Erp Helps Productivity at Northern Digital

Case athletic field 7. 1. ERP Helps Productivity at Northern Digital Inc. forefront 1. For a midget company like NDI, why is an ERP conk out than SCM applications? Answer ERP supports internal go forth chemical chain within an enterprise, while SCM applications support just certain bankrupt of internal provide chain. Therefore, for small companies like NDI, its more economical and effective to implement one dust, namely ERP, instead of more SCM establishments. Further, ERP softw argon product support several functionalities for come forth chain management, and small companies like NDI could film which functionalities they would like to implement, i. e. to support by IT advantages.Also, unlike SCM applications, ERP system of newfangled generation provides new opportunities for enterprises in (near) future to connect to their railway line partners, to integrate new functionalities (open ERP), to use Internet capabilities, to integrate with CRM solutions, etc. In practi cal sense, forethought/servicing and training for one ERP- softw ar instead of several SCMs- is better for NDI in financial and duration sense. Finally, kind of manufacturing (high-tech) within NDI conk out considers in effect(p) supply chain management, with high turnover of assets and inventory, so as precise and efficient production and inventory preparedness.Question 2. Identify the supply chain segments that the ERP supports be specific. Answer In the fact of NDI enterprise, implemented ERP system would support those activities which sired greatest be in previous period, putting node satisfaction at risk and making internal moral decreasing. Also, the ERP supports the segments in NDI as well as its environment. First, ERP optimizes the production processes in NDI including taking into line the demand of its employees. Second, ERP contributes to better forecasting of gets and, additionally, better processing of their coiffures.Third, ERP efficiently coordinates upriver activities between NDI and suppliers. In the company, the implementation the ERP results shine of be and join on of taxation. In detail, using the ERP software amends the ability of NDI. Providing randomness for the demand forecasts of the products helps to decrease inventory. Therefore, in NDI case, revenue increased from 10 to 20 million with little increase in inventory value. Additionally, managing the processes of the company more efficiently increases separate capacity. dissolvent is an increase of revenue due higher ordered quantities.The better planning doubles the turnover of inventory, i. e. NDIs automated inventory management achieved instead of 2 now 4 turnovers of inventory per year. At the side of the client, having the opportunity for a better forecast of the demand and increasing the efficiency of the company, results to squinch the order cycle. This ensures the customers better and quicker service connected with reducing leadership times and on -time deliveries. Therefore, supported by ERP production control system, NDI overcomed its order cycle time for flagships product from 4 months to 4 weeks.This also contributes to utility of customers relationships. At the side of the suppliers, knowing the demand of customers helps NDI to forecast its own demand for existent. ERP allows them to make orders to the suppliers on time and to avoid bottleneck caused by physical lack. Additionally, optimization of the processes in the company makes it possible to forecast the need for labour. Implementing ERP decreases the address in the company and increases its advantageousness. Additionally, it improves the relationship between the smashed and it customers and suppliers.This ensures loyalty in the future relations. Question 3. Relates this case to Porters value chain and to its competitive model (Appendix 1A). Show the ERP contribution. Answer The Porters warring Model describes five movers, which endanger the profitability o f NDI The first factor is nemesis of entry of new competitors. Main barriers for new companies to enter the market are economies of scale, product differentiation, brand identity, cost advantages, etc. Therefore, implementing ERP NDI has increased the overall efficiency of the company. In this way, the production costs fall down.Additionally, it increases order quantities, which decreases production costs per unit. These facts ensure costs advantages compared with other companies in the same application. Second factor is the bargaining power of suppliers. The fact that the ERP system allows NDI to forecast better its demand contributes to a precise forecast for material. This ensures on-time deliveries. On the other hand, the increase of ordered quantities affects increase in the ordered quantity of materials. This fact ensures lower prices for material. The triad point is the bargaining power of customers.The software improves the relationship with the customers. The profits of the buyers are proving aft(prenominal) sales information, on-time deliveries. Additionally, the satisfied customers increase their orders. As a result, the revenue of NDI increases. Forth is the threat of substitute products or services. The use of ERP provides NDI with information slightly sales ensures communication with customers and gives information somewhat their needs. Good relations with customers decrease the probability that customers will prefer substitutes. Fifth, the rivalry among existing forms in the industry endangers the companys profitability.Producing efficiently ensures the firm a head horizon in front of its competitors. Delivering on time their orders gives an advantage to NDI. Taking care of the customers relationship with help of ERP creates loyalty of the customers. Testing the quality on any production step ensures the customers the high quality products. The Porters honour Chain Model is divided into two split Primary activities spend a penny good s or services for which customers pay. They begin with the input of materials, through production, sales and marketing, and after sales service. The ERP system provides information to NDI in each of these steps.ERP ensures on time deliveries due to collaboration with vendors also, it increases the efficiency of using the resources of NDI. Quality control during every(prenominal) process guarantees for high quality. Collaboration on side of the customers provides information for their needs and past orders. Finally, ERP supports the after sales services. Support activities provide support to the NDIs primary activities. Support activity is for example the procurement. ERP helps collaboration with vendors. Also, ERP presents a alike(p) system for the whole NDI system, and it supports information flows from the sales department to the accountings department.In supports, also, the merciful resource management department with detail forecast for the needs of labour. Question 4. Enter intuitivemfg. com and report on capabilities of the companys ERP product. Answer The a priori ERP product has a goal to increase the profitability of a company. transcendent ERP software achieves this goal by (1) up the productivity and reducing the costs (2) increasing satisfaction of customers (3) supporting better decision making and, finally, (4) improving the overall IT infrastructure. First, the product reduces the needed manual work of the employees.Avoiding this process we reduce the data entry and errors. It delivers visible reports, which summarise the information and provides data for the new situation in the company. In this way, it is ease to indicate problems before it is excessively late. The software shows bottleneck before they occur. Thus, we could increase the throughput and make more efficient schedules. ERP provides quickly information about future need, which can be provided to suppliers in a minute. The process reduces significantly lead times and avoids bottlenecks. Visualisation of material report and collaboration with vendors improves on time deliveries.We can save cost with better forecast of our demands and providing this information to our suppliers. This information gives us the opportunity to produce just-in-time. Thus, we can reduce our inventory and save costs. The increase of our efficiency increases the order capacity and revenue. Second, the software helps company to satisfy its customers. We easily get information about the history of every customer from the system. Many process connected with providing information to the customers can be automated, which improves communications. ERP allows the company to access information about orders through Internet.Inspection of all processes improves the quality of products, which contributes to satisfaction of customers. The system offers an after sales support to customers. It provide information if the firm can set up its orders and calculates the feasible dates to finish th e production of the order. Third, ERP provides visualisation of the information of the company. Many indicators, which are needed to monitor the business, are calculated automatically. Thus, critical elements in the firm are presented. The software provides the needed information to make the optimal decisions.Forth, the system combines the information of the company in one central system and standardises the process. In this way, the firm saves money by the efficient use of its recourses. In conclusion, ERP improves the profitability of the company. It contributes to the improvement of the relationship of the customers and allows using the resources more efficiently. Question 5. Relate this case to business planning and strategy. Answer Using existing technology, NDI has recognised business planning problems in achieving efficient product/order life cycle, and delivering its products to customer in satisfied way.The demand for NDI products was growing, but existing technology wasnt able to respond to new environment, i. e. market circumstances. NDI recognised forecasting capabilities -of marketing department- as important cause for recorded missed sales and poor people inventory management. Therefore, needed raw materials werent in place for demanded products by customer, and customer had to wait too long, starting even to return back shipments. Pressed by higher demands from market, NDI determined produce as main business strategy, and forecasting and planning segments of internal value chain as key support for chosen strategy.In other words, forecasting and planning segments of value chain were assigned as most beneficial parts for IT support towards more effective and efficient production process of growth strategy. Implemented ERP has supported whole NDI production process and its control, along with subaltern activities, but stressed capabilities of Material Requirements Planning and Forecasting modules necessary for fructify prediction of future de mand and, therefore, better raw material supply and inventory management. In general, ERP support NDIs business data compendium and manipulation, i. . data management, and subsequent data mining and optimization of production processes towards great revenue, i. e. decrease production costs. Finally, defining long-term strategic company goals and strategy, NDI managed to improve its own operation using IT support for right production functions, adjust directly and successfully corporate business strategy with IT strategy. Now, mobilising human resources, as the greatest wealth of an organisation, NDI could now plan more radical strategy towards achieving competitive or lock in- position within own industry cluster.