Amity Business School

Partner Relationship
Management (PRM)
Definition:
• Applications that apply many of the same
tools used in CRM systems to enhance
collaboration between a company and its
business partners, such as distributors and
dealers, to better coordinate and optimize
sales and service to customers across all
marketing channels

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Case #2: Challenges of

Implementing ERP
• Enterprise resource planning (ERP)
implementations are a lot more than software
packages. They are a fundamental
transformation of a company’s business
processes. People, processes, policies, the
company’s culture are all factors that should
be taken into consideration when
implementing a major enterprise system.

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Enterprise Resource Planning

(ERP)
Definition:
• A cross-functional enterprise system driven
by an integrated suite of software modules
that supports the basic internal business
processes of a company

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ERP Benefits

• Quality and Efficiency – ERP creates a

framework for integrating and improving a
company’s internal business processes that results
in significant improvements in the quality and
efficiency of customer service, production, and
distribution

• Decreased Costs – Significant reductions in

transaction processing costs and hardware,
software, and IT support staff

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ERP Benefits

• Decision Support – Provides vital cross-functional

information on business performance quickly to
managers to significantly improve their ability to
make better decisions in a timely manner

• Enterprise Agility – ERP breaks down many

former departmental and functional walls of
business processes, information systems, and
information resources

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Costs of ERP

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Causes of ERP Failures

• Business mangers and IT professionals underestimate
the complexity of the planning, development, and
training needed

• Failure to involve affected employees in the planning

and development phases

• Trying to do too much too fast in the conversion process

• Failure to do enough data conversion and testing

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Case #3: Business Value of SCM

Benefits of SCM:
• Reduces production and distribution costs

• Improves timeliness of shipments

• Reduces manufacturer inventory levels

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Case #3: Business Value of SCM

Challenges of SCM:
• Acquisition of secure extranet

• Change company structure

• Resistance from employees wedded to

traditional processes

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Supply Chain Management

(SCM)
Definition:
• A cross-functional interenterprise system that
uses information technology to help support
and manage the links between some of a
company’s key business processes and those
of its suppliers, customers, and business
partners

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Electronic Data Interchange

(EDI)
Definition:
• Involves the electronic exchange of business
transaction documents over the Internet and
other networks between supply chain trading
partners

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EDI Activities

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SCM Planning Functions

• Supply Chain Design – optimize network of

suppliers, plants, and distribution centers

• Collaborative Demand and Supply Planning

– develop an accurate forecast of customer
demand by sharing demand and supply
forecasts instantaneously across multiple
tiers

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SCM Execution Functions

• Materials Management – share accurate inventory
and procurement order information, ensure
materials required for production are available in
the right place at the right time, and reduce raw
material spending, procurement costs, safety stocks,
and raw material and finished goods inventory

• Collaborative Manufacturing – optimize plans and

schedules while considering resource, material, and
dependency constraints

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SCM Execution Functions

• Collaborative Fulfillment – commit to delivery dates
in real time, fulfill orders from all channels on time
with order management, transportation planning,
and vehicle scheduling, and support the entire
logistics process, including picking, packing,
shipping, and delivery in foreign countries

• Supply Chain Event Management – monitor every

stage of the supply chain process, from price
quotation to the moment the customer receives the
product, and receive alerts when problems arise

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SCM Execution Functions

• Supply Chain Performance Management –

report key measurements in the supply chain,
such as filling rates, order cycle times, and
capacity utilization

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SCM Benefits
• Faster, more accurate order processing

• Reductions in inventory levels

• Quicker times to market

• Lower transaction and material costs

• Strategic relationship with suppliers

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Causes of SCM Failures

• Lack of proper demand planning knowledge, tools and guidelines

• Inaccurate or overoptimistic demand forecasts

• Inaccurate production, inventory and other business data

provided by a company’s other information systems

• Lack of adequate collaboration among marketing, production,

and inventory management departments within a company

• Immature, incomplete or hard to implement SCM software tools

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Trends in SCM

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Case #4: Benefits & Challenges

of SCM
Benefits of SCM:
• Materials prices reduced

• Fewer employees needed to manage supply chain

• Order fulfillment time reduced

• Increased sales by reducing inventory shortages

• Enables new business partnerships

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Case #4: Benefits & Challenges

of SCM
Supplier reluctance:
• Cost of hardware and software

• Software can be confusing, contradictory and

not sculpted to their needs

• Impenetrable technical jargon

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Case #5: SCM Best Practices

Why is Wal-Mart’s IT infrastructure a key competitive
advantage?

• Wal-Mart invested early and heavily in cutting-edge

technology to identify and track sales on the individual
item level.

• The company is still pushing the limits of supply chain

management, searching for and supporting better
technology that promises to make its IT infrastructure
more efficient.

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Case #5: SCM Best Practices

The Wal-Mart Example:

• Opened sales and inventory databases to
suppliers
• Implemented a collaborative planning,
forecasting, and replenishment program
• JIT inventory program that reduced carrying
costs for Wal-Mart and its suppliers

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Case #5: SCM Best Practices

1. Do you agree that Wal-Mart is “the best

supply chain operator of all time”? Why or
why not?

2. What has Mattel learned from Wal-Mart?

How well are they applying it to their own
business? Explain your evaluation.

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Case #5: SCM Best Practices

3. What can other businesses learn from the

experiences of Wal-Mart and Mattel that
could improve their supply chain
performance? Use an example to illustrate
your answer.

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Summary

• Customer relationship management is a

cross-functional enterprise system that
integrates and automates many of the
customer-serving processes in sales,
marketing, and customer services that
interact with a company’s customers.

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Summary

• Enterprise resource planning is a cross-

functional enterprise system that integrates
and automates many of the internal business
processes of a company, particularly those
within the manufacturing, logistics,
distribution, accounting, finance, and human
resource functions of the business.

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Summary

• Supply chain management is a cross-

functional inter-enterprise system that
integrates and automates the network of
business processes and relationships between
a company and its suppliers, customers,
distributors, and other business partners.

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