Lecture 1 of my Enterprise Resource Planning course - an introduction to enterprise resource systems.

1. Introduction to Enterprise Resource Systems

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Learning Objectives
 Identify the following aspects of customer
relationship management (CRM), enterprise resource
management (ERP), and supply chain (SCM) mgt
systems:
 Business processes supported
 Customer and business value provided
 Potential challenges and trends
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3. Customer Relationship Management (CRM)
– The Business Focus

4. What Does CRM Do For An Organization?
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What Does CRM Do For An Organization?
 Provides customer‐facing employees with a single,
complete view of every customer at every touch
point and across all channels
 Provides the customer with a single, complete view
of the company and its extended channels
 Integrates and automates many of the customer
serving processes
 Creates an IT framework of Web‐enabled software &
databases that integrates these processes with the
rest of the company’s business operations
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CRM Benefits And Challenges
 Allows a business to identify its best customers
 Makes possible real‐time customization &
personalization of products & services based on
customer wants, needs, buying habits, & life cycles
 Enables a company to provide consistent customer
service experience across the organization
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CRM Failures
 Due to lack of understanding & preparation.
 CRM is not a silver bullet
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Trends in CRM
 Operational CRM
 Analytical CRM
 Collaborative CRM
 Portal‐based CRM
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11. Enterprise Resource Planning (ERP):
The Business Backbone

12. How Does An ERP Help An Organization?
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Enterprise Resource Planning
 Serves as a cross‐functional enterprise backbone
that integrates & automates many internal business
processes and information systems
 Helps companies gain the efficiency, agility, &
responsiveness needed to succeed today
 Gives a company an integrated real‐time view of its
core business processes
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Enterprise Resource Planning (continued)
 ERP software suites typically consist of integrated
modules of…
 Manufacturing
 Distribution
 Sales
 Accounting
 Human Resource Management
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Benefits of ERP Systems
 Quality and efficiency
 Helps improve the quality and efficiency of customer service,
production, & distribution by creating a framework for integrating
and improving internal business processes
 Decreased Costs
 Reductions in transaction processing costs and hardware, software,
and IT support staff
 Decision support
 Provides cross‐functional information on business performance to
assist managers in making better decisions
 Enterprise agility
 Results in more flexible organizational structures, managerial
responsibilities, and work roles
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Biggest Challenge of ERP
 Costs of ERP
 The costs and risks of failure in implementing a new ERP
system are substantial.
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Causes of ERP Failures
 Underestimating the  Trying to do too much, too
complexity of the planning, fast
development, and training  Insufficient training
required  Believing everything the
 Failure to involve affected software vendors and/or
employees in the planning & consultants say
development phases and
change management
programs
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Trends In Enterprise Resource Planning
 Flexible ERP
 Web‐enabled ERP
 Inter‐Enterprise ERP
 E‐Business Suites
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20. Supply Chain Management:
The Business Network

21. What Is Supply Chain Management?

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Supply Chain Management
 A cross‐functional inter‐enterprise system that uses
IT to help support & manage the links between some
of a company’s key business processes and those of
its suppliers, customers, & business partners.
 Goal is to create a fast, efficient, & low‐cost network
of business relationships.
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What Do Supply Chain Management Tools Do?
Supply chain management tools enable
managers to make informed business
Supply Chain
Management Definition
decisions about the operation of their
supply chain
Supply chain management tools facilitate
Supply Chain
planning and production scheduling
Management based on known business constraints
Overview
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SCM Capacity Constraints
Managing a supply chain
would be easy if we had
unlimited resources
“How do I decide what to do
on which piece of equipment,
and when?” Can only drill
one piece of metal
at a time
-- OR --
Computer processing
and storage capacity
not infinite
Supply Chain Manager
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SCM Tools levels
SCM Service Offering
Strategic
Planning Network Design
Demand Planning
Supply Planning
Production Planning
Tactical
Planning
Warehouse Management
Transportation Management
Order Management
Inventory Management
Operational
Planning Event Management
Real time / Hours / Weeks / Quarters Years
Minutes Days Months
Supply Chain Planning Tools Supply Chain Execution Tools
Source: BAH
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Supply Chain Planning Process
Demand Planning
 Anticipate demand
based on historical
trends and current
conditions
Network Design  Perform what if analysis
 Design where to place - highlight the impact Production Planning Production Scheduling
production facilities of changing demand
drivers  Decompose the supply  Optimize processing
and optimize the end plan into sub flows, sequence, and
to end chain assembly / production timing
 Construct alternate flow needs by site  Produce a finite
scenarios that  Balance production capacity production
incorporate Supply Planning capacity across sites schedule
associated constraints
 Balances unconstrained
demand against high
level supply chain
constraints
 Reflect order priority
and due dates
Planning Weeks / Hours /
Years Quarters
Horizon Months Days
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Supply Chain Execution Process
Inventory Warehouse Transportation
Order Management Management Management Management
 Record customer  Streamline information  Optimization  Optimize and
orders and track movement and
status from receipt provide tight and track outbound
to final delivery inventory control
 Direct efficient  Inventories
management of and inbound
response to orders replenished using warehouse shipping
with dynamic cost / kanban, min-max, or
benefit analysis of reorder point processes
options
Event Management
 Monitorand manage critical planning and event information
 Broadcast alert notification and present response alternatives based on pre determined
business rules
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SCM Vendors
 Although each of the vendors claim to
provide an end to end solution, they
actually fall into two distinct camps Leading SCM Vendors
 First are the ERP vendors who provide a
ERP Focused SCM Focused
strong solution for integrating the data
environment and providing visibility
 Oracle  i2
 Second are the SCM vendors who  SAP  Manugistics
provide robust optimization solutions  JD Edwards  Aspentech
 In combination, with an ERP vendor  Peoplesoft  Logility
providing the data environment and a  Invensys / Baan
SCM vendor providing the optimization
solution, you can achieve a very elegant
solution
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Benefits of Supply Chain Management
 Can provide faster, more accurate
 order processing
 reductions in inventory levels
 quicker time to market
 lower transaction and materials costs
 strategic relationships with suppliers
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Challenges of Supply Chain Management
 Lack of proper demand planning knowledge, tools, and
guidelines
 Inaccurate or overoptimistic demand forecasts
 Inaccurate production, inventory, and other business
data
 Lack of adequate collaboration
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