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Enterprise Applications Achieving Operational Excellence & Customer Intimacy Whirlpool fixes its supply chain Number one US home appliance maker Washers, dryers, refrigerators, … Brands Whirlpool, Kitchen Aid, Roper, Speed Queen Facility 50 manufacturing and research centers

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Enterprise Applications


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enterprise applications

Enterprise Applications

Achieving

Operational Excellence &

Customer Intimacy

slide2
Whirlpool fixes its supply chain
    • Number one US home appliance maker
      • Washers, dryers, refrigerators, …
    • Brands
      • Whirlpool, Kitchen Aid, Roper, Speed Queen
    • Facility
      • 50 manufacturing and research centers
      • 80 distribution centers
    • Major sales partners
      • Sears, Lowe’s & Best Buy
slide3
Challenges, 2000
    • Inventory of finished goods was very high
    • Product availability was low
      • Supply chain systems
        • Sales disablers
      • 4 US major appliance makers
        • Whirlpool ranked 5th in delivery performance
slide4
The old supply chain systems
    • Demand forecast systems
      • i2, installed in 1997
    • ERP
      • SAP, accounting & order processing
    • Supply chain system
      • Home grown
        • Not well integrate with
          • ERP
          • Suppliers
          • Wholesalers
      • Slow & cumbersome manual procedures
slide5
Solution tried
    • Overstock its warehouse
      • Ensure items were in plenty supply
        • More than enough for customer orders
    • Raise inventory carrying cost
      • Eroding profit
    • Continue to lose sales
      • Wrong decision about specific items to stock
      • Did not have the appliance customers wanted
slide6
Global overhaul, 2001

Supply chain management systems

Focus on serving customers

    • Advance planning & scheduling systems, APS
      • i2,
      • Supply chain integration & optimization software
    • Collaborative planning, forecasting, & replenishment (CPFR)
      • i2
      • Share & combine sales forecast
slide7
Achievement
    • Improvement in customer service
      • 97% availability
        • Was 87%
    • Reduce supply chain cost
      • Reduce finished goods
        • More than 20%
      • Reduce freight & warehouse cost
        • 5%
slide8
Meet customer’s needs with
    • The right products
    • In the right stores & warehouses
    • At the right time
slide9
9.1 Enterprise systems

9.2 Supply chain management systems

9.3 Customer relationship management systems

9.4 Enterprise applications

  • New opportunities & challenges
9 1 enterprise systems
9.1 Enterprise systems
  • Enterprise resources planning, ERP

Chapter 2

    • A suite of integrated software modules
    • A common central database
      • Data are collected from all
        • Divisions and departments in a firm
        • Key business process
      • Made data immediately available to all
        • Divisions and departments in a firm
        • Key business process
slide13
Sales rep
    • Place an order for tire rims
  • The system verify
    • Customer’s credit limit
    • Schedule the shipment
    • Identify the best shipping route

If inventory is insufficient

  • The system schedules the manufacturing
slide14
Enterprise software
    • Built around thousands of predefined business processes
      • Best practice 典範作業
        • Most successful solutions or problem solving method
      • Sources of best practices
        • Consulting firms
        • Enterprise software firms

Hire a consulting firm or enterprise software firm

Hire the knowledge base of best practice

=

slide15
Implementation
    • Select the functions
      • Finance & account, …
    • Map
      • Their business processes
      • Predefined business processes of software supported
    • Configuration tables
      • Tailor software to business processes
        • ABC accounting, standard cost accounting
slide16
If software does not support the way the organization does business
      • Rewrite software
        • Software is complex
        • Expensive customization
        • Degrade system performance
      • Company changes the way they work
  • Major ERP vendors
    • SAP
    • Oracle

鼎新電腦

slide17
Business value of enterprise systems
    • Increase operation efficiency
    • Provide firm-wide information
      • Make better decision
    • Enforce standard practices and data
      • Everyone does business the same way
        • Ex: Coca-cola (SAP)
          • Standardize business process in 200 countries
          • Leverage its world-wide buying power
slide18
Respond rapidly to customer requests
    • Integrate data
      • orders, manufacturing, …
  • Analytical tools
    • Evaluate overall organizational performance
slide19
9.1 Enterprise systems

9.2 Supply chain management systems

9.3 Customer relationship management systems

9.4 Enterprise applications

  • New opportunities & challenges
slide20
Supply chain
    • Network of organizations and business processes
      • Procuring raw material
      • Transforming material into
        • Components
        • Finish products
      • Distribute to customers
slide21

Design, market,

& sell

Internal supply chain

slide22
Information & supply chain management
    • Inefficiencies in the supply chain
      • Part shortage
      • Underutilized plant capacity
      • Excessive finished goods inventory
      • High transportation cost

Caused by inaccurate or untimely information

slide23
Manufacturer has perfect information
    • Exactly how many units
    • When

customers wanted

  • Make Just-in-time strategy possible
slide24
Uncertainty arise in supply chains
    • Uncertain product demand
    • Late shipments from suppliers
    • Defective parts or raw materials
    • Production process breakdown
  • Solutions
    • Build more inventory
      • On product that manufacturer thinks customer need
    • Safety stock
      • Inventory cost vs. low fill rate cost
slide25
Bullwhip effect
      • 長鞭效應、啤酒遊戲 (beer game)
    • Information about the demand for a product
      • Get distorted
        • As it pass from one entity to the next
        • Across the supply chain
    • These changes ripple throughout the supply chain
      • Magnifying
      • Creating excess inventory
slide27
P&G
    • Pampers disposal diapers
      • Offer aggressive price promotion
    • Customer purchases are fairly stable
    • Order from distributors will spike
  • The bullwhip is tamed
    • By reduce uncertainty
    • Accurate & up-to-date info
slide28
Supply chain management applications
    • Supply chain planning
      • Generate demand forecasts
        • Demand planning
          • How much product a business needs to make

to satisfy all its customers’ demand

      • Develop sourcing and manufacturing plans
        • How much to manufacture in a given period
        • Establish inventory level
        • Determine where to store finished goods
slide29
Example
    • A large customer
      • place a large order than usual or
      • change the order on short notice
    • Create a widespread impact
      • additional material
      • different mix of raw materials

Supply chain planning software

      • makes the necessary adjustments
      • shares the info about all changes
slide30
Supply chain execution
    • Manage the flow of products
        • Thru distribution centers and warehouse
      • Ensure that products are delivered
        • to the right locations
        • In the most efficient manner
    • Functions
      • Track goods
      • Manage material, warehouse, transportation
      • Financial information
slide31
Major vendors
    • Manugistics
    • i2
    • SAP
    • Oracle
slide32
SCM & the Internet

Before Internet

    • Difficulties to make info flow
      • Internal supply chain
        • ERP
      • External supply chain
        • Incompatible technology platform
slide33
Internet Technology
  • Intranet
  • Extranet
    • Improve coordination among supply chain
  • Benefits
    • Instantly communication
    • Up-to-date info
  • Example
    • Customer can tap into supplier’s system
      • 台積電 虛擬工廠
slide35
Demand-driven supply chains
    • From push to pull manufacturing
    • Efficient customer response
    • Push-based model
      • Build-to-stock
        • Based on forecast
        • Products are pushed to customers
slide36
Pull-based model
    • Demand-driven model
    • Build-to-order
      • Orders or purchases trigger events
        • Transactions to produce and deliver only what customers have ordered
    • Walmart
      • Continuous replenishment system
    • Dell computer
      • Build-to-order
slide38
Internet technology
    • Change supply chain information movement
      • From sequential
      • To concurrent
        • Information flow in many directions simultaneously

Members of supply chain can adjust to changes immediately

slide40
Business value of SCM systems
    • Streamline processes
    • More accurate information
    • Match supply to demand
    • Reduce inventory levels
    • Improve delivery service
    • Reduce cost

優化、暢流

slide41
9.1 Enterprise systems

9.2 Supply chain management systems

9.3 Customer relationship management systems

9.4 Enterprise applications

  • New opportunities & challenges
slide42
Innovation-based competitiveness is short-lived

Enduring competitive strength may be their relationship with customers

  • Info nurture strong, long-lasting relationship
    • Exactly who your customers are
    • How to contact them
    • Whether they are costly to service and sell to
    • What kind of products or services they are interested in
    • How much they spend on your products
  • Small-town store
slide43
Small business owners
    • Know their customers
      • Personal
      • Face-to-face
  • Large business
    • Impossible to “know your customers”
      • Too many customers
      • Too many ways to interact with customers

over the web, phone, fax, face-to-face

difficult to integrate info from all sources

slide44
Customer relationship management
    • Capture and integrate customer data
      • from all over the organization
    • Consolidate data
    • Analyze the data
    • Distribute the results
      • to various systems and customer touch points
slide45
Touch points
    • Contact points
    • Methods of interaction with the customer
      • Phone
      • Email
      • Customer service desk
      • Conventional mail
      • Web site
      • Wireless device
      • Retail store
slide46
Well-designed CRM software
    • A single enterprise view of customers
      • Regardless of touch point
    • Analytical tools
      • Customers’ lifetime value
      • Loyal customers
      • Most profitable customers
      • Most frequently ask questions
      • Customer’s preferences
slide47
CRM software
    • Niche tools
      • Personalizing web sites for specific customers
    • Large-scale enterprise applications
      • Capture many interactions with customers
      • Link to other enterprise systems
        • SCM
    • More comprehensive CRM
      • Partner relationship management
      • Employee relationship management
slide48
Partner relationship management
    • Enhance collaboration between a company and its selling partners
      • Company does not sell directly to customers
        • Via distributors and retailers
    • Distribute
      • Leads
      • Data about customers
    • Integrate
      • Lead generation, pricing, promotions, availability
slide49
Employee relationship management
    • Setting objectives
    • Employee performance management
    • Performance-based compensation
    • Employee training
  • Major CRM vendors
    • Siebel systems
    • Clarify
    • Salesforce.com
slide50
Sales force automation
    • Focus sales efforts on the most profitable customers
      • Sales prospect
      • Product info
      • Product configuration
      • Quote generation
      • Forecast
      • Territory management
slide51
Customer Service
    • Increase efficiency
      • Call centers
      • Help desks
      • Customer support staff
    • Capabilities
      • Assign & manage customer service requests
        • Route calls to the correct service person
      • Consistent and accurate info
        • Handle more calls
        • Shorten the duration of calls
      • Web-based self service
slide52
Marketing
    • Direct-marketing campaigns
      • Capture prospect
      • Provide product & service info
      • Qualify leads
      • Scheduling & tracking mails & emails
    • Cross selling
      • Marketing of complementary products
slide55
CRM software
    • Operational CRM
      • Customer-facing application
        • Sales force automation
        • Call center
        • Customer service support
        • Marketing automation
slide56
Analytical CRM
    • Analyze customer data
      • Data warehousing
        • Consolidate data from

operational CRM

customer touch points

        • OLAP, online analytical processing
        • Data mining
    • Outputs
      • Identify buying pattern
      • Create segments
      • Pinpoint profitable and unprofitable customers
slide58
Outputs
    • Customer lifetime value
      • Revenue produced by a specific customer
      • The expense incurred in acquiring and servicing that customer
      • Expect life of the relationship between the company and the customer.
slide59
Business values of CRM
    • Increase customer satisfaction
    • Reduced direct marketing costs
    • More effective marketing
    • Lower cost for customer acquisition and retention
    • Increase sale revenue
slide60
9.1 Enterprise systems

9.2 Supply chain management systems

9.3 Customer relationship management systems

9.4 Enterprise applications

  • New opportunities & challenges
slide61
Enterprise systems
    • Powerful instruments for
      • Achieving operational excellence
      • Enhancing decision making
    • Powerful in
      • Changing the way the organization works

Challenging to implement

slide62
Challenges of enterprise applications
      • Complex software
      • Expensive to purchase and implement
        • Software
        • Database tools
        • Consulting fee
        • Personnel cost, training
        • hardware
slide63
Fundamental changes in the way the business operates
    • Best practices
    • Employee must accept
      • new job function & responsibility
      • New set of work activities
  • Implementation create enormous operation problems
    • K-Mart, i2,
      • did not work with promotion-driven business model
    • Hersey, SAP
      • Shipment ran 2 weeks late
slide64
Best practice is not compatible with unique business process
  • Switching cost
  • Organization-wide definition of data
    • 就源輸入
slide65
Extended enterprise software
    • More flexible, web-enabled, and capable of integration with other systems
    • Service platform
      • Integrate multiple application
      • From multiple business
      • Deliver seamless experience
        • Customer
        • Employee
        • Business partner