Management Information Systems

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Chapter 7
Enterprise Systems From Supply Chains to ERP to
CRM
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ESSENTIALS OF ENTERPRISE SYSTEMS AND SUPPLY CHAINS
Enterprise systems integrate the separate
functional systems
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Enterprise Systems

• Enterprise systems software that integrates the
  organization
• Functional systems confined to one functional
  area or dept.
• Examples of Enterprise Systems Components
• ERP supports internal supply chain
• CRM customer support (downstream)
• PRM supports business partners (upstream)

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Supply Chain
Supply chain refers to the flow of materials,
information, money, and services from raw
material suppliers, through factories and
warehouses to the final consumer. When it is
managed electronically via web, it is referred to
as an e-supply chain.

• 3 Supply Chain Flows
• Materials flows are all physical products, new
  materials, and supplies that flow along the
  chain.
• Information flows are data associated with
  demand, shipments, orders, returns and schedules.
• Financial flows include all transfers of money,
  payments, credit card information, payment
  schedules, e-payments and credit-related data.

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Supply Chain
Supply Chain
Value chain
Flow of info goes both ways. Flow of materials
generally goes one way. Flow of money generally
goes one way (green line)
Value chain inbound logistics, operations,
outbound, sales/mkt, service
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You know you have Supply Chain Problems when

• Unable to meet customer demand
• Inventories too large (overstock)
• Inventories too small (understock)
• Customers are not satisfied
• poor service
• poor product quality
• Expediting shipments in or out

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Two Sources of Supply Chain Problems

• Uncertainty (forecast problem)
• bullwhip effect
• Solutions
• Building inventories
• Information sharing with suppliers (eg, PRM)
• VMI
• RFID
• Etc

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Two Sources of Supply Chain Problems

• Ineffective coordination of activities, internal
  units, and business partners
• Solution
• Supply chain management (SCM)
• Decrease inventory levels
• Reduce cycle time
• Improve business processes and customer service

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ESSENTIALS OF ENTERPRISE SYSTEMS AND SUPPLY CHAINS
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ERP Enterprise Resource Planning
ERP is an enterprise system that controls all
major business processes with a single software
architecture in real time.

• It is comprised of a set of applications that
  automate routine back-end operations
• financial management
• inventory management
• scheduling
• order fulfillment
• accounts payable and receivable
• It includes front-end operations such as
• POS
• Field Sales
• Ordering supplies
• ERP integrates back-end and front-end operations

Support activities
Primary activities
Integration
ERP
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Benefits of ERP

• ERP is a strategy for Systems Integration
• Benefits
• Inventory reduction
• Personnel reduction
• Productivity improvement
• Order management improvement
• Procurement cost reduction
• Cash management improvements
• Revenue/profit increases
• Logistics cost reduction
• On-time delivery improvement

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Benefits of ERP, cont
Why is integration important?

• Greater efficiency
• Eliminates manual data re-entry
• Reduces errors and costs of errors
• Greater data reliability and integrity
• 2. Less redundancy
• 3. More effective discovery, communication, and
  collaboration

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Customer Relationship Management (CRM)

• CRM is an enterprise wide effort to acquire and
  retain customers
• It focuses on building longterm customer
  relationships
• 2. CRM is a business strategy to select and
  manage customers to optimize long-term value
• Is it manipulation or good business practice?
• What is the cost of losing a customer?
• 3. CRM differentiates between individual
  customers
• Valuable customers may be given extra benefits
• Is this discrimination?

CRM recognizes that customers are the core of a
business.
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Web-based CRM Examples

• Customer Service on the Web
• Search and Comparison Capabilities
• Free Products and Services
• Technical and Other Information and Service
• Customized Products and Services Online
• Track Accounts or Order Status
• Tools for Customer Service
• Personalized Web Pages
• FAQs
• Chat Rooms
• E-Mail and Automated Response
• Call Centers
• Troubleshooting Tools
• Wireless CRM

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Evolution Is Continuing in Supply Chain
Management
Solutions for supply chain problems
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MANAGERIAL ISSUES

• How much to integrate?
• Role of IT
• Organizational adaptability
• Going global
• The Customer is king/queen
• Set CRM policies with care