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CHAPTER NINE

Enterprise
Applications to
Manage Supply
Chains and
Respond to
Customers
Oleh : Kundang K Juman
Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
LEARNING OBJECTIVES

After reading this chapter, you will be able to answer the


following questions:
1. How do enterprise systems help businesses achieve
operational excellence?
2. How do supply chain management systems
coordinate planning, production, and logistics with
suppliers?
3. How do customer relationship management systems
achieve customer intimacy?
Continued
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
LEARNING OBJECTIVES (continued)

4. What are the challenges posed by enterprise


applications?
5. How are enterprise applications used in platforms for
new cross-functional services?

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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Allan Candy: How Sweet Independence Is!

Problem: As an independent company, company needed to improve


speed to market; needed to manage both its upstream and
downstream production and distribution processes and have realtime access to inventory, production, financial, and distribution
data.
Solutions: Eliminate manual procedures and implement supply chain
software suite to allocate inventory more accurately, forecast
demand, and understand customer needs.
Technology: outsourced development and hosting/storage to
Metafore; implemented MS- Dynamic GP software, and ERP system
that to manage inventory, including purchasing and invoicing
Demonstrates ITs role in improving inventory and distribution
processes
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Systems

What are enterprise systems?


Suite of integrated software modules and a
common central database
The database collects data from many different
divisions and departments in a firm and from a
large number of business processes
Information collected from one process can be
accessed and used by other processes in the firm
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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Systems

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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Systems

Enterprise Software

Built around thousands of predefined business processes that


reflect best practices
Finance/accounting: General ledger, accounts payable, etc.
Human resources: Personnel administration, payroll, etc.
Manufacturing/production: Purchasing, shipping, etc.
Sales/marketing: Order processing, billing, sales planning, etc.

To implement, firms:
Select functions of system they wish to use
Map business processes to software processes
Use softwares configuration tables for customizing

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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Systems

Business Value of Enterprise Software


A more uniform organization
More efficient operations and customer-driven
business processes
Firm-wide information for improved decision making

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

The supply chain


A network of organizations and business
processes for procuring raw materials,
transforming these materials into intermediate
and

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Information Systems and Supply Chain


Management
Inefficiencies cut into a companys operating costs

Can waste up to 25% of operating expenses

Just-in-time strategy:

Components arrive as they are needed


Finished goods shipped after leaving assembly line

Safety stock

Buffer for lack of flexibility in supply chain

Bullwhip effect

Information about product demand gets distorted as it passes


from one entity to next across supply chain

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Supply Chain Management Software


Supply chain planning systems

Model existing supply chain

Demand planning

Optimize sourcing, manufacturing plans

Establish inventory levels

Identifying transportation modes

Supply chain execution systems

Manage flow of products through distribution centers and


warehouses

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Case Study: Canada Post Automates Data Entry

Read the Case Study and then discuss the following


questions:
1.Why is it hard for Canada Post to automate data
entry into its SAP systems? What business
processes are involved?
2.Why were management, organization, and
technology factors responsible for Canada Posts
problems with automating data entry?
3.How did implementing the Winshuttle software
change the way Canada Post handled data entry?
4.Describe two processes that were improved by
implementing the Winshuttle system.
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Global Supply Chains and the Internet


Before Internet, supply chain coordination hampered
by difficulties of using disparate internal supply chain
systems
Enterprise systems supply some integration of
internal supply chain processes but not designed to
deal with external supply chain processes
Demand-Driven Supply Chains: From Push to Pull
Manufacturing and Efficient Customer Response

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Business Value of Supply Chain Management


Systems
Match supply to demand
Reduce inventory levels
Improve delivery service
Speed product time to market
Use assets more effectively
Reduced supply chain costs
Increased sales
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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Supply Chain Management Systems

Copyright 2013 Pearson Canada Inc.

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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

What is Customer Relationship Management?


CRM systems
Capture and integrate customer data from
across the organization
Consolidate the data
Analyze the data
Distribute the results to various systems and
customer touch points across the enterprise
Touch Point: a method of interaction with the
customer
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

CRM Software
More comprehensive packages have modules for:
Partner relationship management (PRM)
Employee relationship management (ERM)

Most packages have modules for


Sales force automation (SFA): Sales prospect and contact
information, and sales quote generation capabilities; etc.
Customer service: Assigning and managing customer service
requests; Web-based self-service capabilities; etc.
Marketing: Capturing prospect and customer data, scheduling
and tracking direct-marketing mailings or e-mail; etc.

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Copyright 2013 Pearson Canada Inc.

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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Operational and Analytical CRM


Operational CRM
Customer-facing applications such as call centre
and customer service support
Analytical CRM
Based on data warehouses that consolidate the
data for data analysis

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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Copyright 2013 Pearson Canada Inc.

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Customer Relationship Management Systems

Business Value of Customer Relationship Management


Systems
Increased customer satisfaction
Reduced direct-marketing costs
More effective marketing
Lower costs for customer acquisition/retention
Increased sales revenue
Reduced churn rate

Churn rate:
Number of customers who stop using or purchasing
products or services from a company.
Indicator of growth or decline of firms customer
base

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Management Information Systems


Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Applications: New Opportunities and Challenges

Enterprise Application Challenges


Highly expensive to purchase and implement
enterprise applications total cost may be 4 to
5 times the price of software
Requires fundamental changes

Technology changes
Business processes changes
Organizational changes

Incurs switching costs, dependence on


software vendors
Requires data standardization, management,
cleansing
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Applications: New Opportunities and Challenges

Next generation enterprise applications


Enterprise solutions / suites:

Replacing stand-alone enterprise, CRM, SCM systems


Make these applications more flexible, Web-enabled,
integrated with other systems

Open-source and on-demand applications

SaaS, Salesforce.com

Service platform: Integrates multiple applications to


deliver a seamless experience for all parties

Order-to-cash process

Portals:
Increasingly, new services delivered through
portals
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Applications: New Opportunities and Challenges

Enterprise Applications Move to the Cloud


Read the Window on Technology, and then discuss the
following questions:
1. What types of companies are most likely to adopt cloudbased ERP and CRM software services? Why? What
companies might not be well suited for this type of
software?
2. What are the advantages and disadvantages of using
cloud-based enterprise applications?
3. What management, organization, and technology issues
should be addressed in deciding whether to use a
conventional ERP or CRM system versus a cloud-based
version?
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Chapter 9 Enterprise Applications to Manage Supply Chains and Respond to Customers
Enterprise Applications: New Opportunities and Challenges

Copyright 2013 Pearson Canada Inc.

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CHAPTER NINE

Enterprise
Applications to
Manage Supply
Chains and
Respond to
Customers
Copyright 2013 Pearson Canada Inc.

9-32