1. Which businesses processes are the most important at Summit Electric Supply? Why? There are several business processes that were used by the Summit Electric Supply company. Among them the important ones are:
1) ERP software from SAP-> Scalability and investors visibility was the two factors most important to the company and both these factors were very well tackled by the ERP software.SAP functionality in sales and distribution, materials management and financials greatly benefited the company to boost its distribution capacity.
2) SAP’s NetWeaver BW – For Business Intelligence reporting and analysis this process was used. This helped the company to evaluate the profitability of its sales channels,using what-if solutions. 3) The “Batch management” process- Wires and cable are Summit most important product category. It buys these products in reels of length 5000 feet and then cuts them into various lengths and sells to the customers which make it difficult to maintain the inventory of this product. The batch management process removed the problem of maintaining the inventory of such products.
2. What problems did Summit have with its old systems? What was the business impact of those problems? There were a few problems that Summit went through with when they were using the old legacy systems. Some of the few problems they came across were— The old system caused them to have delay with their supplies. Also the system was complicated as it would separate different categories of products which eventually was difficult to combine when needed. The business impact from the problems was that the system was not able to keep up with the fast growing business.
It limited the business as it was only able to handle a few range of numbers and location at a time.
3. How did Summit’s ERP system improve operational efficiency and decisions making? Give several examples. Summit’s ERP system improved operational efficiency and decisions making by advancing operations. It made the processing faster and distributed the supplies on time. With the old system the Summit had to do a huge amount of manual work. The employees would have to go into details with the customers just to find specific manufactures to identify a product. Once they have done that they would have to put it into Microsoft excel spreadsheet. The whole old system was too much time consuming.
For example collecting and reviewing all the invoices manually would take up to a month and the company would have stacks of papers of the copies of the invoices to give to their vendors. Now the new ERP system has improved it. They are now able to produce more data quickly and they are able to view them more often. The ERP system has helped provide tools to help the company evaluate the sales channel with what-if scenarios. For example, now that the company uses this tool, they are now able to evaluate profitability by the branch, sale person, customers, and manufacture. Now the exposure to the internal working of the system, on how its operations are performed have been greatly enhanced which in turn makes the company and the management to make important decisions.
4. Describe two ways in which Summit’s customers benefit from the new ERP system. One way that the Summit’s customers are benefitting from the new ERP system is that they can rely on the company for their needs and products. The company is now more efficient with the new ERP system. The company wants the customers to feel that they can provide what all they have produced —all the products which the customers want are being dispatched to them in a short time period. Also customers can track their order status and from which manufacture it came from. Large customers that have long-term job sites are benefitting from the new system as well.
The company built temporary warehouses on-site to supply the customers with its electrical products. They create what they call parent-child warehouse relationship to be able to work with the customers. That means that if a Summit’s office has more than a few temporary on-site warehouses than the warehouse can be controlled like subparts of the main Summits warehouse. With this system, it helps to prevent anybody from selling the consigned inventory into the warehouse.
5. Diagram Summit’s old and new process for handling chargebacks. The old process for handling chargebacks had so many flaws in it due to which the company was losing on revenue opportunities and sometime barely making any profit. Processing chargeback in the old system was very much manual. You have to compare the sales to contract. This means that a distributor can have up to hundreds maybe thousands of contracts. They have to identify the chargeback and which manufacturer with enough documentation of the contract. They would have to go through the customers invoices for detailed manufacturers to identify which chargeback they could have claimed. Then after identifying they would have to put the chargeback details in Microsoft Excel spreadsheet.
The new process for handling chargebacks was more efficient. It automatically review Summit’s billing activity for the day and the compares it to all chargebacks agreements loaded in the SAP system by the end of every day. Whenever there was a match in the system they were able to claim. The system is after identifying the claimable chargebacks were able to create a separate chargeback document outside the consumer invoice. The system is able to process chargeback more quickly and is able to review it within the same day. Since it is fully automated, the company increased its claim by 118 percent over the old system.
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