Enterprise Systems and Supply Chain Management Notes

Enterprise Systems and Supply Chain Management

Overview

• Section 8.1: Enterprise Systems and Supply Chain Management

  • Building a Connected Corporation Through Integrations

  • Supply Chain Management (SCM)

  • Technologies Reinventing the Supply Chain

• Section 8.2: Customer Relationship Management and Enterprise Resource Planning

  • Customer Relationship Management (CRM)

  • The Benefits of CRM

  • Enterprise Resource Planning (ERP)

  • Organizational Integration with ERP

Building a Connected Corporation Through Integrations

• Integration: Allows separate systems to communicate directly, eliminating manual entry into multiple systems.

  • Application Integration

  • Data Integration

  • Forward Integration

  • Backward Integration

• Enterprise System: Provides enterprise-wide support and data access for a firm’s operations and business processes.

• Enterprise Application Integration (EAI): Connects the plans, methods, and tools aimed at integrating separate enterprise systems.

• Three Primary Enterprise Systems

  • Supply Chain Management

  • Customer Relationship Management

  • Enterprise Resource Planning

Supply Chain Management

• Supply Chain Management (SCM): The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and profitability.

• Five Basic Supply Chain Activities Include

  • Plan

  • Source

  • Make

  • Deliver

  • Return

• Three Main Links of the Supply Chain:

  1. Materials flow from suppliers and their “upstream” suppliers at all levels.

  2. Transformation of materials into semi-finished and finished products through the organization’s own production process.

  3. Distribution of products to customers and their “downstream” customers at all levels.

• Effective and efficient SCM systems can enable an organization to:

  • Decrease the power of its buyers.

  • Increase its own supplier power.

  • Increase switching costs to reduce the threat of substitute products or services.

  • Create entry barriers thereby reducing the threat of new entrants.

  • Increase efficiencies while seeking a competitive advantage through cost leadership.

• Three Supply Chain Optimization Models

  1. Supply chain optimization

  2. Inventory optimization

  3. Transportation and logistics optimization

Technologies Reinventing the Supply Chain

• Three Components of Supply Chain Management

  • Procurement

  • Logistics

  • Materials Management

• Technologies:

  • 3D Printing: A process that builds, layer by layer in an additive process, a three-dimensional solid object from a digital model.

    • Supports Procurement

  • RFID: Uses electronic tags and labels to identify objects wirelessly over short distances.

    • Supports Logistics

  • Robotics: Focus on creating artificial intelligence devices that can move and react to sensory input.

    • Supports Materials Management

  • Drones: Unmanned aircraft that can fly autonomously, or without a human.

    • Supports Logistics

Customer Relationship Management and Enterprise Resource Planning

• Learning Outcomes

  • Explain operational and analytical customer relationship management.

  • Identify the core and extended areas of enterprise resource management.

  • Discuss the current technologies organizations are integrating in enterprise resource planning systems.

Customer Relationship Management

• Customer Relationship Management (CRM): Involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization's profitability.

• Organizations can find their most valuable customers through RFM:

  • Recency: How recently a customer purchased items.

  • Frequency: How frequently a customer purchased items.

  • Monetary Value: The monetary value of each customer purchase.

• CRM Technologies

  • CRM reporting technology: Help organizations identify their customers across other applications.

  • CRM analysis technologies: Help organization segment their customers into categories such as best and worst customers.

  • CRM predicting technologies: Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving.

• CRM Analysis Technologies

  • Reporting (What Happened)

    • Customer Identification

  • Analyzing (Why It Happened)

    • Customer Segmentation

  • Predicting (What Will Happen)

    • Customer Prediction

• Measuring CRM Success

  • Sales Metrics

  • Customer Service Metrics

  • Marketing Metrics

Operational and Analytical CRM

• Operational CRM: Supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers.

• Analytical CRM: Supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers.

• Operational CRM Technologies

  • Marketing

    • List Generator

    • Campaign Management

    • Cross-Selling and Up-Selling

  • Sales

    • Sales Management

    • Contact Management

    • Opportunity Management

  • Customer Service

    • Contact Center

    • Web-Based Self-Service

    • Call Scripting

Analytical CRM

• Website Personalization: Occurs when a website has stored enough data about a person’s likes and dislikes to fashion offers more likely to appeal to that person.

• Analytical CRM relies heavily on data warehousing technologies and business intelligence to obtain insights into customer behavior.

• These systems quickly aggregate, analyze, and disseminate customer information throughout an organization.

Extending CRM

• Supplier Relationship Management (SRM)

• Partner Relationship Management (PRM)

• Employee Relationship Management (ERM)

Enterprise Resource Planning

• Enterprise Resource Planning (ERP): Integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprise-wide decisions by viewing enterprise-wide information on all business operations.

• Reasons ERP systems are powerful tools:

  • ERP is a logical solution to incompatible applications.

  • ERP addresses global information sharing and reporting.

  • ERP avoids the pain and expense of fixing legacy systems.

• ERP systems collect data from across an organization and correlates the data generating an enterprise-wide view.

• Benefits of ERP

  • Core ERP Component: Traditional components included in most ERP systems and they primarily focus on internal operations.

  • Extended ERP Component: Extra components that meet the organizational needs not covered by the core components and primarily focus on external operations.

• Core ERP Components

  1. Accounting and Finance

  2. Production and Materials Management

  3. Human Resource

• Extended ERP Components

  • Business Intelligence

  • Customer Relationship Management

  • Supply Chain Management

  • E-business components include:

    • Elogistics

    • Eprocurement