Question

ERP Case Study:

Company information

CheeseCo is an international cheese and nutritional products company with annual sales approaching $2 billion. The company was established in 1967 and its development strategy is centered on high-growth areas in its three core business divisions – consumer foods, food ingredients and nutritionists. With headquarters in Toronto, CheeseCo employs 4,900 people across Canada and USA. The organization supplies cheese and nutritional food products through the major supermarket chains and through its website. Due to the perishable nature of CheeseCo’s core product, effective reporting is essential to staying ahead in this competitive environment. The Group is also currently building a nutritional facility in Mexico which it plans to open in 2025.

In recent years, CheeseCo has faced a number of business challenges. Lack of commonality exists between subdivisions and other sites, with each subdivision having different information technology (IT), information systems (IS) and business processes. A major concern is the lack of integration between its different functional areas, including sales and distribution, financial accounting and materials management, resulting in important information being locked within departments and not effectively shared or utilized across the organization. Many of the systems for storing and processing of daily business transactions were implemented nearly 15 years ago, are non-integrated and based on traditional file management techniques.

Many of the users find existing IT/IS systems outdated, cumbersome and highly inefficient. Staff find existing processes extremely laborious and would like an integrated system in place which would simplify the sales process. Furthermore, the lack of an effective process for receiving and processing customer sales, has led to instances whereby sales leads have been lost, as well as the inability to generate computerized sales orders and quotations. Additionally, customers have requested the need for more accurate delivery dates. Management find it extremely difficult to extract important information regarding sales and value a system which would allow them to simplify the sales order process.

With no solid platform to build on for future growth, as part of a major global IT change program, the company is considering implementing an ERP system. CheeseCo wants to introduce an ERP across its subdivisions and other sites to achieve a “newly formed” CheeseCo, with the aim of accomplishing system and process standardization across the entire group. More specifically, they would like a robust system allowing for the creation of new customers (including inquiries and quotations), create sales orders, check stock status and the ability to better handle its credit management functions. The finance/payment team have highlighted the need for a new system which would enable them to process invoices in a timely fashion, as well as create payments. All users have requested that, in terms of an ERP system, they would like an easy to use (apps based), modern interface, as well as improved mobile work capabilities.

Nevertheless, the company realizes that to successfully implement an ERP system requires patience and can be a costly endeavour. The company executive director, John Burns, is concerned that one of the biggest challenges is changing the existing organizational culture and structure. More specifically, the current atmosphere (lack of integration between departments) has led to a very insular environment, and a cultural orientation favouring departmentalism (silos mentality). As noted by John:

“to successfully take on an ERP system, an organization needs to change its corporate culture. Staff need to change their focus on their own job, to the whole organization. What they now do in their own area has impacts in places they may never have envisioned”.

The situation is further exacerbated by growing worries among middle managers and employees. Managers have expressed concerns that the movement to an integrated ERP system will bring major structural changes, particularly at the middle management level. During a recent company- wide meeting, employees were concerned that ERP might be used as a performance management tool, whereby ERP makes profits more measurable down to the departmental and individual level. Staff are concerned that the key focus may become on profit and individual performance.

QUESTION 1

1. Although John, executive director, sees the benefits of implementing an ERP system, he is unsure which specific ERP module(s) will be a top priority to address the current challenges facing CheeseCo. In no more than 200 words, advise John on which specific ERP modules should be implemented as a top priority to address the current challenges facing CheeseCo.

Notes for Question 1:

• Your answer should include up to two specific ERP modules.
• Use the information in the case study to support your answer.

Question 2

2. CheeseCo has asked you to conduct research/information gathering to help with the selection of an ERP software vendor. In no more than 400 words, recommend two vendors which CheeseCo could use to supply ERP software.

Notes for Question 2:

• For each vendor you recommend, you should include the following information in your answer a) justification of why you recommend the vendor and b) challenges the vendor might face working with CheeseCo.
• Use the information in the case study to support your answer.

Answer 1

QUESTION 1

ERP Modules :

1. Functional modules :

ERP software is made up of many software modules. Each ERP software mimics a major functional area of an organization. Common ERP modules include modules for product planning, parts and material purchasing, inventory control, product distribution, order tracking, finance, accounting, marketing, and HR. Organizations often selectively implement the ERPmodules that are both economically and technically feasible.

Newly formed cheeseco aims at accomplishing system and processes standardization across entire group.

2. Manufacturing and Logistics Modules

It consists of a group of applications for planning. Production, taking orders and delivering products to the customer.

The main sub system of material. Management modules are:

1. Prepurchasing activities

2. Purchasing

3. Vendor evaluation

4. Inventory management

5. Invoice verification and material inspection.

QUESTION 2

Recommending Vendors which CheeseCo could use to supply ERP software.

1. SAP : SAP business one is a business management ERP solution created for SMEs.SAP business one software offers affordable and easy to use industry specific solutions for manufacturing and distribution businesses. The product is popular for its cross functionalities, time management, minimized manual error and optimum utilization of resources.

Their main focus is on:

1.ease of use

2. Business processes

3.crystal reports and analytics

4.intergration and collaboration etc

2. Oracle :

It provides businesses in a wide variety of industries with the tools to automate and centralize processes across departments. This includes taks such as financial. Management, distribution, CRM and supply chain management. This solution is cloud based and is available whenever and whereever, as long as you have an internet connection. Additionaly this tool is customizable and has a relatively low cost of ownership due to its automated software maintenance. It provides real time data insights across workflows and includea the option to build dashboarda that are unique to your business.

I recommed SAP for the following reasons:

Their main focus is on:

1.ease of use

2. Business processes

3.crystal reports and analytics

4. Integration

Oracle also has their own features mentioned above under the head oracle

Challenges faced:

1. Lack of intergration between departments

2. Unsurity of the use of software (ERP)

3. Corporate culture

4. Staff management

5. risk of failure

6. Heavy cost, effort and time