Question

1. One benefit claimed by third-party logistics provider is that they can provide access to critical performance and operational data. From the supply chain information system perspective, what do you think these data could be? How these data may impact supply chain performance? Are these data really critical to a firm? Also, why can 3rd party logistics providers collect these data?

2. ERP system started in the 1990s and has quickly become a necessity for almost all companies. People claim that the ERP system has brought enormous benefits to organizations, from improving competition and efficiency to enhanced collaboration. This is the reason why almost all companies are working (or planning to work) with an ERP system.

However, the study has shown that the failure rate of the ERP system is significant. The failure rate ranges from 50% to 70% depends on different studies. If ERP is such a great system, people must have accumulated sufficient experience over decades of history. Why do you think there is still such a high failure rate?

Answer 1

Answer:

From the supply chain information system perspective, what do you think these data could be?

Third party logistics is also referred to as 3PL. They can provide access to the critical performance and operational data. From the supply chain information system perspective, these data could be:

1. 3PL has a very huge resource network which can prove to be beneficial for the company as far as the supply chain is concerned. Through this resource network, each processes of the supply chain can be implemented and executed more efficiently and in the most cost effective manner.

2. 3PL has a wide network of warehouses, technology, transportation and the agencies who conduct the necessary paper works, audits and billing. 3PL always stay updated with the latest technological developments and manufacturing developments.

3. 3PL always remain updated with the Operational data such as the information related to the external environment of the company and it includes data pertaining to the creditors, suppliers, customers and the competitors.

How these data may impact supply chain performance?

These data can be used to make the supply chain of the company to run in the most efficient manner. The data of suppliers available with 3PL can be used to order the raw material and other components related to the production at the least cost. This would reduce the cost of manufacturing and would help company in serving the product to the customer at the price less than its competitors thus providing the edge for the differentiated pricing strategy over the competitor.

The data of competitors available with 3PL can be used to know the latest technologies being used by them and the strategies being planned by them for selling their products to the customers. The data of the customers available with 3PL can be used for various purposes such as for knowing the demand of the customer, their tastes and the preferences, their behaviour towards a particular product while purchasing that product, selling the product to the customer, etc. The data of creditors can help the company in asking for the credits whenever it is in need of the working capital of the materials on the credit basis for a certain period of time.

Are these data really critical to a firm?

The data available with 3PL is critical to the firm as it is highly associated with the various functions of the supply chain and helps in the smooth management of the same. These data can sometime be used for the purpose of forecasting as well such as the data related to the technological advancement in the market and data pertaining to the customers and competitors and this data can act as a deciding variable while conducting the forecast.

why can 3rd party logistics providers collect these data?

Some of the 3PL deliberately collect these kinds of data which can be helpful for the other firms in taking the business decisions for their firm. These 3PL then sell this data to the firm so as to make the profit out of it. Some of the 3PL do not deliberately collect these kinds of data but because of their huge network and their extensive presence in the market, they are always updated with this kind of information and when this information are asked by the firms and if 3PL reveals these information, it becomes data for the firm.

If ERP is such a great system, people must have accumulated sufficient experience over decades of history. Why do you think there is still such a high failure rate?

ERP system has become a necessity for almost all companies. People claim that the ERP system has brought enormous benefits to organizations, from improving competition and efficiency to enhanced collaboration. However, the study has shown that the failure rate of the ERP system is significant.

The reasons that there is still such a high failure rate are because of the following reasons:

1. May companies have taken ERP software assuming that it will solve all of their business problems and without actually figuring out the goals that they are required to accomplish through the use of ERP system. They do not know what exactly they want to achieve from the ERP software and what are their priorities and how they will measure these priorities.

2. Most of the time the management of the organisation fails to provide the sufficient time for the management of the ERP system. While handling the ERP system, the management of the company should clearly define the expectation from the projects, provide the necessary resources required, providing time for planning and making strategies for the key business areas, etc.

3. In most of the cases the user of the ERP system is not completely knowledgeable. ERP implementation is a methodological process that involves the deployment of a project team, a project manager and the user of the ERP system. The user of the ERP system should have the complete knowledge of the various departments of the company such as the human resource department, finance department, marketing department, purchasing department, etc.

4. Intermittent and lack of communication between the various stakeholders of the company has also led to the failure of the ERP system.