Enterprise System

Enterprise Information
System and Business Focus on integrating the key internal
business processes of the firm
Process Integration Also known as Enterprise Resource
Planning.
Zaldy Adrianto Based on a suite of integrated software
[email protected]
modules and a common central
database.

ERP in Government Definition of ERP

“accounting oriented information
system for identifying and planning the
• City of Palo Alto, and Sacramento (USA), enterprisewide resources needed to
• Cape Town (South Africa). take, make, ship, and account for
customer order”
• implement SAP.
APICS (American Production and
Inventory Control Society)

Key Benefits of ERP Key Risks of ERP

System System
Increased reliance on application controls
Centralized storage of company data
Less applications / interfaces Less human intervention in processes
May be less manual paper flow Multiple points of security failure (e.g,
client, application server, database)
May have centralized application
security Implementation projects typically miss
deadlines and go over budget
Less ‘programming’ – more
‘customization Functionality and controls may not be
adequately tested
How Enterprise System
Work?
•Integration they force on firm’s information
and business processes.
•Suite of integrated software modules and a
common central database
•Collects data from many divisions of firm
for use in nearly all of firm’s internal
business activities
•Information entered in one process is
immediately available for other processes Enterprise System

How Enterprise System Work? Business Processes supported

Enterprise Software by enterprise system
Built around thousands of predefined business processes that reflect best
prac5ces Financial and General ledger, Account payable, Account Receivables, Fixed Assets, Cash
Management and Forecasting, Product Cost Accounting, Cost-Center
Finance and accoun+ng Accounting Accounting, Asset Accounting, Tax Accounting, Credit Management, and
Human resources Processes Financial Reporting.
Manufacturing and produc+on
Sales and marke+ng Human Personnel Administrations, Time Accounting, Payroll, Personnel Planning and
development, Benefits Accounting, Applicant Tracking, Time Management,
To implement, firms: Resources Compensations, Workforce Planning, Performance Management, and Travel
Select func+ons of system they wish to use. Processes Expense Reporting.
Map business processes to so=ware processes.
Use so=ware’s configura+on tables for customizing. Manufacturing Procurement, Inventory Management, Purchasing, Shipping, Production
Planning, Production Scheduling, Material requirements planning, Quality
and Production Control, Distribution, Transportation execution, and Plant and equipment
Major ERP vendor : SAP and ORACLE, Processes maintenance.

Sales and Order processing, Quotations, Contracts, Products configurations, pricing,

Marketing Billing, Credit Checking, Incentive and Commission Management, and Sales
Planning
Processes
www.sap.com www.oracle.com

How Enterprise System

Best practices Work?
If the enterprise software does not
support the way the organization does
The most successful solutions or business, companies can rewrite the
problem-solving methods for software (customization)
consistently and effectively achieving a
If companies want to reap maximum
business objective
benefits from enterprise software, they
must change the way they work (Business
Process Redesign)
 Business value of Enterprise System
enterprise system Implementation
Integrate diverse internal business
processes of a firm into a single 17,000 vehicles in 2010
information architecture. The Management receive information
•Increase opera+onal efficiency about the efficiency of fuel’s consumption
•Provide firm-wide informa+on to support decision
making
in a day
•Enable rapid responses to customer requests for
informa+on or products
Efficient procurement process for spare-
•Include analy+cal tools to evaluate overall organiza+onal part, and reduce its cost by 30%
performance

Forecasting tools from SAP AG

Supply Chain
Supply Chain
Management Systems
Network of organizations and processes for:
Nowadays customer wants greater
Procuring materials, transforming them into products, and
value of product, faster order distributing the products
fulfillment, and responsive service. Upstream supply chain:
Firm’s suppliers, suppliers’ suppliers, processes for managing
Competitive advantage may be based relationships with them
on entire supply chains. Downstream supply chain:
SCM refers to the close linkage and coordination of Organizations and processes responsible for delivering
activities involved In buying, making and moving the products to customers
product Internal supply chain
 Nike’s Supply Chain Toyota’s supply chain

A supply chain
Upstream : portion of supply chain
includes the organization’s suppliers and
the processes for managing relationship
with them
Downstream : consist of the
organizations and processes for
distributing and delivering products to
final customers.

Information and Supply

Chain Management

Inefficiencies in the supply chain are

caused by inaccurate or untimely
information.
For example : manufacturers may keep too many
inventory because they do not know exactly when
they will receive their next shipment.
 Information and Supply Chain
Airbus A350 XWB Management (continued)
12 Billion euro development cost in-Inefficiencies cut into a company’s
1500 supplier’s enterprise operating costs
• Can waste up to 25 percent of operating expenses
Just-time strategy:
• Components arrive as they are needed
• Finished goods shipped after leaving assembly line
Safety stock:
Buffer for lack of flexibility in supply chain
Bullwhip effect
Information about product demand gets distorted as it
passes from one entity to next across supply chain

Bullwhip Effect Example

Forecasting tools from

SCM Software
Supply chain planning systems
•Model existing supply chain
•Enable demand planning
•Optimize sourcing, manufacturing plans
•Establish inventory levels
•Identify transportation modes
Supply chain execution systems
•Manage flow of products through distribution
centers and warehouses
 Emerging Internet Driven
Supply Chain Management
Supply chain
and the internet
Firms can use intranets to improve coordination among
their internal supply chain processes.

They can also use extranet to coordinate supply chain

processes shared with their business partner.

Internet helps manage global complexities

• Warehouse management
• Transportation management
• Logistics
• Outsourcing
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Push Based Model Pull based Models

Production master
schedule are based
on forecast or best Also known as demand-driven model
guesses of demand or build-to-order
of products, and Actual customer orders or purchases
products are trigger events in the supply chain
“pushed” to
customers.

Push and pull based supply chain Example of supply-chain

management for apparel company

Internet enables move from sequential supply

chains to concurrent supply chains
Complex networks of suppliers can adjust immediately
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 Business Value of SCM

• Match supply to demand; reduce inventory levels

• Improve delivery service
• Speed product time to market
• Use assets more effectively
• Reduced supply chain costs lead to increased
profitability
• Total supply chain costs can be 75 percent of operating budget
• Increase sales

Customer Relationship Management

Opportunities,Challenges, and
Management Systems solutions
Opportunities
Basis of competitions has Fundamentally change the way
switched from who sells the organization works.
most products and services Dramatic reductions in inventory costs,
to who “owns” the customer. order to delivery time
Efficient customer response.

Management
Solutions
Challenges
Look at business objectives first

High total cost of ownership Attention to data and data

management
Organizational change requirement
Senior management commitment and
Realizing strategic value employee support
Education and training
?