Question:
Discuss about the Work System Method for Connecting People.
Introduction
Information system is used to integrate the business process, social process and the technical process of the organization. There are various types of information system ranging from knowledge systems, decision support system to behavioral analytics, supply chain management systems. The information system brings in lot of advantages to the business organizations. These systems improve the business operational efficiencies and effectiveness. Hence many organizations have already adopted these information systems in their business operational activities. Nike is a world leader in sports based accessories. It offers wide range of products to men, ladies and kids section. As a top leader in sports apparels Nike has many operational units across many countries of the world. It also allows the flexibility of customers buying Nike products from Nike website online. Thus, there are some issues that can be better dealt if the company makes use of supply chain management and customer relationship management system based information system. This work examines the necessities and thus promotes the adoption of integrated enterprise system strategy for the company to increase the overall efficiency and effectiveness of the supply chain management and customer relationship management of the company.
Information system
Information system is defined as a system organized for collection, storage and transfer of information and data among other connected systems. It comprises of integrated technical system and a social system. The technical system includes various IT based technology and processing components to process the information. Social system includes the people of the organization that are the part of the information system. It thus involves the study of IT based technology used to collect process and distribute data for a given network of people in an organization example data warehouses, supply chain management systems etc. (Alter, 2006).
Information system helps in developing of a network for the organization for efficient communication of the data and information for the business use. It helps in synchronizing various business process, store large amount of data, make the data available in various reporting format to the user on demand, takes in feedback from users, etc. thus they have an important role to play in business processes of an organization. The main components of the Information systems include hardware, software, data, procedures & processes, people of the organization and the feedbacks. Many organizations have already implemented the various forms of information systems like decision support system, Enterprise resource planning system, supply chain management system etc. to improve the overall working efficiency of the organization. Information system offer many advantages to the organization. It improves working efficiency, enhances the work effectiveness, improves communication between various modules and departments of the organization, makes the data available at the needed time and reduces errors in the business process. Seeing its advantages many organizations make use of these systems (O’Brien 2003).
Nike
Nike is a well-known organization which gives quality products in sports section, sports footwear, hardware and games frill. It has a Swoosh image as it logo and the word Nike connotes the name of the goddess of triumph. Nike Company was built up in January 1964 as Blue Ribbon Sports (BRS) by Philip Knight and his tutor Bill Bowerman. Knight was a University of Oregon track competitor. They both together formed an association of BRS. The organization was at initial a wholesaler for the Japanese shoe producer Onitsuka Co and their image Tiger. With an aim to improve the shoe, Bowerman would routinely tear isolated the Tiger brand shoes and thus see how he could enhance them lighter and improve them. He used to take help from school runners to test his indications and accumulate their information (Porter et al 2002).
By 1971, BRS touched $1 million; the business relationship with Onitsuka was turning sour. Along these lines, they continued ahead from being traders of athletic footwear to makers and creators of athletic footwear and took full control over their value chain. Hence, by 1978 the gathering named their organization as Nike. The organization advanced and achieved a deal characteristic of half athletic shoe piece of the overall industry in the United States of America. It was Davidson who outlined the eminent “swoosh” logo for $35 when he was a design student. Today, the surveyed market estimation of Nike is about $10.8 billion (Porter et al 2002).
Nike then made use of high class research and development to develop new products for sports athletics. It made emphasis in new quality product development and thus had a world class established research laboratory. The product development at Nike is done after extensive research on customer needs, through proper testing of the prototype and finally releasing the product using an attractive advertisement and endorsements. Company advertisements are made up of story boards or attractive tag lines which reveal the effort put in developing the product. An endorsement with sports stars has been one of the key business marketing strategies of the company. In just 32 years, Nike has turned into the business’ sports and wellness organization with revenue reaching $US 17.7 billion.
The mission of the Nike is “To bring inspiration and innovation to every athlete in the world” (Nike, 2016).
The principle target of the organization vision is to bear on the legacy of Bowerman as far as inventive thinking and planning and growing new items that point in helping competitors capacities and hence making manageable business opportunities which should make the organization be not quite the same as its competitors (Nike, 2016).
Nike Company provides products or items in men’s section, ladies’ areas, kid segments, sports adornments and exceptionally outlined items for sports. For the men areas, the fundamental items are shoes for ordinary games, workout shoes, apparel which incorporates shirts, t-shirts, pants, gears which incorporate caps, fuel groups. For the ladies segment, the primary items are shoes for ordinary games, workout shoes, dress that incorporates pants, tights, sports bras, swimwear, and shirts. For children, the different items are top, bottoms and games gears (Porter et al., 2002).
Nike integrated Supply chain and CRM need
Nike supply chain with delivery precision is critical for the company success. Nike does not own any factories or manufacturing plants. Rather the manufacturing is outsourced by the company to third parties as it offers advantages of cost reduction and managerial overheads. The contract based companies manufacture the product for the company. The company buys raw materials from other vendors and supplies them to the manufacturers. Form manufacturers the finished goods are sent to the distribution centers. The Nike Company has 16 distribution centers outside USA and 5 in USA (Koch, 2004).
Now the product from the distribution center is distributed in three ways:
Products are sold to the wholesales in the markets
Products are directly sold to customers through its website via e-commerce
Products are sold to global brand divisions
The company main focus is to sell products directly to the customers through brand stores, online portals and factory stores (Koch, 2004).
Thus the company makes use of multiple sourcing partners for supplying raw materials, for productive manufacturing companies, and directly deals with customers. Hence there are issues of communication among suppliers and the company, manufacturers and the company and various customer related relationship management. Moreover the company main success lies is delivery precisions. If delivery precision is not met then problems like increased inventories and error in product delivery shall be in existence. Such errors and increased inventories shall cause huge on the company reputation and relationship with customers. Wrong delivery shall bring down the trust of the customer and thus bring down the relationship with the customer. Increased inventories shall result in longer supply chain processes; reduce profit margins from the products and thus loss in the revenue generated by the company. Thus company needs an integrated framework that synchronizes the activities of supply chain and customer relationship management. This framework should be integrated in the entire system as this is the way of doing business in the entire organization.
Integrated SCM & CRM advantages
Supply chain management is defined as the integrated process management from suppliers supplying raw materials, to manufacturing plants products and information that add values for customers and stakeholders. Thus the main process involved in supply chain management are the warehousing, inventory, transportation management, purchasing, packaging, production support and customer order processing.
Nike company supply chain includes activities from supplier supply raw materials to manufacturing sites, manufacturing plants producing products and supplying it to distribution centers, distribution centers to brand store or factory stores or retailers or to the customer directly by order processing. Thus, with an aim to maximize the value and goal of the company (Amini et al 2005).
Thus company for its success need to maintain good relationship with suppliers, manufacturing plants, maintain inventory, process order, communicate and synchronize all the activities in real-time to avoid any errors and maintain the necessary quality of management. Moreover the company needs to have a real –time monitoring and controlling of all the activities.
Now if a customer buys a product from Nike online portal and the customer received a wrong product. The customer places a complaint in the customer feedback form and requests for the product exchange. If this customer relationship management is not notified to supply chain management than the supply chain management shall never be aware and thus can’t take any actions (McKenzie et al 2002). For addressing such complaint the CRM needs to take data from supply chain management order processing part and get details of the order, then recheck it with the product and the store from where the supply was made and then resolve the query. Thus there is a need of coordination among SCM and CRM as a single entity in the company (Basnet et al. 2003).
Thus an integrated SCM and CRM are needed for the entire enterprise. Such integrated framework shall offer following advantages:
It shall help in proper management of customer queries
It shall help in real-time order tracking etc. (Boysen 2011).
It shall help in maintain appropriate inventory levels for the organization. A reduced inventory level shall be gained.
It shall increase communication between the parties
Company integration between departments shall increase (Chang et al 2014).
It shall make the data available on real-time and thus can help in quick decision making and thus result in improved levels of decision making (Culnan 1987).
It shall synchronize and automate all the tasks and reduce data entries.
It shall improve warehousing and procurement.
It can help in improving forecasting as data is available on real-time
It shall increase the efficiency of the organization by improving more outputs with same set of inputs, reduce time waste for repetitive processing of information
It can reduce the control costs by eliminating mistakes.
Increase financial turn over due to accurate transactions and strong relationship with supplier, manufactures and customers
On the basis of the above analysis and the advantages it is thus viable to make use of integrated enterprise strategy for implementing SCM and CRM in the company.
Issues
The implementation of an enterprise based information system needs to address following issues:
Security issues: the company should make use of SCM and CRM system that are secure from network attacks, cyber-attacks and hacking. The data stored in the database of the system should be protected and thus measures like data encryption, user authentication using passwords, and priority user database levels must be employed. Firewalls and intrusion detection system can be employed to protect the overall system. The data contained with the system is of customers details, supplier details manufacturing details and if such data is compromised it can be used for internet based frauds and many wrong things. Hence such security measures are needed (Bisong et al 2011).
Ethical issues: data of the company should be shared only to authorized partners and the confidentiality and privacy of the data should be protected. It is company responsibility and company shall be accountable for any losses.
Privacy issue: the data of the company and the customer records should be held confidential. It should be disclosed only after permission from the authorities otherwise no (Gonzalez 2012).
Comparison of CRM vendors is given in figure 1 below:
Thus among sales force, Base and Zoho, Base is the best CRM package
Comparison of SCM vendors is given in figure below
Thus from the above figure SAP business one is the best among all the three SCM (Spiral model 2016).
The best breed solution shall be to use SAP business one as it already includes CRM.
Conclusion
Information system helps in developing of a network for the organization for efficient communication of the data and information for the business use. It helps in synchronizing various business process, store large amount of data, make the data available in various reporting format to the user on demand, takes in feedback from users, etc. thus they have an important role to play in business processes of an organization. For Nike it is essential to have an integrated SCM and CRM strategy. The best solution would be to use SAP business one.
References
Alter, S. 2006. The Work System Method: Connecting People, Processes, and IT for Business Results. Works System Press, CA
Amini, M.M., Retzlaff-Roberts, D. and Bienstock, C.C. 2005. Designing a reverse logistics operation for short cycle time repair services. International Journal of Production Economics. Vol. 96 No. 3, pp. 367-80.
Basnet, C., Corner, J., Wisner, J. and Tan, K.C. 2003. Benchmarking supply chain management practice in New Zealand. Supply Chain Management: An International Journal. Vol. 8 No. 1, pp. 57-64.
Bisong, A. and Rahman, S.S.M. 2011. An Overview of the Security Concerns in Enterprise Cloud Computing. International Journal of Network Security & Its Applications, 3(1), 30-45. doi:10.5121/ijnsa.2011.3103
Bititci, U., Cavalieri, S. and von Cieminski, G. 2005. Implementation of performance measurement systems: private and public sectors. Production Planning & Control. Vol. 16 No. 2, pp. 99-100.
Boysen, M. 2011. Why CRM fails – and how to fix it. Effective CRM. Retrieved from https://effective-crm-consulting.com/why-crm-fails.html/
Chang, R.M., Kauffman, R.J., Kwon, Y. 2014. Understanding the paradigm shift to computational social science in the presence of big data. Decision Support System. 63, 67–80.
Chapman, R.L. and Corso, M. 2005. From continuous improvement to collaborative innovation: the next challenge in supply chain management.Production Planning & Control. Vol. 16 No. 4, pp. 339-44.
Culnan, M. J. 1987. Mapping the Intellectual Structure of MIS, 1980-1985: A Co-Citation Analysis, MIS Quarterly, pp. 341-353.
Friedlein, A. 2003. Maintaining and evolving successful commercial web sites managing change, content, customer relationships, and site measurement. Boston: Elsevier/Morgan Kaufmann.
Gonzalez, N., Miers, C., Redigolo, F., Simplicio, M., Carvalho, T., Naslund, M. and Pourzandi, M. 2012. A quantitative analysis of current security concerns and solutions for cloud computing. Journal of Cloud Computing, 1(11), 1-18.
Koch, C. 2004. Nike Rebounds: How (and Why) Nike Recovered from Its Supply Chain Disaster. CIO.com, [online] available from: https://www.cio.com/article/32334/Nike_Rebounds_How_and_Why_Nike_Recovered_from_Its_Supply_Chain_Disaster?page=1&taxonomyId=3207 [Accessed at 25/5/2016].
McKenzie, Ray 2002. “CRM Poses Global Pitfalls,” Computing Canada, 28 (14), 27
O’Brien, J A. 2003. Introduction to information systems: essentials for the e-business enterprise. McGraw-Hill, Boston, MA
Porter, Jeff; Harris, Mark; Yeung, Gavin 2002. “Nike” (PDF).Management 296 – International Business Management.
Sprial model 2016. What is Spiral model- advantages, disadvantages and when to use it? [Online] Available from: https://istqbexamcertification.com/what-is-spiral-model-advantages-disadvantages-and-when-to-use-it/ [Accessed at 25/5/2016].
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