Midterm Flashcards
What is an upstream process?
The things leading to the company (can include manufacturing, raw materials, and suppliers)
What is a downstream process?
The things that come after the company (directly consumer facing, retailers, etc.)
What are the three types of flows?
Product, Information, and Financial
What is a product flow?
Movement of raw materials
What is an information flow?
An exchange of data between supply chain partners
What is a financial flow?
Payments, credit card terms, etc.
Who are the general participants in a supply chain?
- Suppliers
- Manufacturers
- Distributors
- Retailers
- Consumers
What is an ERP?
Enterprise Resouce Planning
Core business processes
What is a MRP?
Materials Requirement Planning
Ensures raw materials are available
What is a MES?
Manufacturing Execution System
Tracks real-time production
What is a WMS?
Warehouse Management System
Controls warehouse operations
What is a TMS?
Transportation Management System
Optimizes logistics and transportation
What is an APS?
Advanced Planning System
Enhances supply chain planning
What are the two biggest ERP software providers?
SAP, Oracle
What are examples of smaller ERP providers?
NetSuite, Azure
What are the benefits of an ERP?
Data Integration
Best practices/processes built in
Consistency
Simplified IT landscape
Strategic considerations, competitive advantage
Supply chain collaboration
What does the SAP sales and distribution module do?
Records customer orders and schedules deliveries
Information like pricing, how and where to ship products, how the customer is to be billed
What does the SAP material management module do?
Manages acquisition of raw materials from suppliers
Purchasing operational activity
Inventory control functionality/cycle counts
What does the SAP production planning module do?
Shop floor control (e.g. production, order creation)
BOM maintenance/production execution
MRP plan replenishment of inventory
S&OP and demand planning
What does the SAP quality management module do?
Plans and records quality-control activities, such as product inspections and material certification
What does the SAP F1/Financial Accounting module do?
Records transactions in general ledger accounts, used for external reporting
What does the SAP controlling module do?
Used for internal management
Manufacturing and service costs assigned to products and to cost centers so company profitability can be analyzed
Supports managerial accounting and activity-based costing
What does the SAP plant maintenance module do?
Planning for preventative maintenance of plant machinery
Managing maintenance resources
What does the SAP asset management module do?
Manages fixed-asset purchases (plants and machinery & its related depreciation)
What does the SAP Human Resources module do?
Handles employee recruiting, hiring, training, payroll, etc.
What does the SAP project system module do?
Planning/control complex projects such as construction
Implemented in low volume, high complexity environments
What are the ERP cost drivers?
Size
Scope
Data
Consulting/Internal Staff ***
Customization
End-user readiness
Opportunity costs
What were the cost categories from the San Diego Schools case?
Hardware (servers, workstations, etc.)
Software (licenses, maintenance fees)
Network/Data Transport
Labor
What were the financial benefits from the San Diego Schools case?
Cost Savings (staff reductions, reduced overtime, reduced printing costs, reduced processing errors, reduced space costs)
Productivity Improvements (clerical staff, principals)
Soft Benefits (improved EE morale/productivity, improved recruiting, improved management access to data)
What are the ERP assessment criteria, as stated in the San Diego Schools case?
Product functionality, price, support, and organizational strength
What do the blue invoice sticky notes do in the paper game?
Invoice - deliver paper squares sold to customer as required by the sales order, amount paid in T+2 days
What do the white customer payments do in the paper game?
The customer payment to our business. 2 days after invoice was received
What do the pink purchase orders do in the paper game?
Purchase cost of one sheet of paper, interest to buy put on the pink post-it, supplier lead time is one day
What do the green sticky notes do in the paper game?
It’s the supplier payment. We must pay the supplier once we pick up the materials the day after the purchase order was received.
What are the steps in a Purchase-to-Pay (P2P) Process in SAP?
1) Create a purchase requisition
2) Convert the requisition into a purchase order
3) Create a Goods receipt
4) Create an invoice receipt
5) Post the outgoing Payment
What documents are in the Purchase-to-Pay (P2P) process in SAP?
Purchase requisitions
Purchase orders
Goods receipt
Invoice
Payment
What are the steps in the Order-to-Cash (OTC) process in SAP?
1) Create inquiry
2) Create sales order
3) Create delivery
4) Post Goods issue
5) Invoice customer
6) Receive payment from customer
What are the documents in the Order-to-Cash (OTC) process in SAP?
Inquiry
Sales Order
Delivery
Goods issue
Invoice
Payment receipt
What impact do Purchase-to-Pay (P2P) processes have in accounting?
Increased inventory
Increased accounts payable
Decreased cash
Increased COGS
What impact do Order-to-Cash (OTC) processes have in accounting?
Increased accounts receivable
Increased revenue
Decreased inventory
Increased cash
What documents have to match in a 3-way match in SAP?
Make sure that purchase orders, Goods receipt, and invoice match
Why do you need a 3-way match in SAP?
Ensures accuracy before payment
Prevents fraud and discrepancies
What documents can be exchanged with EDI?
Purchase orders (P2P) to a sales order entry (OTC)
Payment to vendor (P2P) to receipt of payment (OTC)
Ship materials (OTC) to Goods receipt (P2P)
Invoice customer (OTC) to invoice receipt (P2P)
What is an Electronic Data Interchange (EDI)?
A computer to computer transfoer of standard business documents that avoids costs and delays related to paper-based systems
Transmit POs, Invoices, and cash
What is the relationship between EDI and ERP?
EDI systems compliment ERP systems by transmitting standard business documents between supply chain trading partners.
How do EDI’s work?
1) Business process is defined with trading partner
2) After invoice is created in an ERP, the document is translated to EDI standard format
3) Invoice “envelope” electronically addressed to trading partner
4) EDI document sent to value-added network (VAN) “post office”
5) VAN opens envelope and translates data that can be read by their ERP
6) VAN routes document to manufacturer based on address
7) Manufacturer’s ERP system generates payable
What does the feedback loop look like between sellers and buyers using EDI?
Buyer - Purchase Order - Seller
Buyer - $$$ or ACH - Seller
Seller - Goods - Buyer
Seller - Invoice - Buyer
What is a blockchain?
A decentralized digital ledger technology that records transactions across multiple computers securely and transparently
In a SC: enhanced traceability, fraud prevention, smart contracts, real-time data sharing
What are the limitations of QuickBooks, as discussed in the Broadband-X case study?
-Lack of production management, so EE had to rely on manual
-Manual data entry (employees filled out daily activity sheets that the bookkeeper had to enter manually)
-Inventory tracking not automatically updated
- Disconnected systems/lack of integration
-Limited scalability
What did the digital landscape at Broadband-X look like prior to the ERP implementation?
QuickBooks used for accounting
Spreadsheets for production/inventory management
Manual communication between departments
No centralized/standardized systems for processes
What are the phases of ERP implementation?
Ex-ante evaluation
Configuration and rollout
Go-live
Onwards and upwards
What are the steps in the supplier selection of ERP implementation?
Long list of suppliers
RFI
Presentations
IP/ IP recommendations
ASP/ ASP recommendations
Short list
What are the different consulting strategies in ERP implementation?
Turnkey - consultants handle everything
DIY - internal employees handle everything
What are the different model building/process standardization models in ERP implementation?
One-instance: same ERP for all subsidiaries
Kernel (template): same template of ERP with modifications specific to each subsidiary
Multi-model: each subsidiary operates with different ERPs
What are the different types of go-live strategies in ERP implementation?
Big Bang
Go live by location, function, process, market, etc.
What are the methods of a functional fit analysis in ERP implementation?
Process replication
Process modification
Software modification
Exploration - find company with the best fit
What are the CSFs in risk analysis in ERP implementation?
Condition for achieving objectives
Top managment support, project champion, executive ownership, continued shareholder communications
Area of much academic research
What are the topics of risk in ERP implementation?
Cost overruns
Partial realization of benefits
No improvements in financial performance
Go-live operational problems
What are the methods of risk analysis in ERP implementation?
Risk identification
Risk assessment
Risk control: evasion, reduction, transfer, acceptance
What is the approach to risk analysis in ERP implementation?
Severity (uncontrolled) = P(uncontrolled) X Impact(uncontrollled)
Severity (controlled) = P (controlled) X Impact(controlled) + Cost of control
If S(c) < S(u), risk control is worthwhile
What is the approach of a cost-benefit analysis in ERP systems?
Timing of costs and benefits
Incorporate functional fit and risk analysis
NPV
What are the chronological steps of the ASAP implementation process?
Project preparation
Business blueprint
Realization
Final preparation
Go live/support
What is involved in the project preparation ASAP step?
Define project scope
Select and train implementation project team
Select consulting partner
Perform end-user readiness assessment
Perform risk analysis and ROI analysis
Establish project budget and project plan
What is involved in the business blueprint ASAP step?
Map as-is vs to-be processes
Business requirements are collected
Produce detailed description of how company intends to run its business
Guides the project team members in configuring the new ERP systems
Technical team determines how data will be transferred from legacy systems
What is involved in the realization ASAP step?
Project teams configure the ERP software
Developers program modifications/enhancements to ERP, custom reports, interfaces to/from non-ERP information systems
What is involved in the final preparation ASAP step?
Test critical business processes (unit testing - UT, integration testing - IT, user acceptance testing - UAT)
Establishes end-user support model
Train end users of system
Confirm go-live date
Detailed cut-over planning
What is involved in the go-live/support ASAP step?
“Cut-over” from legacy systems to ERP
Staffing/overtime should be increased one week before and one week after
Stabilization indicators should be defined/tracked
Monitoring system performace
What are examples of the strategic critical success factors (CSF)?
Top managemnet committment and support
Visioning and planning
Build a business case
Project champion
Implementation strategy and timeframe
Vanilla ERP
Project management
Change management
Management of cultural change
Why does Dell want an ERP?
to digitize the supply chain - it’s currently disconnected and lacking integration
What are the key challenges that Dell is experiencing?
Lack of unified digital strategy
Reliance on manual processes
Complex supply chain
Growing customer expectations
What was Dell’s transformation approach?
1) Transparency, predictive analytics, automation
2) Stakeholder-centric digital roadmap
3) Implemented digital tools - RPA, ML
What are the results of Dell’s ERP?
Improved inventory tracking/supplier coordination
Faster response times to supply chain disruptions
Reduced reliance on manual data entry/reporting
Increased transparency operations
What is Alibaba?
Started as an e-commerce company and evloved into a digital ecosystem integrating retail, finance, logistics and cloud computing
Surpassed WalMart in global sales and be came one of the world’s ost valuable technology firms
Entire business approach is centered around smart business
What are the key themes in the Alibaba article?
Building digital ecosystem
Smart business model
What is the impact of Alibaba on future businesses?
Rise of platform ecosystems
AI-driven decision-making
Competitive advantage through data
