GST 5083 - INFORMATION SYSTEMS & ELECTRONIC COMMERCE

MASTER OF BUSINESS ADMINISTRATION

Malaysian Graduate School of Entrepreneurship & Business

UNIVERSITI MALAYSIA KELANTAN( UMK SARAWAK )

GROUP MEMBERS

1. Arni B. Hj. Morshidi P14D461P2. Anisah Bt Ismail P14D389P3. Syarifah Rohaya Bt Wan Idris P14D397P4. Dayang Adelina Bt Hj Abang Muan P14D394P5. Norhana Aini Bt Saini P14D398P

CASE STUDY WEEK 4:

SUMMIT ELECTRIC LIGHTS UP WITH A NEW

ERP SYSTEM

INTRODUCTION

Top wholesale distributors of industrial electrical equipment and supplies

3 divisions:Global export –

HoustonMarine – New Orleans

Sales - Dubai

Founded in 1977 in Albuquerque, New Mexico

A “middle man”

CASE SUMMARY

• A legacy information system not keep up with the business

• Done manually• Only handle a fixed number of

locations and limited of numbers used on documents

• IS Department• Had to use the same range of

document numbers over again every few months

CASE SUMMARY

• Summit needed a system that could handle a very large number of SKUs

• Changed to new system ERP provided by SAP • That would require improve its business process and the way people worked.

Question 1

•Which business processes are the most important at Summit Electric Supply? Why?

Question 2

•What problems did Summit have with its old systems? What was the business impact of those problems?

Question 3

•How did Summit’s ERP system improve operational efficiency and decision making? Give several examples.

QUESTIONS

QUESTIONS

Question 4

•Describe two ways in which Summit’s customers benefit from the new ERP system.

Question 5

•Diagram Summit’s old and new process for handling chargeback.

Question 1

• Which business processes are the most important at Summit Electric Supply? Why?

SUPPLY CHANGE MANAGEMENT (SCM): the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage. • Summit Electric Supply is one of the top wholesale

distributors of industrial electrical equipment and supplies in U.S.

• Distributes products that include motor control, wire and cable and etc.

• As a “middle man” – obtains finished goods from manufacturers and sell them to electrical contractors working on projects

• Handle a very large number of SKUs transaction in a very short lead times

Question 1

• Which business processes are the most important at Summit Electric Supply? Why?

ERP System• A packaged business software system that enables a company to manage the efficient and effective use of its resources.

SAP Application

• SAP is a core ERP application and the best practices function in sale and distribution, materials management, Human Resources and Financials and its knowledge in distribution business.

• SAP’s Net Weaver support Summit Electronic more organize and be able to control how much was needed to be produced and distributed.

• It’s useful for business intelligence reporting and analysis.

Question 2

• What problems did Summit have with its old systems? What was the business impact of those problems?

Question 2

• What problems did Summit have with its old systems? What was the business impact of those problems?

Question 3

• How did Summit’s ERP system improve operational efficiency and decision making? Give several examples.

ERP improved operational efficiency and give scalability and the ability in Summit’s business process

Especially in supply chain areas like sales and distribution, inventory management and financial reporting system-as the company expected strong growth in these areas.

Question 3

• How did Summit’s ERP system improve operational efficiency and decision making? Give several examples.

Running more frequent inventory updates

• It’s running smaller and frequent inventory update throughout the day, instead of a night-which caused a delay.

• New system provided accurate information of shipping order, which Summit’s was able to ship immediately.

Adapting the inventory tracking process

• To replenish wire and cable, the ERP batch material management identified the customer purchase amount, length of wire and product manufacturer.

• Each time a customer buys a length of wire, the length is entered into the system to track how much of the “batch” was sold.

Question 3

• How did Summit’s ERP system improve operational efficiency and decision making? Give several examples.

Changing how inventory is managed at job sites

• To secure inventory for special customers, with long term projects, Summit created a “parent- child” warehouse relationship in ERP system to secure the materials in inventory as well as on premises.\.

Question 3

• How did Summit’s ERP system improve operational efficiency and decision making? Give several examples.

• To make a better manage its finance and ordering system, Summit implemented the SAP’s/NetWeaver BW data warehouse and business intelligence.

• By integrating the NetWeaver, Summit was able to analyze the profit of each sales person, manufacturer, customer and branch.

• Using SAP software, Summit was able to improve its ROI, by automating sales tax and chargeback’s.

• The SAP/Paybacks and Chargeback’s application was able to identify the billing activity, if there was a chargeback, the SAP system would automatically submit the information to bill the chargeback- increase its chargeback claims of up to 118%.

• Summit decision making for implementing the new ERP system was based on the growth of the organization, the complexities of processing orders, analyzing finances and back and reporting.

• Once the new ERP/SAP was in place, Summit management was able to focus on sales and orders and quotes, supplier performance and delivery schedule.

• The new SAP/ERP has allowed Summit to run its operations with flexibility and allow the SAP to operate efficiently.

• The new ERP system allowed management to have a greater vision for decision making and managing its operations

Business intelligence

Question 4

• Describe two ways in which Summit’s customers benefit from the new ERP system.

Customer can rely on the company for their needs and products• The company now more efficient• The company wants that customers to feel that

they can provide that they have produced products the customer want and sent to them in short time period.

To accommodate large customers with long term job sites• SES sets up temporary warehouse on site to supply

electrical products. • Create “parent – child” warehouse relationship – to able to

work with customers. • The warehouse can be controlled like subparts of the main

SES warehouse.• It helps to prevent anybody from selling the consigned

inventory into the warehouse.

Question 5

• Diagram Summit’s old and new process for handling chargebacks.

Chargeback is the return of funds to a consumer.

The chargeback mechanism exists primarily for consumer protection.

For the distribution company, chargeback occurs when the supplier sells a product at a higher price to the distributor than the price they have set with the end user.

Question 5

• Diagram Summit’s old and new process for handling chargebacks.

Look through

customers invoices

Identify specific manufacturer which Summit

chargeback could claim

Input data manually in

Excel spreadsheet

Submit paper copies of invoices to

vendors

Received responds

from vendors

OLD PROCESS

Question 2

• What problems did Summit have with its old systems? What was the business impact of those problems?

NEW PROCESS

All chargeback agreement loaded

in SAP system

System review billing activity and do a matching

to create a separate chargeback documents