Question 5 Part A a) Detail your understanding of ERP. [400-500 words] ERP stands for Enterprise Resource Planning systems.

ERP can be described as: - A business strategy and set of industry-domain-specific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise collaborative operational and financial processes.

Accounting Software as Part of Enterprise Resource Planning (ERP) Larger organisations often go for an ERP package where finance comes as a module. An ERP is an integrated software package that manages the business process across the entire enterprise.

Choice of an ERP Choice of an ERP depends upon the following factors: 1. Functional requirement of the organisation: The ERP that matches most of the requirements of an organisation is preferred over the others. 2. Reports available in the ERP: The organisation visualises the reporting

requirements and choses a vendor which fulfils its reporting requirements. 3. Background of the vendors: The service and deliverable record of a vendor is extremely important in choosing the vendor. 4. Cost comparisons: The budget constraints and fund position of an enterprise often becomes the deciding factor for choosing a particular package.

c) Does the cost of an ERP solution outweigh its advantages? Explain. [300 words] No, the cost of an ERP solution does not outweigh its advantages. It all depends on the organization that intends to use it or is using it. An ERP system provides the solid operational backbone manufacturers and distributors need to improve the volume of production and fulfilment of orders while reducing costs. However, if there is enough planning put into place before and post the implementation of the product, then it is most likely that using ERP may turn out to be a safe bet.

While ERP systems certainly have their benefits, they're really not that practical for all but the largest and most wealthy companies. Implementing an Enterprise Resource Planning (ERP) System is extremely challenging. You are likely changing systems that your employees have grown used to using. It is always difficult to implement and manage change, and with an ERP system it is also very expensive. For companies that do successfully implement an ERP System the benefits far outweigh the costs.

The benefits derived from ERP can far outweigh the costs of the system, providing that the system is selected carefully and is appropriate for your company from a feature, cost, and technology standpoint.

Part B b) Amazons entry into India Amazon enters India at a time when Indians are shopping online growing through popular outlets like Flipkart, Naaptol, Bookmyshow, Myntra, Homeshop18 and travel portal MakeMyTrip.

Like Apple, Amazon has a great knack of moving the market and affect consumer behaviour significantly. Indian online firms are sparing no effort to maintain their dream run. Indian e-commerce companies are scrambling to retain key staff, and strengthen their back-end supply chains. They are also hiring staff in a big way to fill up vacancies, and upgrading technologies.

Amazon made it clear through last month hiring process that it was in the process of setting up its first warehouses in India, which would make shipments faster and cheaper.

This set-up lets Amazon's Indian operations avoid government rules which forbid multi-brand retailers from abroad from operating in India, as Junglee.com only directs customers to other websites selling products, instead of selling directly. Indias government stated in January that it would let foreign multi-brand retailers, into the nation. But they later did a U-turn due to concerns that the changes would hurt small businesses. Analysts still say that the government will eventually ease regulations to allow multi-brand retailers into the countrys markets.

c) The budget allocations to the Indian IT sector Government of India follows a system of five year plans and the budget allocations to different sectors are prioritized for the plan period.

The allocation for the TUFS (Technology Up gradation Fund Scheme) is also made for the plan period. In order to strengthen the information flow and facilitate monitoring and control of Budgetary allocations for TUFS, Nodal Agencies /Nodal Bank/.

Co-opted PLIs are required to submit information from initial stage of sanction of loan. It aims to facilitate proliferation and absorption of emerging technologies in the country by supporting Research and Development in IT; to promote the use of free and open source software; develop and apply state-of-art cost effective indigenous solutions for important industrial sectors; technology developments in bioinformatics, IPR promotion and setting up of IT Research Academy.

If budgets are not allocated uniformly or as per immediate requirements, key functionalities might get effected and benefits might not be realized consistently. Integration issues with legacy systems can affect the quality of output.

PART C: IT need not just be a tool to smoothen the functioning of an organization. Yes, it can serve as an enabler as well. The IT Vision and the Business Vision of an organization are interlinked. In some cases, Information Technology drives the business firm. While in other cases, Information Technology is being driven by the business firm. It can be both ways. But both are interlinked either ways! In case of Google, technology drives business, but in case of equity markets, business drives technology (software to handle the transactions). For the most part, it is demand for a functionality that drives its supply. Without technology, business can't move forward... Without the Business, technology simply isn't used. But it is technology that has got the upper hand. Owners and CEOs of private companies must recognize the importance of information technology systems in implementing a growth strategy and driving revenue or they could find themselves lagging behind competitors who do. Information technology can be an important tool for private company owners trying to put their companies on a course to sustainable growth. Information technology not only keeps business owners one step ahead of the competition by allowing them to analyze costs and markets; it also makes them more efficient by freeing up badly needed manpower. Yet, despite the critical roles it can play, particularly in a small or mid-size business, IT is often a forgotten ally when companies build their long-term growth plans. Small businesses and private companies sometimes neglect to factor IT into their companys growth strategy usually because of one of two reasons: either the cost of updating a system seems prohibitive, or it may be that management fails to grasp the untapped potential of IT. But a cost-benefit analysis can change attitudes quickly. Another barrier to increasing IT efficiency is staffing. If management is continually moving people in and out of the IT function, no one is ever fully up to speed with the system, and the company will not be able to use IT to greatest advantage. Management is often focused on business issues, without fully realizing that the time spent running spreadsheets and similar tasks could easily be handled by streamlining their IT systems.

Technology generally has improved the speed at which companies can conduct business. As the railway industry grew, companies were able to ship products faster to places farther away. Later, as airlines began to develop, companies could ship goods quickly to customers all over the world. Similarly, the Internet has sped up how companies do business. Companies can conduct meetings via video conferencing online, rather than spending time and money to travel to a meeting. People can exchange documents and ideas within seconds in an email, rather than sending contracts through the mail. Increased speed through technology allows companies to develop more efficient business strategies. Ecommerce companies do a significant percentage of their business online. These include retail companies that sell products to consumers through a website and companies that develop and sell online technology or software to other companies or consumers. Doing business online would not be possible without the technology behind the Internet. Doing business online is a completely new business strategy that developed as a result of the Internet. Companies that sell software or computer programs rarely even use tangible technology to sell and ship products: a customer can buy a product online, download and install it instantly to begin using it. No shipments are necessary. Technology also has changed the way businesses strategize about resource allocation and organization. Some companies focus more on technology resources than human resources. Machines are often able to work faster than people and are more reliable in that they do not get sick or take vacation time. Some machines can do the work of multiple people, giving companies an opportunity to save money on paying salaries and benefits. Automated teller machines have replaced human bankers to an extent, and customers can book airline travel or make other purchases directly online as opposed to calling and talking to a human. In the end, owners and managers have to realize that a fully utilized IT system can add substantial value by making a company more efficient.

QUESTION 6 (a)
1. This is the explanation of supply chain of a mobile manufacturing firm. 2. The sales department identifies a need for a product. The sales department tells the marketing department about their idea and provide any supporting information / data. 3. The marketing department use business analysts to support the project and to complete the research. 4. Data and supporting evidence is passed back to the marketing department for completion of a business plan. 5. A fully detailed business plan is forwarded to the Business Unit Manager / Directors. 6. This unit comprises of the senior business directors or managers who make a decision on the project. 7. After approval the plan is passed back to the analysts to prepare and implement the manufacturing process. 8. Details of raw materials and components passed to purchasing. 9. Purchasing work with logistics and transport to plan the purchase and delivery of the materials to the manufacturing plant. 10.Suppliers receive orders for product and then dispatch on agreed transport on agreed dates. 11. Carriers approved by the business transport the raw materials and components to the manufacturing site. 12. Products are received into the warehouse and then moved to manufacturing. 13. Finished products are moved from manufacturing to the finished goods warehouse which might be situated locally or in a remote location.

14. Finished goods are put into inventory awaiting orders. The company computer system is updated. Product is now available to sales. 15. Customers place orders through customer services. 16. Customer Services take orders and input them to the company computer system. 17. The central computer system maintains transaction records and provided visibility of product for sale. 18. An order is completed and a pick list sent to the warehouse. 19. A copy of the order is sent to the export department for completion of export documentation. 20. Export department manages the final dispatch of the product and produces any export documents. 21. Documents are sent to the warehouse to meet up with the finished order. 22. The order is dispatched by the warehouse. 23. The transport company collects the consignment and delivers it to the customer based upon the INCO terms of carriage. 24. As stock has now been used the computer system generates a request for new stock. 25. The re-order process generates a request to the purchasing department to place new orders with the suppliers.

(b)
Yes, every business has a supply chain. So does the internet service provider. The Internet supply chain consists of the transport factories telephone, cable, satellite, power grid and other companies who own and maintain the networks, and wholesale

Transport Factories

Secondary Wholesalers

Aggregators

Internet Service Providers

Consumers/Content Providers

Figure The Internet Supply Chain

They supply products to the next level of the supply chain. That next level may be a secondary wholesaler in the case of a T-1 line, or an aggregator who buys in volume at a discount in order to serve a number of ISPs.

ISPs, who do not own the network, nonetheless are the critical resale outlets that sell the capacity of the factories to the end consumers. Consumers then make use of that capacity to create works and products that are shared in a common marketplace with other consumers.

References: http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&ved=0CGUQFjAI &url=http%3A%2F%2Fusiia-net.org%2Fpubs%2F21stisp.doc&ei=Oev5T8PfLsmGrAeUosTIBg&usg=AFQjCNGm6i7_a314gWf89mH4len2c4CUg EXAMPLE OF INDUSTRIES WITH HIGH INVENTORY REQUIREMENTS: 1. Vehicle Manufacturing Industry 2. Clothing EXAMPLE OF INDUSTRIES WITH LOW INVENTORY REQUIREMENTS: 1. Networking 2. Paper manufacturing The industries with high inventory requirement implies the product is manufactured in large number of steps and vice-versa

DISADVANTAGES OF PUSH BASED STRATEGY:

Applied to that portion of the supply chain where demand uncertainty is relatively small

Production and distribution decisions are based on long term forecasts Based on past orders received from retailer's warehouse. Inability to meet changing demand patterns Large and variable production batches Unacceptable service levels Excessive inventories due to the need for large safety stocks Less expenditure on advertising than pull strategy

ADVANTAGES OF PUSH BASED STRATEGY: Easy to implement as there is loads of time in advance.

ADVANTAGES OF PULL BASED STRATEGY:

Applied to that portion of the supply chain where demand uncertainty is high Production and distribution are demand driven No inventory, response to specific orders Point of sale (POS) data comes in handy when shared with supply chain partners Decrease in lead time

DISADVANTAGES OF PUSH BASED STRATEGY:

Difficult to implement as small amount of time is available.

EXAMPLES OF INDUSTRIES: Toyota Motors Manufacturing is frequently used as an example of pull production, yet do not typically produce to order. It should use push based strategies. Clothing Industry use pull based strategy as the style changes in a short time.