Author: srivaths

Cryptocurrency was never intended to be invented. The invention was a digital cash system which is completely decentralized, without a server or central authority similar to a Peer-to-Peer network for file sharing, which led to the emergence of cryptocurrency.

Cryptocurrency can be defined as limited entries in a database no one can change without fulfilling specific conditions. A cryptocurrency has a network of peers which records all transactions. A transaction is complete only when it gets confirmed by miners and it is permanent, forming a part of historical transactions called block chain.

Working of Cryptocurrency

Some of the popular cryptocurrencies are Bitcoin, Ether, Litecoin, Monero, Ripple. Bitcoin is the largest cryptocurrency and often regarded as the first cryptocurrency, even though prior systems existed.

Advantages of Cryptocurrency:

• No central authority, flexibility to make transactions all across the world.
• Almost impossible to manipulate transactions due to the additional layer of security called cryptography.
• All transactions have to be confirmed by miners, and once confirmed they are immutable.
• Personal information is hidden, thereby reducing the possibility of identity theft.
• Minimal processing fees.

Disadvantages

• If the holdings are not backed up, a computer crash can cause loss of cryptocurrency.
• There are constant fluctuations of cryptocurrency value.

 

http://blockgeeks.com/guides/what-is-cryptocurrency/

http://www.moneycrashers.com/what-are-bitcoins/

Some of the best practices for a perfect implementation of an ERP system are:

 

1) Executive Backing: getting support and participation from company executives will encourage users to support the process. Moreover, the project can function within the limitations of time, scope and money. It builds overall consensus in the organization, which is critical for a successful implementation.

 

2)Set Practical Goals: An ERP system is going to solve a lot of problems such as, cost reduction, an increase in productivity etc., but all this is not going to happen in a short period time. Implementation will take time and an ERP system should not be considered as a solution to all organizational problems.

 

3) Training and Change Management: it is imperative to train the users on how to feel comfortable using an ERP system. If users are confident about the working of the ERP systems, the user adoption will increase dramatically

 

4) Maintenance Planning: ERP system will have problems and solving those problems will cost money. In order to avoid such situations, it is imperative to foresee and have adequate resources in place to solve problems. This will ensure a long-term success of the ERP implementation.

 

5) Understanding Key features: Many users don’t have a good understanding of what features the ERP system provides. Knowing the key features and understating them will ensure functions are completed faster, and business objectives are met.

 

http://www.netsuite.com/portal/resource/articles/erp/erp-implementation.shtml

http://www.socius1.com/6-erp-implementation-best-practices/

ERP systems can be broadly classified into three tiers based on the total cost of ownership (TCO), scalability, and functionality.

Tier 1: The main players in the tier 1 category are SAP, Oracle, Microsoft dynamics, and Infor. The tier 1 category for a long time has been a two horse race between SAP and Oracle. However, of late, Microsoft dynamics and Infor have been considered by many as tier 1 ERP systems, including Panorama consulting. The TCO is extremely high and revenue is typically measured in billions of dollars. These ERP systems are best suited for fortune 1000 companies which have a global presence. Implementing the ERP system is an extremely complex procedure and requires highly skilled professionals.

Tier 2: ERP systems which fall under this category are best suited for mid-size companies. Main players are Epicor ERP, Sage, Exact, IQMS. These systems are not as complex as tier 1 systems, but they are often robust and agile enough to fit the needs of mid-size organizations. Tier 2 vendors are usually limited number to a few number of countries or regions.

Tier 3: There are many players in the tier 3 category, and they are mainly suited for smaller than medium sized businesses. Revenues typically range from $10 million to $100 million. They have limited functionality and are often designed for a vertical industry.

http://www.compudata.com/difference-between-erp-tier-1-erp-tier-2-erp-tier-3/

https://www3.technologyevaluation.com/research/article/tier-1-vs-tier-2-vs-tier-3-erp-whats-the-difference-anyway.html

In May 2004, HP wanted to centralize all of its disparate North American ERP systems onto one SAP system. The cost of the project was estimated to be around $30 million and the ERP problems cost HP $160 million.

Mistakes made by HP

1) When the system went live almost 20% of the customer orders were blocked and had to be entered manually. This was because of data modeling problems between the legacy and SAP system, and it resulted in a backlog of orders. The connection between the legacy and SAP system were tested for both orders with customization and without customization, and they worked fine. The mistake was that HP did not test the all the different customer configuration, and hence some of the orders went through and some did not.

2) Customer service representatives were not properly trained to use the new system which resulted in more dropped orders.

3) The demand for configure to order system was 35% more than what HP had predicted, because of which HP had to buy a new factory in Europe. HP tried speeding up the delivery process for the backlogged orders which further increased the delivery cost by 35 to 40 percent.

All these problems were minor problems which could have been handled by HP, but since they all occurred together it turned to be a huge problem.

http://www.cio.com/article/2439385/project-management/when-bad-things-happen-to-good-projects.html

 

 

An MRP system is used to typically answer what items are required? how many are required? and when are they required?. It answers these questions by taking inputs from Master Production Schedule Bill of Material Inventory Status Records. MRP was commercialized in the 80’s but it hasn’t adapted much to the meet current needs. For example, product lifecycle has reduced drastically, there is more customization, customer tolerance time has reduced, there is more product variety. Also, an MRP system is highly dependent on different business processes and changes in any process usually affect other processes. Due to this, MRP has been facing problems such as an error in forecasting, which results in having more/less inventory or having the wrong inventory.

These problems can be overcome by using a Demand Driven MRP(DDMRP). In DDMRP, only qualified sales orders within a short range horizon qualify as demand allocations, sales orders give a near perfect demand signal in terms of what will be sold and when it will be sold. This means there are fewer variations and additional costs such as the need to expedite a process can be reduced. Also inventory size would be ideal, neither too less nor too much.

 

http://demanddrivenworld.com/wp-content/uploads/2014/06/Lunch-and-Learn-Supply-Chain-5.22.14.pdf

http://blog.primeadvantage.com/precisely-wrong-all-the-time-the-real-story-behind-the-bullwhip-effect

http://www.beyondmrp.com/demand-driven-mrp-benefits/

https://visiepartners.nl/NL/opleidingen/ddmrp-demand-driven-mrp

 

Ikea

Cost per touch inventory tactic : Ikea uses this technique where customers select and retrieve the packages themselves. The more an item moves, the more it costs. By making the customers retrieve the packages they are reducing moving and retrieval costs for an item.

High-Flow & Low-Flow Warehouse : Products stored in High flow warehouses are in high demand and they are fully automated to reduce costs per touch. Low flow warehouses are not in demand and the processes are mostly manual because the workers don’t have much to move and stock.

Walmart

Cross docking is Walmart’s strategy of replenishing inventory effectively. Cross-docking is the process of unloading materials from an inbound truck and loading these materials directly into outbound trucks with little or no storage in between.

Amazon

Products in amazons warehouse are not organized by category. They are placed on shelves as if by random. When a product is picked up hand by a collector he scans it with a handheld device to ensure that the right product is picked up. The products progress in the warehouse is monitored in every step because of the scanning of the product in each step. By doing so, Amazon is able to track where a particular product is at any given point of time.

A 90-second video on how Amazon manages its warehouse https://www.youtube.com/watch?v=5TL80_8ACPc

Make to order and make to stock may seem similar but are different processes. Make to stock is triggered by a need to increase inventory and make to order is triggered by a need to fulfill customer order. Make to order business model was made popular by Dell computers.

Replacing inventory with information such as accurate forecasting helps in having an agile supply, which is at the same time flexible enough to adapt to any changes in the supply and demand. Having excess levels of inventory increases storage costs.

Dell Computers pioneered the Internet-based direct sales model for its personal computers which was highly successful in the 90’s and early 2000. Dell stood out from other computer makers which followed the make to stock model. The just in time strategy (JIT) of Dell made it possible to operate with lowest levels of inventory. The make to order model further reduced costs by removing middlemen such as retailers and wholesale distributors. The internet based direct sales model also generated a huge amounts of market data which Dell used effectively to forecast sales. This ensured Dell to be a market leader for a very long time.

However, in recent years Dell sales have dropped and Dell is trying to reinvent its supply chain by focusing on what it calls segmented supply chain, that is offering different solutions based on customer needs.

http://www.manufacturingnews.com/news/98/0703/art1.html

http://www.industryweek.com/blog/dell-reinvents-its-supply-chain

Enterprises across the globe have moved towards greater adoption of mobile solutions and ERP is no exception to the trend.  Here are ways how mobile ERP will benefit enterprises

1) More time for better decision making.

If your key supplier has a huge shipment of raw materials stuck in transit, the operations managers finds out only when they access the ERP platform through a fixed workstation which sometimes maybe too late. With Mobile ERP, managers will be informed immediately giving them more to come up with an alternative solution.

2) Sales People have access to Information while on the go

With a mobile ERP app, salespeople who visit customers can carry important information about the products they are selling and the customers they are selling. They have the advantage of  checking  inventory on hand, order status while being with the customer.

3) Remote workforce:

Most of the companies have remote workers in distant areas, these workers can benefit from having mobile access to the central ERP platform.  Also with the Mobile ERP, upper management can stay connected to the business.

http://www.meritsolutions.com/enterprise-mobility/mobile-erp-benefits/

This week we learned about the fulfillment process. A typical order fulfillment process consists of the following steps.

• Order is received and the customer is notified about the order.
• Order is sent to the warehouse.
• Order is picked up from the warehouse.
• Order is packed and prepared for shipping.
• Order is shipped.
• Customer is notified about the shipping status.
• Customer receives the order.

Some of the challenges faced during a fulfillment process are :
1) Demand Planning: Planning in advance for the demand of a product.

2) Inventory Management: Having real time inventory levels is essential and can fasten the fulfillment process by having adequate stock.

3)  Supply Chain Execution: When items are out of stock or low on stock it is necessary to order new items as quickly as possible so as to reduce the fulfillment time.

4) Logistics Planning: Determining how long it will take to deliver the item to the customer once it is ready to ship is Logistics Planning.

The perfect order metric (POM) is one of the most critical metrics in fulfillment.

The Warehouse Education and Research Council’s (WERC) definition of the perfect order metric is that a perfect order is delivered:

• Complete;
• On time;
• Damage free;
• Correct documentation and invoicing.

Source: https://logisticsviewpoints.com/2014/11/10/a-critical-fulfillment-metric-the-perfect-order/

Case study on the perfect order which mentions about the measuring index for a perfect order and also the benefits of a perfect order.

http://www.werc.org/assets/1/workflow_staging/Publications/647.PDF

This week we discussed about Master data, Organizational Data from a Procurement perspective and also about the whole Procurement Process.

The different steps in a Procurement Process are :

1) Determination of Requirements: This process involves determining what services and materials are needed.
2) Creating Purchase Requisition : the purchasing department is informed about what items or services are required.
3) Creating Purchase Order : when the requisition is approved it becomes a purchase order.
5) Goods Receiving and Inventory Management : Process in which the goods or services are received and receipt of goods are confirmed by entering PO number. Inventory is updated.
6) Invoice Verification : In this process the PO order and Invoice are checked and matched.

Some the different business models in a Procurement Process are
1) Vendor-managed inventory ( VMI ) is inventory that is managed by the vendor and vendor(supplier) decides when and how much to stock. In Vendor Managed Inventory process the vendor and distributor are linked via Electronic Data Interchange or a secure internet connection due to which vendor has access to the retailer or distributor’s stock levels This is done by linking the companies ERP (Enterprise Resource Planning) systems together.

2) Consignment Inventory is inventory that is in the possession of the retailer, but is still owned by the supplier. Usually used when the retailer is not confident of sales and the supplier uses the retailer for carrying inventory. It creates a condition of shared risk/shared benefit and both parties are benefited by the sale of the product.