Tag: enterprise software

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: 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: Reinventing Federal-Mogul’s Supply Chain

Federal-Mogul handles more than 400 million auto parts annually
Federal-Mogul handles more than 400 million auto parts annually

For more than a century, Federal-Mogul  has handled the gritty task of producing hundreds of thousands of auto parts, sticking them in boxes and shipping them to warehouses or stores across the country. Now—aggravated by how much time is lost in the process—the company is spending $100 million to upgrade its supply chain from end to end. Improvements range from an online parts catalog with 360-degree views of products to “picking robots” in its warehouses to help ensure that parts are delivered to customers on time. The $7 billion company produces everything from pistons and engine bearings to windshield wipers and exhaust gaskets.

Over the years, Federal-Mogul has become a patchwork of IT systems adopted from the companies it acquired, writes The Wall Street Journal (Oct. 14, 2015). The push under the new plan is to move the entire company onto SAP enterprise software. “We are facing a proliferation of parts,” says the supply chain chief. “Cars are staying on road longer, so you need to keep those parts, and meanwhile, auto makers are adding more models.”

So Federal-Mogul has opened additional warehouses that feature robotics systems that allow the company to consolidate storage space and offer all of the parts the company makes under one roof. (Using robotics is a page right out of Amazon’s playbook, which has used robots to speed the picking of individual pieces of merchandise for shipping). Radio-controlled, battery-operated robots run across the grid picking up requested containers when orders are received and put them onto a conveyor that will take them to the sorting area–a much more efficient system than at the older warehouses. “You have hundreds of people walking miles every day within the warehouses to get these parts, and that takes time,” says the head of logistics. “There is also the chance that parts get mixed up or broken. Now we have the parts come to the employees.”

Classroom discussion questions:

  1. Why does the firm need the SAP system, and what will the new software do?
  2. What is the advantage to using robots in the warehouses?