Proposal to Implement Erp

Topics: Supply chain management, Strategic management, Implementation Pages: 6 (1617 words) Published: August 12, 2007
Project Proposal Sheet
HANA KIMI CO. would like to adopt an online Supply Chain Management System (SCM) whereby the customers may buy company's products online via company's website and able to track the status of the order including the availability of the stocks by integrating the Online Sales System with the company's Inventory, Manufacturing and Production System.

2.0Type of Project
Revenue Generating

Cost Savings

3.0Type of System
The implementation of the online SCM will involve the operational level only Vertical:
The following functions will be integrated:
Manufacturing and Production System
Sales and Marketing System
Inventory System
4.0Business Imperative
To perfectly match the supply side activities of procurement, production planning, distribution planning, production allocation, warehouse planning, inventory planning and so forth with the demand side activities of incoming orders and forecasts so that all demands are met with the least cost and most convenience, and as the initial step for the implementation of Enterprise Resource System (ERP).

The online SCM system and ERP support various business strategies for competitive advantage over other companies, among others: Support business strategy, and provide E-Business benefits.

5.1Support Business Strategy

At the business level, this system helps the company to:

•Reduce operating costs
The system attempts to integrate business processes across departments onto a single enterprise-wide information system. The major benefits are improved coordination across functional departments and increased efficiencies of doing business. The immediate benefit from implementing ERP systems we can expect is reduced operating costs, such as lower inventory control cost, lower production costs, lower marketing costs and lower help desk support costs.

•Differentiate products and services
The company may stand different from other companies which do not offer the same products and services.

•Serve new markets
By going online, the company would attract new market segments who are the frequent users of the internet or those who prefer online shopping.

•Lock in customers and suppliers
By using efficient customer response and supply chain application.

At the firm level, the system can be used to:
•Achieve new efficiencies.
•Enhance services by tying together the operations of separate business units. •Promote sharing of knowledge across business units.

At the industry level, this system will:
•Promote competitive advantage by facilitating cooperation with other firms. •Creating avenue for sharing information, exchanging transactions or coordinating activities.

Sustainable Competitive Advantage through e-Commerce can be supported by the Porter's Five Forces Analysis and Value Chain Analysis.

6.1Porter's Five Forces Analysis
As described by Porter's Competitive Forces Model, there are five important forces that determine competitive power in a situation. These are:

Supplier Power
Here, we assess how easy it is for suppliers to affect prices or in other words, to drive up the price. The power over prices normally driven by the number of suppliers that we have, the quality and uniqueness level of their products or services, their strength and control over the business and the cost of switching from one to another. The lesser the supplier numbers we have means the more suppliers' help we need, therefore the more powerful they will be over the business. Hence, it is rather important to keep up suitable suppliers and to maintain a good relationship with each one of them.

Buyer Power
As contradict to suppliers, here is where we assess how easy it is for our buyers to drive down the prices. Again, this is driven by the number of buyers, the importance of each buyer to the business, the cost to them for...
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