Quản trị kinh doanh - Enterprise resource planning

Enterprise Resource PlanningMPC 6th EditionChapter 1aEnterprise Resource PlanningA comprehensive software approach to support decisions concurrent with planning and controlling the business. ERP systems are, first and foremost, integrated.AgendaWhat is ERP?Connecting functional units with ERPThe need for standardizationSupport of MPC decisionsTransaction processingPerformance metricsThe ERP experienceWhat is ERP?ERP software is MultifunctionalIntegratedModularAble to facilitate MPC activitiesMultifunctionalThe ability to track financial performance in monetary terms ($, €)Can track purchasing activity in material units (pounds, kilos, tons)Follows sales in terms of products or servicesReports manufacturing activity in terms of products, resources, or peopleERP ScopeManufacturing and logisticsManufacturing planning and controlSales and operations planning (front end)Material and capacity planning (engine)Material and vendor management (back end)Enterprise resource planningEnterprise planning modelsEnterprise performance measuresData warehousingReport generationTransaction processingHuman resource managementFinanceSales and marketingIntegratedData entered by one functional area updates all other functional areasEliminates reposting of data (errors)Ensures a common visionModularFunctional units (finance, sales, manufacturing, etc.) are narrowly focusedFunctional units can be combined to create a single systemSoftware from other sources can be connected as wellMPC Activity SupportForecastingProduction planningMaterial planningInventory managementProcess StandardizationWithout standard terminology, integration is impossibleWhat is demand?What is inventory?How are exchange rates determined?What transfer costs apply (for internal transactions)?What labor rates are applied?Decision SupportHelping users make decisions about running the businessPeople make the decisions, software provides them with better tools and informationTransaction ProcessingAn ERP system is designed to process business transactions in real time, working from a single databaseData warehouse software may be added to facilitate queries not built into the ERP systemPerformance MetricsFunctional Silos – Each area is responsible for optimizing its own operation, with no consideration for how the overall firm is affectedPurchasing pursues cost rather than qualityManufacturing builds long runs rather than responding to customersDistribution focuses on cost of delivery stages instead of total system costsIntegrated Supply Chain MetricsDeveloped by the Supply Chain CouncilDesigned to measure the impact of decisions on the entire supply chainAvoids development of functional silos by developing metrics that reflect the entire supply chainSupply Chain MetricsSource: Supply Chain CouncilMeasureDescriptionBest-in-ClassAverageDelivery performancePercentage of orders shipped according to schedule93%69%Fill rate by line itemPercentage of actual line items filled97%88%Perfect order fulfillmentComplete orders shipped on time92.4%65.7%Order fulfillment lead timeTime from when an order is placed until it is received by the customer135 days225 daysWarranty costWarranty expenses as a % of revenue1.2%2.4%InventoryDays of supply held in inventory55 days84 daysCash-to-cash cycle timeTime required to turn cash used to purchase raw materials into cash received from customers35.6 days99.4 daysAsset turnsMeasure of how many times per year assets are used to generate revenue4.7 turns1.7 turnsCash-to-Cash Cycle TimeIntegrates the finance function with purchasing, manufacturing, and sales/distributionProcurement cycleManufacturing cycleSales and distribution cyclePurchase cost of materialAccounts payableRaw materials inventoryWork-in-processFinished goods inventoryDistribution inventoryAccounts receivableCash-to-cash cycle time = Inventory days of supply + Days of sales outstanding – Average payment period for materialERP View of Cash-to-Cash TimeERP databaseAccounts payableInventoryCost of salesSalesAccounts receivablePurchasingManufacturingSales and distributionCash-to-cash cycle timeCalculating Cash-to-Cash TimeAverage daily sales (Sd)Accounts receivable days (ARd)Average daily cost of sales (Cd)Average days of inventory (Id)Accounts payable cycle time (APd)Cash-to-cash cycle timeCash-to-Cash ExampleSales over last 30 days = $1,020,000Accounts receivable = $200,000Inventory value = $400,000Cost of sales = 60% of total salesAccounts payable = $160,000The ERP ExperienceEli Lilly and CompanyIntegration of a global companyProcess improvementSimplified trainingStrategic directionOrganizational flexibilitySet of global policiesConcluding PrinciplesRedundant transactions must be reduced or eliminated.To maintain data accuracy and realize efficiencies, information must be captured at the initial entry, using documented processes.Processes need to be changed to support the data needs of the ERP system–hardware and software alone isn’t sufficient.Concluding PrinciplesThe company must define a comprehensive set of performance measures, with policies and goals that correspond to these measures.IT economies of scale can be obtained from supporting fewer hardware and software platforms.Quiz – Chapter 1aTo free the ERP system for basic applications, a _______ _______ is often used to capture, manage, and analyze data.For a firm with average daily sales (Sd) of $200,000, current inventory (I) of $1,000,000, and cost of sales (CS) of 50%, what is the average days of inventory (Id)?Which of the following actions would be likely to increase the cash-to-cycle time for a firm?Increasing the cost, but not the price, of the productTaking advantage of “early pay” discounts with suppliersRevaluing inventory to reflect reductions in purchasing prices