Guest Lecture on Enterprise

Resources Planning and Supply

Chain Management
By
Prof. Dr .R.Kesavan
Associate Prof. M.Pazhaniappan
 ERP
• Enterprise Resource Planning ERP is the
integrated management of core business
processes , often in real time and mediated by
software & technology.
• Typical business processes are :
• Finance Accounting Mgmt. Accounting
HR Mgmt. Mfg. Mgmt. Order Processing
SCM Project Mgmt. CRM Data Services
 ERP
Characteristics of ERP :
• An integrated system
• Operates in ( near ) real time
• A common database supporting all
applications
• A consistent look and feel across the business
function modules
• Elaborate application /data integration by IT
 ERP
• GRP ( Govt. Resource Planning ) is ERP adapted
for Govt. bodies.
• It is an integrated office automation system and
success depends on cultural factors.
• ERP s/w is flexible and enables users to modify
for the best way to perform each business
function.
• The above enable compliance with Industry
standards as the procedure is codified and
replicated across multiple businesses.
 ERP
Elements of ERP :
• Connectivity to plant floor information :
ERP systems connect to real time data and
transaction data and are configured by system
integrators with expertise on process ,
equipment and vendor solutions.
The services are : Direct integration Data base
integration Enterprise appliance transaction
modules Custom –integration solutions.
 ERP
• Implementation of ERP :
ERP requires changes in staff work processes
and practices and are achieved by consulting,
customization and support.
Lot of months and large number of consultants
are required.
Existing business practices are matched with
the ones of ERP
 ERP
Configuration of an ERP system is making the
system to work as per specific requirements of
the enterprise.
ERP systems have settings to modify system
operations.
e.g. : selection of inventory accounting FIFO or
LIFO
revenue by geographical unit or product
line or distribution channel etc.
 ERP
Two Tier ERP: Two ERP systems ,one at
corporate and another at division / subsidiary.
Regional centres respond to local customers
independent of HQ with own business models,
workflows and business processes
Agile , swift, economical and apt system for
regional operations
More specific regional ERPs for customer
delight and higher profitability.
 ERP
Customization : measures over configuration to
exactly meet the specific requirements of
customers.
Rewriting part of the delivered software
Writing a homegrown module within the ERP
system
Interfacing to an external system.
Customer friendly and competitive
 ERP
Extensions : ERP systems can be extended with
third party s/w with access to data and features
through published interfaces
Extensions offer the following features :
Reporting , and publishing
Capturing transactional data e.g., using scanners
Access to specialized data and capabilities e.g.,
Syndicated marketing data Trend analytics
Advanced planning and scheduling
Managing facilities , and transmission in real-time
 ERP
Data Migration : Moving, copying , and
restructuring data from the existing system to
the ERP system
Critical to success of implementation of ERP
and hence planned and executed meticulously
Migration related setups are decided
Data archiving policies and procedures are
defined.
 ERP
Advantages :
• Integration of myriad business processes
• Saving of time and expenses
• Error free and fast decision making
• Data visible across the organisation
• Vital tasks are performed very well ( Sales
forecasting, Order tracking, Revenue tracking,
Matching purchase orders with inventory
receipts ,and invoices )
 ERP
• Centralization of business data resulting in the
following advantages : Elimination of
synchronizing of changes between multiple
systems such as finance, HR, Mfg.etc.,
Legitimate and transparent data
Standard product naming / coding
Comprehensive view on the enterprise – Real
time information to mgmt. anywhere anytime
to make instant decisions
Protection of sensitive data by consolidating multi
security systems into one
 ERP
• Operations are streamlined and hence better
o/p for customer delight
• Informations to top mgmt. for decision making
• Flexibility and agility to the firm
• Data in different format viz.,documents,files,
forms, audio and video,e-mails can be
collaborated
 SCM
• Supply Chain Mgmt. ( SCM ) is the
design,planning,execution,control,and
monitoring of supply chain activities to create
net value , building a competitive
infrastructure ,leveraging worldwide logistics,
synchronizing supply with demand and
measuring performance globally.
• SCM is mgmt. of flow of goods & services.
 SCM
• Supply Chains are interconnected networks , channels
and node businesses combine to prvide goods and
services to end customers.
• SCM is multidisciplinary and is based on Industrial
Engineering , Systems Engineerind , Operations
Management , logistics procurement , IT, and
Marketing
• Firms want to concentrate on core competence and
hence outsource input purchase and distribution to
other firms who can perform better.
• Less control and more partners and hence to get
collaboration SCM is essential.
 SCM
• SCs provides global competence to firms very
economically.
• Globalization , outsourcing , and IT explosion
has made SCs inevitable for business success.
• SCM results in organizational learning and
firms with geographically extensive SCs of
diverse trade partners become more innovative
and productive.
 SCM
• SCs today are complex and rapid to cater to
global competition , volatile markets ,
fluctuating oil prices , short product life cycles,
expanded specializations , talent scarcity.
• SCs today are agile and manage changes for
continuous flexibility and value addition.
 SCM
Key Supply Chain Processes :
• CRM
• Customer Service Management
• Demand Management
• Order Fulfillment
• Mfg. Flow Mgmt.
• Supplier Relationship Mgmt.
• Product Development and Commercialization
• Returns Mgmt.
 SCM
• CRM : Mutually delightful objectives for Co.
and customers are determined
• Rapport is established with the customer and
maintained
• Positive feelings are induced in the Co. and the
customers.
 SCM
• Customer Service Mgmt. : Customer service is
the source of customer information.
• Customers are provided real time information on
scheduling and product availability through inter
faces with Co.’s prodn. distribution operations.
• Demand Mgmt. : Internal and external
collaboration Reduced lead time Tight feedback
from customers and market demand Customer
level forecasting.
 SCM
• Order Fulfillment :
1. Accurate Demand Sensing and Shaping :
Demand Sensing : Signal repository allow
companies to capture real time multi-channel
demand data and analyze to develop a more
accurate forecast.
Demand Shaping : Incentives and dynamic
pricing to stimulate demand or optimize product
promotions to maximize growth and profitability.
 SCM
• 2. Global Order Promising (GOP) : On-time
deliveries, reliable and accurate promises to
customers, and keeping commitments to key
customers.
• 3. Global Distributed Order Orchestration
and Fulfillment :With Distributed Order
Orchestration, organizations are able to apply
enterprise-wide rules and processes, and
identify and rectify problems.
 SCM
• Mfg. Flow Mgmt. Process : Mfg. processes
are made flexible to meet market fluctuations
and accommodate mass customization.
• Orders are on JIT basis in min. lot sizes.
• Shorter cycle times
• Mgmt. of activities related to planning ,
scheduling , WIP storage , handling ,
transportation , time phasing of components,
inventory at mfg. sites.
 SCM
• Supplier Relationship Management :
Outsourcing of purchase of materials ,
components , and services and focusing only on
activities in which the Co. has distinct advantages
is the current practice.
• Blend of central and local involvement : Strategic
decisions are taken centrally and monitoring and
control of supplier performance and day – to day
liaision with suppliers and logistics partners are
managed locally.
 SCM
• Product Development and Commercialization :
Customers and suppliers are integrated into the
product development to reduce the lead time
• Apt products are developed and launched
immediately as products life cycles are short
• Customer articulated needs obtained from CRM
• Materials and suppliers are selected in
conjunction with Purchase department
• Develop Prodn. Tech. in mfg. Flow to
manufacture and integrate into the best supply
chain flow
 SCM
• Returns Management : Returns management is
the supply chain management process by which
activities associated with returns, reverse
logistics, gatekeeping, and avoidance are
managed within the firm and across key members
of the supply chain. The correct implementation
of this process enables management not only to
manage the reverse product flow efficiently, but
to identify opportunities to reduce unwanted
returns and to control reusable assets such as
containers.
 SCM
• Case Studies : Wal – Mart : Success due to
SC design , planning , and operation
• Hi –investments in transportation and
information infrastructure for flow of goods
and information
• Cluster of stores around DCs for frequent
replenishment and matching supply & demand
• Sharing information with suppliers for
economy & avilability.
 SCM
• Cross docking inventory from suppliers direct
to stores with a brief stop at DCs for transfer
from inbound trucks to outbound trucks
• Huge orders to selected suppliers
• Balance in responsiveness and efficiency
• EDI , ERP , SCM S/ ws and RFID tags used.
• ERP ( what is going on ) SCM ( what to do )
• LOW COST & AVAILABILITY
 SCM
• TOYOTO MOTORS : Global prodn. &
distribution network.
• Local prodn. units produce for both local &
global requirements.
• Commonality of parts.
• AMAZON : Sales over Internet with
Warehouses , engaging package carriers UPS
Hi – growth
 SCM
• 7 – Eleven Japan in US :
• DSD ( Direct Stores Delivery ) by
manufacturers and also by wholesalers
• CDC ( Combined Distribution Centers ) to
deliver fresh items ( sandwiches , bakery items
perishables every day
• Hot food items such as pizza and wings made
in stores.
 SCM
• Jaipur Rugs Company : MSME in mfg. &
export of rugs and carpets to US and Europe.
• SC linking artisans in remote villages in 8 states
with above markets
• Walmart – Bharti : Economies of scale &
network visibility by Walmart
• Network & practices from Bharti
• Modest nearby stores for daily use items
 SCM
• Reliance Retail : Indigenous direct sourcing.
• Direct sourcing from farmers by contract
farming , own transport to cold storages and
warehouses and retail outlets.
• Indian retail outlets must be small , closeely
located , customer focused , with trained and
empowered workforce to beat traditional ones.
 SCM
• Fresh & Healthy Enterprises : Logistics
services by Container corporation of India.
• Huge Controlled Atmosphere store at Sonepat
• Get apples from HP & sort , grade , pack , &
store at above store and sell across India
through wholesalers and retail chains
• Agro scientists for pre harvest care and post
care mgmt.
SCM
SCM
SCM