Chapter 2

ERP Related Technology

and Manufacturing
Perspective
ERP Related Technology
• BPR-Business Processing Reengineering,
• Data Warehousing, Data Mining,
On-line Analytical Processing(OLAP),
• SCM-Supply Chain Management,
CRM-Customer Relationship Management,
• MIS - Management Information System,
• DSS - Decision Support System,
• EIS - Executive Information System

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 Business Process
Re-engineering (BPR)

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 What Is (BPR)?
➢ Radical redesign of business processes to achieve improvements in
critical aspects like quality, output, cost, service, and speed
➢ Aims at cutting down enterprise costs and process redundancies on
a very huge scale
➢ Achieved through renovate the organization structures, job
descriptions, performance management, training and the most
importantly, the use of IT i.e. Information Technology.
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 BPR contd..
➢ First time in history a private bank has merged a public sector bank
i.e. ICICI Bank announced merger with Bank of Rajasthan.
➢ Many companies like Ford Motors, GTE, and Bell Atlantic tried out
BPR during the 1990s to reshuffle their operations. The
reengineering process they adopted made a substantial difference to
them, dramatically cutting down their expenses and making them
more effective against increasing competition.
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Is business process Reengineering (BPR) same as
business process improvement (BPI)?

➢ BPI might be about tweaking a few rules here and there. But
reengineering is an unconstrained approach to look beyond the
defined boundaries and bring in seismic changes.
➢ While BPI is an incremental setup that focuses on tinkering with the
existing processes to improve them, BPR looks at the broader picture.
➢ BPI doesn’t go against the grain.
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 BPR Experts will follow these General Steps:
➢ Step 1: Identify and communicate the problem
➢ Step 2: Build a team
➢ The senior manager will supervise your BPR project and make sure you have the
necessary resources to get the job done.

➢ The operational manager will provide the in-depth expertise when it comes to the
process you’re reengineering. Continuing with the example from earlier, this could be
whoever’s in charge of the grain transportation portion of the process.

➢ Additional BPR experts might be necessary as well, depending on the scope of the
project.
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 BPR Experts will follow these General Steps:
➢ Step 3: Identify the inefficient process and define key performance indicators
▪ Perhaps you discover that the reason why the trucks are losing so much grain during transport is
because the road between the farm and the factory is too long and bumpy.
▪ Now, you can set up specific key performance indicators (KPIs) for your team based on that part of
the process. A KPI is a type of performance measurement used to help achieve business goals.
▪ In this case, the KPI could be cycle time, or the amount of time from the beginning to the end of
the production process. If you can cut down cycle time, you can save some grain and increase the
company’s output.
▪ At this point, you’ll start developing different solutions, organizing them into process flowcharts,
reviewing them with your team, and acknowledging the pros and cons of each one (paying extra
attention to any new expenses that will be incurred). 8
 BPR Experts will follow these General Steps:

➢ Step 4: Re-engineer the process

➢ Finally, it’s time to implement your solution. How are you going to cut down cycle
time? What’s the most efficient way to get the grain from the farm to the factory? Will
you upgrade to faster trucks and/or try to fix the road?
➢ In the real-life scenario that this example is based on, the BPR reduced cycle time by
cutting trucks out of the process entirely. They built a new factory directly next to the
farm, so no grain was lost between harvesting and factory production.

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 A Real-life Example of BPR
Many companies like Ford Motors, GTE, and Bell Atlantic tried out BPR
during the 1990s to reshuffle their operations. The reengineering
process they adopted made a substantial difference to them,
dramatically cutting down their expenses and making them more
effective against increasing competition.

Here are 6 more real-world business process management examples.

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 When should you consider BPR
➢ A startup, five months after launch, might undergo a pivot including

business process reengineering that only has minimal costs to execute.

➢ BPR is effective when companies need to break the mold and turn the

tables in order to accomplish ambitious goals.

➢ For such measures, adopting any other process management options will

only be rearranging the deck chairs on the Titanic.

 Data mining
Vs.
Data warehouse
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 Data Mining Vs. Data Warehousing
➢ Data warehouse refers to the process of compiling and organizing data into
one common database,
➢ Data Mining refers to the process of extracting useful data from the
databases.
➢ The data mining process depends on the data compiled in the data
warehousing phase to recognize meaningful patterns.
➢ A data warehousing is created to support management systems.

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 Data Warehouse
➢ Place where data can be stored for useful mining.
➢ It is like a quick computer system with exceptionally huge data storage
capacity.
➢ Data from the various organization's systems are copied to the
Warehouse, where it can be fetched and conformed to delete errors.
➢ Combines data from numerous sources which ensure the data quality,
accuracy, and consistency.

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 Features Data Warehouse
➢ 1. Subject Oriented:
➢ Provides useful data about a subject instead of the company's ongoing operations, and these subjects
can be customers, suppliers, marketing, product, promotion, etc.

➢ 2. Time-Variant:
➢ The different data present in the data warehouse provides information for a specific period.

➢ 3. Integrated
➢ A data warehouse is built by joining data from heterogeneous sources, such as social databases, level
documents, etc.

➢ 4. Non- Volatile
➢ once data entered into the warehouse cannot be change.
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 Data Mining
➢ Computer analyzes the data and extract useful information from it.
➢ It looks for hidden patterns within the data set and try to predict future behavior.
➢ Data mining is primarily used to discover and indicate relationships among the data
sets.
➢ Aims to enable business organizations to view business behaviors, trends
relationships that allow the business to make data-driven decisions.
➢ It is also known as knowledge Discover in Database (KDD).
➢ Data mining tools utilize AI, statistics, databases, and machine learning systems to
discover the relationship between the data.
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 Important features of Data Mining:

➢ It utilizes the Automated discovery of patterns.

➢ It predicts the expected results.

➢ It focuses on large data sets and databases

➢ It creates actionable information.

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Online Analytical
Processing
(OLAP)
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 Online Analytical Processing

➢ Computing method that enables users to easily and

selectively extract and query data in order to analyze it from different

points of view.

➢ OLAP business intelligence queries often aid in trends analysis, financial

reporting, sales forecasting, budgeting and other planning purposes.

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 Online Analytical Processing contd..

For example, a user can request that data be analyzed to display a

spreadsheet showing all of a company's beach ball products sold in Florida in

the month of July, compare revenue figures with those for the same

products in September and then see a comparison of other product sales in

Florida in the same time period.

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 How OLAP Systems Work
➢ Data is collected from multiple data sources and stored in data warehouses then
cleansed and organized into data cubes.
➢ Each OLAP cube contains data categorized by dimensions (such as customers,
geographic sales region and time period) derived by dimensional tables in the
data warehouses.
➢ Dimensions are then populated by members (such as customer names, countries
and months) that are organized hierarchically.
➢ OLAP cubes are often pre-summarized across dimensions to drastically improve
query time over relational databases.
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22
 How OLAP systems work
➢ Analysts can then perform five types of OLAP analytical operations against

these multidimensional databases:

▪ Roll-up. Also known as consolidation, or drill-up, this operation summarizes the data along the
dimension.
▪ Drill-down. This allows analysts to navigate deeper among the dimensions of data, for example
drilling down from "time period" to "years" and "months" to chart sales growth for a product.
▪ Slice. This enables an analyst to take one level of information for display, such as "sales in 2017."
▪ Dice. This allows an analyst to select data from multiple dimensions to analyze, such as "sales of
blue beach balls in Iowa in 2017."
▪ Pivot. Analysts can gain a new view of data by rotating the data axes of the cube.
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 Types of OLAP systems

➢ OLAP (online analytical processing) systems typically fall into one of three

types:

➢ Multidimensional OLAP (MOLAP)

➢ Relational OLAP (ROLAP)

➢ Hybrid OLAP (HOLAP)

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Supply Chain
Management
(SCM)
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 What is SCM
➢ Is the handling of the entire production flow of a good or service —

starting from the raw components all the way to delivering the final

product to the consumer.

➢ A company creates a network of suppliers (“links” in the chain) that

move the product along from the suppliers of raw materials to those

organizations that deal directly with users.

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 Examples of Best SCM
1. The Coca-Cola Company.
➢Main makers, marketers and distributors of drink concentrates and non-alcoholic syrups.
➢The main office is located in Atlanta, GA but their products are distributed to virtually every
country in the world.
➢Their preparation, distribution and transportation logistics are in line with a segmentation
strategy for their customers when it comes to the size and presentation of their products.
➢Aside from having an extremely successful supply chain, Coca-Cola participates in sponsorships,
partnerships, and alliances; thus creating a great management and marketing of their products.

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 Examples of Best SCM contd..
2. Colgate
➢The main toothpaste brand made by Colgate-Palmolive, dedicated to producing, distributing and selling
oral hygiene and home cleaning products since the last part of the 19th century.

➢ Colgate keeps present all aspects of product diversity, effectiveness, optimization and customer

support and it uses an effective distribution channel that encompasses all aspects of care and

maintenance.

➢Their products are sold in many venues such as pharmacies, supermarkets, convenience stores and
small wholesalers, thus creating an excellent impact within their distribution channels and management.
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 Examples of Best SCM contd..
3. 7-Eleven
7-Eleven is an international chain of convenience stores, based out of Dallas, Texas. The currently have

around 58.308 in 16 different countries, most of them franchises.

They are mainly focused on selling basic food items, medicine and toiletries and magazines, but this all

depends on their host country.

Their main stores are located throughout the United States and Asia.

They supply a huge variety of customer needs 24 hours a day in most locations.

Their reach, capacity and management have made 7-Eleven one of the biggest and most productive

companies in the world. 29

 Examples of Best SCM
4. Zara
Zara is one of the main clothing and accessory retailers internationally based in Spain.

They are mainly focused on new, trendy and cutting edge fashion for men and women alike.

Currently it operates in 88 different markets worldwide, their main distributors are in Madrid and

Zaragoza.

Zara is known for its energy saving efforts and techniques, as well as their minimization and efficient

waste management.

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 Examples of Best SCM
5. Amazon
➢Amazon is a US electronic commerce and cloud computing company.
➢Their headquarters are based in Seattle,, videogames, shoes, clothing, luggage and many
other accessories.
➢One of the reasons why Amazon can have such a wide spectrum of products is the fact that
they are not limited by physical spaces, since they don’t have actual stores.
➢Their supply chain goes from the lowest levels of inventory, through the logistics of the order
itself all they way up to an outstanding distribution chain of their products in an international
scale.
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 How does SCM work?
➢ There are five components of traditional supply chain management systems

➢ 1. Planning

➢ 2. Sourcing

➢ 3. Manufacturing

➢ 4. Delivery and Logistics

➢ 5. Returning
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 Why is SCM Important ?
Three scenarios where effective supply chain management
increases value to the supply chain cycle:

➢ 1. Identifying potential problems.

➢ 2. Optimizing price dynamically.

➢ 3. Improving the allocation of “available to promise” inventory.

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 Key Features of Effective SCM
Five “Cs” of the effective supply chain management of the future:

➢ 1. Connected

➢ 2. Collaborative:

➢ 3. Cyber-aware:

➢ 4. Cognitively enabled:

➢ 5. Comprehensive:

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Customer Relationship
Management
(CRM)
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 What is CRM
➢ Refers to all strategies, techniques, tools, and technologies used by enterprises

for developing, retaining and acquiring customers.

➢ Ensures that every step of the interaction with consumers goes smoothly and

efficiently in order to increase the overall profits.

➢ The software gathers customer data from multiple channels.

➢ Stores detailed information on overall purchase history, personal info, and even

purchasing behavior patterns. 36

 Who can Benefit From CRM ?
➢ Almost any organizational unit can benefit from it — from sales and customer

service to recruiting, marketing, and business development.

➢ Good CRM software gives a better way to manage external relationships.

➢ Storing all customer information in one place, recording service issues, identifying

sales opportunities, managing marketing campaigns — these are just a few

capabilities that CRM features.

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 Top 5 examples of CRM implementation in organizations

1. Apple CRM
➢ Customer Relationship Management plays a pivotal role in Apple’s growth strategy.

2. Coca-Cola CRM
➢ Coca-Cola uses CRM to promote collaboration and deal with customer issues quickly and efficiently.

3. Amazon CRM

4. Activision CRM
➢ Activision is a pioneer in the video gaming industry that uses CRM to connect with gamers via social media websites such as Facebook

and Twitter.

5. Tesco CRM
➢ Like most retailers today, Tesco uses a Clubcard to reward its most loyal customers 38
 Management
Information System
(MIS)
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 What is MIS ?
➢ To the managers,

➢ Management Information System is an implementation of the organizational

systems and procedures.

➢ To a programmer

➢ it is nothing but file structures and file processing. However, it involves much

more complexity.
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 What is MIS ? Contd..
➢ The three components of MIS provide a more complete and focused definition,

where

➢ System suggests integration and holistic view,

➢ Information stands for processed data, and

➢ Management is the ultimate user, the decision makers.

➢ A system for processing data in order to give proper information to the management for performing its

functions. 41
 Definition

Management Information System or 'MIS' is a planned system of collecting,

storing, and disseminating data in the form of information needed to carry

out the functions of management.

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 Objectives of MIS
➢ Capturing Data

➢ Processing Data

➢ Information Storage

➢ Information Retrieval

➢ Information Propagation

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Decision Support
System
(DSS)
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 Decision Support System (DSS)

➢ Is an analytics software program used to gather and analyze data to inform

decision making.

➢ from modern business intelligence which uses AI and machine learning to suggest

insights and analyses for humans to perform,

➢ to model-based DSS systems which use predefined criteria to perform automated

calculations and deliver best-case decisions.

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 DSS contd..
➢ Traditional DSS: Historically, DSS and BI tools relied on preconfigured, historical

data with no ability to drive real-time decisions and action. With this approach,

decisions are made based on the past.

➢ Modern DSS: New tools and processes allow for “active intelligence”, a state of

continuous intelligence with an end-to-end analytics data pipeline delivering real-

time, up-to-date information designed to trigger immediate insights and actions.

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DSS Characteristics: 3 Key Elements
➢ Model Management: Models can be leveraged by formally coded rules in DSS software or by
analysis using a BI platform.

➢ Organizational Data or Knowledge Base: Before any DSS can be used, raw data must be
transformed into clean, accurate, and up-to-date information. The data is then stored in a

repository such as a data lake or data warehouse using a governed data catalog.

➢ User Interface: A user interface, complete with digital dashboards, tables, graphs, widgets or
other tools to present information, enables users to better interact with, view, and use the data

at their disposal.
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Executive Information
System
(EIS)
48
 EIS Introduction
➢ It is a MIS which supports, facilitates, and makes decisions for senior

executives by providing easy access to both internal and external

information.

➢ Can also be considered a specialized form of a DSS.

➢ The focus on EIS is on easy to use user interfaces and graphical displays.

➢ The benefits of this are that they offer strong reports and drill down

capabilities. 49
 EIS Introduction contd..
➢ Users can extract much needed information without the hardship to learn

complex query language or any difficult formulae.

➢ It enables the users to get information on time without any delay.

➢ It enables users to have access to management reports.

➢ Are important because they help top-level executives analyze, compare and

highlight trends in important areas so they can monitor performance and identify

opportunities and problems. 50

 HOW AN EIS SHOULD BE?
➢ EIS should be very easy to understand so that the users do not get confused while using it. A user friendly

➢ EIS can help management to save time and collect information rather easily.

➢ EIS should be such that it helps in achieving organizational objective.

➢ EIS data should clearly reflect objectives of the organization in various core fields of the organization.

➢ EIS should be such that it encourages staff & management to work towards growth of the organization.

➢ EIS must be such that it meets the changing needs of the organization.

➢ EIS should help to reduce the workload of the top management and staff.

➢ Confidential Information should not become part of the EIS.

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 COMPONENTS OF EIS

An ideal EIS should be able to produce graphical representations of data on a single

dashboard and have drill-down capabilities for users with specific requirements. An

EIS has four major components_

hardware, software, a UI, and telecommunications capability.

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COMPONENTS OF EIS Contd..
• USER INTERFACE: User Interface allows the users to communicate with the EIS. User interface must be
easy to use and understand. Users should not be required to understand the complex query languages
and other mathematical or statistical formulas.
• HARDWARE: Hardware refers to devices by which users give input, data processing and the output is
received. Users may give input via keyboard and mouse and CPU may be used for processing and
output may be received on monitor or from printer.
• SOFTWARE: Software is required for various calculations, providing graphical view to the
management, storing data in the form of Information, etc. Software allows user to get information in
the form it is actually required.
• TELECOMMUNICATION: In today’s world the most important thing is communication. Users may
require transferring information from one point to another point. The information might be a little
confidential in nature. The secrecy of the information should be well maintained.

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Review questions
▪ Define Business Process Reengineering (BPR) and list its key principles
▪ Recall the main objectives of Data Warehousing
▪ Name two primary goals of Customer Relationship Management (CRM)
▪ List the components of a Decision Support System (DSS).
▪ Identify the key features of an Executive Information System (EIS)
▪ Define data mining and its role in business intelligence
▪ Explain the concept of demand forecasting in the context of Supply Chain Management.
▪ Explain the concept of Data Mining and how it is different from Data Warehousing
▪ Describe the role of On-line Analytical Processing (OLAP) in data analysis
▪ Summarize the fundamental principles of Supply Chain Management (SCM).
▪ Explain how Management Information System (MIS) supports decision-making in
organizations.

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Review questions
▪ Clarify the purpose and benefits of Business Process Reengineering (BPR).
▪ Apply the concept of Data Warehousing to a real-world business scenario
▪ Demonstrate how CRM can be used to enhance customer satisfaction in a specific industry
▪ Analyze the impact of Customer Relationship Management (CRM) on customer retention
▪ Evaluate the effectiveness of Business Process Reengineering (BPR) in improving organizational
efficiency.
▪ Assess the role of Management Information System (MIS) in supporting various levels of management.
▪ Propose improvements to the current Supply Chain Management (SCM) processes in a specific industry.
▪ Develop criteria for selecting the most suitable Data Mining techniques for a given dataset.
▪ Develop a framework for assessing the success of a Data Warehousing initiative within an organization.
▪ Construct a proposal for the implementation of an Executive Information System (EIS) in a large
corporation.

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