CONTENTS

S.N. Pg No.

1. Executive Summary 2

2. Suggested Technologies for Improvements of SMS 3

3. Enterprise Resource Planning 3-5

4. Customer Relationship Management 6-7

5. Bar coding 8

6. RFID 9

7. Knowledge Management 10-12

8. Organisation Structure 13-15

9. Event driven Process Chain, Value Chain 16

10. Problems faced currently and Recommended solution 17

11. References

12. Appendix

EXECUTIVE SUMMARY

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The given case study is of Special Metal Stamps which manufactures punches used for marking metal
products with a stamp. Due to global crunch and recession the demand for products has gone down.
The company is also facing intense competition from Far East. Currently the demand for products is
increasing. The company has already implemented Lean on shop floor to reduce waste but has not yet
implemented its business processes.

Due to peak in demand, the company wants to take advantage of the situation. The company wants to
acquire products at minimum cost without any compromise in quality of product. They want to offer
best possible service.

After implementing lean philosophies, the company can eliminate waste and increase its revenue. The
company needs to implement business processes which will reap long term benefits.

Some of the business process techniques recommended is Enterprise Resource Planning, Customer
Relationship Management, Knowledge Management, product tracking like Barcoding and RFID.
These techniques have been explained in detail with pros and cons and how can SMS reap benefits by
applying these tools. Success stories of the company, who have already benefitted after application of
these techniques, have been mentioned in brief.

A process improvement model is drawn in ARIS software as a recommended approach. This model
has some assumptions and implementation of Barcoding technique. Organization chart is also made
for SMS.

SUGGESTED TECHNOLOGIES FOR IMPROVEMENT OF SMS

1. Enterprise Resource Planning

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2. Customer Relationship Management

3. Bar coding

4. RFID

5. Knowledge Management

ENTERPRISE RESOURCE PLANNING

An Enterprise Resource Planning (ERP) system is an integrated computer-based application used to

manage internal and external resources, including tangible assets, financial resources, materials, and
human resources. [1]

The main objective is to integrate all parts of the business departments and functions across the
company on to a single computer’s database, that can be accessed by every part of the company and
that can serve all those different departments' particular needs. [2]

ERP is evolved from Manufacturing Resource Planning [3]. ERP implementation is most successful
when there is a long term commitment to the project. ERP systems can be huge, and influence
thousands of people, processes, practices and policies. [4]

Ideally, ERP solutions should be flexible as the businesses they support and cover all basic functions
of an organization, by handling the manufacturing, logistics, distribution, inventory, shipping,
invoicing, and accounting for a company. [5]

If it is done right, a new ERP implementation can dramatically improve business processes. Some key
steps for successful ERP implementation is to focus on efforts, build the right team, secure
commitment and support and manage and execute. Since ERP system impact many areas of the
business, it is important that the implementation project team includes members from all departments
as well as specialists from the ERP vendor.

ERP implementation is push oriented technique, as ERP forces an organization to accept standard
integrated business processes, where is more about the design of the business processes and
organization structure.

BENEFITS OF ERP

 It eliminates the problem of synchronizing changes between multiple systems - consolidation

of finance, marketing & sales, human resource and manufacturing applications.
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  Provides top-down view of the enterprise (no "islands of information"), real time information
is available to management anywhere, anytime to make proper decisions.

 Quality improvement: The integration process, moving the data in to a centralized database
overcomes the process of repeated data entry helping in reducing errors, redundancy which
improvises the reliability, accuracy of the data or information entered and stored.
 Improvising customer services. [6]

 The web integrated ERP helps the companies to link up with the customers, suppliers online.
This system brings the customers and suppliers much closer to the company.

 ERP is based on client-server architecture that is every system that is connected to the central
computer has access to the data. [7]
 Its unique feature of making decisions increases the operational decision makers to include
latest information that the company has got.
 It has the feature that can link to the company’s external supply chain partners through the
electronic data interchange (EDI) systems. [8]
 Reduction in IT costs
 Benefits at organizational level: It supports change in the organizational structure and as well
as business processes; Increases the involvement of the employees in the business
management and It centralizes all the employees' vision on work, increases efficiency in
communication between different employees and different departments hence improvising the
processes internally within the department.
 Opportunity for Globalisation [6]

DISADVANTAGES OF ERP

In 1998, for example, US pharmaceutical company FoxMeyer went bankrupt and sued both SAP and
Andersen Consulting, claiming that a botched ERP software implementation had contributed to its
demise. Other well publicised cases include those of Hershey's, and W L Gore, both of which cited
ERP installation problems for serious losses.

 Takes time to implement.

 Calls for a voluminous and exorbitant investment of time and money.

 Security Issues.

 Customization of the ERP software is limited.

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  Re-engineering of business processes to fit the "industry standard" prescribed by the ERP
system may lead to a loss of competitive advantage. [9]

 ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and
business process of some companies—this is cited as one of the main causes of their failure.

 Once a system is established, switching costs are very high for any partner (reducing
flexibility and strategic control at the corporate level).[10]

 The blurring of company boundaries can cause problems in accountability, lines of

responsibility, and employee morale.

CASE STUDY ANALYSIS FOR ERP

World’s one of the largest and most successful automobile and gas turbine manufacturers are ‘Rolls
Royce’. They manufacture gas turbines that help the civil aircraft, military aircraft and ships to propel.
These engines are exceptionally difficult to design and are complex products with 25,000 parts along
with hundreds of assemblies and sub-assemblies with over 600 suppliers. Hence maintaining all the
resources to design is a complex task.
Initially they built their own software to manage their resources which was not successful as the
departments and the data were not centralized which led to data redundancy and errors. Hence to
overcome this problem they adopted ERP as their solution and became the clients to German SAP
Company. This helped them centralize, reduce errors and duplication in the organizational data
concerning to various departments like inventory, product information, external sales, resource
information etc.
The company implemented ERP systems with a great care using a team of highly technical experts to
minimize any risk and implementation errors. The data underwent extensive clean-up to ensure data
accuracy and they forced themselves to re-examine all their internal processes to fit the SAP systems.
Soon after the implementation of ERP systems Rolls Royce experienced improved customer service,
reduction in inventory and improved business information within operations. [11]

CUSTOMER RELATIONSHIP MANAGEMENT

CRM, or Customer Relationship Management, is a company-wide business strategy designed to

reduce costs and increase profitability by solidifying customer satisfaction, loyalty, and advocacy.

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Viewpoints of CRM-

 Earning profit is the ultimate objective

 Customers are most important assets of a business.

 Maintaining Customer relationship is THE core Business Process [12]

BENEFITS OF CRM

A major benefit can be the development of better relations with your existing customers, which can
lead to:

 increased sales through better timing by anticipating needs based on historic trends
 Customer Retention
 identifying needs more effectively by understanding specific customer requirements
 cross-selling of other products by highlighting and suggesting alternatives or enhancements
 identifying which of your customers are profitable and which are not [13]

CRITICAL SUCCESS FACTORS OF CRM

There are five key CSF-

• the industry

• competitive strategy

• industry position

• environmental factors

• temporal factors

• Managerial position. [14]

WHY CRM IN SMS

 CRM will help SMP to target the customer which would help them to have maximum returns.

 Using PARETO’s 80:20 rule (turnover, profit, service, supply) target segment could be
planned out.

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  It will help the firm retain customers even during high competition.

 CRM will assist SMP in carrying out marketing campaigns and surveys which would keep
them inform about the market

 Knowing other assisting demands and fulfilling them will create a feeling of loyalty in the
customer.

 Using CRM customers can be made aware of current schemes and discounts which would
buying experience more profitable and joyous to them

CASE STUDY ANALYSIS FOR CRM

• Carnegie Museums of Pittsburgh: Increased its email house file more than 50 % in just 8
months. Now sends quarterly newsletters to members.  The average online gift is 16 % higher
than offline gifts.  Attendance is up for events that are marketed & managed online.  [15]

• HoustonPBS: Raised more than $123,000 online via pledge drives in 14 months.  Has
completed 33% of event registrations online. Used online communications in the wake of
eliminating roughly $150,000 annually in paper-based communications.  Just launched a
“members only” area, offering a wide array of services, which will help to grow loyalty. [16]

BAR CODES

One of the most important aspects in business is inventory tracking. For a smooth functioning of any
firm, the entities handling them must have thorough knowledge of the amount in stock and about the
condition in which the stock is kept. After a complete know-how and thorough analysis, the company
can make any decisions about the sales, production and customer satisfaction.

Bar coding and RFID are ways of tracking Inventory. The code uses a sequence of vertical bars and

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spaces to represent numbers and other symbols. [17]

HOW DOES BARCODE WORK?

• Identifier: This allows a computer to search for information about a product from a numerical
or alphabetical code.

• Beams: Beams of light from a reader take a picture of the barcode and reads the relative
widths of both the bars and the spaces, giving each code a unique identifier [18]

BENEFITS OF BARCODING

 Speed

 Efficiency

 Accuracy

 Access to information

 Completeness of information

 Over all competence of logistics [19]

RFID

The Radio Frequency Identification (RFID) technology is an automatic identification technology that
uses radio waves carrying energy or data between interrogators and unidentified tags/objects.

All RFID systems have a common factor: the data are transferred using high frequencies, that is to
say, by using electromagnetic waves. [20]

An RFID system has three main components:

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  A scanning antenna

 A transceiver with a decoder to interpret the data

 A transponder-the RFID tag- that has been programmed with information.

HOW RFID WORKS?

The scanning antenna puts out radio-frequency signals in a relatively short range. The RF radiation
does two things:

 It provides a means of communicating with the transponder (the RFID tag) AND
 It provides the RFID tag with the energy to communicate [21]

BENEFITS OF RFID IN SMP

 It is faster than manual processing

 Reduction in Out of Stock conditions

 Tracking of lost products becomes easier

 Improve Customer experience

 Reduction in warehouse and distribution labour cost

 Reduction in Point of Sale Labour Cost

 Reduction in theft

KNOWLEDGE MANAGEMENT

Knowledge management involves the identification and analysis of available and required knowledge
assets and knowledge asset related processes, and the subsequent planning and control of actions to
develop both the assets and the processes so as to fulfil organisational objectives.

Knowledge assets are the knowledge regarding markets, products, technologies and organisations,
that a business owns or needs to own and which enable its business processes to generate profits, add
value, etc. [22]
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TYPES OF KNOWLEDGE

Explicit knowledge: It is the visible knowledge available in the form of letters, reports, memos,
literatures, etc. Explicit knowledge can be embedded in objects, rules, systems, methods etc.

Tacit knowledge: It is highly invisible and confined in the mind of a person. It is hard to formalize
and therefore, difficult to communicate to others. [23]

KNOWLEDGE MANAGEMENT CYCLE

A functioning knowledge management system follows six steps in cycle dynamically refining
information over time

 Create knowledge.

 Capture knowledge.

 Refine knowledge.

 Store knowledge.

 Manage knowledge.

 Disseminate knowledge. [24]

BENEFITS OF KNOWLEDGE MANAGEMENT

 Increase in collaboration, conversation amongst the employees

 Reduce loss of intellectual capital from people leaving the company.

 Reduce cost by decreasing and achieving economies of scale.

 Minimize redundancy of knowledge-based activities

 Increase productivity by making knowledge available more quickly and easily

 Enhancement of innovation and creativity

 Give equal opportunities to all the individuals to express and share their knowledge.

 cut across departmental boundaries and formal reporting lines;

 provide early warning of potential opportunities and threats;

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  can be vehicle for cultural change (creating a knowledge sharing culture); [25]

CHALLENGES OF KNOWLEDGE MANAGEMENT

The challenge of Knowledge Management is not only to develop new knowledge, BUT, How to
locate and acquire others’ knowledge, How to diffuse knowledge in your organization, How to
recognize knowledge interconnections, How to embody knowledge in products, How to get access to
the learning experiences of customers.

DIFFICULTIES OF MANAGING CORPORATE KNOWLEDGE

Knowledge management is difficult because knowledge is hard to extract and pass on. It usually
exists in the minds of the individual; it can be buried in old, forgotten reports and often leaves with
the employee. It is believed that knowledge is power and this concept can lead to knowledge
hoarding. Knowledge hoarding is when someone refuses to share their knowledge in order to hold an
advantage over other employees.

BENEFITS OF KNOWLEDGE MANAGEMENT IN SMS

 Standardization and better organization of the firm possible.

 Better information flow possible.

 Satisfaction of the employees.

 Substantial reduction in cost.

 Customer satisfaction can be achieved.

 Knowledge is never wasted. Even unwanted but un acquired knowledge

 Improved Profitability

 Improved team communication

CASE STUDY ANALYSIS FOR KNOWLEDGE MANAGEMENT

ICL Ltd. has changed its entire organization into communities. This fall into two types: Professional
and Interests. All employees belong to a Professional community dependent on their function (Sales,
Project Management, Consultancy, etc.) and any employee can also belong to any one or more
communities of Interest (KM, Quality Improvement, etc.). For example, a Consultant will belong to a
Professional Community of Consultants and work and develop within the consultancy framework.

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The Consultant can also specialize in KM and therefore belong as a member of the KM Community.
S/he is able to discuss, share and develop in the KM field. The KM community, for example, meets at
regular intervals, guest speakers are invited to the meeting, lots of tacit exchange takes place. It
develops into a true community spirit. The Interest community will typically regulate itself and have
an administrator to facilitate the web space and other co-ordination activities. [26]

ORGANISATION STRUCTURE

 Structure refers to how tasks are divided, resources deployed and how the departments co-
ordinate in order to achieve the goals.

 It describes the existing divisions and clusters of tasks and people within an organization.

 For example, in a college, there would be divisions such as Biology, Chemistry, Mathematics,
Physics etc. These are headed by a particular person who looks after the efficient running of
the department. This is the structure of that college.

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TYPES OF STRUCTURES

I. FUNCTIONAL STRUCTURE
 A simple single level of management structure.
 It works best when the organization has few products, few locations, and few types of
customers, a stable environment and routine technology.

CEO

Manufacturing Sales R&D Accounting & Finance

II. DIVISIONAL STRUCTURE

 A division is a collection of functions working together to produce a product.
 Divisions create smaller, manageable parts of a firm.
 These could be product-based, geographical location based or market based.

 PRODUCT STRUCTURE [27]

The divisions are created according to the goods and/or services produced
such as detergents, soaps, cosmetics, clothes etc or the washing machine
division, lighting division and the television division.

CEO

Soup Division Nuts Division

Manufacturing Sales Manufacturing Sales

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  GEOGRAPHIC STRUCTURE
 Such divisions are based on the area or region of locations of the organization
such as the Northern region, the Eastern region, the Western region and the
Southern region. [28]
 For example, Apple has a geographic structure with the Global Headquarters
heading the Apple divisions of Apple U.S.A, Apple Europe, and Apple
Pacific.

CEO

Northern Division Eastern Division Western Division Southern Division

 MARKET STRUCTURE
 The divisions are based on the type of customer and the market segments the
organization caters to such as large business customers, small business customers,
individual and institutional customers.

III. TALL AND FLAT STRUCTURES

 A tall structure has many levels of authority relative to the size.
 It is a centralized structure that discourages initiative and can distort verbal
communication.
 A flat structure has few levels but a wide span of control i.e. more number of people
report to a single manager.
 This increases autonomy among the subordinates and is suitable in an unstable
environment.
 A flat structure is getting maximum work done with the minimum number of people.

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 EVENT DRIVEN PROCESS CHAIN (eEPC)

Event driven process chains are a method to visualize succeeding events and functions by which the
logical timing of a business process is shown. Consequently, event driven process chains are the
description method for business processes. Event driven therefore is equivalent to describing the
dynamic part of a business process.

Event: It refer to a point of time

Function: It refer to an action that uses time

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 Activity

Event Event

There are three Logical symbols used:

AND- Two events / functions must occur.

OR- One event / function AND / OR another event / function must occur.

XOR- Either an event / a function OR another event / function must occur.

Steps:

1. Start with an event symbol

2. Add function to it

3.  Information or materials are represented by rectangles.

4. Connect the nodes

5. It always finishes with an event

(The exception is that using XOR/OR no two activities can follow) [29]

PROBLEMS FACED CURRENTLY

 There is lot of paperwork involved in the process.

 The business processes have not yet been adopted so the company is lack of adequate IT
support

 Delay in decision making

 No quick response to the changing environment

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 RECOMMENDED SOLUTION

 Reduced paperwork

 Effective communication and flow of data

 Quick decision making

 Strategic: Strong vision and purpose

VALUE ADDED CHAIN

Product
Order from Stock Verifying Barcoding
Delivered to
Customer Availability Product Details Installation
Customer

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