QUESTION BANK

DEPARTMENT MBA - INTEGRATED

SEMESTER 9

TITLE OF THE PAPER ENTERPRISE RESOURCE PLANNING

SUBJECT CODE 17CMBF91

SECTION – A (5 MARKS)

UNIT- I

1. Predict the reasons for growth of ERP

2. Outline the advantages of ERP Software.
3. Outline the business modeling in ERP.
4. Determine the limitations of ERP.
5. Predict the benefits of ERP.
6. Determine the term ERP.
7. Discuss the term enterprise.
8. Complete the reason for growth of ERP market.
9. Outline the overview of ERP.
10. Discuss the term enterprise.
11. Associate the different modules significance in ERP.
12. Summarize the ERP in present Indian Scenario.
13. Determine the characteristics of ERP.
14. Determine the tangible and intangible benefits of ERP.
15. Articulate ERP concept.

UNIT- II

16. Summarize the phases of BPR.

17. Infer the meaning of BPR.
 18. Comment the reason for implementing business process.
19. Determine the term Enterprise Application Integration (EAI).
20. Summarize the tips to overcome the limitations of ERP.
21. Implement Re-engineering process with example.
22. Summarize the different tips for End user training of ERP in detail.
23. Summarize the important aspects of ERP training.
24. Associate business function and business process with diagram.
25. Sketch the role of enterprise in business.
26. Display the data model and its relationship with the real world.
27. Relate cross functional nature of business process.
28. Express the challenges faced in reengineering process.
29. Summarize the five keys to successful reengineering?
30. Infer the meaning of EIS.

UNIT- III

31. Comment the reason for implementing MIS.

32. Summarize the history of SCM.
33. Outline the different phases of BPR.
34. Comment the reason for implementing DSS.
35. Associate the SCM processes and participants.
36. Determine the Pros and Cons of EIS.
37. Comment the reason for implementing EIS.
38. Determine the types of DSS.
39. Comment the reason for implementing SCM.
40. Complete integration of ERP, supply chain, and customer relationship applications.
41. Predict the components of the e-business supply chain.
42. Infer the meaning of is MIS?
43. Express the ERP related technologies.
44. Outline the data warehouse importance.
45. Infer the meaning of GIS.
UNIT- IV

46. Summarize top ten ERP packages for manufacturing industry.

47. Outline the ERP modules.
48. Summarize any ten sub systems of human resource management module.
49. Outline the overview of Baan Company.
50. Determine the Oracle Corporation.
51. Complete a comparative assessment and selection of ERP packages and modules.
52. Determine the warehouse management system in ERP
53. Comment on leading ERP vendor SAP AG.
54. Predict the benefit of people soft.
55. Infer the meaning of JD Edwards.
56. Summarize top ten ERP packages for maintenance management.
57. Determine the ERP vendors.
58. Complete SAP products with examples.
59. Express Microsoft dynamics.
60. Comment on QAD.

UNIT- V

61. Outline the different phases of ERP implantation.

62. Predict any 15 vendors for ERP small business.
63. Articulate pre-evaluation screening in ERP.
64. Sketch the lessons that can be learned from the post-implementation review.
65. Examine gap analysis in ERP.
66. Determine the cost associate with ERP training
67. Sketch the key risks of ERP implementation.
68. Sketch 10 success factors of ERP implementation
69. Explain the requirements elicitation process with the help of a diagram.
70. List out 10 golden rules for choosing an ERP package system.
71. What are post-implementation activities?
72. What are the post-go-live activities?
73. Predict any 10 expectations of post ERP implementation.
 74. Illustrate why ERP implementation become failure.
75. List out the major steps identified to implement ERP applications.

SECTION – B (10 MARKS)

UNIT- I

76. Explain the evolution of ERP in detail with a diagram.

77. Illustrate the ERP drivers and its key characteristics.
78. Discuss the scenario and justification of ERP in India
79. Defend the differences between MRP, MRP II and ERP.
80. Organize the common ERP myths.
81. Illustrate the history of ERP.
82. Appraise why is ERP important to a company?
83. Discuss the major business problems faced by an enterprise due to the unavailability of
ERP Solution.
84. Assess the importance of ERP Implementation in business
85. Organize the selection criteria of ERP software.

UNIT- II

86. Explain the EIS in detail.

87. Investigate the various ERP Market TIERS.
88. Discuss the overview of ERP software solutions for medium and large enterprises
89. Explain in detail the principles of BPR with suitable examples.
90. Describe Enterprise Architecture Lifecycle in detail with a diagram.
91. Assess the benefits of Enterprise architecture. Explain in detail.
92. Determine the benefits of business process mapping and modelling. Explain in detail.
93. Explain the different phases of BPR.
94. Organize the guidelines for maximizing chance for BPR success
95. Illustrate OLAP in detail.
UNIT- III

96. Discuss supply chain business process integration with ERP.

97. Categorize the various components of EIS with a digram and suitable examples.
98. Determine DSS and explain how is it different from MIS.
99. Explain Business Process Reengineering with examples.
100. Explain the characteristics of business processes reengineering cycle.
101. Investigate the ERP and related technologies.
102. Describe Supply Chain Management and its process?
103. Assess the various types of DSS? Explain in detail with suitable examples.
104. Illustrate the improvements that happened in the SCM with ERP.
105. Compare MIS and DSS.

UNIT- IV
106. Investigate the various functional modules of ERP.
107. Investigate the various modules of SAP – ERP.
108. Explain the plant maintenance module of ERP.
109. Explain the quality management module of ERP.
110. Explain the material management module of ERP.
111. Appraise the comparative assessment and selection of ERP packages & modules.
112. Defend how do plant maintenance module help in achieving competitiveness?
113. Illustrate the leading ERP vendors Like SAP, Oracle and their strength and
weakness.
114. Appraise the main factors to be evaluated while going for an ERP?
115. Discuss the different ERP modules and its specific coverage of business.

UNIT- V

116. Examine the selection criteria of ERP package.

117. Explain the various change management strategies adopted by companies for an
ERP implementation.
118. Categorize the different types of ERP vendors.
119. Discuss the ERP implementation life cycle with diagram.
120. Explain the success and failure factors of ERP.
121. Compare various ERP system packages available in market. Which one occupies
the top most position and why?
122. Illustrate the persons involved in ERP implementation.
123. Defend the technological, operational, and business reasons for implementing
ERP.
124. Explain Organization of the ERP implementation project with diagram.
125. Illustrate the main pre-implementation tasks that should be performed.

SECTION – C - 20 MARKS

CASE STUDY
1. A Company has proved its dominance for long years in selling Italian made shoes and
markets the products in the entire gulf region. It has its headquarter in Dubai, UAE and
the other branches are located in Doha, Qatar as well as in Muscat, Oman. Taking the
advantage of powerful internet connectivity, the company has decided to create web
stores. It represents the classic e-retailer case of procuring and shelving products for
resale to both online and telephone customers.

The shoe-marketing company was in need of an efficient solution to manage the huge
volume of contact details, transactional data related to purchase, sales and shipments
generated by their successful web stores. This is required to enable controls, get the better
margins and hence, to increase the profitability.

Question:
Recommend the company for implementing the apt modules of ERP.

2. IKEA Operations Management

Love it or hate it, IKEA is the most successful furniture retailer ever. With 276 stores in
36 countries, they have managed to develop their own special way of selling furniture.
Their stores’ layout means customers often spend two hours in the store – far longer than
in rival furniture retailers. IKEA’s philosophy goes back to the original business, started
in the 1950s in Sweden by Ingvar Kamprad. He built a showroom on the outskirts of
Stockholm where land was cheap and simply displayed suppliers’ furniture as it would be
in a domestic setting. Increasing sales soon allowed IKEA to start ordering its own self-
designed products from local manufacturers. But it was innovation in its operations that
dramatically reduced its selling costs. These included the idea of selling furniture as self-
assembly flat packs, which reduced production and transport costs, and its ‘showroom-
warehouse’ concept, which required customers to pick the furniture up themselves from
the warehouse (which reduced retailing costs). Both of these operating principles are still
the basis of IKEA’s retail operations process today.
Stores are designed to facilitate the smooth flow of customers, from parking, moving
through the store itself, to ordering and picking up goods. At the entrance to each store
large notice boards provide advice to shoppers. For young children, there is a supervised
children’s play area, a small cinema, and a parent and baby room so parents can leave
their children in the supervised play area for a time. Parents are recalled via the
loudspeaker system if the child has any problems. IKEA ‘allow customers to make up
their minds in their own time’ but ‘information points’ have staff who can help. All
furniture carries a ticket with a code number which indicates its location in the
warehouse. (For larger items customers go to the information desks for assistance.) There
is also an area where smaller items are displayed, and can be picked directly. Customers
then pass through the warehouse where they pick up the items viewed in the showroom.
Finally, customers pay at the checkouts, where a ramped conveyor belt moves purchases
up to the checkout staff. The exit area has service points, and a loading area that allows
customers to bring their cars from the car park and load their purchases. Behind the
public face of IKEA’s huge stores is a complex worldwide network of suppliers, 1,300
direct suppliers, about 10,000 sub-suppliers, and wholesale and transport operations,
including 26 distribution centres. This supply network is vitally important to IKEA. From
purchasing raw materials, right through to finished products arriving in its customers’
homes, IKEA relies on close partnerships with its suppliers to achieve both ongoing
supply efficiency and new product development. However, IKEA closely controls all
supply and development activities from IKEA’s hometown of Älmhult in Sweden. But
 success brings its own problems and some customers became increasingly frustrated with
overcrowding and long waiting times.
IKEA spokeswoman Nicki Craddock said: ‘We know people love our products but hate
our shopping experience. We are being told that by customers every day, so we can’t
afford not to make changes. We realized a lot of people took offence at being herded like
sheep on the long route around stores. Now if you know what you are looking for and just
want to get in, grab it and get out, you can.’
Questions:
1. Justify implementing an ERP package can solve this issue. ‘Substantiate your views.
2. Recommend the ‘best method for ERP implementation within IKEA?
How is this different from the ‘enterprise Applications? Explain in detail with suitable
examples.

3. Currently the organization has an ERP set up. It would like to enhance or extend it to the
next level in order to achieve an excellence in the operations.Construction Enterprise
Company (CEC) ltd. is located in northern part of India. The company was established in
1932 under the leadership of Mr.Marukh Irani. This company is tied up with many well
known global partners either to form the joint ventures or in the form of doing subcontracting
work for them or to source the technical knowledge.CEC has many concurrent high value
projects across in India and in some part of Middle Ease and Africa. The company is
diversified in the construction business and has established the operations ranging from
marine to transportation and tunneling works. Recently, the company has tied up with mega
real estate enterprise to enter into reality sector.

The current turnover of the organization is Rs. 5900 crore. Around 3000 people are working
in this organization. The company is not yet listed on any of the stock exchanges and is a
closely held organization.

Current ERP Systems

Organization had successfully implemented SAP /R3 in the year 2009 with the following
modules:
FI/CO : Finance and costing to cover the areas related to general ledger, accounts payable
and receivable, cash management, bank reconciliation and costing
MM: Materials covering end to end procurement and inventory activities
PS: Project systems related to project budgets, entering the daily progress reports, defining
sales and distribution to handle client billing
SD: Sales and distribution to handle client billing
PM: This is to ensure plant maintenance
HR: To cover end to end cycle related to HR activities, namely, recruitment, employee life
cycle etc.

Problem
The organization had streamlined its business processes after implementing SAP/R3. Nearly
one year was taken by the organization to achieve the streamlining process at head office as
well as at the project sites.
In the year 2012, the management decided to take the next step to get into the detailing of the
reports and take a deep dive in data mining exercise related to the project activity costing.
SAP/R3 was less capable to bring out the user-friendly reports with slicing and dicing
features.

Question:
Recommend the next level of ERP – Extended ERP to evaluate the solution related to
business intelligence?

4. A joint venture of Larsen & Toubro Ltd and CNH Global NV, L&T–CASE manufactures
and sells construction and road-building equipment. Based in Pithampur, India, the company
operates multiple production sites as well as working with subcontractor locations across the
country.
L&T-CASE is expanding fast as the Indian economy continues to grow, resulting in positive
national investment in transport infrastructure. The company used separate software systems
to manage its production, inventory and financial solutions, resulting in a complex web of
interlinked systems and a large measure of manual, paper-based record-keeping.
Mr S K Sethia, DGM-IT, explains the difficulties caused: “In many cases we send materials
to specialist subcontractors. The vendors pay 50 percent of the materials value to L&T-
CASE, to ensure that we are protected against loss, and to avoid the potential drain on cash
flow. When the finished goods are received at L&T-CASE, the subcontractor charges the full
amount for their service.
“The materials and finished goods are in constant flow between the subcontractors and L&T-
CASE. Production planning and materials management processes were controlled by
specialist software solutions. At any moment we have approximately 50 projects in progress
each worth some INR8 million (about $150,000), totaling INR400 million ($7.5 million).
The financial solution, though, was separate, and all the goods movement data had to be
checked and agreed manually using complex, linked spreadsheets, and it was very difficult to
reconcile figures.”
Lack of integration hinders growth
As the company grew, the manual reconciliation procedure was a barrier to progress. Figures
were slow to arrive, were a source of dispute and revision, and were perceived as unreliable.
It was important to accelerate the information flow and provide validated data, so that
subcontractors and L&T-CASE understood the true financial position.

With timely, accurate data, L&T-CASE would be able to identify and eliminate costs, and
ensure work was placed with the most cost-efficient subcontractors.
Question:
Recommend to L&T regarding the implementation of ERP package?

5. Hikal belongs to biotech, agro chemicals and special chemicals industries. It was
established in 1988. The company provides world class active ingredients, intermediates and
research and development services and solutions in a safe, secure and confidential manner.
Hikal has advanced infrastructure and the same is inspected and approved by globally
recognized bodies such as USFDA.
 Hikal is a company built on enduring relationships and it is committed to deliver value as a
complementary partner. By delivering on this commitment, Hikal has earned the respect and
recognition of leading companies at the global scale.
The company has two research and development centres and five manufacturing facilities
across India. It is listed in the Mumbai Stock Exchange and the National Stock Exchange of
India.
Question:
Explain the challenges faced by Hikal and suggest for the implementation of ERP IT
solutionat Hikal

6. Rosenbluth, a privately held, family-owned company, is the second largest travelservices

firm in the world, with American Express being number one. Rosebluth’sGlobal Distribution
Network (GDN) is a worldwide telecommunications networkthrough which the airline
reservation systems are accessible. All Rosenbluth agents areconnected to GDN as most of
the company’s travel software applications. Client’s planningtrips can either use the network
to research or book their travel arrangements, or they canwork through a Rosebluth agent.
Moreover, clients can choose to use a local Rosenbluthagent, or they can turn to specific
agents of their choice anywhere in the world.

Hal Rosenbluth of the company had this to say, “…Now we will not only connect peopleby
planes or trains but we will connect them through technology.”

Questions

1. How has technology helped companies like Rosenbluth deliver customized

services?

2. Is it possible for small companies to adopt technology similar to Rosenbluth’s? Why

or why not? Justify.

3. What is the significance of Rosenbluth’s statement? Give your viewpoint.

7. Select comfort is the bed that invented the “sleep number” system, which
provides arange of mattress firmness setting to accommodate sleeping preferences.
Founded in 1987, the Minneapolis, Minnesota-based company delivered net sales of
$691million in 2005. The company has 32U.S.-issued or pending patents and was ranked
by Furniture/Today as the top bedding retailer in the nation for the sixth consecutive year.

Needless to say, a company of this size depends on enterprise-wide software systems to

provide access to valuable information throughout the organization. A few years ago,
Select Comfort began moving away from its hard-to-maintain legacy systems to
integrated enterprise resource planning (ERP) software. The e-Business Suite from
Oracle provides ERP services through a convenient Web-based interface. The suite helps
Select Comfort coordinate its sophisticated made-to-order manufacturing operations in
South Carolina and Utah, and keep mattress orders flowing smoothly from the store to
the factory to the consumer’s home. Select Comfort adopted several e-Business Suite
modules to assist in varying parts of its business: an order management module to fulfill
the hundreds of mattress orders it receives daily, a customer relationship management
(CRM) module for keeping track of customer interaction, and modules that handle typical
business needs such as assets management, general ledger, payables, purchasing and
receivables. The ERP system ensures that all these modules and services are
synchronized and centralized so they can provide up-to-date information.

Seeking to make use of the latest technologies, Select Comfort adopted business
intelligence(BI) software from Siebel Systems, Inc. BI software allows a business to
combine its database sand extract useful information to apply to business strategies. The
BI software from Siebel caught the interest of Select Comfort because of its power and
ease of use. Select Comfort plans to deploy Siebel Business Analytics to 2,500 users
company-wide by 2008.The software will deliver alerts and dashboard capabilities to
show how the company’s 400stores are performing in real time. Select comfort had
concerns about using enterprise-wide software from two vendors, Oracle and Siebel.
When companies adopt new software, the software, the software must be able to integrate
with existing systems. Select Comfort resigned itself to the fact that itwould have to work
with Siebel on integration issues.
 Shortly after Select Comfort purchased the Siebel software, Oracle announced that it
waspurchasing Siebel. The partnership means that the Siebel BI software will eventually
beintegrated with oracle’s database and ERP software. David Dobrin, an analyst at
B2BAnalysts, Inc., in Cambridge, Massachusetts, said Select Comfort will likely have to
waitfor a strong link between the products. Integration “will take years and years, and
probablyOracle will have to do a major revision to data systems,” he said.

Questions

1. What benefits does Select Comfort’s ERP system provide that individual software

solutions from a variety of vendors could not?

2. What risk did Select Comfort assume when it chose software from a different

vendor?

8. MIS & Security

Retailers turn to smart carts: The retail industry is going through an extraordinary
metamorphosis as transactions are increasingly supported by a wide variety of digital
technologies. The previous chapters provided many examples of businesses expanding to
the Web to reach more customers.

New forms of transaction data collection are also evident in brick-and-mortar stores. For
example, consider the rapidly expanding number of self-service checkout systems in
popular grocery stores, department stores, super discount stores, home warehouse stores,
and even fast food restaurants. Fujitsu calls it the Pervasive Retailing Environment: the
use of digital technologies to integrate wired and wireless network devices to facilitate
transactions in retail stores. Self-serve check-outs are only the tip of the iceberg. Soon
customers will have access to product information from any location in the store through
devices like Fujitsu’s U-Scan Shopper .Mounted on a shopping cart, the U-Scan Shopper
is a rugged wireless computer with an integral bar code scanner. The device provides
services to shoppers as well as retailer. The device reduces checkout time by allowing
customers to scan and bag items themselves as they pick them off the selves. Shoppers
can view the running total to see exactly how much is being spent as they shop. No more
 surprises at the checkout counter. If an item is missing a price, the device can be used as a
price-checker. Consumers can also use the U-Scan Shopper to place orders with
departments in the store for pickup.

You can place a deli or prescription order when you arrive at the store and pick it up at the deli
counter or pharmacy. The U-Scan Shopper also provides a store directory so you can easily find
the department or goods you want. U-Scan devices are integrated into the store network and
internet. This means customers can upload a shopping list to the store’s Web site before leaving
home, and then download the list to the shopping cart upon arriving at the store. When shopping
is completed, the U-Scan device uploads information to the self-serve checkout and the shopper
is out the door after a quick swipe of a debit or credit card.

For retailers, the U-Scan device offers what Fujitsu calls “true 1:1 marketing” the enables
personalized in-store advertisements campaigns that are relevant both to shoppers’ preferences
and to their location in the store. Location is determined by shelf-mounted, battery-powered
infrared transmitters that track the movement of U-Scan devices throught he store. As a shopper
passes the condiments aisle, for example, the shopping cart display might post a message stating.
“It has been over a month since you purchased mustard. If you want to pick some up today, turn
down this aisle.” A retailer can offer special deals to each consumer. For example, as a shopper
passes the condiments aisle, message on the U-Scan device might state, “You have just won an
electronic coupon for $0.89 off mustard. Turn now to take advantage of this special deal!” The
89 cents would be deducted as the item is scanned on the U-Scan device.

Questions

1. What transaction processing services does the U-Scan Shopper provide for

consumers?

2. How does U-Scan technology provide retailers with a competitive advantage? Why

might you choose a U-Scan store over one without U-Scan devices?

9. Building Information Systems at the Wireless Café

Barbara and Jeremy have done some serious economic justification of the my riad technologies
that could benefit their business, and they have chosen CRM as the top priority. They feel that
they have grown to a point where they will need a fulltime project manager to oversee the
acquisition and implementation of the CRM, and they have asked you to describe how you
would proceed on this project. At the start of your internship, you were hopeful it might lead to a
full-time job offer after graduation, so you see this as your opportunity to impress Barbara and
Jeremy with your business education and your systems expertise.

Questions

1. Propose a systems development life cycle for implementing a CRM at the Wireless Cafe
(TWC). Consider methodologies that are well-suited to rapid development of Web-based
applications.

2. Once a CRM system is identified, should its implementation be outsourced? Assuming you do
decide to outsource the entire implementation of the selected CRM, how would you manage the
outsourcer to make sure the implementation is successful?

3. As TWC expands its utilization of IT, the concept of an application service provider becomes
increasingly attractive. What are some risks and benefits to a small business of using an ASP for
major applications?

10. System X Inc. Withdraws ` 1 Billion Soft Guide Acquisition Offer

The following is an excerpt from a news article in the Daily Update, March 07, 2010

“System X Inc., called off its acquisition of Soft Guide Knowledge Consultants, Friday, saying
that 1 Billion was too high a price.” (Soft Guide has a considerable market share in Training and
Development services and would therefore help System X to diversify and expand its range of
services to customers.)“Although System X officials would not comment further, several
observers said that problems discovered at Soft Guide probably lay behind the decision…. The
article said that System X feared that Soft Guide’s data-processing system was inadequate to
handle the new products planned for the Soft Guide sales staff. SystemX officials were also
concerned about the 30 percent annual turnover among sales personnel… Tabrez A., SoftGuide
CEO, responded that the SoftGuide’s data-processing was quite competent and has absorbed
atleast one new product a month for two years.”

Questions

1. Why should SystemX be so concerned about the capabilities of SoftGuide’s dataprocessing?

2. What competitive advantages to a Training and Consultancy services company maybe

provided by an information system?

11. Ten Guidelines for Strategic MIS Planning

Robert V. Head, a consultant on MIS planning, provided ten guidelines to help MIS executives
who are on the threshold of experimenting with strategic MIS planning:

1. Make provisions in the systems plan for taking small steps rapidly. “Don’t have a plan with
goals extending so far into the future that there is no way of tracking it.”

2. Develop alternative plans when significant contradictory trends are discerned in business
objectives or technology.

3. Interface the systems plan with the corporate plan, modifying both appropriately.

4. Document the systems plan in a format intelligible to top management and arrange for
personal presentation.

5. Establish a formal mechanism for review and reiteration of the systems plan.

6. Develop a system for tabulating and forecasting utilization of installed data processing (DP)
equipment.

7. Fix the organizational responsibility for systems planning.

8. Rotate the assignment of technical personnel to the planning staff in order to avoidan “ivory
tower aura.”

9. Budget for research and development.

10. Set up a comparative systems intelligence activity.

Question

1. What can be the drawback of having a formal system as mentioned in point 5?

2. Can transparency make organizational responsibility more effective?

12. Information System in Restaurant

A waiter takes an order at a table, and then enters it online via one of the six terminals located in
the restaurant dining room. The order is routed to a printer in the appropriate preparation area:
the cold item printer if it is a salad, the hot item printer if it is a hot sandwich or the bar printer if
it is a drink. A customer’s meal check listing (bill) the items ordered and the respective prices are
automatically generated.

This ordering system eliminates the old three-carbon-copy guest check system as well as any
problems caused by a waiter’s handwriting. When the kitchen runs out of a food item, the cooks
send out an ‘out of stock’ message, which will be displayed on the dining room terminals when
waiters try to order that item. This gives the waiters faster feedback, enabling them to give better
service to the customers.

Other system features aid management in the planning and control of their restaurant business.
The system provides up-to-the-minute information on the food items ordered and breaks out
percentages showing sales of each item versus total sales. This helps management plan menus
according to customers’ tastes. The system also compares the weekly sales totals versus food
costs, allowing planning for tighter cost controls. In addition, whenever an order is voided, the
reasons for the void are keyed in. This may help later in management decisions, especially if the
voids consistently related to food or service.
Acceptance of the system by the users is exceptionally high since the waiters and waitresses
were involved in the selection and design process. All potential users were asked to give their
impressions and ideas about the various systems available before one was chosen.

Questions

1. In the light of the system, describe the decisions to be made in the area of strategic planning,
managerial control and operational control? What information would you require to make such
decisions?

2. What would make the system a more complete MIS rather than just doing transaction
processing?

3. Explain the probable effects that making the system more formal would have on the customers
and the management.

13. Building the IT Infrastructure

Alfred is a do-it-yourself entrepreneur who built up his fortune in trading. He traded in anything
and everything, and kept close control of every activity. That was how he had grown rich enough
to indulge in his one dream — to build a college in his hometown. A college that would be at par
to the ones in the better cities, the ones in which he could not study himself.

Work started a year back and the buildings were coming along well. He himself did not use
computers much and became hooked to the Internet and e-mail only recently. He was determined
to provide a PC with Internet connectivity to every students and faculty member. He was
currently engrossed in plans for the 100-seater computer lab. What was confusing him was the
choice of Internet connectivity. He had about a dozen quotes in front of him. Recommendations
ranged from 64 kbps ISDN all the way to 1Gbps leased line to Guwahati, which was almost 200
km away. Prices ranged from slightly under a lakh all the way up to ` 25 lakhs and beyond. He
did not understand most of the equipment quoted firewall, proxy server, cache appliance. Nor
was he sure what the hidden costs were. Although it went against his very nature, he would have
to identify a trustworthy consultant who would help him make sense of the whole thing.
Questions

1. In the context of the given case, what managerial issues need to be addressed by Alfred? Why
is it important for managers to be tech savvy?

2. What is the importance of a ‘systems consultant’ to an organization? What skills should he/she
possess?

14. Quantum Corporation Streamlined its Supply Chain

Quantum Corporation (quantum.com) is a major U.S. manufacturer of hard-disk drives and other
high-technology storage components. Quantum faced two key challenges in its manufacturing
process.

The first challenge was streamlining its component supply process in order to reduce on-hand
inventory. Quantum’s traditional ordering process was labor-intensive, involving numerous
phone calls and manual inventory checks. To ensure that production would not be interrupted,
the process required high levels of inventory. Quantum needed a solution that would automate
the ordering process to increase accuracy and efficiency, reduce needed inventory to 3 days’
supply, and provide the company’s purchasing agents with more time for non-transactional tasks.
Quantum’s second challenge was to improve the quality of the components’ data in its Material
Requirements Planning (MRP) system. Incomplete and inaccurate data caused delays in
production. Quantum’s solution of manually reviewing reports to identify errors was labor
intensive and occurred too late; problems in production were experienced before the reports were
even reviewed. Quantum needed a technology solution that would enable to operate proactively
to catch problems before they caused production delays. The solution that Quantum chose to
automate its component supply process was an inter-enterprise system that automatically e-mails
reorders to suppliers. Initiated in 1999,the system uses an innovative event detection and
notification solution from Categoric Software (categoric.com). It scans Quantum’s databases
twice daily, assessing material requirements from one application module against inventory
levels tracked in another.
Orders are automatically initiated and sent to suppliers as needed, allowing suppliers to make
regular deliveries that match Quantum’s production schedule. The system not only notifies
suppliers of the quantity of components required in the immediate orders, but also gives the
supplier a valuable window into amount of inventory on hand future weekly requirements.

The system also provided other improvements. It enabled Quantum to tap into multiple data
sources to identify critical business events. To evaluate data quality, Quantum implemented
Categoric Alerts to proactively catch any data errors or omissions in tis MRP database. The
system’s notifications are now sent whenever any critical MRP data fall outside the existing
operational parameters. The system has produced the desired results. For example, the estimated
value of the improved ordering process using the new system is millions of dollars in inventory
reductions each year. The buyers have reduced transaction tasks and costs, and both Quantum
and its buyers get a lot more information with a lot less work. Before the implementation of
Categoric Alerts, Quantum’s and analysts would search massive reports for MRP data errors.
Now that new system is implemented, exceptions are identified as they occur. This new process
has freed the analysts from the drudgery of scanning reports and has greatly increased employee
satisfaction. Data integrity of the MRP increased from 10 percent to almost 100 percent, and
Quantum is now able to quickly respond to changing customer demand. The system paid for
itself in the first year.

Questions

1. Identify the internal and external parts of the supply chain that were enhanced with the system.

2. Describe how Quantum’s customers are being better served now.

3. Explain how purchasing was improved.