Nội dung

www.downloadslide.net PART THREE Key System Applications for the Digital Age Chapter 9 Chapter 11 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Managing Knowledge Chapter 10 Enhancing Decision Making Chapter 12 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, and knowledge management; e-commerce applications; and business intelligence 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 decision making and help companies make better use of their knowledge assets? CHAP TER www.downloadslide.net 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Learning Objectives After reading this chapter, you will be able to answer the following questions: 9-1 How do enterprise systems help businesses achieve operational excellence? 9-2 How do supply chain management systems coordinate planning, production, and logistics with suppliers? 9-3 How do customer relationship management systems help firms achieve customer intimacy? 9-4 What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies? MyLab MIS™ Visit mymislab.com for simulations, tutorials, and end-of-chapter problems. CHAPTER CASES Alimentation Couche-Tard Competes Using Enterprise Systems Unilever Unifies Globally with Enhanced ERP DP World Takes Port Management to the Next Level with RFID Customer Relationship Management Helps Celcom Become Number One VIDEO CASES Life Time Fitness Gets in Shape with Salesforce CRM Evolution Homecare Manages Patients with Microsoft Dynamics CRM Instructional Video: GSMS Protects Patients by Serializing Every Bottle of Drugs 364 www.downloadslide.net Alimentation Couche-Tard Competes Using Enterprise Systems W hen Alimentation Couche-Tard purchased Statoil Fuel and Retail (SFR) in April 2012, it was the Canadian convenience store giant’s most ambitious acquisition to date (€2.058 billion). SFR, a division of Statoil, the Norwegian State Oil Company, had been spun off from its parent in October 2010. The purchase added 2,300 retail fuel stations—most full-service with a convenience store—throughout North America and expanded CoucheTard’s reach to eight European countries—Norway, Sweden, Denmark, Poland, Estonia, Latvia, Lithuania, and Russia. In 2016 the firm had 12,000 sites and employed over 105,000 people. SFR operates in both the B2C (sales to consumers) and B2B (sales to other businesses) sectors. Fuel products including gasoline blends, diesel fuels, biofuels, and LPG (liquefied petroleum gas) generate 70 percent of its business. The full-service retail stations offer product lines that differ according to operator and location factors. Some prefer a product mix that concentrates on auto supplies and services while others focus on food-related products, beverages, and even fastfood. SFR’s 12 terminals, 38 depots, and 400 road tankers provide bulk sales to commercial customers, including bus and car rental companies, road construction crews, and independent resellers. Couche-Tard welcomed both the opportunities and the challenges of its acquisition. Immediate synergies between Couche-Tard and SFR could not completely cover the remaining expenses from SFR’s split from Statoil, rebranding efforts, and the replacement of an antiquated IT infrastructure and enterprise resource planning (ERP) system. The old system used different processes in each country and market, resulting in over 5,000 custom software objects for the IT department to manage in addition to massive operational inefficiencies. SFR needed to maximize supply chain efficiency for its three closely related value chains—the fuel value chain, the grocery value chain, and the lubricants value chain. All corporate functions that provided shared services to the © trondur/123rf.com 365 www.downloadslide.net 366 Part Three Key System Applications for the Digital Age value chains had to be standardized and workplace activities coordinated for its 18,500 employees. Finally, SFR managers wanted an advanced pricing method for fuel sales to maximize profits in its core low-margin business. Oracle’s JD Edwards EnterpriseOne enterprise resource planning system was chosen as the basic platform, and a Web services interface was developed within the ERP system to convert all data into a single format. This common source of master data now drives all transactions throughout the supply chains as well as financial and other reports generated by the Oracle Business Intelligence Suite. Stock availability and average sales at each service station feed a realtime planning program that projects expected demand and feeds the data to a third-party distribution planning system. Onboard computers convey product types and quantities to tanker drivers at terminals and delivery locations. Fuel restocking, delivery, and confirmation occur automatically. To coordinate workplace activities, Oracle Fusion Middleware integrates data management and communication across social, mobile, and cloud technologies and among multiple systems and regions. Called the “Connect Project,” the software coordinates dozens of interfaces throughout the supply chain, implements a consistent fuel pricing structure, and manages multiple complicated excise taxes and regulations. In 2014 Statoil began a migration from Oracle database software to SAP’s Business Planning and Consolidation Application. As a result, in 2015 Statoil achieved financial consolidation six times faster than before, data processing speeds increased fifteen times, and opening and closing periods for work status is now eight times faster than before. In 2015 Couche-Tard re-branded its SFR retail stores to Circle K stores. Today it’s one of the largest global players in the convenience store market space with over 12,000 sites in Canada, the U.S., Asia, and Europe, and employs more than 100,000 people. In 2016 the company announced it’s largest ever acquisition of Texas-based CST Brands, which will bring it an additional 2,000 locations in the south and southwest U.S. states. The firm’s prior investments in enterprise systems enable it to manage a sprawling global network of convenience stores. The company’s executives promise to double the size of the firm once more in the next five years. Not bad for a company that started in 1980 with a single store in Quebec. Sources: “Alimentation Couche Tard Inc. Is Severely Undervalued,” by Joey Frenette, The Motley Fool, Fool.com, March 1, 2017; “Couche-Tard’s Alain Bouchard Has a Bold Vision: ‘We Will Double the Size of This Company Again’”, by Karl Moore, businessfinancialpost.com, December 8, 2016; “After Shareholder Rebuff Last Year, Couche-Tard Gets Its Focus Back with Largest-Ever Acquisition,” by Barry Crutchley, businessfinancialpost.com, August 22, 2016; “Annual Report 2016,” Alimentation Couche-Tard Inc., http://corpo.couche-tard.com; Alyn Bailey, “Statoil Fuel & Retail the World’s First SAP to Oracle JD Edwards Migration,” http:// www.pcubed.com/bulletins, accessed January 2, 2016; “Statoil: Accelerating Planning and Financial Close Cycles with SAP® EPM powered by SAP HANA® and SAP MaxAttentionTM,” dam.sap.com/28274_Statoil_BTS.htm, accessed January 2, 2016; Jade Vachon, “Statoil Switches from an Oracle DB to the SAP HANA Platform with SAP MaxAttention,” SAP.com, February 21, 2014. C ouche-Tard and Statoil’s efforts to standardize and integrate corporate functions into the supply chain and coordinate workplace activity illustrate the impact of ERP systems on supply chain management (SCM). Couche-Tard www.downloadslide.net Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Business Challenges • Plan production • Establish inventory requirements • Select new forecasting technology Management • Receive customer orders • Replenish inventory • Revise supply chain processes Organization • Deploy SAP Business Objects Web Technology Intelligence • Deploy SAP Business objects dashboards • Integrate with SAP APO • Volatile demand • Long production lead times • Manual planning processes Information System • Forecast demand more accurately • Reduce forecast time Business Solutions • Reduce costs • Increase sales • Increase customer satisfaction did not have a single source of business data nor uniform methods for handling many critical SCM functions. Inventory holding costs were unnecessarily high, the IT department was strained, and lack of coordination was negatively impacting workplace productivity. The chapter-opening diagram calls attention to important points raised by this case and this chapter. All transactions throughout Couche-Tard’s supply chains are now in a common and consistent format that feeds directly into its reporting software. The integrated ERP environment enables real-time planning based on stock availability and average sales at each service station, and a real-time fuel value chain can now accommodate variable demand from both consumer and business customers. Benchmarks against which to assess future results by country, terminal, or market are being developed using the advanced pricing method developed by the Connect team. On the B2B side, managers will be able to quickly assess the effects of pricing structures and even sales reps will be able to evaluate the effects of purchasing terms. Here are some questions to think about: How did Couche-Tard’s lack of standardized processes affect its business operations? How were Couche-Tard’s employees and supply chain management affected by the adoption of standardized interfaces? Why did Couche-Tard retain its legacy systems instead of replacing them entirely? 9-1 How do enterprise systems help businesses achieve operational excellence? Around 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 367 www.downloadslide.net 368 Part Three Key System Applications for the Digital Age 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 databases and systems, none of which could speak to one another. Imagine your company had 10 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 hard-copy reports, often out of date, and it would be difficult to 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 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 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). FIGURE 9. 1 HOW ENTERPRISE SYSTEMS WORK Enterprise systems feature a set of integrated software modules and a central database by which business processes and functional areas throughout the enterprise can share data. www.downloadslide.net Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 369 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 is 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 can tap into the system and find out where that particular order is at any minute. Management can obtain information at any point in time about how the business was operating. The system can also generate enterprise-wide data for management analyses of product cost and profitability. 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 that enterprise software supports. Companies implementing this software first have to 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.) Configuration tables provided by the software manufacturer enable the firm 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. 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 defined by 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 that it obtained the maximum benefits from the enterprise software, Tasty Baking Company deliberately planned for customizing less than 5 percent 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 www.downloadslide.net 370 Part Three Key System Applications for the Digital Age 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, IBM, Infor Global Solutions, and Microsoft. Versions of enterprise software packages are designed for small and medium-sized businesses and on-demand software services running in the cloud (see the chapter-opening case and Section 9-4). Business Value of Enterprise Systems Enterprise systems provide value by both increasing operational efficiency and providing firmwide 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, companywide business processes prevented the company from using its worldwide buying power to obtain lower prices for raw materials and from reacting rapidly to market changes. Crocs used ERP for similar purposes, as described in the Chapter 15 ending case study. 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 number 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 31 countries and more than 200 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 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-tothe-minute data on sales, inventory, and production and uses this information to create more accurate sales and production forecasts. Enterprise software includes analytical tools to use data the system captures 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 find out easily at any moment how a www.downloadslide.net Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 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 companywide costs of delivering services to employees, and measures the effectiveness of employee recruitment, compensation, and training. 9-2 How do supply chain management systems coordinate planning, production, and logistics with suppliers? 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 by using just a telephone and fax machine. But if you manage a firm that produces more complex products and services, you will have hundreds of suppliers, and each of your suppliers will have its own set of suppliers. Suddenly, you will need to coordinate the activities of hundreds or even thousands of other firms to produce your products and services. Supply chain management (SCM) systems, which we introduced in Chapter 2, are an answer to the 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. 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 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, Nike’s 371 www.downloadslide.net 372 Part Three Key System Applications for the Digital Age 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. 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 that manufacture, such as Nike’s contract suppliers of sneakers, also manage their own internal supply chain processes for transforming materials, components, and services their suppliers furnish into finished products or intermediate products (components or parts) for their customers and for managing materials and inventory. The supply chain illustrated in Figure 9.2 has been simplified. It 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 actually comprises 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, underused plant capacity, excessive finished goods inventory, or high transportation costs, are caused by inaccurate or untimely information. For example, manufacturers