ERP Solution for Arkwright.docx

1、ERP Solution for ArkwrightArkwrights ERP SolutionEnterprise Resource PlanningThe consultancy team has been hired by United Holdings to produce a management report, which will provide to advice on how Arkwrights performance might be significantly enhanced through the introduction of a SAP package.5/1

2、6/2012ContentsIntroduction 3Situation Analysis 4Company background 4Internal problems 4Finance Resource Management 4Material Resources Planning 4Customer Relationship Management 5Human Resource Management 5Supply Chain Management 6External environment 6Competitors in the tablet industry 7Treats of t

3、he new entrants 7Treats of substitutes 7The barging power of customers 7The bargaining power of suppliers 7Project Goals 7 Decrease inventory costs 8 Increase visibility 8 Improve controllability of supply chain 8 Increase flexibility 8 Decrease operation cost 8 Increase customer satisfaction 8 Incr

4、ease availability of information 8 Increase profit 8Benefits of ERP 8Improved supply chain management (SAP SCM) 9Systematic production planning 9Optimized inventory management 9More efficient purchasing 10Improved material resources planning (SAP MRP) 10Better CRM, FRM, HRM 10Priorities for Computer

5、isation 11Production Planning (PP) 11Creating routing and production orders 11Product costing 12Display automatic goods movement and relevant accounting documents 12Material Management (MM) 13Vendor Master Records 13Purchasing info records 14Controlling (CO) 14Creating cost centre 15Creating activit

6、y types 16Creating Cost Centre Group for the Tablet Assessment 16Cost centre report 16Sales and distributions (SD) 17Customer master record 18Sales price 18Sales order 19Remaining targets for computerisation 19Financial Accounting 19Warehouse Management (WM) 19Customer relationship management (CRM)

7、20Human Resource Management (HRM) 20Project Plan 20Establishment of knowledge management 20Change in business process 21Training 22Other key factors to successful ERP system implementation 22Conclusion 23References 25IntroductionOur consultancy team has been entrusted by United Holdings to help Arkw

8、right improving its performance through the replacement of all existing systems with a fully integrated enterprise resource planning (ERP) system. ERP is defined as “a method for the effective planning and control of all resources needed to take, make, ship, and account for customer orders in a manu

9、facturing, distribution, or service company” (Khalid, 2003:494). A fully integrated and global ERP system was created by the company named SAP (Simha and Word, 2009). The software, developed by SAP, is now widely used by over 50,000 of the worlds best-managed companies (Simha and Word, 2009).In the

10、current competitive business world, companies do everything possible to satisfy customers faster and less expensively than their competitors. To do so, the key is to have advanced and efficient information systems. Effective information systems can significantly improve management of business proces

11、ses. Once companies have efficient business processes, they can compete successfully with other practices in the marketplace. ERP has a tremendous impact on a companys management by serving as a company-wide computing environment that includes a database that is shared by all functional departments

12、(Monk and Wagner, 2009). It offers process efficient, technological, strategic, financial, and organisational benefits over different and various computing systems (David, 2004).In practice, the most common ERP modules include Finance Resource Management (FRM), Material Resource Planning (MRP), Cust

13、omer Relationship Management (CRM), Human Resource management (HRM), and Supply Chain Management, as shown in Figure1.Figure 1: Critical Components of an ERP System However, ERP packages indicate a certain way of doing business, and the users are required to follow that way of doing things. Due to t

14、he constraints inherent in ERP, some of a businesss operations and some segments of its operations might not be a good match with it. Therefore, it is necessary for an organisation to investigate its own business strategy, organisational structure, corporate culture, and operation before choosing an

15、 ERP approach. Actually, most companies study their real needs and then entrust an external team of software consultants to help select the right software suppliers and the best way to implementing ERP (Monk and Wagner, 2009).Situation AnalysisAccording to the theories that mentioned above, it is im

16、portant to analysis the internal problems and external market environment that Joshua Arkwright & Sons is currently experiencing. Thus, we can provide a more complete solution for the company.Company background Joshua Arkwright & Sons, a medium sized, family run and British-based manufacturer of tab

17、let computer, was acquired by United Holdings PLC in September of last year. It was initially founded by Joshua Arkwright and his sons in 1980. After nearly twenty years development, Joshua Arkwright & Sons has built a solid reputation in tablet PC industry, based largely on its fashionable design a

18、nd high quality products. It is worth mentioning that Arkwright first introduce the touch screen technology into tablet PC. By the end of 2011, Arkwright had 200 full-time employees, two plants and three direct-sale stores located in London, Birmingham and Manchester. The average turnover of the com

19、pany is approximately 25 million pounds.Internal problemsCurrently, the companys management has a range of issues such as the accounts receivable problem in financial management; poor communication between different departments; inefficient production plan and so on. However, one of the biggest prob

20、lems is the management of supply chain. Finance Resource ManagementActually, Arkwrights products are still much in demand in the marketplace owed to their high quality. However, the finances of the company had been degrading in the past five years. An urgent need involved a severe cash flow problem.

21、 The company had developed a serious accounts receivable collection problem due largely to weak control on credits. Arkwright usually allows the selling to small or medium sized corporate clients on credits. However, some of the companies will default on payments because of their own financial matte

22、rs. And as the inefficient exchange of information between the sales department and accounting department, these customers still can get the products on credits. Continuously for a long time hence, these bad debts will affect companys daily operation. Moreover, the company has been unable to effecti

23、vely control costs, primarily because their invoicing procedures, budget planning and debtor control have all been ineffective. Material Resources PlanningThe bill of materials (BOM) for Arkwrights tablet PC is illustrated in Figure 2. It can be seen that the main components of one finished tablet P

24、C include a touchscreen and an integrated motherboard which contains a graphics card and a wireless network card. Although Arkwright had made the complete routing towards computerisation, most of their systems have been assigned and built in a piecemeal fashion, and many are now inefficient and out-

25、dated. Therefore, the configured working plan of the company is backward and ineffectual. More specifically, they have been unable to sufficiently flexible to respond, at short notice, to adjust their production plans, either in terms of the mix of products required or the level of production for an

26、 order. Indeed, the production controllers of Arkwright have found that it is difficult to change the production mix, as it requires a switch from one set of design documents / bill of materials / production processes, to another, at very short notice. Poor communication and coordination among funct

27、ions that frequently characterizes in a manual environment, make the process more problematic if BOM changes.Figure 2: The Bill of Materials of Tablet PCCustomer Relationship ManagementIn practice, much of the focus and attention of Arkwright has been related to the topic of product flow, with signi

28、ficant concern for matters such as design, technology and quality. Its supply chains typically begin at the point of manufacture and end with the sale of product to consumers. Thus, Arkwright & Sons is, to some degree, the manufacturer who is far away from customer market or the end user (Coyle et a

29、l, 2003). Briefly, the company had a poor performance in customer relationship management and neglected the importance of customer service.Human Resource ManagementGenerally, HR needs detailed information or data from the other departments to do its job accurately (Monk and Wagner, 2009). However, t

30、he HR department of Arkwright always lack of accurate and timely data for management use due to the out-dated and inefficient computer system. Particularly, they have not been able establish a database of skills required to do particular jobs and the prevailing pay rates. Sometimes, they do not know

31、 what skills are needed to perform a particular job and how much the company can afford to pay employees. Also, the company has a higher employee turnover because of a lower employee satisfaction rate. They rarely concern staffs needs.Supply Chain ManagementProduction PlanningIn general, the aim of

32、a production plan is to arrange production economically, so that the company can deliver merchandises to customers by the promised shipment dates in a most cost efficient way (Monk and Wagner, 2009). However, there are some communication breakdowns exist between Arkwrights sales department and production department for a long time. On one hand, Arkwrights marketing and sales personnel do not share information with production personnel; on the other hand, the companys daily prod