Nội dung

P A R T T H R E E Key System Applications for the Digital Age Chapter 9 Chapter 11 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Managing Knowledge Chapter 12 Enhancing Decision Making Chapter 10 E-Commerce: Digital Markets, Digital Goods Part Three examines the core information system applications businesses are using today to improve operational excellence and decision making. These applications include enterprise systems; systems for supply chain management, customer relationship management, collaboration, and knowledge management; e-commerce applications; and decision-support systems. This part answers questions such as: How can enterprise applications improve business performance? How do firms use e-commerce to extend the reach of their businesses? How can systems improve collaboration and decision making and help companies make better use of their knowledge assets? Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications LEARNING OBJECTIVESS CHAPTER OUTLINE After reading this chapter, you will be able to answer the following questions: 9.1 ENTERPRISE SYSTEMS What Are Enterprise Systems? Enterprise Software Business Value of Enterprise Systems 9.2 SUPPLY CHAIN MANAGEMENT SYSTEMS The Supply Chain Information Systems and Supply Chain Management Supply Chain Management Applications Global Supply Chains and the Internet Business Value of Supply Chain Management Systems 9.3 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS What Is Customer Relationship Management? Customer Relationship Management Software Operational and Analytical CRM Business Value of Customer Relationship Management Systems 9.4 ENTERPRISE APPLICATIONS: NEW OPPORTUNITIES AND CHALLENGES Enterprise Application Challenges Next-Generation Enterprise Applications 9.5 HANDS-ON MIS PROJECTS Management Decision Problems Improving Decision Making: Using Database Software to Manage Customer Service Requests Improving Operational Excellence: Evaluating Supply Chain Management Services 1. How do enterprise systems help businesses achieve operational excellence? 2. How do supply chain management systems coordinate planning, production, and logistics with suppliers? 3. How do customer relationship management systems help firms achieve customer intimacy? 4. What are the challenges posed by enterprise applications? 5. How are enterprise applications used in platforms for new cross-functional services? Interactive Sessions: Southwest Airlines Takes Off with Better Supply Chain Management Enterprise Applications Move to the Cloud LEARNING TRACK MODULES SAP Business Process Map Business Processes in Supply Chain Management and Supply Chain Metrics Best-Practices Business Processes in CRM Software .CANNONDALE LEARNS TO MANAGE A GLOBAL SUPPLY CHAIN I f you enjoy cycling, you may very well be using a Cannondale bicycle. Cannondale, headquartered in Bethel, Connecticut, is the world-leading manufacturer of high-end bicycles, apparel, footwear, and accessories, with dealers and distributors in more than 66 countries. Cannondale’s supply and distribution chains span the globe, and the company must coordinate manufacturing, assembly, and sales/distribution sites in many different countries. Cannondale produces more than 100 different bicycle models each year; 60 percent of these are newly introduced to meet ever-changing customer preferences. Cannondale offers both make-to-stock and make-to-order models. A typical bicycle requires a 150-day lead time and a four-week manufacturing window, and some models have bills of materials with over 150 parts. (A bill of materials specifies the raw materials, assemblies, components, parts, and quantities of each needed to manufacture a final product.) Cannondale must manage more than 1 million of these bills of materials and more than 200,000 individual parts. Some of these parts come from specialty vendors with even longer lead times and limited production capacity. Obviously, managing parts availability in a constantly changing product line impacted by volatile customer demand requires a great deal of manufacturing flexibility. Until recently, that flexibility was missing. Cannondale had an antiquated legacy material requirements planning system for planning production, controlling inventory, and managing manufacturing processes that could only produce reports on a weekly basis. By Tuesday afternoon, Monday’s reports were already out of date. The company was forced to substitute parts in order to meet demand, and sometimes it lost sales. Cannondale needed a solution that could track the flow of parts more accurately, support its need for flexibility, and work with its existing business systems, all within a restricted budget. Cannondale selected the Kinaxis RapidResponse on-demand software service as a solution. RapidResponse furnishes accurate and detailed supply chain information via an easy-to-use spreadsheet interface, using data supplied automatically from Cannondale’s existing manufacturing systems. Data from operations at multiple sites are assembled in a single place for analysis and decision making. Supply chain participants from different locations are able to model manufacturing and inventory data in “what-if” scenarios to see the impact of alternative actions across the entire supply chain. Old forecasts can be compared to new ones, and the system can evaluate the constraints of a new plan. Cannondale buyers, planners, master schedulers, sourcers, product managers, customer service, and finance personnel, use RapidResponse for sales reporting, forecasting, monitoring daily inventory availability, and feeding production schedule information to Cannondale’s manufacturing and order processing systems. Users are able to see up-to-date information for all sites. Management uses the system daily to examine areas where there are backlogs. 335 336 Part Three Key System Applications for the Digital Age The improved supply chain information from RapidResponse enables Cannondale to respond to customer orders much more rapidly with lower levels of inventory and safety stock. Cycle times and lead times for producing products have also been reduced. The company’s dates for promising deliveries are more reliable and accurate. Sources: Kinaxis Corp., “Cannondale Improves Customer Response Times While Reducing Inventory Using RapidResponse,” 2010; www.kinaxis.com, accessed June 21, 2010; and www.cannondale.com, accessed June 21, 2010. C annondale’s problems with its supply chain illustrate the critical role of supply chain management (SCM) systems in business. Cannondale’s business performance was impeded because it could not coordinate its sourcing, manufacturing, and distribution processes. Costs were unnecessarily high because the company was unable to accurately determine the exact amount of each product it needed to fulfill orders and hold just that amount in inventory. Instead, the company resorted to keeping extra “safety stock” on hand “just in case.” When products were not available when the customer wanted them, Cannondale lost sales. The chapter-opening diagram calls attention to important points raised by this case and this chapter. Like many other firms, Cannondale had a complex supply chain and manufacturing processes to coordinate in many different locations. The company had to deal with hundreds and perhaps thousands of suppliers of parts and raw materials. It was not always possible to have just the right amount of each part or component available when it was needed because the company lacked accurate, up-to-date information about parts in inventory and what manufacturing processes needed those parts. An on-demand supply chain management software service from Kinaxis helped solve this problem. The Kinaxis RapidResponse software takes in data from Cannondale’s existing manufacturing systems and assembles data from multiple sites to furnish a single view of Cannondale’s supply chain based on upto-date information. Cannondale staff are able to see exactly what parts are available or on order as well as the status of bikes in production. With better tools for planning, users are able to see the impact of changes in supply and demand so that they can make better decisions about how to respond to these changes. The system has greatly enhanced operational efficiency and decision making. Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 9.1 ENTERPRISE SYSTEMS A round the globe, companies are increasingly becoming more connected, both internally and with other companies. If you run a business, you’ll want to be able to react instantaneously when a customer places a large order or when a shipment from a supplier is delayed. You may also want to know the impact of these events on every part of the business and how the business is performing at any point in time, especially if you’re running a large company. Enterprise systems provide the integration to make this possible. Let’s look at how they work and what they can do for the firm. WHAT ARE ENTERPRISE SYSTEMS? Imagine that you had to run a business based on information from tens or even hundreds of different databases and systems, none of which could speak to one another? Imagine your company had 10 different major product lines, each produced in separate factories, and each with separate and incompatible sets of systems controlling production, warehousing, and distribution. At the very least, your decision making would often be based on manual hardcopy reports, often out of date, and it would be difficult to really understand what is happening in the business as a whole. Sales personnel might not be able to tell at the time they place an order whether the ordered items are in inventory, and manufacturing could not easily use sales data to plan for new production. You now have a good idea of why firms need a special enterprise system to integrate information. Chapter 2 introduced enterprise systems, also known as enterprise resource planning (ERP) systems, which are based on a suite of integrated software modules and a common central database. The database collects data from many different divisions and departments in a firm, and from a large number of key business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources, making the data available for applications that support nearly all of an organization’s internal business activities. When new information is entered by one process, the information is made immediately available to other business processes (see Figure 9-1). If a sales representative places an order for tire rims, for example, the system verifies the customer’s credit limit, schedules the shipment, identifies the best shipping route, and reserves the necessary items from inventory. If inventory stock were insufficient to fill the order, the system schedules the manufacture of more rims, ordering the needed materials and components from suppliers. Sales and production forecasts are immediately updated. General ledger and corporate cash levels are automatically updated with the revenue and cost information from the order. Users could tap into the system and find out where that particular order was at any minute. Management could obtain information at any point in time about how the business was operating. The system could also generate enterprise-wide data for management analyses of product cost and profitability. 337 338 Part Three Key System Applications for the Digital Age FIGURE 9-1 HOW ENTERPRISE SYSTEMS WORK Enterprise systems feature a set of integrated software modules and a central database that enables data to be shared by many different business processes and functional areas throughout the enterprise. ENTERPRISE SOFTWARE Enterprise software is built around thousands of predefined business processes that reflect best practices. Table 9-1 describes some of the major business processes supported by enterprise software. Companies implementing this software must first select the functions of the system they wish to use and then map their business processes to the predefined business processes in the software. (One of our Learning Tracks shows how SAP enterprise software handles the procurement process for a new piece of equipment.) Identifying the organization’s business processes to be included in the system and then mapping them to the processes in the enterprise software is often a major effort. A firm would use configuration tables provided by the software to tailor a particular aspect of the system to the way it does business. For example, the firm could use these tables to select whether it wants to track revenue by product line, geographical unit, or distribution channel. TABLE 9-1 BUSINESS PROCESSES SUPPORTED BY ENTERPRISE SYSTEMS Financial and accounting processes, including general ledger, accounts payable, accounts receivable, fixed assets, cash management and forecasting, product-cost accounting, cost-center accounting, asset accounting, tax accounting, credit management, and financial reporting. Human resources processes, including personnel administration, time accounting, payroll, personnel planning and development, benefits accounting, applicant tracking, time management, compensation, workforce planning, performance management, and travel expense reporting. Manufacturing and production processes, including procurement, inventory management, purchasing, shipping, production planning, production scheduling, material requirements planning, quality control, distribution, transportation execution, and plant and equipment maintenance. Sales and marketing processes, including order processing, quotations, contracts, product configuration, pricing, billing, credit checking, incentive and commission management, and sales planning. Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications If the enterprise software does not support the way the organization does business, companies can rewrite some of the software to support the way their business processes work. However, enterprise software is unusually complex, and extensive customization may degrade system performance, compromising the information and process integration that are the main benefits of the system. If companies want to reap the maximum benefits from enterprise software, they must change the way they work to conform to the business processes in the software. To implement a new enterprise system, Tasty Baking Company identified its existing business processes and then translated them into the business processes built into the SAP ERP software it had selected. To ensure it obtained the maximum benefits from the enterprise software, Tasty Baking Company deliberately planned for customizing less than 5 percent of the system and made very few changes to the SAP software itself. It used as many tools and features that were already built into the SAP software as it could. SAP has more than 3,000 configuration tables for its enterprise software. Leading enterprise software vendors include SAP, Oracle (with its acquisition PeopleSoft) Infor Global Solutions, and Microsoft. There are versions of enterprise software packages designed for small businesses and on-demand versions, including software services delivered over the Web (see the Interactive Session on Technology in Section 9.4). Although initially designed to automate the firm’s internal “back-office” business processes, enterprise systems have become more externally-oriented and capable of communicating with customers, suppliers, and other entities. BUSINESS VALUE OF ENTERPRISE SYSTEMS Enterprise systems provide value both by increasing operational efficiency and by providing firm-wide information to help managers make better decisions. Large companies with many operating units in different locations have used enterprise systems to enforce standard practices and data so that everyone does business the same way worldwide. Coca Cola, for instance, implemented a SAP enterprise system to standardize and coordinate important business processes in 200 countries. Lack of standard, company-wide business processes prevented the company from leveraging its worldwide buying power to obtain lower prices for raw materials and from reacting rapidly to market changes. Enterprise systems help firms respond rapidly to customer requests for information or products. Because the system integrates order, manufacturing, and delivery data, manufacturing is better informed about producing only what customers have ordered, procuring exactly the right amount of components or raw materials to fill actual orders, staging production, and minimizing the time that components or finished products are in inventory. Alcoa, the world’s leading producer of aluminum and aluminum products with operations spanning 41 countries and 500 locations, had initially been organized around lines of business, each of which had its own set of information systems. Many of these systems were redundant and inefficient. Alcoa’s costs for executing requisition-to-pay and financial processes were much higher and its cycle times were longer than those of other companies in its industry. (Cycle time refers to the total elapsed time from the beginning to the end of a process.) The company could not operate as a single worldwide entity. After implementing enterprise software from Oracle, Alcoa eliminated many redundant processes and systems. The enterprise system helped Alcoa reduce requisition-to-pay cycle time by verifying receipt of goods and automatically 339 340 Part Three Key System Applications for the Digital Age generating receipts for payment. Alcoa’s accounts payable transaction processing dropped 89 percent. Alcoa was able to centralize financial and procurement activities, which helped the company reduce nearly 20 percent of its worldwide costs. Enterprise systems provide much valuable information for improving management decision making. Corporate headquarters has access to up-to-theminute data on sales, inventory, and production and uses this information to create more accurate sales and production forecasts. Enterprise software includes analytical tools for using data captured by the system to evaluate overall organizational performance. Enterprise system data have common standardized definitions and formats that are accepted by the entire organization. Performance figures mean the same thing across the company. Enterprise systems allow senior management to easily find out at any moment how a particular organizational unit is performing, determine which products are most or least profitable, and calculate costs for the company as a whole. For example, Alcoa’s enterprise system includes functionality for global human resources management that shows correlations between investment in employee training and quality, measures the company-wide costs of delivering services to employees, and measures the effectiveness of employee recruitment, compensation, and training. 9.2 SUPPLY CHAIN MANAGEMENT SYSTEMS If you manage a small firm that makes a few products or sells a few services, chances are you will have a small number of suppliers. You could coordinate your supplier orders and deliveries using a telephone and fax machine. But if you manage a firm that produces more complex products and services, then you will have hundreds of suppliers, and your suppliers will each have their own set of suppliers. Suddenly, you are in a situation where you will need to coordinate the activities of hundreds or even thousands of other firms in order to produce your products and services. Supply chain management systems, which we introduced in Chapter 2, are an answer to these problems of supply chain complexity and scale. THE SUPPLY CHAIN A firm’s supply chain is a network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers. It links suppliers, manufacturing plants, distribution centers, retail outlets, and customers to supply goods and services from source through consumption. Materials, information, and payments flow through the supply chain in both directions Goods start out as raw materials and, as they move through the supply chain, are transformed into intermediate products (also referred to as components or parts), and finally, into finished products. The finished products are shipped to distribution centers and from there to retailers and customers. Returned items flow in the reverse direction from the buyer back to the seller. Let’s look at the supply chain for Nike sneakers as an example. Nike designs, markets, and sells sneakers, socks, athletic clothing, and accessories throughout the world. Its primary suppliers are contract manufacturers with factories in China, Thailand, Indonesia, Brazil, and other countries. These companies fashion Nike’s finished products. Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Nike’s contract suppliers do not manufacture sneakers from scratch. They obtain components for the sneakers—the laces, eyelets, uppers, and soles— from other suppliers and then assemble them into finished sneakers. These suppliers in turn have their own suppliers. For example, the suppliers of soles have suppliers for synthetic rubber, suppliers for chemicals used to melt the rubber for molding, and suppliers for the molds into which to pour the rubber. Suppliers of laces would have suppliers for their thread, for dyes, and for the plastic lace tips. Figure 9-2 provides a simplified illustration of Nike’s supply chain for sneakers; it shows the flow of information and materials among suppliers, Nike, and Nike’s distributors, retailers, and customers. Nike’s contract manufacturers are its primary suppliers. The suppliers of soles, eyelets, uppers, and laces are the secondary (Tier 2) suppliers. Suppliers to these suppliers are the tertiary (Tier 3) suppliers. The upstream portion of the supply chain includes the company’s suppliers, the suppliers’ suppliers, and the processes for managing relationships with them. The downstream portion consists of the organizations and processes for distributing and delivering products to the final customers. Companies doing manufacturing, such as Nike’s contract suppliers of sneakers, also manage their own internal supply chain processes for transforming materials, components, and services furnished by their suppliers into finished products or intermediate products (components or parts) for their customers and for managing materials and inventory. FIGURE 9-2 NIKE’S SUPPLY CHAIN This figure illustrates the major entities in Nike’s supply chain and the flow of information upstream and downstream to coordinate the activities involved in buying, making, and moving a product. Shown here is a simplified supply chain, with the upstream portion focusing only on the suppliers for sneakers and sneaker soles. 341 342 Part Three Key System Applications for the Digital Age The supply chain illustrated in Figure 9-2 only shows two contract manufacturers for sneakers and only the upstream supply chain for sneaker soles. Nike has hundreds of contract manufacturers turning out finished sneakers, socks, and athletic clothing, each with its own set of suppliers. The upstream portion of Nike’s supply chain would actually comprise thousands of entities. Nike also has numerous distributors and many thousands of retail stores where its shoes are sold, so the downstream portion of its supply chain is also large and complex. INFORMATION SYSTEMS AND SUPPLY CHAIN MANAGEMENT Inefficiencies in the supply chain, such as parts shortages, underutilized plant capacity, excessive finished goods inventory, or high transportation costs, are caused by inaccurate or untimely information. For example, manufacturers may keep too many parts in inventory because they do not know exactly when they will receive their next shipments from their suppliers. Suppliers may order too few raw materials because they do not have precise information on demand. These supply chain inefficiencies waste as much as 25 percent of a company’s operating costs. If a manufacturer had perfect information about exactly how many units of product customers wanted, when they wanted them, and when they could be produced, it would be possible to implement a highly efficient just-in-time strategy. Components would arrive exactly at the moment they were needed and finished goods would be shipped as they left the assembly line. In a supply chain, however, uncertainties arise because many events cannot be foreseen—uncertain product demand, late shipments from suppliers, defective parts or raw materials, or production process breakdowns. To satisfy customers, manufacturers often deal with such uncertainties and unforeseen events by keeping more material or products in inventory than what they think they may actually need. The safety stock acts as a buffer for the lack of flexibility in the supply chain. Although excess inventory is expensive, low fill rates are also costly because business may be lost from canceled orders. One recurring problem in supply chain management is the bullwhip effect, in which information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain. A slight rise in demand for an item might cause different members in the supply chain—distributors, manufacturers, suppliers, secondary suppliers (suppliers’ suppliers), and tertiary suppliers (suppliers’ suppliers’ suppliers)—to stockpile inventory so each has enough “just in case.” These changes ripple throughout the supply chain, magnifying what started out as a small change from planned orders, creating excess inventory, production, warehousing, and shipping costs (see Figure 9-3). For example, Procter & Gamble (P&G) found it had excessively high inventories of its Pampers disposable diapers at various points along its supply chain because of such distorted information. Although customer purchases in stores were fairly stable, orders from distributors would spike when P&G offered aggressive price promotions. Pampers and Pampers’ components accumulated in warehouses along the supply chain to meet demand that did not actually exist. To eliminate this problem, P&G revised its marketing, sales, and supply chain processes and used more accurate demand forecasting The bullwhip is tamed by reducing uncertainties about demand and supply when all members of the supply chain have accurate and up-to-date information. If all supply chain members share dynamic information about inventory