IST 346 ERP Design and Implementation

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IST 346ERP Design and Implementation

• Scott E. Grasman
• Supply Chain Integration

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Importance of SCM

• Global Competition
• International Markets
• New Markets
• E-commerce
• E-business
• C-business
• M-business

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Forms of Competition

• Quality 1980s Decade of Quality
• Speed 1990s Decade of Speed
• Cost 2000s Decade of Cost

Efficient Utilization of Resources to Reduce Costs
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Supply Chain Management

• FocusProduction/Service Operations Management
• Help Managers
• Identify Opportunities for Improving Systems
• Design Effective New Systems
• Make Tradeoffs to Coordinate Policies from
  Different Functional Areas

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Supply Chain Management

• Scope Operations
• Application of Resources to the Production of
  Goods and Services
• Capital
• Materials
• Technology
• Human Skills
• Knowledge/Information

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Systems View

• A system is a set of interrelated components
  working together toward some common objective or
  purpose.

OPERATIONS
HR
FINANCE
MARKETING
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Example Applications

• Factories
• Hospitals
• Banks
• Restaurants
• Military

• Physical Goods
• Medical Procedures
• Financial Services
• Food/Entertainment
• Security

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Growth of SCM

• Reduced Economic Regulation
• Recognition by non-Operations Managers
• Technological Advances
• Growing Power of Retailers
• Globalization of Trade

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Key Logistical Relationships

• Finance- Capital Budgeting, Inventory Valuation
• Marketing- Place, Price, Product and Promotion
• Production- Runs, Postponement Concept

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Channel Coordination

• Marketing (Ownership) Manufacturer, Wholesaler,
  Retailer
• Negotiations Buy/Sell Arrangements
• Financing Payments, Credit
• Promotions New Product Introduction
• Logistics

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Logistics

• Process of planning, implementing, and
  controlling the efficient, effective flow and
  storage of goods, services and related
  information from the point of origin to the point
  of consumption for the purpose of conforming to
  customer requirements.
• Right Stuff! Right Place! Right Time! Right Price!

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Logistics Channel

• Customer Service
• Demand Forecasting
• Facility Location
• Industrial Packaging
• Inventory Management
• Materials Handling
• Order Management
• Parts and Service Support

• Production Scheduling
• Procurement
• Returned Products
• Salvage/Scrap Disposal
• Transportation Management
• Warehouse Management

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Role of Logistics

• Adviser to Marketing
• Cost of customer service size of inventories,
  number of shipping points, order processing
  requirements, warehousing and transportation
• Establishing a Service Program
• Customer wants, priorities, comparison to
  competitors
• Evaluate by economics, nature of competition,
  nature of product

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Enterprise Resources Planning

• ERP Designed to Control
• Manufacturing
• Logistics
• Accounting
• Finance
• Marketing
• Personnel (Human Resources)
• Customer Relationship Management

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Enterprise Resource Planning

• Baan
• J.D. Edwards
• Oracle
• PeopleSoft
• SAP

• Microsoft
• IBM
• i2
• Manugistics

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Supply Chain

• Encompasses all activities associated with the
  flow and transformation of goods from raw
  materials, through the end user, as well as the
  associated information flow.
• Coordinates various functions within
  organizations and across organizations!

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Direct Supply Chain
Organization
Supplier
Customer
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Extended Supply Chain
Organization
Supplier
Customer
Customer
Supplier
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Ultimate Supply Chain
3rd Party Logistics
Organization
Ultimate Customer
Ultimate Supplier
Supplier
Customer
Financial Provider
Marketing Firm
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SCM Integration

• partnerships
• strategic alliances
• third-party arrangements
• contract logistics

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Vertical vs. Horizontal Integration
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Supply Chain Configurations
Distributor
Warehouse
Retailer
Factory
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Supply Chain Management

• The systematic, strategic coordination of the
  traditional business functions and the tactics
  across these business functions within a
  particular company and across businesses in the
  supply chain, for the purposes of improving the
  long-term performance of the individual companies
  and the supply chain as a whole.

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SCM Requirements

• overt management efforts
• enterprise point of view
• systems approach
• Supply Chain Operations Reference Model (SCOR)

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SCOR Model
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Key Attributes

• Customer Power
• Wal-Mart
• Target
• Kmart
• Long-Term Orientation
• Relational Exchanges ?
• Transactional Exchanges ?

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Exchanges

• Transactional whats in it for me?
• Relational Exchanges whats in it for us?
• trust
• commitment
• dependence
• investment
• shared benefits
• Information sharing

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Key Attributes

• Leveraging Technology
• Enhanced Communication
• Coordination
• supply chain councils
• Implanted personnel
• coopetition

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Barriers to SCM

• Regulatory and Political Considerations
• Lack of Top Management Commitment
• Reluctance to Share or Use Relevant Data
• Incompatible Information Systems
• Incompatible Corporate Cultures