MIS 2101 Final Exam Study Guide Carey O Donnell Chapters 7 10 Chap 7 Enhancing Business Processes Using ERP Traditional business functions primary focus of ERP systems not silos but highly interrelated Marketing and sales Human resources Supply chain management Accounting and finance Order To Cash Process all of the processes associated with selling a product or service Sales Order Process Procure To Pay process the processes associated with procuring goods from external vendors Supply Chain Make to Stock Make to Order Process the processes associated with producing goods Production Supply Chain Core business processes enable the creation of supply chains a river of material and activity Value Chain the set of business activities that add value to the end product Two types of business activities Core Activities Inbound Logistics Manufacturing Outbound Logistics Sales Marketing Customer Service Support Activities Administration HR Tech Development Purchasing Legacy Systems describes a firm s existing IT systems usually not integrated silos of individual systems ERP Provides an integrated set of business applications in a master database used by every department business process Internally focused systems Externally focused systems Primary ERP modules applications CRM Customer Relationship Management Sales Order Processing SCM Supply Chain Management Core Components of ERP Systems Financial Management Operations Management Human Resource Management Primary value of ERP systems forcing Best Practices on all business processes The primary organizational problems that drove the rapid implementation of ERP systems Stand alone Legacy applications silos Not designed to communicate with other system Variety of computing hardware platforms Enable departments to conduct daily business activities Not helpful for other areas in the firm Multiple Proprietary Legacy systems From vendors Not designed to share with other vendors systems Problem of knitting together hodgepodge portfolio of discordant proprietary applications Lack of integration between systems The Formula for Success with Enterprise Resource Planning Systems Secure executive sponsorship Most failures are due to lack of top level management support Get help from outside experts consultants can make implementations faster Training is the most overlooked underestimated and poorly budgeted expense Thoroughly train users Take a multidisciplinary approach to implementations Include end users from all functional areas in the development implementation Chap 8 Supply Chain Systems What is a Supply Chain A supply chain is a collection of companies and processes moving a product suppliers of raw materials suppliers of intermediate components final production to the customer Upstream flow from sources of raw materials and components Downstream flow to customers Suppliers have their own supply chain A better name for this process supply network Benefits Problems with Supply Chains Potential benefits Process innovations Just In time Production JIT Vendor Managed Inventory VMI Potential problems Distorted information Excessive inventories Inaccurate capacity plans Missed product schedules Just In Time Production JIT Keeping inventory is costly storage capital missed production schedules JIT optimizes ordering quantities Parts and raw materials arrive when needed for production As orders arriver in smaller quantities but at higher frequency investment in storage space and inventory is minimized It is used extensively by computer manufacturers to avoid component obsolescence Moore s law Example Dell keeps only two hours of inventory in stock JIT requires tight cooperation between all partners in the supply network Other issues involving complex Supply Chains The Bullwhip Effect Where small end product demand fluctuations cause large fluctuations further up the supply chain and Small forecasting errors at end of supply chain cause large errors further up the supply chain Integrated business processes ERP help mitigate the bullwhip effect Corporate Social Responsibility Transparency and accountability within the supply chain helps save costs and create a good image ERP s can help when facing Product Recalls Promotes sustainable business practices Supply Chain Planning SCP Four types of plans are used in businesses Demand planning and forecasting Examination of historic data Distribution planning Delivering products to consumers Warehousing delivering invoicing and payment collection Production scheduling Inventory and safety stock planning Coordination of activities needed to create the product service Optimization of the use of materials equipment and labor Development of inventory estimates Supply chain visibility The ability to track products as they move through the supply chain and to foresee external events Supply chain analytics The use of key performance indicators to monitor performance of the entire supply chain including sourcing planning production and distribution Primary Objectives of Supply Chain Management SCM Strategy Efficiency cost minimization Effectiveness customer service maximization RFID Radio Frequency Identification is revolutionizing Supply Chain Management Walmart the world leader in SCM via RFID RFID will soon replace standard bar codes on products Tags are programmable a vast array of uses scanning can be done from greater distances Many privacy concerns about RFID Primary drivers of Customer Relationship Management CRM Technology Customers have the power Economic transformation is taking place i e from transactions to relationships Keeping customers satisfied is the key Primary objectives of CRM Companies search for ways to widen lengthen and deepen customer relationships Widen attract new customers Deepen develop small customers into long term profitable customers Lengthen keep customers satisfied and coming back Primary architecture of CRM systems Operational CRM e g Sales Force Automation SFA Customer Service Support CSS Analytical CRM Analysis of customer behavior and perceptions to support marketing campaigns customer segmentation and pricing strategies Collaborative CRM improve communications internally externally to better satisfy retain customers Powerful CRM Tool Digital Dashboards information quickly Digital dashboards help to visualize key CRM performance metrics help process comprehend lots of Chap 9 Developing Acquiring New Information Technology Systems Justifying IT Systems requires making a Good