The Haidiri Beverages Group was set up in 1979 and is Pepsi's sole selling

agent for District Rawalpindi and Islamabad. Hairdi Beverages’ primary

functions are to conduct a systematic manufacturing and supply of the
product without any tactical flaws. It manages the supply for several
wholesalers, retailers, restaurants, hotels and other such food outlets. In
order to get along well with the current Information Technology era, Haidri
Beverages planned to purchase and implement ERP system within the
organization. Since the outsourced ERP system estimation went beyond Rs
7.5 million, the company decided to hire IT professionals for an in-house
development of their ERP system. The MIS department has successfully
implemented modules like Accounts, HR, Inventory control and Sales which
have been in use for more than 3 years duration. Only minor changes are
made and updation in hardware, software and backend databases are done
at regular basis.

The scope of ERP, however, is limited to Transaction Processing Systems

(TPS) only, and the far-reaching benefits of ERP systems are yet to be
discovered and implemented by the company. Besides this, limiting the
scope to TPS only has given birth to a number of problems for all levels of
management. Such setbacks include lack of decision-making support and
excessive manual work yet to be done by the managers.

Supply chain is considered to be a backbone of every manufacturing

company. Unfortunately, Haidri Beverages has been unable to design and
implement the Supply Chain Management (SCM) module as yet, which
caused them a huge price since the company maintains a history of bearing
loss of production due to lack of communication with their suppliers.
Problems such as poor inventory management, inaccurate demand forecast,
and lack of internal communication through ERP systems have been reported
as one of the major setbacks of the current scenario. Other problems,
incorporated with the above, which have been reported by the management,
include unnecessary purchase of raw materials since the exact data to be
produced is still ambiguous as well as producing more or lesser than the
required quantity.

The limited TPS functionality of the deployed ERP system further adds to the
problem. The managers need a system which would help them make
decisions about how much to produce, how much to procure, monitoring
distributor and supplier performance, sales analysis as to which product
gives the maximum profit and which one needs more marketing, and many
other decision–related features.

The company doesn’t seem to adopt the idea of connecting the supply chain
participants with their ERP system through a web-based SCM module. They
fear that the supply chain system could only be able to connect a maximum
of 10 percent of their suppliers and distributors although they have not
conducted a survey yet from their supply chain partners.

The far–reaching benefits of the ERP system is yet to be discovered and

implemented by the company. As what they call an “ERP system” is only an
automated system generating static reports. The management of Pepsi
Haidri Beverages needs to be convinced that a mere automated system
cannot drive the company towards maximized profitability and accurate real-
time information sharing to build a strong collaborated supply chain.
Considering the above scenario, answer the following questions:
1. What are the key features of Supply Chain Management system, in this
case, that would be used as a basis for building consensus of the
management to implement SCM system?
2. What are the perceived benefits achieved by Haidri Beverages as a
result of connecting the distributors and suppliers with the SCM system
deployed by them?
3. How will the SCM system be implemented, as a first step, without
disturbing the currently running ERP system?
4. Describe and justify the best possible implementation strategy adopted
by the company to implement SCM module integrated with the current
ERP system.
5. Would it be more beneficial to upgrade the whole system as Web-
based ERP or just to integrate web-based SCM and CRM modules with
the currently running desktop application? What benefits would the
company get in shifting the application to internet?
6. Would the SCM system be a re-engineered system, a customized
system or both? Provide justification for your answer.