Review Questions

1. How do enterprise systems help businesses achieve

operational excellence?
Define an enterprise system and explain how enterprise
software works.
Answer:
Enterprise software consists of a set of interdependent software
modules that support basic internal business processes. The
software allows data to be used by multiple functions and
business processes for precise organizational coordination and
control. Organizations implementing this software would have
to first select the functions of the system they wish to use and
then map their business processes to the predefined business
processes in the software. A particular firm would use
configuration tables provided by the software to tailor a
particular aspect of the system to the way it does business. These
include financial and accounting processes, human resources
processes, manufacturing and production processes, and sales
and marketing processes.
Describe how enterprise systems provide value for a
business.
Answer:
Enterprise systems provide value both by increasing operational
efficiency and by providing firmwide information to help
managers make better decisions. Large companies with many
operating units in different locations have used enterprise
systems to enforce standard practices and data so that everyone
does buisness the same way. Enterprise systems helps firms
respond rapidly to customer requests for information or
products. Manufacturing is better informed about producing
only what customers have ordered, procuring exactly the right
amount of components or raw materials to fill actual orders,
staging production, and minimizing the time that components or
finished products are in inventory. Enterprise software includes
analytical tools for using data captured by the system to evaluate
overall organizational performance. Enterprise system data has
common standardized definitions and formats that are accepted
by the entire organization. Enterprise systems allow senior
management to easily find out at any moment how a particular
organizational unit is performing or to determine which products
are most or least profitable. Companies can use enterprise
systems to support organizational structures that were not
previously possible or to create a more disciplined
organizational culture. They can also improve management
reporting and decision making. Furthermore, enterprise systems
promise to provide firms with a single, unified, and all-
encompassing information system technology platform and
environment. Lastly, enterprise systems can help create the
foundation for a customer-driven organization
2. How do supply chain management systems coordinate
planning, production, and logistics with suppliers?
Define a supply chain and identify each of its components.
Answer:
A supply chain is defined as a network of organizations and
business processes for procuring materials, transforming raw
materials into intermediate and finished products, and
distributing the finished products to customers. It links suppliers,
manufacturing plants, distribution centers, retail outlets, and
customers to supply goods and services from source through
consumption. Supply chain management is the integration of
supplier, distributor, and customer logistics requirements into
one cohesive process.
Explain how supply chain management sys-tems help
reduce the bullwhip effect and how they provide value for a
business.
Answer:
The bullwhip effect occurs when information about the demand
for a product gets distorted as it passes from one entity to the
next across the supply chain. It can also result from gaming,
as purchasers present manufacturers or suppliers with a false
picture of consumer demand. It can be dealt with by reducing
uncertainties about demand and supply when all the players in a
supply chain have accurate and up-to-date information.
Define and compare supply chain planning systems and
supply chain execution systems.
Answer:
Supply chain planning systems enable the firm to generate
demand forecasts for a product and to develop sourcing and
manufacturing plans for that product. They help companies
make better operating decisions such as determining how much
of a specific product to manufacture in a given time period;
establishing inventory levels for raw materials, intermediate
products, and finished goods; determining where to store
finished goods; and identifying the transportation mode to use
for product delivery. One of the most important functions is
demand planning, which determines how much product a
business needs to make to satisfy all of its customers demands.
These functions are referred to as order planning, advanced
scheduling, demand planning, distribution planning, and
transportation planning. Supply chain execution systems manage
the flow of products through distribution centers and warehouses
to ensure that products are delivered to the right locations in the
most efficient manner. They track the physical status of goods,
the management of materials, warehouse and transportation
operations, and financial information involving all parties. These
functions are referred to as order commitments, final production,
replenishment, distribution management, and reverse
distribution.
Describe the challenges of global supply chains and how
Internet technology can help companies manage them better.
Answer:
Firms use intranets to improve coordination among their internal
supply chain processes, and they can use extranets to coordinate
supply chain processes shared with their business partners.
Using intranets and extranets (both based on Internet
technology), all members of the supply chain can instantly
communicate with each other, using up-to-date information to
adjust purchasing, logistics, manufacturing, packaging, and
schedules. A manager can use a Web interface to tap into
suppliers systems to determine whether inventory and
production capabilities match demand for the firms products.
Business partners can use Web-based supply chain management
tools to collaborate online with suppliers and customers. Sales
representatives can access suppliers production schedules and
logistics information to monitor customers order status. The
Internet has introduced new ways of managing warehousing,
shipping, and packaging based on access to supply chain
information that can give companies an edge in delivering goods
and services at a reasonable cost.
Distinguish between a push-based and a pull-based model
of supply chain management and explain how contemporary
supply chain management systems facilitate a pull-based
model.
Answer:
In a push-based model, production master schedules are based
on forecasts or best guesses of demand for products, and
products are pushed to customers. In a pull-based model,
actual customer orders or purchases trigger events in the supply
chain. In contemporary supply chain management systems, the
Internet and Internet technology make it possible to move from
sequential supply chains, where information and materials flow
sequentially from company to company, to concurrent supply
chains, where information flows in many directions
simultaneously among members of a supply chain network.
Members of the network immediately adjust to changes in
schedules or orders.
3. How do customer relationship management systems help
firms achieve customer intimacy Define customer
relationship management and explain why customer
relationships are so important today.
Describe how partner relationship manage-ment (PRM)
and employee relationship
management (ERM) are related to customer relationship
management (CRM).
Answer:
CRM systems capture and integrate customer data from all over
the organization, consolidate the data, analyze the data, and then
distribute the results to various systems and customer touch
points across the enterprise. Companies can use this customer
knowledge when they interact with customers to provide them
with better service or to sell new products and services. CRM
systems integrate and automate many customer-facing processes
in sales, marketing, and customer service, providing an
enterprise-wide view of customers. These systems track all of
the ways in which a company interacts with its customers and
analyze these interactions to maximize customer lifetime value
for the firm. CRM extends to a firms business partners who are
responsible for selling to customers. The more comprehensive
CRM packages contain modules for partner relationship
management (PRM) and employee relationship management
(ERM). PRM uses many of the same data, tools, and systems as
CRM to enhance collaboration between a company and its
selling partners. If a company does not sell directly to customers
but rather works through distributors or retailers, PRM helps
these channels sell to customers directly. ERM software deals
with employee issues that are closely related to CRM, such as
setting objectives, employee performance management,
performance-based compensation, and employee training.
Describe the tools and capabilities of customer relationship
management software for sales, marketing, and customer
service.
Answer:
Customer relationship management systems typically provide
software and online tools for sales, customer service, and
marketing. Capabilities include the following: Sales: Sales force
automation modules in CRM systems help sales staff increase
their productivity by focusing sales efforts on the most
profitable customers, those who are good candidates for sales
and services. Provide sales prospect and contact information,
product information, product configuration capabilities, and
sales quote generation capabilities. Enable sales, marketing, and
delivery departments to easily share customer and prospect
information.
Increase salespeoples efficiency in reducing the cost per sale as
well as the cost of acquiring new customers and retaining old
ones. Capabilities for sales, forecasting, territory management,
and team selling. Supports direct-marketing campaigns by
providing capabilities for capturing prospect and customer data,
for providing product and service information, for qualifying
leads for targeted marketing, and for scheduling and tracking
direct-marketing mailings or e-mail. Customer Service: Provide
information and tools to make call centers, help desks, and
customer support staff more efficient. Includes capabilities for
assigning and managing customer service requests. May also
include Web-based self-service capabilities. Marketing: Support
direct-marketing campaigns by providing capabilities for
capturing prospects and customer data, for providing product
and service information for qualifying leads for targeted
marketing, and for scheduling and tracking direct-marketing
mailings or e-mail. Includes tools for analyzing marketing and
customer data. Identifies profitable and unprofitable customers,
designs products and services to satisfy specific customer needs
and interests, and identifies opportunities for cross-selling, up-
selling, and bundling.
Distinguish between operational and analyti-cal CRM.
Answer:
Operational CRM includes customer-facing applications such as
tools for sales force automation, call center and customer service
support, and marketing automation. Analytical CRM includes
applications that analyze customer data generated by operational
CRM applications to provide information for improving
business performance management. Applications are based on
data warehouses that consolidate data from operational CRM
systems and customer touch points. The database serves online
analytical processing, data mining, and other data analysis
techniques. Provides information related to customer lifetime
values.