SUPPLY CHAIN AND INFORMATION MANAGEMENT SYSTEMS

1. SUPPLY CHAIN AND INFORMATION MANAGEMENT SYSTEMS

2. IMPORTANCE OF INFORMATION MANAGEMENT • The development of radically new information and communication technologies driven by internet have enabled companies to deploy revolutionary methods of building levels of competitive advantage. • With the advent of e-commerce, new business models can be architected leveraging supply chains to create new regions of strategic advantage and market place value. • Responsiveness to customer demand, and overall customer satisfaction, cannot be achieved without proper management of both the goods movement and information flow throughout the supply chain.

3. The Importance of Information Dynamic Marketing Environment Why Information Is Needed Competition Customer Needs Strategic Planning

4. BUISNESS MANAGEMENTSYSTEMS (MR, DRP, ERP, PDM, EIP AND CPFR)

5. MR - MARKET RESEARCH • Market research is the process of systematically gathering, recording and analyzing data and information about customers, competitors and the market. • Its uses include to help create a business plan, launch a new product or service, fine tune existing products and services, and expand into new markets. • Market research can be used to determine which portion of the population will purchase a product/service, based on variables like age, gender, location and income level.

6. QUESTIONS THAT CAN BE ANSWERED THROUGH MARKET RESEARCH • What is happening in the market? What are the trends? Who are the competitors? • How do consumers talk about the products in the market? • Which needs are important? Are the needs being met by current products?

7. TYPES OF MARKET RESEARCH • Primary market research involves testing such as focus groups, surveys, field tests, interviews or observation, conducted or tailored specifically to that product. • In secondary research, the company uses information compiled from other sources that appears applicable to a new or existing product.

8. STUDIES CARRIED UNDER MARKET RESEARCH • Study of market trends • Customer analysis • Competitor analysis • Risk analysis • Product research • Advertising research

9. Defining the Problem and the Research Objectives Developing the Research Plan Implementing the Research Plan The Marketing Research Process Interpreting and Reporting the Findings

10. Marketing Research ProcessStep 1. Defining the Problem & Research Objectives • Gathers preliminary information • that will help define the problem • and suggest hypotheses. Exploratory Research • Describes things such as consumers’ • attitudes and demographics • or market potential for a product. Descriptive Research • Test hypotheses about cause- • and-effect relationships. Causal Research

11. Marketing Research ProcessStep 2. Develop the Research Plan Determine the Specific Information Needed Secondary Primary Information collected for the specific purpose at hand. Information that has been previously collected. Both Must Be: Relevant Accurate Current Impartial

12. Primary Data Collection ProcessStep 1. Research Approaches Observational Research Gathering data by observing people, actions and situations (Exploratory) Survey Research Asking individuals about attitudes, preferences or buying behaviors (Descriptive) Experimental Research Using groups of people to determine cause-and-effect relationships (Causal)

13. Primary Data Collection ProcessStep 2. Contact Methods Contact Methods

14. Primary Data Collection ProcessStep 3. Developing a Sampling Plan Who is to be surveyed? Probability or Non-probability sampling? Sample - representative segment of the population How should the sample be chosen? How many should be surveyed?

15. Primary Data Collection ProcessStep 4. Research Instruments Research Instruments • Questionnaire • What to ask? • Form of each • question? • Wording? • Ordering? • Mechanical Devices • People Meters • Grocery Scanners • Galvanometer • Tachistoscope

16. Marketing Research ProcessStep 3. Implementing the Research Plan Collection of Data Research Plan Processing of Data Analyzing the Data

17. Interpret the Findings Marketing Research ProcessStep 4. Interpreting and ReportingFindings Draw Conclusions Report to Management

18. DRP - DISTRIBUTION RESOURCE PLANNING • Distribution Resource Planning (DRP) is a method used in business administration for planning orders within a supply chain. • DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate the time-phased inventory requirements.

19. VARIABLES USED BY DISTRIBUTION RESOURCE PLANNING • the on-hand inventory at the end of a period. • the backordered demand at the end of a period. • the required quantity of product needed at the beginning of a period. • the constrained quantity of product available at the beginning of a period. • the recommended order quantity at the beginning of a period.

20. INFORMATION REQUIRED BY DRP • the demand in a future period. • the scheduled receipts at the beginning of a period. • the safety stock requirement for a period. • the on-hand inventory at the beginning of a period.

21. ERP - What is it? • ERP is a generic term used to describe a comprehensive information system designed to integrate all the business processes found in an enterprise. • Efficiency and productivity are improved through the integration of information and the removal of duplicate information and processes.

22. ERP - ENTERPRISE RESOURCE PLANNING • The term ERP originally implied systems designed to plan the use of enterprise-wide resources. • Enterprise Resource Planning (ERP) systems integrate (or attempt to integrate) all data and processes of an organization into a unified system. • A typical ERP system will use multiple components of computer software and hardware to achieve the integration. • A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.

23. The Current Scenario • Islands of Information • Difficult to get timely & accurate information • Heterogeneous Hardware & Software • platforms & practices • Poor connectivity between different • organizational locations • Sticking with obsolete technology • Resist to change • Lack of proven man-power to develop • integrated software Enterprise Resource Planning

24. Why ERP? • For Management – to know what is happening • in the company • One solution for better Management • For cycle time reduction • To achieve cost control & low working capital • To marry latest technologies • To shun the geographical gaps • To satisfy the customers with high expectations • To be Competitive & for survival Enterprise Resource Planning

25. Evolution of ERP • 1960’s - Systems Just for Inventory Control • 1970’s - MRP – Material Requirement Planning • (Inventory with material planning & procurement) • 1980’s - MRP II – Manufacturing Resources Planning • (Extended MRP to shop floor & distribution Mgnt.) • Mid 1990’s - ERP – Enterprise Resource Planning • (Covering all the activities of an Enterprise) • 2000 onwards – ERP II – Collaborative Commerce • (Extending ERP to external business entities) Enterprise Resource Planning

26. ERP – Expectations • Integrating all the functions • Integrating the systems running in all the locations • Transparency of information using a single • data source across the organization • Software must be responsive • Modular • Flexible • Easy to add functionalities • Provide growth path Enterprise Resource Planning

27. ERP – Options OPTION 1 – MAKE [Using Internal resources] Developing a custom-built ERP package, specific to the requirements of the organization, with the help of the in-house IT department OPTION 2 - BUY Going for Tailor-made ERP packages available in the market like SAP, Oracle applications, Baan, PeopleSoft etc. OPTION 3 – MAKE [using External resources] Developing a custom-built ERP package, specific to the requirements of the organization, with the help of a software solution provider Enterprise Resource Planning

28. EXAMPLE: MODULES IN AN ERP • Manufacturing - Engineering, Bills of Material, Scheduling, Capacity, Workflow Management, Quality Control, Cost Management, Manufacturing Process, Manufacturing Projects, Manufacturing Flow • Supply Chain - Inventory, Order Entry, Purchasing, Product Configurator, Supply Chain Planning, Supplier Scheduling, Inspection of goods, Claim Processing, Commission Calculation • Financials - General Ledger, Cash Management, Accounts Payable, Accounts Receivable, Fixed Assets

29. Customer Relationship Management (CRM) - Sales and Marketing, Commissions, Service, Customer Contact and Call Center support • Human Resources - Human Resources, Payroll, Training, Time & Attendance, Rostering, Benefits • Data Warehouse Management - Self-Service interfaces for Customers, Suppliers, and Employees • Decision Support System.

30. ERP: Operations Integration OPERATIONS MARKETING FINANCE

31. ADVANTAGES • design engineering (how to best make the product). • order tracking from acceptance through fulfillment. • the revenue cycle from invoice through cash receipt. • managing interdependencies of complex Bill of Materials • tracking the 3-way match between Purchase orders (what was ordered), Inventory receipts (what arrived), and Costing (what the vendor invoiced). • the Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level.

32. DISADVANTAGES • Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP. • Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed. • Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. • ERP systems can be very expensive to install often ranging from 30,000 US Dollars to 500,000,000 US Dollars for multinational companies.

33. ERP vendors can charge sums of money for annual license renewal that is unrelated to the size of the company using the ERP or its profitability. • ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies—this is cited as one of the main causes of their failure. • Systems can be difficult to use. • Systems are too restrictive and do not allow much flexibility in implementation and usage.

34. Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. • Some large organizations may have multiple departments with separate, independent resources, missions, chains-of-command, etc, and consolidation into a single enterprise may yield limited benefits. • There are frequent compatibility problems with the various legacy systems of the partners. • The system may be over-engineered relative to the actual needs of the customer.

35. PDM - PRODUCT DATA MANAGEMENT/ PRODUCT LIFECYCLE MANAGEMENT • Product Data Management (PDM) is a category of computer software used to control data related to products. • PDM creates and manages relations between sets of data that define a product, and store those relationships in a database. • Product Data Management is focused on capturing and maintaining information on products and/or services through its development and useful life.

36. PDM MODULE INCLUDES • Part Number • Part Description • Supplier/Vendor • Vendor Part Number and Description • Unit of Measure • Cost/Price • Schematic or CAD Drawing • Material Data Sheets

37. PDM ADVANTAGES • Track and manage all changes to product related data • Accelerate return on investment with easy setup; • Spend less time organizing and tracking design data; • Improve productivity through reuse of product design data; • Enhance collaboration.

38. FIELDS OF USE • NPD—New Product Development: Design, manufacture and R&D of new products e.g. consumer appliances, automotive, automotive components, aerospace and defence. • CPD—Customised Product Development: Design and manufacturing of customised products as per customer requirement e.g. heavy engineering. • EPC: Engineering, procurement and construction industries e.g. infrastructure projects.

39. EIP – ENTERPRISE INFORMATION PORTAL • An enterprise information portal (EIP) is a software package that gives an enterprise a relatively easy and systematic way to create a Web site that will serve as a single gateway to a company's information and knowledge base for employees and possibly for customers, business partners, and the general public as well.

40. Portal Characteristics • Presenting information to the user that the user requires in a standard format with a standard interface. • Secure delivery of information while making the complexities of security, as well as access to disparate information sources, transparent to the user. • Transmitting information. • Support for user interactivity.

41. EIP – ENTERPRISE INFORMATION PORTAL • An enterprise portal, is a framework for integrating information, people and processes across organizational boundaries. • It provides a single point of entry, often in the form of a web-based user interface, and is designed to aggregate information through application-specific portlets. • Enterprise Information Portals enable users to jump from business intelligence systems to ERP applications to sales reports, all without leaving their browsers.

43. Enterprise Information Portal goals: Establish a competitive advantage Increase ROI Improve business processes Increase employee productivity Enable collaboration between employees, suppliers, and customers Provide universal access to corporate resources Maintain a consistent view of corporate data and information

44. ELEMENTS OF EIP • Access/search: Access/search allows a user to get all the information needed (but no more) in the desired context. For example, a loan officer does not need marketing information to approve a loan. An EIP makes sure the loan officer gets only the information needed. • Categorization: An EIP categorizes all information so that it is delivered to the user within the context needed (think of the subject structure on Yahoo) • Collaboration: An EIP allows individuals to collaborate regardless of geographical location. • Personalization: The information provided to individuals using an EIP is personalized to that person’s role, preferences, and habits.

45. Expertise and profiling: Expertise and profiling is essential for the collaboration element of an EIP. Individuals within an enterprise are profiled according to their experience and competencies. If an individual needs to collaborate with others, he can choose those that are qualified for the project. • Application integration: This allows individuals to deliver, access, and share information regardless of applications used. • Security: This provides information to users based on security clearance. The user logs on and is given access only to information that the user is authorized to access.

46. User Management and Security • Single sign-on and authentication. • Automatically identifying users and their roles. • Secure database access. • Connecting to other systems.

47. Single Sign-On and Authentication To logon to a computer users must be authenticated by the Active Directory. The user’s credentials are then passed transparently to the portal and through to other back office systems.

48. User Identification When a user enters the portal the only information known about them is their username Active Directory Portal database A linked data source was created between the SQL Server and the Active Directory. This link facilitates retrieving information about the user the first time they access the portal, and also keeps the user’s active directory information up to date.

49. User Identification User Information Active Directory The user information in the Active Directory is maintained according to corporate standards. The information retrieved from the Active Directory is analyzed and then used to deliver the appropriate content to the user’s customized home page.

50. Secure Database Access • The web server communicates with the portal database through a set of stored procedures. • This strategy allows for a separation between database access and the user interface. • Users are granted access to certain stored procedures, but are not granted any access to the underlying data in the database except through the stored procedures.