Enterprise resource planning assignment is about business process management software called ERP that allows an organization to use a system of integrated applications to manage the business .
Case Study and Analysis
Introduction to the Apparel Industry:
Relatively shorter product life cycles, demand which is highly volatile and unpredictable, huge product variety, and supply processes those are long and inflexible are the basic traits of an Apparel industry. These characteristics coupled with a supply chain which is very complex is instrumental in making apparel industry an apt situation where efficient supply chain management practices may be able to create a competitive advantage for a particular business entity. In spite of the opportunities related to huge quantity of data which are readily available coupled with the power of information technology, it has been seen that research and practices related to the supply chain management in this particular industry has not been done to good extent.
There are very few industries where making prediction and forecast on the demand of the products are as complicated as apparel industry. It is virtually impossible to predict demand in apparel industry correctly. The main reasons behind this are product proliferation and a relatively shorter product life cycle. These lead to the uncertainty of the demand. On the other hand longer lead times cause by a very complicated and fractioned global supply chain ensures that retailers need to make commitments well before the due time. This also makes sure that the demand predictions lack in accuracy.
These practices lead to different problems for the industry players. The basic problems related to it are huge inventory carrying cost, high costs of stock outs etc. These costs are generally paid by the retailers who in turn loose out on their share of profit. To adjust with the risks related to the ever evolving fashion scene is one of the most important issues that the apparel industry faces today. Integration of supply chain system is an important step that should be taken to able cope with this problem.
Two things have ushered valuable changes to the apparel retailing industry. They are information technology revolution during the 80s and 90s decade and the retailers’ ever increasing bargaining power. The changes that have been brought by these practices are vendor managed inventory or the quick Response by apparel sectors, which have been instrumental in changing the relationship between the retailers and the suppliers.
Requirements of ERP in the retail apparel industry:
Sales order module
Internet Order Entry: In the Internet order entry, the company sees styles presented in a matrix made up of color, size and other dimension (leg or sleeve length, collar size etc.) as it would on an order pad. The contours and framing on the page match the style’s matrix without empty or unused data fields.
Available to Sell: Inventory availability appears beside each order-entry field at the color and size detail level. Future available-to-sell is presented in the same color-size matrix with anticipated completion and status. Thumbnail pictures provide access to catalog or product specifications.
Open Order and Ship Status: The query regarding the order status which is made by the customer shows the style level status in summary and helps the user in drilling down to the details as minute as color, size etc.
- Zone Logic
- Wave Picking
- Wireless Picking and Packing
- Enterprise Capacity Planning
- Batch Picking
- Fixed Locations
- Random Location
- Pick to Clear
- Zone Picking
- Cycle Counting
PLMPDM and Sourcing module
The functions include store and retrieve pictures, images, sketches, etc. These will be made available for output to production documents and queries and sales meetings and catalogues.
- A detailed bill of materials, trims and labels is decided on the basis of a component list which is structured relating to different product types (types of materials and other components are generated from the master database). Predictions related to the costs for the different component may be different for different colors and sizes by exception (used when needed).
- Different kinds of fabric swatches and trim pictures are used for quick recognition, search etc. The swatches or the pictures may be printed or seen on documents like cutting slips, cost sheets, material requisitions etc.
- A detailed list of different operations is required for successfully ending production phase like cutting of clothes, sewing etc. This list can be used for costing of labors and loading of plants.
- Tables giving the details of standard of specifications of style, different measurements and technical information which needed for sewing and total quality control of the process.
- A process has to be carried out where full costing based on sensitivity analysis and subsequent price calculation are done based on margin set by the company. Different formula for costing related to discounts and add-ons can be requested by the customer in case of private label and depending upon product category. This sensitivity analysis has to be designed in such a way so that it covers currency exchange fluctuations, different taxes and duties, freight charges and brokerage fees and several other factors which may have an impact on the profit margin for exports as well as imports.
The schedule for the individual prototype is merged into the schedule for the group as a whole and Merchandise Calendar in which different events are highlighted and coupled with related activities. Different events are highlighted to keep a track of them. These events are meetings for the group review, fashion show, etc.
Offshore Manufacturing Features
- Commercial Documents
- Supplier Capacity Planning
- Detailed PO printing integrated with PDM
- Container tracking and auto packing
- Web interface
- Vendor ASN
- All reports formatted to PDF or Excel
- Letter of Credit Management
- Traffic Reports
- Material and Trim Requirements
PO Status reports and traffic reporting – The reports can be written or updated with recent facts and figures by agents through the internet. Different purchase orders are flagged to pre-defined dates and the critical path of the production process.
Sample QC measurements – The WEB QC module helps the agents and factories as well as the users to monitor and manage the process of QC sample. The module is able to make sample reports in Portable Document Format and generate self initiated mails to the maker showing the exact problem areas.
- Sales Forecasts
- Production forecasting
- Import of Retailers generated forecasts
- Generation of recommenced units to cut or order based on Forecasts.
- Revised and Actual Forecasts
- Support of Min, Max and target inventory levels.
- Time phased reporting of data, with 52 week look ahead.
- Exception based reporting
Material requisition and management
The ERP software programs will be instrumental in making a choice in case of time-phased requirements purchases and inventory. The time phased requirements are generally decided on the basis of different material estimates present on the detailed bill of materials. The new purchase orders can be made with just a click on the correct cell.
8. Accounting module
- Interface to Accounts receivable
- Accounts payable ling to purchase system for matching of PO
- Document management
- Financial feasibility
- Multiple currencies
- Multiple companies and divisions
- Sales by product class and royalty reporting
- G/L consolidations
- Inter-company transfers
Pantaloon Retail (India) Limited, one of the India’s leading retailers which operates through several retail store formats in the segment of value as well as lifestyle products catering to the needs of the Indian consumers has its headquarter in Mumbai (Bombay) of India. The company operates over 5 million square feet of retail space, has over 450 stores across 40 cities in India and employs over 18,000 people.
The key sources of merchandise for Pantaloon are:
- Pantaloon group companies manufacturing the in house brands
- Vendors manufacturing only the Pantaloon in–house brand
- Vendors manufacturing external labels like Freelook.
Almost 70-80 per cent of the stocks in the store is Pantaloon in-house brands and this makes supply chain management much simpler. In case of fashion and new merchandise, the purchase invoice is raised by the category management department since the goods are under best of performance. But for regular goods and replenishments the SCM team raises the invoice and informs the category management department accordingly.
Pantaloon has employed ERP software Baan to better manage its merchandising functions. The aim was to get ahead of the competition by a clear 18 to 24 months and set benchmarks in (faster) response, lower inventories and (quicker) cycle time turnarounds. Pantaloon’s mantra is to build upon its existing retail network by adding more space in cities where it already has a presence, as well as move to fresh markets. The company used Baan which they feel is a simple, flexible, open ended software to incorporate latest business structure like category management. This was not easy for a retailing operation generating two million transactions per month through 46 retail shops across the country, totaling a data size of 15GB every month.
The main challenge was tracking dispatch and replenishment of stocks to all the stores in the country. In Pantaloon, each department was divided into categories; the product lines too were converted into categories based on the revenue generated by each of them. The categories were then mapped to seven levels in the category master in Baan and 14-digit items were assigned to these.
Pantaloon went live on BaanlVB2 in a quick ten months and the systems are online at the transaction levels. A business transaction at the head office and central warehouse is effected online in an integrated environment an all modules – finance, distribution, purchase, sales and manufacturing – have been implemented in one go.
Category Management: Pantaloon implemented category management through Baan with massive customization. Eighty percent was customized independently and the rest via Baan’s process module. The software’s open-ended architecture enabled implementation and the seven levels were mapped to Baan.
Integration: Prior to Baan Pantaloon was on Lotus Notes. Baan discussion database on Lotus Notes facilitated a higher level of integration across functional users.
Interfaces: Pantaloon operates in a very complex and highly processor oriented environment. Currently, it has 46 retail shops across the country and plans to open 10 more in the current year. The company has 65,000 14 digit items in its item data master. IT interfaces with Baan were built in the sales, stock transfers, delivery, receipts and between the central warehouse and all the retail shops. These interfaces ensure accurate MIS to top management.
More Control: The Company has 15 work centre in Mumbai. Earlier, due to faulty allocation, they were actually canceling purchase orders. With Baan, the company has attained very high visibility, which enables it to pinpoint the exact workload at each centre and the capacities are optimally utilized. The company has achieved 60 per cent more accurate material allocation after going online with Ban. Other incremental benefits include:
- Timely delivery to various retail outlets and absolutely no overloading; hence space which is at a premium at a retail outlets is used effectively
- A great deal of money otherwise incurred in shipping materials too – and – fro between work centers and retail outlets has been saved
- Because the visibility in data flow, the company now has the flexibility of reallocating and changing the work centre to meet a particular demand
Less Loss: By implementing a greater retailing concept – category management – a lot of work flow initiatives have been automated. With Baan, the company has detected almost 30K dead items which constitute 5% of the total stock in the warehouse.
Better Systems: With Baan, Pantaloon understood that it was operating in a high growth environment and clearly wanted to establish top class systems and processes to handle moving targets and manage growth effectively.
The spin-offs are mainly:
- Cycle-time turnaround is reduced by half. Currently, stock turns are once every quarter
- Safety stock levels have been recalibrated to be updated every month
- Data visibility and information sharing is better. The company is now getting proper MIS report
- There is an integrated information system work flow across various departments of the company and more transparency
- Currently, requirement of fabrics, MRP and production orders for finished goods are automated and generated from the Baan system. The company now manufactures garments with online integration with the supply chain process
- The company’s balance sheet is prepared through Baan
Thus, Pantaloons has gained tremendously by using the Baan ERP software which has helped it streamline its operations and has brought about a lot of clarity into the supply chain, while integrating its systems together.
In this way we can say that the strategic supply chain factors for the evaluation of different ERP software programs and a n organizations application of value chain will help the organization in identifying an ERP software program which is fit and compatible for that particular organization. If the companies are able to choose the right kind of ERP software program for it not only it will be able to integrate its business more efficiently but also it will be possible for the company to derive the benefits generated by the ERP system throughout its entire value chain. We can say that ERP system implemented by a company is virtually inseparable from the value chain of it. So it is highly recommended that for efficiently and effectively implementing an ERP system, the analysis of the ERP system along with understanding of the value chain activities of the company is needed to be done. [Read all other Business Development Assignment Help]
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