Information Technology Reference
In-Depth Information
and/or store. For example, a supplier might ship a certain raw material in units of 80,000
pound rail cars. The producer might need 95,000 pounds of the raw material. A decision
must be made to order one or two rail cars of the raw material.
Walters Metal Fabrication is a structural steel fabrication and erection company. As the
firm experienced a recent growth spurt, it became clear that it needed software tools to support
an increase in production volume. Walters used to depend on suppliers to tell it how much
material was required for its parts. The firm implemented MRP software from FabTrol to
help with estimating, material management, production control, and shipping management.
According to Don Porter, project manager: “The seamless import of the bill of materials from
the [software] saves us a lot of time as well. In fact, importing the bill of materials, determining
the changes, and producing an estimate now takes minutes instead of what used to take us
days. Plus, the estimates are more accurate.”
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Purchasing
uses the information from materials requirement planning to place purchase
orders for raw materials and transmit them to qualified suppliers. Typically, the release of
these purchase orders is timed so that raw materials arrive just in time to be used in production
and minimize warehouse and storage costs. Often, producers will allow suppliers to tap into
data via an extranet that enables them to determine what raw materials the supplier needs,
thus minimizing the effort and lead time to place and fill purchase orders.
Production
uses the detailed schedule to plan the details of running and staffing the pro-
duction operation.
ERP systems do not work directly with production machines, so they need a way to
capture information about what was produced. This data must be passed to the ERP
accounting modules to keep an accurate count of finished product inventory. Many com-
panies have personal computers on the production floor that count the number of cases of
each product item by scanning a UPC code on the packing material. Other approaches for
capturing production quantities include the use of RFID chips and manually entering the
data via a PDA.
Separately, production-quality data can be added based on the results of quality tests run
on a sample of the product for each batch of product produced. Typically, this data includes
the batch identification number, which identifies the production run and the results of
various product quality tests.
Customer Relationship Management and Sales Ordering
Customer Relationship Management
As discussed in Chapter 2, a
customer relationship management (CRM) system
helps a
company manage all aspects of customer encounters, including marketing and advertising,
sales, customer service after the sale, and programs to keep and retain loyal customers (see
Figure 9.7). The goal of CRM is to understand and anticipate the needs of current and
potential customers to increase customer retention and loyalty while optimizing the way that
products and services are sold. CRM is used primarily by people in the sales, marketing, and
service organizations to capture and view data about customers and improve communica-
tions. Businesses implementing CRM systems report benefits such as improved customer
satisfaction, increased customer retention, reduced operating costs, and the ability to meet
customer demand.
CRM software automates and integrates the functions of sales, marketing, and service in
an organization. The objective is to capture data about every contact a company has with a
customer through every channel and store it in the CRM system so the company can truly
understand customer actions. CRM software helps an organization build a database about
its customers that describes relationships in sufficient detail so that management, salespeople,
customer service providers—and even customers—can access information to match customer
needs with product plans and offerings, remind them of service requirements, and know what
other products they have purchased. Figure 9.8 shows contact manager software from SAP
that fills this CRM role.
customer relationship
management (CRM) system
A system that helps a company
manage all aspects of customer
encounters, including marketing
and advertising, sales, customer
service after the sale, and programs
to retain loyal customers.
