EnterpriseResourcePlanning(ERP)systemsareintegraltothesuccessofmanybusinesses,
Introduction
EnterpriseResourcePlanning(ERP)systemsareintegraltothesuccessofmanybusinesses,
ERPsoftwareandsystemsareusedtoorganizeandcontrolallcriticalactivitiesinthe supplychain,manufacturing,services,finance,andotherorganizationalfunctions.
GuardianLockisaB2Bfirmthatmanufactureslocksandsecuritydoorlocksandhasaround$3millioninrevenuebutnoERPsystem.
GuardianLocksconductsitssourcifulfillmentment,andmanufacturingoperationsmanually,dependingprimarilyonpaper,phonecallstopersonnel,andtheutilizationofphysicalmethodstoguaranteethat goodsmovefromoneplacetoanother.
The implementation of an ERP system will link the operations into a single integrated process, allowing the organization to increase its efficiency.
CORE FUNCTIONS IN THE COMPANY
One of the primary objectives of a guardian lock is to sell locks to other companies (B2B). They obtain lock components, assemble the locks, and sell them to other businesses.
The company's operations are separated into five categories:
Design and product development - 6 employees (Directors, draughtsman, and tool room fitters)
Sales - 8 employees - Lock marketing to other businesses
General Administration - 2 typists/clerks working at the office
Finance Three finance clerks and the MD perform basic financial responsibilities.
Operations in production and warehousing include directors, works Managers, systems managers, supervisors, setters, operations, locksmiths, inspectors, and packers.
FACTORY SETTING
THE FULFILMENT PROCESS
The fulfillment process starts when a companyInquiries about the availability of the locks they want to buy. The sales department receives the inquiry and then produces a quotation before sending it back to the customer. The following client sends a purchase order to the sales department, which receives it and forwards it to the finance department for a credit check on the client. A sales order is prepared and sent to the warehouse manager for processing if the customer has excellent credit status.
The logistics department then sends the package to the customer after the warehouse department has finished packing and gathering the necessary quantities of the requested goods. The company confirms receipt of the goods and sends the payment within 30 days to the Finance department. The finance department then updates the company account and the fulfillment process ends. If the customer does not have good credit status. The customer is advised to make payment through alternative means.
THE PRODUCTION PROCESS
The production process begins with the sales order indicating a made-to-order product or engineer-to-order. The warehouse manager checks if all the parts to make the locks are available in the warehouse. if all parts are available the warehouse operatives begin the assembly of the locks. If the locks are not available. The manager sends a request to the finance department for the purchase of the parts from the external supplier. The components are made in-house in the press shops where Steels are fed into machines to make cases for the locks then passed to the Sub assembly where the locks are assembled. Pre-assembling some of the components are passed to Final assembly The final lock is put together and further passed to the key shop. The locks are finally sent to the warehouse for packaging and storage.
PROCUREMENT PROCESS
The warehouse manager creates a request to buy supplies to start the procurement process. He makes sure that there are sufficient supplies of all the products in stock. A request is sent to the production department by the manager when quantities drop below a certain level, they will send a purchase order to their vendor. Theordered material will be sent by the vendor in a shipment, which is received by the warehouse manager.
The receiving step involves verifying the contents of the shipment. It can also include other steps such as quality inspection and storing the material in the right locations. The vendor then sends a bill, or invoice, for the material shipped. This invoice is received by the finance department.
Process Maps
Guardian Lock processes its orders according to 3 main product types:
1. Make to Order
2. Make to Stock
3. Engineer to Order.
Guardian Locks business processes are illustrated in the following process diagrams using the 3 main product types.
Business Improvement
An enterprise system improves the efficiency and effectiveness of business processes by centralizing all data associated with the process in a single database that is accessible to all parties involved in the process's execution. The system also improves communication among those involved in the process. Because all of the data about the process is stored in a common database, an enterprise system can automate some of these steps in the process. In today's hyper-competitive global marketplace, companies cannot compete effectively if they must execute their business processes manually. Customers today expect instant visibility into the status of their order and next-day shipment, and companies must optimize their fulfillment process to meet these expectations.
Functional Capability of ERP
Below are examples of five functional areas that can be improved with the implementation of a modern ERP solution
Finance, Accounting, Payables, and Receivables
. All financial activity within your organization can benefit from an integrated ERP system. It enables the organization to successfully manage financials with a modern, integrated interface geared to higher levels of productivity and transparency.
Customer Service
Many ERP systems have an e-commerce functionality. Better data insights can in turn improve your customer service.
Supply Chain Management
Successfully refining the supply chain management function is the holy grail for manufacturing companies that deal with materials, inventory, assembly, and line personnel. ERP software can help you streamline your manufacturing processes domestically and internationally. When dealing with variations such as manufacturing compliance from country to country, currency fluctuations, and import/export laws, an ERP solution well-versed in supply chain management can be a valuable asset.
Order Processing
An order processing module within an ERP system is designed to help an organization better manage order entry, credit checking, shipping, sales analysis, and reporting. it provides the capability to manage inventory, shipping, and other fulfillment tasks.
Human Resources
ERP solutions with a human resources module can improve the management of staff system-wide.
Project Management
When activities such as billing, expense management, and human capital management must be accounted for and incorporated into your overall balance sheet, ERP solutions can play an important role in helping your organization run smoothly and accommodate when scalability is necessary.
Business Case
Executive Summary
Guardian lock uses a nonintegrated system in its operation which causes problems with accuracy and timeliness. This project aims to proffer solutions to the common setbacks faced by the company by implementing an ERP system in the organization.
Problems
Poor credit management
Poor customer service
Lack of proper accounting and financial management system
Inventory forecasting is difficult
Goals and objectives
Scalable to Future Growth
To include advanced supply chain logistics management
Improved Finance Integration
Consistent data and integrated data flow
Improved inventory controls
Improved CRM and SCM
Paperless
Real-time visibility
Cloud Vs On-Premise Software Comparison
Essentially, the fundamental difference betweencloudvson-premisesoftware is where it resides. On-premise software is installed locally, on your businesscomputers and servers, whereas cloud software is hosted on the vendors server and accessed via a web browser.
Dubbed better than on-premise due to its flexibility, reliability, and security, the cloud removes the hassle of maintaining and updating systems, allowing you to invest your time, money, and resources into fulfilling your core business strategies. Providing real-time access to systems and data from a variety of devices regardless of the location and with a guaranteed up-time of 99%
Cost
The budget for the project is 50,000 pounds
Price of License 20,000 pounds
Cost of systems 10,000 pounds
Training and consultancy- 15% of the budget
Operational cost-10,000 pounds
Rational for the ERP system
Strategic Rationale
The system will improve customer response time
Competitive Rational
With the implementation of the ERP system, guardian lock will gain a competitive advantage by responding to market changes quickly and proactively
Technology Rationale
One single database will be put in place to increase the visibility of all order statuses. The use of E-commerce will also help with the fast places/ordering of the locks by using an e-commerce website.
Business Process Rationale
Unnecessary business processes will be eliminated;
Critical Success factors
Critical success factors have been defined as "those few critical areas where things must go right for the business to flourish" The following factors will be put in place for the project to go well.
Strategic Tactical
Organizational The management will be carried along.
There will be effective change management in place
The business process will be re-engineered
A project manager will be recruited
There will be trust between the stakeholders and the consultants
All the fitters and other staff will be involved actively in the project
The staff and consultants will be dedicated
The project plan will be personalized
Adequate training will be given to the staff
The consultants will be used appropriately
The decision-makers will be empowered
Technological An implementation strategy and plan will be affected
There will be adequate ERP versions
There will be adequate Software Configuration
The legacy System will be known
System Selection and Implementation
ERP plays the role of integrating the external and internal management information across all departments within an organization. It utilizes integrated software that helps to automate information management activities (Turban et al. 2008, p. 319). ERP systems facilitate the flow of information across all departments within an organization and manage connections with external stakeholders such as customers and suppliers. There are many different forms of ERP systems that are designed to suit different types of companies. The following table presents 14 types of ERP systems that can be applied in the business process in Guardian Locks;
Source: Thin (2013, p. 78)
To come up with the most suitable ERP system for Guardian Locks, there is a need to eliminate systems that are not cloud-based and too expensive to implement in the short and long term. Guardian Locks has 81 staff including managers and directors. The company may not afford the one-time deployment of the ERP system. In consideration of those factors, there is a need to remove some ERPs from the list because they are expensive to implement (Thin, 2013, p. 78). Microsoft Dynamics and JD Edwards Enterprise One Systems are designed for a large number of users and may not be very suitable for Guardian Locks. The following table provides further analysis of the remaining three ERP systems to determine the best.
Cloud software will be preferred due to due to its flexibility, reliability, and security, the cloud removes the hassle of maintaining and updating systems, allowing us to invest your time, money, and resources into fulfilling other core business strategies. Providing real-time access to systems and daourrom a variety of devices regardless of the locate aand with a guaranteed up-time of 99%
Capability Dynamics 365 SAP S/4 HANA Oracle ERP Cloud
Cost Lowest cost Comparatively higher cost Highest cost amongst the three ERPs
Architecture Built from ground-up Built from ground-up Built by integrating several systems
Payback period Shortest Longest Comparatively short
Scalability Easily scalable Comparatively easy to scale Not easily scalable
Audience Medium and large businesses Medium to large businesses Medium to large businesses
Ease of use Exceptionally easy to use; very short learning curve. Complex GUI; steep learning curve. Slightly complex UI; long learning curve.
Implementation time Shortest implementation time. Comparatively short implementation. Longest implementation time due to development of custom modules.
Customization Easy to customize. Comparatively difficult to customize. Easy to customize.
Integration Seamless integration with Microsoft and non-Microsoft products. Offers only native integration. Seamless integration with Oracle and non-Oracle products.
Although Guardian Locks can deploy any of the four ERP systems, Microsoft Dynamics is the most suitable option when looking at the analysis from the table. It is designed in a way that helps to provide comprehensive enterprise management. Also, it can grow as the number of customers increases (Turban et al. 2008, p. 320).
Recommendation
In conclusion, Guardian Locks should consider implementing an ERP system within the organization. An ERP system will improve operations and help to prevent some of the company's problems. The main issue in the company is a delay in the manufacturing process. Such delays can be avoided with the help of an ERP system over stockingwill be eliminated as well. The ERP system will aid in improving customer relationship management, red cases o poor service or dissipate
Implementation Plan
PROJECT ROADMAP: TASKS AND MILESTONES
The sysdissipatingllation and implementation should take about 6 months.
The staffs will be trained and a change management technique will be put in place tostaffsure they accept the change
Gap analysis
Identified Problems in the Business Prtheysses
All company information is contained in various paper documents. If a manager needs information about the number of parts available in the store, he must manually retrieve and review the documents or physically count the parts in the store, which takes time and is prone to error.
- It is very difficult for customers to track their orders in Guardian Lock because there is no system to retrieve the status of the orders they place, which is a potential problem for the company. After all, the customer will not be satisfied with the service.
Lack of information can make costing and budgeting impossible for managers of those functions
The employee performance cant be tracked, the workers dont have a system to log and work so they can monitor their performance
Customers find it difficult to track their orders in Guardian Lock because there is no system in place to recall the status of the orders, which does not reflect well on the company.
lack of proper visibility of stock in the warehouse due to the lack of a system in place, increasing the likelihood of lock part shortages or overstockingof unnecessary parts
optimized production schedule, resulting in production process delays
There is a lack of integration between sales, manufacturing, and purchasing functions, making providing real-time information about customers difficult. When a business sends an order and what to know the status of their order. Its usually a difficult task, customers keep waiting on the phone for a response.
Lack of systems to handle the back-office processes like taking and fulfilling orders, managing inventory, calculating taxes, and tracking financials.
Inventory Forecasting is difficult because the manager just looks through to check the inventory level and orders for more locks. There might be a wastage of resources. Some parts will be overstocked.
Production department wastes time changing parts
Implementation approach
Based on the comparison below. The phased implementation method will be used because the installation of the different modules of the ERP will be rolled over different elements of the organization at different times
At the end of the project the SOP will be signed off
Recommendation
In conclusion, Guardian Locks shou,,,,,,,,,ld consider implementing an ERP system within the organization. An ERP system will improve operations and help to prevent some of the company's problems. The main issue in the company is a delay in the manufacturing process. Such delays can be avoided with the help of an ERP system. stockingwill be eliminated as well. The ERP system will aid in improving customer relationship management, reducing cases of poor service or dissipate.
References
Gaurav, A., 2019. 5 Functional Areas That an ERP System can Automate Routeget Technologies Limited. [online] Routeget Technologies - Microsoft Gold Partner for Dynamics 365 ERP, CRM, Retail, AI, BI, RPA Bots, provides Business Consulting, Software Development, Implementation, and Support Services. Available at: <https://www.routeget.com/business-consulting/5-functional-areas-that-an-erp-system-can-automate> [Accessed 1 July 2022].
Monk, E. and Wagner, B., 2011. concepts in enterprise resource planning. 4th ed.
Nestell, J. and Olson, D., 2017. Successful ERP systems.
Magal, S. and Word, J., 2009. Essentials of business processes and information systems.
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