Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

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기업과 정보 (Management Information Systems)

Achieving Operational

Excellence and Customer Intimacy: Enterprise

Applications

Chapter 9

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• How do ERP help businesses achieve operational excellence?

• How do SCM coordinate planning, production, and logistics with suppliers?

• How do CRM systems help firms achieve customer intimacy?

• What are the challenges posed by enterprise applications?

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

Learning Objectives

CHAPTER 9: ACHIEVING OPERATIONAL EXCELLENCE AND CUSTOMER INTIMACY: ENTERPRISE APPLICATIONS

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• Problem: Antiquated IT infrastructure and ERP system; disparate processes for each country and market; massive operational inefficiencies

• Solution: Numerous separate legacy systems

replaced with Oracle’s JD Edwards EnterpriseOne ERP system

• Demonstrates use of technology to maximize supply chain efficiency, integrate data into a common source

Statoil Fuel and Retail Competes Using Enterprise Systems

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기업과 정보 (Management Information Systems) Enterprise Systems

• What are enterprise systems?

• A suit of integrated SW modules and a common central db.

• Also called ERP

• Can answer business questions involving every aspects of a business.

• Ex: if an employee placed an order for tire rims, the system verifies customer credit limits, schedules shipment,

identifies best shipping route, and reserves necessary items from inventory.

• Includes Best practices: the most successful problem solving methods in an industry.

• Configuration Tables provided to tailor particular business

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Enterprise Systems

• Business value of enterprise systems

• Increased operational efficiency

• Supports better decisions

• Rapid responses for customer requests

• Ex: All data from order,

manufacturing, delivery are integrated. Exact raw

material requirements, current inventory for customer order can be analyzed on line.

How Enterprise Systems Work

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기업과 정보 (Management Information Systems) Supply Chain Management Systems

• The supply chain:

• A network of organizations and business processes for procuring and transforming raw materials, and distributing finished products to customers.

Nike’s Supply Chain

The flow of information upstream and downstream to coordinate the activities involved in buying,

making, and moving a product.

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• Supply chain management

• JIT strategy (for production and delivery) is desirable

• Safety stock - keeps more inventory than actually needed

• Bullwhip effect? A little “just in case” inventory will increase more and more as chain proceeds. Can be tamed by sharing accurate information to reduce uncertainty.

Supply Chain Management Systems

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• SCM applications

– Supply chain planning systems: performs demand forecasting, sourcing and manufacturing planning, determining inventory levels, etc.

– Supply chain execution systems: manages physical flow of products.

• Business value of SCM

– Matches supplies to demands, reduces inventory levels, improves delivery services, reduces time to markets, etc.

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Read the Interactive Session and discuss the following questions

• DP World

– One of the leading marine terminal operators with 50 terminals in 31 countries, and 11 under development

• DP World is famous for customer-centric operations

– Provides quality innovative services to effectively manage customers’

supply chains.

– Reduces/removes lengthy procedures and paper based logistics – Extensively uses EDI and digital radio communications

– Recently started to use RFID technology

DP WORLD TAKES PORT MANAGEMENT TO THE NEXT LEVEL WITH RFID

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• RFID based tracking systems from Identec Solutions

– Truck Tracking: RFID used in tracking truck movements through port gates. Active RFID tags are fixed at rear chassis of trucks. According to the information on RFID, truck’s waiting lane is automatically

determined and a ticket with proper lane number is issued to the drivers.

– Container Tracking: OCR identifies the numbers of the containers on the trucks. Many lengthy manual procedures for gate passing of

containers are now performed automatically

– Removed traffic congestions and increased customer satisfaction and solved supply chain challenges.

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• Why is port management so important at DP World? What

business processes are affected by the terminal operators’ ability or inability to handle the port?

• What management, organization, and technology factors were responsible for DP World’s problems with port management?

• How did implementing the RFID software change the way DP World ran its business?

• Describe two decisions that were improved by implementing the RFID system?

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• SCM using Internet

– Intranet and Extranet: domestic and global supply chain is efficiently implemented.

– Pull-based manufacturing model

• Demand-driven supply chains

• Ex: Dell’s build-to-order system, Wall-Mart’s continuous replenishment system

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• Global supply chain issues

– Global supply chains typically span greater geographic distances and time differences

– More complex pricing issues (local taxes, transportation, etc.)

– Foreign government regulations

• Future supply chain

– Digital immediately-adjustable communication nerve system

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THE FUTURE INTERNET-DRIVEN SUPPLY CHAIN

FIGURE 9-5

• Digital nervous system.

• Multidirectional

• Immediately adjusts

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“The customer is always right”

“Today, new product or service is very short lived. Customers are not”

• Market Share vs. Customer Share?

• LTV (lifetime value) of a Customer

• CRM?

• A tool for analyzing and managing individual customer’s value, loyalty, and profitability (for our company) over his/her life time.

• Operational and analytical CRM

• Operational CRM: Customer facing applications such as call center or help desk tools

• Analytical CRM: Tool for analyzing data collected by operational CRM systems.

Customer Relationship Management Systems

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• CRM packages typically include tools for:

– Sales force automation (SFA)

• E.g. sales prospect and contact

information, and sales quote generation capabilities

– Customer service

• E.g. assigning and managing customer service requests; Web-based self-service capabilities

– Marketing

• E.g. capturing prospect and customer data, scheduling and tracking direct-marketing

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HOW CRM SYSTEMS SUPPORT MARKETING

CRM provides a single point for users to

manage and evaluate marketing campaigns across multiple

channels, including email, direct mail, telephone, the Web, and wireless

messages.

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• Business value of CRM

– Increased customer satisfaction – Reduced direct-marketing costs – More effective marketing

– Lower costs for customer acquisition/retention – Increased sales revenue

– Reduce churn rate

• Number of customers who stop using or purchasing products or services from a company.

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• Highly expensive to purchase and implement

– $3.5 million to over $12 million

• Technological changes: cloud computing, mobile platform, etc.

• Business process changes

• Organizational changes

• Switching costs

• Dependence on software vendors

Enterprise Applications: New Opportunities and Challenges

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• Next-generation enterprise applications

– Move is to make applications more flexible, Web- enabled, integrated with other systems

– Enterprise suites

• Software to enable CRM, SCM, and enterprise systems work together and with suppliers and client systems

– Open source & on-demand solutions – Mobile compatible

– Web 2.0 capabilities

– Complementary analytics products

Enterprise Applications: New Opportunities and Challenges