Category: Chapter 14

Posts related to Chapter 14

Guest Post: OM and SAP S/4HANA Production Planning and Execution

Dr. Prince Vijai is Assistant Professor of Operations at IBS Hyderabad, India.

In today’s fast‑moving manufacturing environment, production planning is no longer just about scheduling work orders or managing material availability. Modern operations require real‑time visibility, tighter integration across functions, and systems that support rapid decision‑making. SAP S/4HANA’s Production Planning and Execution (PP&E) offers exactly that—an advanced digital backbone for world‑class OM.

At its core, SAP S/4HANA PP&E connects demand, capacity, materials, and shop‑floor activity in one unified environment. This eliminates the traditional disconnect between planning and execution that many firms still struggle with. Instead of relying on batch MRP runs or siloed spreadsheets, planners gain real‑time insights into constraints, bottlenecks, and the ripple effects of schedule changes.

A few capabilities stand out:

  • Real‑time MRP: S/4HANA’s in‑memory engine dramatically accelerates planning cycles, allowing planners to simulate scenarios and adjust instantly.
  • Advanced Scheduling: It provides finite capacity scheduling, enabling more accurate sequencing and resource allocation.
  • Integrated Execution: Shop‑floor data flows directly into the planning system, improving accuracy and reducing reaction time.
  • Exception‑based management: Alerts and analytics help planners focus on issues that matter most—late orders, shortages, or overloaded work centers.

For operations managers, this integration means better alignment between what the system plans and what actually happens on the shop floor. For students, it offers a real-world example of how digital transformation reshapes classical OM concepts like bottleneck analysis, capacity planning, and inventory control.

SAP S/4HANA doesn’t replace foundational OM principles—it amplifies them. The system’s power lies in applying proven concepts with modern speed, accuracy, and connectivity. Whether you’re teaching OM, studying it, or practicing it, understanding tools like S/4HANA is increasingly essential.

As companies continue to adopt advanced planning systems, OM professionals who can bridge theory and technology will be in high demand. SAP’s PP&E environment is a great place to see that bridge in action.

Classroom Discussion Questions:
  1. How does SAP PP transform OM concepts into practical production decisions?
  1. How does cost settlement help operations managers evaluate the financial performance of production?

OM in the News: Agentic AI Revolutionizes the Factory

It’s 4 a.m. at a large automotive parts plant. The night-shift supervisor freezes as the dashboard flashes an alert: a critical spindle is vibrating out of tolerance. In the old world, he’d wait for maintenance to evaluate and decide. But today, an AI agent has already paused the line, checked service records and called the right technician—before he even takes a step toward the control room.

That’s the new reality for many manufacturers facing a stubborn obstacle: the ever-widening gap between data and decisive action. Now, a new class of digital entities is changing that equation. AI agents powered by decision intelligence are beginning to sense, reason and act across the manufacturing ecosystem, cutting decision latency from minutes to milliseconds.

Think of AI agents as the digital nervous system of a modern factory. They continuously sense what’s happening across machines, people and systems, then respond intelligently without losing context. Across the manufacturing stack, they’re quietly reshaping work for every role:

On the shop floor: Agents merge operations and information technology (IT) data to give operators real-time context. They can recommend optimal machine parameters, trigger tool-change schedules, balance workloads across lines or alert technicians before deviations escalate. Maintenance teams can use agents to predict component wear and plan interventions that don’t interrupt production– a topic in Chapter 17.

In production and quality operations: Agents help supervisors and quality staff detect process drift early. They analyze sensor data, images and process variables, suggesting immediate corrections or automated parameter tuning. In continuous manufacturing, this can mean fewer rejects and less rework, which we discuss in Chapter 6.

In ERP and planning: Agents connect production, procurement and finance systems. A planning agent (see Chapter 14) can run simulations of “what if” scenarios, what happens if a supplier shipment is delayed or if energy costs spike and recommend production adjustments.

Across the supply chain: Agents can constantly monitor inventory, supplier performance and logistics signals. When a potential shortage or delay is detected, they are able to trigger contingency workflows such as redistributing available stock, recommending alternate suppliers or rescheduling deliveries–see Chapters 11 and 12.

To sum it up: “Tomorrow’s factories won’t just inform — they’ll decide,” writes Industry Week (June 12, 2026).

Classroom discussion questions:

  1. Summarize what AI agents can do in a factory setting.
  2. How does agentic AI have the potential to change the manufacturing operation?

Guest Post: Why ERP Saves Money

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients.

When most businesses think about implementing an ERP (Enterprise Resource Planning) system (see Ch. 14 in your Heizer/Render/Munson text), they focus on the obvious benefits: streamlined operations, better reporting, and centralized data. But the biggest cost savings from ERP often come from these 5 unexpected areas.

1. Less Money Tied Up in Stock  Too much inventory, over-ordering, poor forecasting, and lack of visibility often leave businesses sitting on cash in the form of unsold goods. ERP provides:

  • Real-time inventory visibility across warehouses, stores, and channels
  • Better demand forecasting to avoid overstocking or stockouts
  • Automated reorder points to optimize purchasing

A large retailer can reduce excess inventory freeing up hundreds of thousands in working capital.

2. Eliminating Revenue Leakage Through Better Invoicing One of the hidden money drains in many businesses is revenue leakage – money earned but never collected. It happens when:

  • Invoices go out late
  • Incorrect billing slips through
  • Credits and discounts aren’t tracked properly

An ERP system centralizes financial data, integrates it with operations, and automates invoicing so nothing falls through the cracks. When invoice turnaround times improve, collection periods drop, significantly improving liquidity.

3. Reducing Compliance Costs and Avoiding Penalties Compliance mistakes are expensive – whether it’s sales tax miscalculations, missed deadlines, or poor audit readiness. ERP makes it easier to:

  • Automate tax calculations
  • Maintain detailed, audit-ready records
  • Track regulatory changes without manual spreadsheets

A manufacturer can avoid potential fines when automating compliance tracking and reporting.

4. Optimizing Workforce Productivity Without Increasing Headcount Labor costs are one of the biggest expenses for any organization. While most leaders expect ERP to make teams “more efficient,” few realize how much efficiency translates into real savings:

  • Automated workflows reduce manual, repetitive tasks
  • Integrated data eliminates duplicate entry
  • Self-service portals empower employees and customers alike

Purchase order approvals and customer reporting can be automated – without laying anyone off.

5. Preventing Costly Errors Before They Snowball Manual processes and disconnected systems increase the chance of making expensive mistakes:

  • Incorrect shipments
  • Duplicate payments
  • Mismanaged vendor contracts

ERP systems reduce these risks by centralizing information and automating checks and balances. Reducing order fulfillment errors saves thousands annually in returns, reshipping fees, and customer appeasements.

Guest Post: Not Implementing ERP Systems Can Be Costly

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients

Companies that hesitate to invest in an Enterprise Resource Planning (ERP) system (see Chapter 14 in your Heizer/Render/Munson text) often believe they are saving money. But the hidden costs of not implementing an ERP system can significantly impact efficiency, scalability, and profitability. While the upfront investment in ERP may be substantial, the long-term consequences of operating without one can be far more costly. Here are 8 reasons why:

1. Inefficiency Leads to Operational Silos One of the primary disadvantages of not using an ERP system is the lack of integration among different business functions. This fragmentation means employees waste time manually transferring data between systems, increasing the risk of errors.

2. Increased Human Error Leads to Data Inaccuracy Manual data entry is prone to mistakes, which can have significant repercussions on financial reporting, inventory management, and customer service. Over time, inaccurate data can result in revenue loss, compliance issues, and reputational damage.

3. Poor Decision-Making Due to Lack of Real-Time Data Businesses without an ERP system often rely on outdated reports, which can lead to poor decision-making,  missed opportunities or reactive rather than proactive business strategies.

4. Higher Operational Costs Without ERP, companies must invest in multiple software solutions, each with their own licensing fees, maintenance costs, and IT support requirements. Over time, these expenses can add up to more than the price of an ERP system.

5. Limited Scalability and Growth Restrictions Companies relying on outdated systems or spreadsheets often struggle to scale efficiently, leading to bottlenecks in production, supply chain management, and customer service.

6. Compliance and Security Risks ERP solutions provide built-in compliance tools and robust security features to protect sensitive business data.

7. Customer Dissatisfaction Can Lead to Lost Revenue A lack of integration between sales, inventory, and customer service can lead to poor customer experiences with delayed order processing, inventory shortages, and inconsistent communication.

8. Competitive Disadvantage Companies that don’t adopt ERP risk falling behind competitors who integrate ERP technology to optimize their operations. In a digital-first economy, businesses that prioritize automation, real-time data analysis, and efficiency gain a significant edge over those relying on outdated systems.

 

Guest Post: ERP as a Competitive Differentiator

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients

In 2025, exceptional customer service is king. It is also a competitive differentiator. To meet growing customer expectations, businesses are turning to enterprise resource planning (ERP) systems, the topic of Chapter 14 in your Heizer/Render/Munson text. Modern ERP solutions enable companies to centralize data, respond to customer needs in real time, and use feedback to drive continuous improvement.

Here’s how ERP software is helps businesses achieve customer service excellence.

ERP Software Centralizes Customer Data Management through a unified platform to manage customer data:

  • 360-Degree View of Customers: By consolidating data from sales, marketing, and support teams, ERP systems create a single source of truth. This allows businesses to track customer interactions, purchase history, and preferences, enabling tailored interactions.
  • Improved Collaboration: With centralized customer data, different departments can collaborate more effectively. Sales, support, and operations teams can work together to address customer needs without duplicating efforts or missing critical details.
  • Data-Driven Personalization: Leveraging customer insights from ERP systems, businesses can personalize their offerings, recommend relevant products, and deliver experiences that resonate with individual preferences.

ERP Software Improves Responsiveness with Real-Time Insights and streamlining processes:

  • Streamlining Service Requests: ERP systems integrate with customer service platforms to manage tickets, prioritize requests, and route them to the appropriate teams.
  • Order Tracking: Real-time order tracking allow customer service teams to provide instant updates on order statuses, shipping details, and estimated delivery times, improving transparency and trust.
  • Proactive Issue Resolution: By analyzing real-time data, ERP systems can identify potential issues, such as delayed shipments or inventory shortages, before they impact the customer. Businesses can take proactive measures to address problems and maintain satisfaction.

ERP Software Integrates Customer Feedback by helping businesses collect, analyze, and act:

  • Feedback Collection: ERP tools can integrate with surveys and reviews to gather customer opinions and sentiments. This provides a comprehensive view of customer satisfaction.
  • Data Analysis for Insights: ERP analytics modules process feedback data to identify trends, recurring issues, and areas for improvement. This allows businesses to prioritize actions that enhance service quality.
  • Closing the Feedback Loop: By integrating feedback with CRM and support systems, ERP solutions enable businesses to inform customers about the steps taken to address their concerns, building trust and loyalty.

OM Podcast #30: An Insider’s Look at Enterprise Resource Planning (ERP)

A continued welcome back to professors and students who are returning to the classroom this month.  In our latest podcast, Barry Render interviews Anne-Marie Salamone, Senior Consultant at MCA Connect, which focuses on helping manufacturing organizations modernize.  In this episode, Anne-Marie and Barry discuss enterprise resource planning (ERP).

 

Transcript

A Word document of this podcast will download by clicking the word Transcript above.

 

Have you subscribed to this podcast on Apple podcasts? Just go to your Apple podcasts app, search “Heizer Render OM Podcast,” and subscribe to get all our podcasts on your mobile device as soon as they come out!

Instructors, assignable auto-graded exercises using this podcast are available in MyLab OM. See our earlier blog post with a recording of author and user Chuck Munson to learn how to find these, or contact your Pearson rep to learn more! https://www.pearson.com/en-us/help-and-support/contact-us/find-a-rep.html

Guest Post: How Will Artificial Intelligence Impact ERP Systems?

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients. She regularly shares her ERP expertise with our readers.

The integration of AI into Enterprise Resource Planning (ERP) systems (the topic of Ch. 14 in your Heizer/Render/Munson text) may revolutionize how businesses manage their operations. There is a lot of buzz around how AI will impact all businesses, and ERP software is not exempt. AI can transform ERP systems from mere transactional platforms to intelligent systems capable of predictive analytics, process automation, and enhanced decision-making.

Benefits of AI-Enhanced ERP Systems

  1. Increased Efficiency: Automation of routine tasks and processes reduces manual effort, speeds up operations, and increases overall efficiency.
  2. Cost Savings: AI-driven optimizations lead to cost savings in various areas, including inventory management, supply chain operations, and customer service.
  3. Better Decision-Making: Enhanced analytics and predictive capabilities provide more accurate and timely information, enabling better decision-making.
  4. Improved Customer Satisfaction: AI-powered customer service tools and personalized experiences lead to higher customer satisfaction and loyalty.
  5. Scalability: AI-enhanced ERP systems can scale easily to handle growing data volumes and business complexity, making them suitable for businesses of all sizes.

Challenges and Considerations

  1. Data Quality: The effectiveness of AI depends on the quality of data. Businesses must ensure their data is accurate, clean, and well-organized.
  2. Integration: Integrating AI with existing ERP systems can be complex and may require significant changes to infrastructure and processes.
  3. Change Management: Implementing AI requires changes in workflows and employee roles. Effective change management and training are essential for successful adoption.
  4. Security and Privacy: AI systems handle sensitive data, making robust security measures and compliance with data privacy regulations crucial.

AI is poised to have a profound impact on ERP systems, transforming them into intelligent platforms that can predict, automate, and optimize various business processes. By leveraging AI, businesses can achieve greater efficiency, cost savings, and enhanced decision-making. However, successful implementation requires careful planning, quality data, and a focus on change management.

Guest Post: 6 Ways ERP Improves Workflows and Repetitive Tasks

Katie Decker is Marketing Manager at Account Mate, a California software firm with over 150,000 clients

It is common for firms to face numerous challenges that can hinder productivity, efficiency, and overall performance. Enterprise resource planning (ERP) software, the topic in Ch. 14 of your Heizer/Render/Munson text, offers a powerful solution by streamlining operations, automating processes, and unlocking new levels of efficiency. It does this in six ways:

  1. Automate Workflows ERP software automates repetitive tasks and workflows, reducing the reliance on manual intervention and minimizing the risk of errors or delays. By defining predefined workflows and business rules, ERP systems can automatically route tasks, trigger notifications, and initiate actions based on predefined criteria.
  2. Centralize Data Management ERP software has the ability to centralize data from various departments within the organization. By consolidating data into a single, unified platform, ERP eliminates data silos and ensures that information is easily accessible to all stakeholders.
  3.  Optimize Resource Allocation ERP software enables businesses to optimize resource allocation by providing real-time visibility into resource utilization, capacity, and demand across various functions and projects. With this insight, decision-makers can allocate resources more effectively, identify bottlenecks, and adjust workflows to maximize productivity.
  4. Enhance Collaboration and Communication ERP systems facilitate collaboration and communication among team members, departments, and external stakeholders. It encourages integrated communication tools, document sharing capabilities, and collaborative workspaces.
  5. Analytics and Decision-Making ERP software provides powerful analytics and reporting tools that enable businesses to gain actionable insights from their data. By analyzing key performance indicators (KPIs), trends, and metrics, decision-makers can make informed decisions, identify opportunities for improvement, and optimize processes.
  6. Scalability and Flexibility As businesses grow, ERP software accommodates changing needs and requirements. Whether expanding into new markets, adding new products or services, or entering new business lines, ERP systems provide the flexibility and scalability to support organizational growth.

As businesses continue to embrace digital transformation, investing in ERP software is an important tool for staying competitive, agile, and resilient in today’s dynamic business environment.

Classroom discussion questions:

  1. What are the advantages of ERP?
  2.  The disadvantages?

OM in the News: John Deere’s Approach to an ERP Upgrade

In Chapter 3, Project Management, we discuss the difference between the waterfall approach to controlling projects versus the agile style of management.  With the first, waterfall, well-defined projects have changes small enough to be managed without substantially revising plans. The projects progress smoothly in a step-by-step manner through each phase. But many projects, like software development, are ill-defined and need an agile approach with constant feedback and adjustments. Such projects are tackled incrementally and small chunks meet limited objectives.

John Deere had invested heavily in a traditional ERP upgrade in Australia, with poor results. Dealers complained that the new system was too hard to use and unintuitive. For example, one process that had been 5 steps turned into 27. Data was inconsistent and often inaccurate, and the system crashed often. After numerous expensive attempts with ‘off the shelf’ ERP software developed by the waterfall approach, John Deere decided to take an agile approach as it upgrades its U.S. Enterprise Resource Planning System (the topic of Chapter 14), says Industry Week (Aug. 11, 2022). 

The old non-customized “off the shelf” ERP systems were just not able to keep up with John Deere’s innovations. For instance, Deere sales teams will be using tablets with video demos and financial data in the field to present new products to customers. Similarly, management wanted current data with product availability and payment data immediately available via a tablet.

Management also recognized the advantages of agile project management. These include faster delivery of new functionality, better alignment between users and developers, and giving users more ownership of new processes. Deere found that another distinct advantage of the agile approach is that as incremental improvements are made in the system both user and customer satisfaction improved. And improved morale supports even more changes. This closer connection between users and developers is expected to bode well for enhanced responsiveness to future changes in Deere’s business processes.

Classroom discussion questions:

1. The use of an in-house agile approach to ERP development will require changes in the John Deere organization. What are some of these changes?
2. The growing digitalization of business suggests what other changes may be coming Deere’s way?

OM in the News: Nike Overhauls its ERP System

Nike just announced it will launch its new ERP system across its global network this year in a bid to increase inventory visibility and productivity, reports Supply Chain Dive (July 11, 2022). The system is the company’s biggest investment in its digital transformation, and is set to go live in China this month, and in North America in 2024. The ERP system will be “foundational for increasing speed and agility across our supply chain as Nike leans increasingly into direct-to-consumer sales,” says the firm’s CFO. The investment involves shifting its ERP onto the SAP S/4 HANA platform.

The ERP launch comes as the retailer continues to face elevated in-transit inventories and extended lead times to get products to market, issues that the new technology system could be instrumental in tackling. Transit times remain at roughly two weeks longer than pre-pandemic levels and aren’t expected to improve significantly through the end of 2023. In China, the extended transit times and factory closures have left Nike with bloated inventory reserves, with seasonal products arriving behind schedule. The firm says it is “recalibrating” its supply and demand in the region in response to shifting market conditions.

Nike has been planning an ERP overhaul since 2020, part of a strategy to more effectively service online customers and unify financial and inventory views across the company’s ecosystem. As part of the retailer’s acceleration of its direct-to-consumer strategy, the CFO noted that the revamped digital system should help fuel profits in China. “And our ERP is frankly the backbone that’s going to enable us to take advantage of those opportunities at a more significant way,” he said.

As we discuss in Chapter 14, ERP tools can make or break a business — they track and manage inventory, procurement, supply chain and other core business operations. Systems need to efficiently enable massive transaction volumes at global scale. But the enterprise technology landscape is riddled with ERP failures. Waste Management, for example, spent $100 million on its ERP failure.  Nike itself is also still somewhat scarred by its 20 year-old reputation as the poster child for bad ERP implementations, having spent $400 million on that earlier failed system.

Classroom discussion questions:

  1. What are the advantages and disadvantages of an ERP system?
  2.  Why do many systems fail and why are they so expensive?

OM in the News: Exciting New Trends in ERP

Enterprise resource planning (ERP) solutions, our topic in Chapter 14, have grown from back-end processes like accounting, HR, purchasing and supply chain management to front-office functions such as sales force automation, marketing automation and ecommerce. Businesses rely on ERP to not only cut costs by eliminating redundant processes and automating mundane tasks but also to provide employees access to critical information to make better decisions, faster.

As companies increasingly rely on ERP, these systems continue to evolve to incorporate new technologies and support a broader range of functions. Oracle NetSuite identifies several major trends this year.

  1. Cloud ERP Historically, many organizations used on-premises ERP applications. But businesses are adopting cloud ERP to take advantage of lower costs and the ability to easily add users and functions to accommodate business growth.
  1. Two-Tier ERP Historically, many companies tried to deploy a single ERP system for both the headquarters and all regional offices and subsidiaries. Two-tier ERP is a strategy that enables organizations to leverage their investment in existing ERP systems at the corporate level (tier 1), while subsidiaries and divisions operate using a different ERP solution (tier 2), which is often cloud-based.
  1. Digital Transformation Digital transformation refers to integrating digital technology into all business functions to improve daily operations. The integration of ERP with IoT devices and the adoption of AI and advanced analytics are part of this change.
  1. Other Technology Integrated With ERP Companies are integrating their business applications with other new technologies to improve core processes. For example, retailers use warehouse management systems that collect data from mobile scanners and smart conveyers to track the movement of goods within the warehouse.  We also see a greater connection between social media and ERP.
  1. Personalization Historically, ERP platforms with complex languages were difficult to customize to the specialized needs of each business. But organizations can now take advantage of what are called “low-code” platforms.
  1. AI-Powered Insights and Improvements Artificial intelligence and machine learning capabilities embedded into ERP systems work behind the scenes to help meet increased demand for personalization and improve a broad range of business processes.
  1. Predictive Analytics The hunger for AI-infused ERP highlights organizations’ increasing desire to mine their operational and customer data for new and relevant insights that will increase the top and bottom lines. (See Module G of your text).

Classroom discussion questions:

  1. Why have ERP systems seen these major changes?
  2. What is the advantage of a 2-tier ERP?

 

OM in the News: Implementing ERP at Coach and Kate Spade Brands

Luxury-goods company Tapestry, the owner of the Coach and Kate Spade brands, has undergone a tech makeover aimed at cutting costs and improving the shopping experience, reports The Wall Street Journal (Oct. 25, 2019). Acquiring Kate Spade in 2017 and Stuart Weitzman in 2015 left the company, formerly called Coach, with 3 brands operating independently under one roof. Various employees were doing similar tasks using different processes and information-technology systems. (Tapestry also sells its handbags, shoes and apparel in department stores).

NY-based Tapestry operates 1,500 stores under its 3 brands: Coach, Kate Spade and Stuart Weitzman

The company’s overhaul that has reduced duplication and centralized business operations across the three brands with a common technological backbone for functions including inventory management, distribution and sales. The centerpiece of the IT overhaul is a new software platform built around SAP’s S/4HANA enterprise-resource planning software that bridges back-office, logistics and other systems. ERP software integrates various functions into one system, streamlining processes and data across the company.

In the past the systems were integrated into seven ERP systems across brands and geographies and now Tapestry has one, single, global, multibrand platform. That provides a foundation for real-time features including inventory checks, in-store pickup for online purchases or the ability for sales associates to reserve a product for customers. The company is taking a 2-year charge of about $80 million related to ERP implementations. As we note in Ch. 14, ERP systems are long-term investments that don’t necessarily pay for themselves right off the bat. Seven years to eight years is often the break-even where a company sees its ERP investment pay off.

Tapestry’s ERP system takes information from point-of-sales systems in stores into a common back-office operation so there is a single process on reporting functions. The company now has a common system to collect and merge data generated by operations including inventory management and sales, providing a better high-level view of business performance across brands.

Classroom discussion questions:

  1. Why spend $80 million for someone else’s ERP system? Why don’t companies hire their own team of programmers to develop a customized version in-house?
  2. Provide examples of ways in which an integrated computer system can improve operations for Tapestry.

OM in the News: Blockchain and High Health Care Costs

Blockchain could eventually be used to provide a secure and accurate medical history for every individual patient.

In the continuing push for affordable health care, one of the biggest stumbling blocks is still the confused and error-filled manner in which electronic data is shared among doctors, insurers, hospitals and patients. One solution, writes The Wall Street Journal (May 29, 2018), could be blockchain technology.

In the current tangle of incompatible records systems that typifies U.S. health care, incorrect information can creep in when patient data gets re-entered multiple times by doctors’ offices, insurers and hospital staff. Big errors can seriously affect the quality of care that patients receive, small discrepancies can result in wrongful denials of insurance coverage, and errors of all types add to the system’s cost.

Blockchain, by contrast, puts patients, insurers and providers all on the same page. With a low-cost and decentralized-ledger approach to managing information, blockchain technology gives all of the parties in the provision of health care simultaneous access to a single body of strongly encrypted data, and it creates an audit trail each time data is changed, helping to ensure the integrity and authenticity of the information.

Eventually, blockchain could be used to provide a secure and accurate medical history for every individual patient. MedRec, a blockchain system being developed at MIT, is designed for patients to be able to manage their own records and give permission to different doctors or providers to access and update the records. And Change Healthcare, a health network of 800,000 physicians, 117,000 dentists and 60,000 pharmacies, introduced a blockchain system this year for processing insurance claims. The shared ledger of encrypted data represents a “single source of truth” for those providers.

Classroom discussion questions:

  1. Explain the concept of blockchain.
  2. How can blockchain work in the supply chain?

Teaching Tip: How Microsoft Sells Supply Chain Management and ERP

ms scm graphicHere is proof that SCM has turned into a field that every student needs to understand. The following is from Microsoft’s web site called the Dynamics of SCM, which promotes its product, called Microsoft Dynamics ERP :

Supply chain management is the oversight of the entire lifecycle of a product or service: from its infancy as a raw material or idea, to the manufacturing of the product, to its distribution, to the retailer, and then ultimately, to the consumer. Each of these stages of the product or service is a link in a chain. Each step is fastened to the next, interconnecting to facilitate the creation of a product.

Maintaining a holistic view of your supply chain activities is essential for efficiency. You need to be able to examine your business—every inch of it—in real time. To have supply chain control, you need to know what’s going on at every stage, at all times.

An enterprise resource planning (ERP) solution will provide you the control of your supply chain you need for more efficient people and processes, better costs, happier customers and greater profits.  This automation helps reduce redundant tasks and can increase accuracy, all the way to your customer’s receiving dock. That can eliminate bottlenecks, improve order processes, and minimize both handling time and overhead.

ERP gives you the ability to find exactly the information you’re looking for so you can make smarter decisions more quickly.

  • Simplify critical purchasing and receiving processes.
  • Know what your customers want.
  • Keep inventory lean and still address demand.
  • Tools to make smarter buying decisions and to negotiate better terms.
  • Help improve customer service and improve customer relationships.