Principles of Supply Chain – Software and Technology Strategies
Analyze different software systems and technology strategies used in supply chain management
You are a newly hired Junior Analyst at Mitchell Consulting, a firm that specializes in providing managerial expertise in supply chain management. You are assigned as a support role to a senior consultant. Your role does not allow you to make selections for clients, but you will be evaluated for future promotion based upon your work in the junior analyst role. You are assigned to new a client, Michael\’s Medical Devices (MMD). Your manager, Senior Analyst Andrea Sims, has directed you to work on this case and provide analysis and options to resolve the problems.
Skip Michaels founded Michael\’s Medical Devices in 2001, after designing a surgical tool to perform a specific task during pancreas surgery. Since then, MMD has created numerous additional tools and medical solutions. Skip has contacted Mitchell Consulting to assist in devising a plan to increase the capacity of MMD by employing technology to improve the operations of the company. He has been reading about ERP and CRM systems and is eager to leverage technology to support expected growth in revenues.
MMD\’s recent rapid growth resulting from a new device that was patented and introduced has resulted in reduced efficiency to produce and deliver product orders. This failure to fulfill orders in the previously achieved timelines is negatively impacting customer satisfaction. Skip and his sales team have been the key factor in developing sustained relationships with doctors and medical schools to identify and provide device solutions for specific medical procedures.
MMD sales exceeded $2 Billion and 10,000 units last year. Revenue forecasts with the new product line are expected to exceed 3% annualized revenue growth for the next 5 years. The current computer system is a collection of older PC\’s that are connected through a three-year old server network. The following departments have their own networks. Each of the systems was the best technology when implemented.
Production and Purchasing Departments: Upgraded to new SCM (Supply Chain Management) hardware and software 3 years ago, currently running at 50% capacity. Many options of the system are not currently utilized since a current ERP system is not in use that allows connectivity with Marketing, Sales, Logistics, and HR.
Marketing and Sales Departments: Share the same system, which consists of three 8 year old PC\’s networked with each other. Daily order reports are emailed on a spreadsheet to the Production, Purchasing, and Logistics departments to initiate order fulfillment. The sales department is using an 8-year old sales tracking software program to track all customer contacts.
Human Resources Department: Uses a 10-year old system that was the best-rated system when purchased. HR currently schedules labor needs for all departments based upon historical data and weekly sales reports. HR is not able to interface directly with the SCM system used by Production and Purchasing due to non-compatible operating systems. Recently, scheduling of employees and resources has resulted in slow order fulfillment and customer dissatisfaction.
Customer dissatisfaction is not known throughout the organization. Based on Skip\’s research in supply chain publications, he believes that a state of the art CRM would greatly improve the alignment of all departments to a common purpose, and would improve customer satisfaction back to an acceptable level.
Skip assembled a number of trusted individuals in his organization to review the options they have. His Capital Procurement Committee has determined that they have three options to achieve Skip\’s vision:
- Upgrade the existing ERP system with existing server and some new software and hardware.
- Purchasing new internal servers and software.
- Outsourcing with a cloud based ERP systems provider.
Create a written proposal to the Capital Procurement Committee with your analysis and recommendations to assist in their selection of a new ERP system. Include the following in your written proposal:
- Outline the key components and benefits of an effective ERP system in supply chain strategy
- Identify tools to employ in research and selection of a new ERP system
- Prioritize factors to consider in selection of one of the three proposed options
- Present the three options to include software and system suggestions for each of three options; to include at least ERP and CRM
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