain, outdated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.

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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.

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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
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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.

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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
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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)

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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
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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
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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.

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Push Vs Pull Model
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Internet Driven Supply ChainDigital Logic
Nervous System
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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

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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

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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
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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.

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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

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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?