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Enterprise e-BusinessSystems

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Learning Objectives

Identify the following aspects ofcustomer relationship management(CRM), enterprise resourcemanagement (ERP), and supply chain(SCM) mgt systems: Business processes supported Customer and business value provided Potential challenges and trends

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Customer RelationshipManagement (CRM):The Business Focus

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Customer RelationshipManagement

Provides customer-facing employeeswith a single, complete view of everycustomer at every touch point andacross all channels

Provides the customer with a single,complete view of the company and itsextended channels

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Customer RelationshipManagement (continued)

CRM.. Integrates and automates many of the

customer serving processes

Creates an IT framework of Web-enabledsoftware & databases that integratesthese processes with the rest of thecompany’s business operations

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Customer RelationshipManagement (continued)

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Customer RelationshipManagement (continued)

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Customer RelationshipManagement (continued)

Benefits and Challenges Allows a business to identify its best

customers Makes possible real-time customization &

personalization of products & servicesbased on customer wants, needs, buyinghabits, & life cycles

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Customer RelationshipManagement (continued)

Benefits and Challenges (continued) Enables a company to provide a

consistent customer service experience

Failures Due to lack of understanding &

preparation. CRM is not a silver bullet

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Customer RelationshipManagement (continued)

Trends Operational CRM Analytical CRM Collaborative CRM Portal-based CRM

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Enterprise Resource Planning(ERP):The Business Backbone

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Enterprise Resource Planning

Serves as a cross-functional enterprisebackbone that integrates & automatesmany internal business processes andinformation systems

Helps companies gain the efficiency,agility, & responsiveness needed tosucceed today

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Enterprise Resource Planning(continued)

Gives a company an integrated real-timeview of its core business processes

ERP software suites typically consist ofintegrated modules of… Manufacturing Distribution Sales Accounting Human Resource Management

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Enterprise Resource Planning(continued)

Benefits Quality and efficiency

Helps improve the quality and efficiency ofcustomer service, production, & distributionby creating a framework for integrating andimproving internal business processes

Decreased Costs Reductions in transaction processing costs

and hardware, software, and IT support staff

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Enterprise Resource Planning(continued)

Benefits Decision support

Provides cross-functional information onbusiness performance to assist managers inmaking better decisions

Enterprise agility Results in more flexible organizational

structures, managerial responsibilities, andwork roles

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Enterprise Resource Planning(continued)

Challenges Costs of ERP

The costs and risks of failure in implementinga new ERP system are substantial.

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Enterprise Resource Planning(continued)

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Enterprise Resource Planning(continued)

Causes of ERP failures

Underestimating the complexityof the planning, development,and training required

Failure to involve affectedemployees in the planning &development phases andchange management programs

Trying to do too much,too fast

Insufficient training

Believing everythingthe software vendorsand/or consultants say

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Enterprise Resource Planning(continued)

Trends Flexible ERP Web-enabled ERP Interenterprise ERP E-Business Suites

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Supply Chain Management:The Business Network

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Supply Chain Management

A cross-functional interenterprise systemthat uses IT to help support & manage thelinks between some of a company’s keybusiness processes and those of itssuppliers, customers, & business partners.

Goal is to create a fast, efficient, & low-costnetwork of business relationships.

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Supply Chain Management(continued)

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What do supply chainmanagement (SCM) tools do?

Supply ChainManagement Definition

Supply ChainManagement Definition

Supply chain management toolsenable managers to make informedbusiness decisions about theoperation of their supply chain

Supply ChainManagement

Overview

Supply ChainManagement

Overview

Supply chain management toolsfacilitate planning and productionscheduling based on knownbusiness constraints

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SCM capacity constraints

-- OR --

Can only drillone piece of metal

at a time

Computer processingand storage capacity

not infinite

“How do I decide what to doon which piece of equipment,

and when?”

Managing a supply chainwould be easy if we had

unlimited resources

Managing a supply chainwould be easy if we had

unlimited resources

Supply Chain Manager

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SCM Tools levels

Supply Chain Planningservices configureoperations to best meetprojected demand levels

The planning horizonranges from developing along term strategic outlookto developing a short termtactical productionschedule

Event Management

Order Management

Inventory Management

Warehouse Management

Production Planning

Supply Planning

Demand Planning

Network Design

SCM Service Offering

OperationalPlanning

TacticalPlanning

StrategicPlanning

Real time /Minutes

Hours /Days

Weeks /Months

Quarters Years

Supply Chain Planning Tools Supply Chain Execution Tools

Supply Chain Executionservices monitor andcontrol productionoperations

They provide real timetracking and alertnotification

Supply Chain Elements

Transportation Management

Source: BAH

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Supply Chain PlanningProcess

Supply PlanningSupply Planning Balances

unconstraineddemand against highlevel supply chainconstraints

Reflect order priorityand due dates

Balancesunconstraineddemand against highlevel supply chainconstraints

Reflect order priorityand due dates

Network DesignNetwork Design Design where to place

production facilitiesand optimize the endto end chain

Construct alternateflow scenarios thatincorporateassociated constraints

Design where to placeproduction facilitiesand optimize the endto end chain

Construct alternateflow scenarios thatincorporateassociated constraints

Production PlanningProduction Planning Decompose the

supply plan into subassembly / productionneeds by site

Balance productioncapacity across sites

Decompose thesupply plan into subassembly / productionneeds by site

Balance productioncapacity across sites

Production SchedulingProduction Scheduling Optimize processing

flows, sequence, andtiming

Produce a finitecapacity productionschedule

Optimize processingflows, sequence, andtiming

Produce a finitecapacity productionschedule

Demand PlanningDemand Planning Anticipate demand

based on historicaltrends and currentconditions

Perform what ifanalysis - highlight theimpact of changingdemand drivers

Anticipate demandbased on historicaltrends and currentconditions

Perform what ifanalysis - highlight theimpact of changingdemand drivers

Hours /Days

Weeks /MonthsQuartersYears

PlanningHorizon

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Supply Chain ExecutionProcess

Order ManagementOrder Management Record customer

orders and trackstatus from receiptto final delivery

Direct efficientresponse to orderswith dynamic cost /benefit analysis ofoptions

Record customerorders and trackstatus from receiptto final delivery

Direct efficientresponse to orderswith dynamic cost /benefit analysis ofoptions

InventoryManagement

InventoryManagement

Streamlineinformationmovement andprovide tightinventory control

Inventoriesreplenished usingkanban, min-max, orreorder point

Streamlineinformationmovement andprovide tightinventory control

Inventoriesreplenished usingkanban, min-max, orreorder point

Event ManagementEvent Management

Monitor and manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined

business rules

Monitor and manage critical planning and event information Broadcast alert notification and present response alternatives based on pre determined

business rules

TransportationManagementTransportationManagement

Optimize andtrack outboundand inboundshipping

Optimize andtrack outboundand inboundshipping

WarehouseManagement

WarehouseManagement

Optimizationandmanagementof warehouseprocesses

Optimizationandmanagementof warehouseprocesses

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I2 >master productionschedule

Source: i2 Technologies

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SCM vendors

Source: Gartner

Although each of the vendors claimto provide an end to end solution,they actually fall into two distinctcamps

First are the ERP vendors whoprovide a strong solution forintegrating the data environment andproviding visibility

Second are the SCM vendors whoprovide robust optimization solutions

In combination, with an ERP vendorproviding the data environment anda SCM vendor providing theoptimization solution, you canachieve a very elegant solution

Leading SCM VendorsLeading SCM Vendors

ERP Focused

Oracle SAP JD Edwards Peoplesoft Invensys / Baan

ERP Focused

Oracle SAP JD Edwards Peoplesoft Invensys / Baan

SCM Focused

i2 Manugistics Aspentech Logility

SCM Focused

i2 Manugistics Aspentech Logility

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Supply Chain Management(continued)

Benefits and Challenges Can provide faster, more accurate

order processing, reductions in inventory levels, quicker time to market, lower transaction and materials costs, & strategic relationships with suppliers

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Supply Chain Management(continued)

Problem causes Lack of proper demand planning

knowledge, tools, and guidelines Inaccurate or overoptimistic demand

forecasts Inaccurate production, inventory, and

other business data Lack of adequate collaboration

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Supply Chain Management(continued)

Trends

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Mitsubishi Motor Sales

Multivendor CRM system Benefits to a business and its

customers of a CRM system likeMitsubishi’s

Mitsubishi’s modular approach toacquiring and installing CRM system Prevention of large scale failures

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Agilent Technologies & RussBerrie

Failures in implementing ERP systems Causes of the major failure of Agilent’s

ERP implementation Russ Berrie

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TaylorMade Golf & HONIndustries

Moving business information systemswith suppliers and distributors to theWeb resulted in dramatic businessbenefits

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H-P, Eastman Chemical, &Others

What is the business value to EastmanChemical and W.W. Grainger of theirinitiatives to help their suppliers andcustomers do business online?

Why are many small suppliers reluctant todo business online with their largecustomers?

What can be done to encourage smallsuppliers to get online?

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Wal-Mart & Mattel

Wal-Mart as “the best supply chainoperator of all time”?

What can other businesses learn fromthe experiences of Wal-Mart andMattel that could improve their supplychain performance?

Enterprise e-Business SystemsLearning ObjectivesSlide31Customer Relationship ManagementCustomer Relationship Management (continued)Customer Relationship Management (continued)Customer Relationship Management (continued)Customer Relationship Management (continued)Customer Relationship Management (continued)Customer Relationship Management (continued)Slide32Enterprise Resource PlanningEnterprise Resource Planning (continued)Enterprise Resource Planning (continued)Enterprise Resource Planning (continued)Enterprise Resource Planning (continued)Enterprise Resource Planning (continued)Enterprise Resource Planning (continued)Enterprise Resource Planning (continued)Slide52Supply Chain ManagementSupply Chain Management (continued)What do supply chain management (SCM) tools do?SCM capacity constraintsSCM Tools levelsSupply Chain Planning ProcessSupply Chain Execution ProcessI2 >master production schedule SCM vendorsSupply Chain Management (continued)Supply Chain Management (continued)Supply Chain Management (continued)Mitsubishi Motor SalesAgilent Technologies & Russ BerrieTaylorMade Golf & HON IndustriesH-P, Eastman Chemical, & OthersWal-Mart & Mattel