Case Study: High Note
Background
The High Note Group (HNG) has been operating in London for ten years, and has a well-established network of permanent full time musical instrument delivery operatives. The group provides a reliable service to; instrument rental services, orchestras, bands and individual musicians who need an experienced and trustworthy organisation to deliver musical instruments to a range of venues in England. High Note guarantees that the instruments will be delivered to the agreed venue, at the agreed time, in the appropriate condition. This is a specialised area of delivery work and the majority of staff are musicians themselves, and take great pride in providing this service.
HNG is owned and managed by Jack. Jack is keen to continue to build on the existing success, and thinks that HNG is well positioned to capitalise on the vast range of new instruments sales by large and small music stores around England and in Europe. For HNG, this would mean expanding into the delivery and returns market.
He has entered into an agreement with the Live Art Network, a Europe-wide chain of community theatres, theatrical schools and live music venues, which will allow customers to collect instruments from, and leave returns at their premises. As these venues are open most afternoons and evenings for rehearsals and performances, long opening hours are the norm. This allows customers to avoid waiting in, or missing parcels. In addition, Jack has noticed the growing volume of Internet sales of musical instruments from companies in Europe to residents in England and elsewhere in Europe. He is in the final stages of reaching an agreement with five European musical instrument companies, to allow HNG to offer the specialised collection and delivery service for instruments from Europe – he believes that HNG will be the first company to offer a service, which allows afternoon and evening deliveries and collections from nominated sites.
The move to the delivery of sold items, rather than relocation of instruments, will be a significant change for HNG. The Live Art network is a combination of community owned and privately owned venues. Therefore, Jack must deal with designated individuals at each venue. The existing company database at HNG is unable to meet the new requirements so Jack is considering a CRM system, but is unsure about whether an ERP system would be better. He would like to use Open Source software but needs guidance in this regard, and he is concerned that his administrative team are apprehensive about the proposed changes and the impact on their roles.
Task
You are a consultant who has been employed to advise HNG on the effective implementation of these strategic changes. You are required to produce a report, which addresses the following elements:
The High Note Group (HNG) is a London based organization delivering musical instruments. It is known to provide reliable rental services. The HNG provides music instruments to orchestras, bands and individual musicians. They are trust worthy organization which delivers musical instruments to a wide range of venues in England. They deliver the musical instruments on time with the appropriate condition. The company wants to continue with the existing success by venturing into new business opportunities. They would expand the existing business. For this purpose they require and effective IT system that will monitor the flow of work in the organization. In order to survive in a business scenario this is highly competitive in nature; HNG has to change the business process of the organization. The change in the business process of the organization will lead to expansion of the product, create competitive sales conditions. It will make the customers better informed about the product. The business orientation will transform which will satisfy the end users (Tarn, Yen and Beaumont, 2002).
The future plans of HNG include entering into an agreement with European musical instruments companies to allow them to provide specialized collection and delivery service of the instruments (Holmström et al., 2006). The service provided by HNG will be first in its kind. In order to make the service effective, HNG should implement a supply chain management system that will make the service delivery effective. Since the company is expanding its business, it requires maintaining a database of the activities of the business. This will make the delivery of the instruments time bound. For this purpose implementation of the ERP system will be most effective (Mujuni Katunzi, 2011).
Jack, the owner and manager of HNG would like to expand its business by entering into agreements with music stores in England and Europe. The effective supply chain management system will procure and supply the musical instruments from the stores and deliver it to the customers. Effective chain of supply management will reduce the waiting time of the customers. It will also reduce the missing of the business parcels (Wang, 2008). It is imperative to implement an innovative and effective supply chain management system that will be monitored from a centralized location (Hendricks, Singhal and Stratman, 2007). It can control the supply and delivery of musical instruments across England and other parts of Europe (Ifsworld.com, 2015).
The first stage at the implementation of an effective supply chain management system is to assess the need of the customers. The driving force behind the implementation of supply chain management system is that it will be able to provide superior service to the customers. The integrated design of the supply chain will help to take the downstream execution decisions (Pitt et al., 2014).
The supply chain opportunities have to be assessed by HNG group in order to maximize the value to the customers. This will leverage the competencies and knowledge for the alliance of the trading of the musical instruments from the companies to the customers. The benefits of the assessment include lowering the costs, providing superior value to the customers and adding new value added services (Ballou, Gilbert and Mukherjee, 2000). This will help to achieve greater flexibility. The strategic changes have to be implemented by HNG in order to expand the business opportunities. The supply chain management system will be effective if it is backed by information technology. ERP will improve the supply chain management of the organization. There will be an improvement in the delivery of the musical instruments at the definite locations (Balan, Vrat and Kumar, 2006).
The transaction survey is a tool for real time data collection that will isolate the performance of supply chain on a specific transaction. It is an in expensive technique to monitor the supply of the deliverables. It is an effective tool for monitoring the customers’ expectations and the level of supply chain compliance (Holsapple and Sena, 2005). The HNG group will be able to evaluate the customers’ expectations make changes in their delivery of the musical instruments. They are the first organization to offer deliveries and collections in the afternoon and evening. The optimal way in which the survey can be conducted includes keeping details of the customers. At the end of each month it has to be evaluated via the transaction survey that whether the supply chain has been effective in meeting the need of the customer (Kelle and Akbulut, 2005).
The supply chain management will be effective to meet the requirements of the customers. The order fulfillment will be effective with the integration of the logistics and marketing plans of HNG group. It can enter into partnerships to meet the customer requirements and deliver the musical instruments in a timely manner (Croxton, 2003). The strategic process of supply chain management determines the infrastructure that is required to fulfill the need of the customers. It will begin with functional strategies of the business. The sub process in the business will be identified. It is important to maintain effective relationship with the customers in order to remain competent in the business (Tan, 2002).
The HNG group requires implementing a cross functional process in order to integrate the various process of the organization with the supply chain (Lambert, 2008). This will reduce the wastage of the valuable resources. It will help to streamline the processes of the business. The cross functional process in the organization requires integration of the cross functional team (Lambert, García-Dastugue and Croxton, 2005). The representatives from the various departments like purchasing finance and marketing has to work in collaboration. The business process will interface with the customers and the suppliers (Lusch and Vargo, 2015). It is imperative for HNG group to implement an effective customer relationship management system along with a supplier relationship management process to form the critical linkage with the supply chain (Lambert, García-Dastugue and Croxton, 2008).
The supply chain management system can be automated by integrating the corporate cross functions such as control of the inventory, distribution of the procured items and management of the project (Corsten and Kumar, 2005). The expansion plan of HNG group will be successful by the replacement of the existing process with new technology intensive process that will meet the need of the end users. Integration of the ERP with the SCM will ensure faster delivery and alleviate the problems associated with the supply and delivery of the musical instruments (Cachon and Fisher, 2000).
The use of Open source packages like the CRM and ERP will automate the business process of HNG group. Since HNG group is planning to expand its business from London to other parts of Europe, the open source packages will be beneficial in simplifying the operations of the business. Both ERP and CRM are necessary to meet the changes in the business process.
The implementation of the supply chain management in the HNG group will improve the efficiency of delivery of the musical instruments to the customers in a timely manner. Since the company is expanding its business, it has to track and monitor the orders. The process of the business has to be organization. In this context the implementation of ERP system becomes imperative. Since the ERP software market has entered into a mature stage, the market if SCM is also growing rapidly. The SCM packages have to be integrated with the ERP system. Partnership with the ERP vendors will serve as an effective tool for efficient supply chain management. With the dynamic change of the business functioning, the opportunities of the business have increased. The information system has to be integrated which will allow the transmission of data in an easy manner (Bose, Pal and Ye, 2008). The communication across the various departments in the organization can be improved. The HNG group will be able to track the order via an effective ERP system. It will provide solutions to the problems of the functional departments. The distribution network and the logistics system can be managed in an effective way. The integration of the supply chain with the information system will lead to functional integration and efficient management of the resources in a timely manner. The effectiveness of the organization will enhance and it will be able to respond to the need of the customers in an efficient manner (Gunasekaran and Ngai, 2004). This will reduce the wastage of the resources. The management of the various projects by HNG group will be effective and efficient. The integration of the supply chain framework with the ERP system will improve the entire process of order taking and dispatch of orders within the organization.
The expansion strategy of HNG group will succeed with support and cooperation from the suppliers. This is essential for critical success of the business. The experience of the stakeholders of the business enhances by integrating the CRM with the SCM (Nah, 2002). The advanced framework of supply chain management is used to satisfy the customers. Thus it is imperative for the organization to maintain the relationship with the customers by using an effective supply chain model. The systems of SCM provide tangible benefits to the customers. They will be able to procure their order in a timely manner. It will help in providing a coordinated planning and flow of materials and information among the partners of the supply chain. The bull whip effect can be mitigated. HNG group can manage the relationship with the customers in a systematic manner by initiation of customer relationship, maintenance and termination. On the other hand the CRM systems will be effective in maximizing the value of the relationship portfolio with the customers. This will result in improvement of business performance of HNG group in the area of customer management. The CRM systems will induce the effectiveness of the business solutions. It will reduce the duplication of the data entry and maintenance of the process will improve. It will help to maintain a firm wide database of the information related to the customers. It will provide a centralized data base across the entire organization. This will comprise of the information of the customers. The new system of database will replace the existing database and make the process of work with the organization simpler and faster. The quality of information processed to the customers will improve. This will maximize the profitability of HNG group. The SCM model of the organization will be successful with the management of relationship with the customers. This will reduce the errors within the business. The market share of the company will increase. The agreement of HNG group with other business houses i.e. Live Art Network and five other companies selling musical instruments from Europe will prove to be successful. The new process will be able to maintain a database of the customers, orders and delivery details (Spiegler, 1995).
HNG group will expand its business to parts of Europe. The strength of customers taking service from the organization will increase. This will increase the profitability of the business. But it requires effective supply chain management system along with ERP and CRM to the process of expansion successful.
Integration of the SCM of HNG group with the ERP system faces several challenges. They are as follows –
HNG group may face critical issues while implementing CRM in the organization. The main agenda of CRM is to make the customers satisfied with the performance of the organization. But there are several challenges faced during the implementation of CRM.
Conclusion and Recommendations
HNG group has to bring certain strategic changes in the organization in order to survive in the competitive business. The expansion plan of the business will be not successful if it is not able to make certain mandatory changes in the system of the organization. The organization plans to enlarge its business process by entering into agreement of music instrument companies in Europe. Since it is engaged in the business of delivery and providing service to the customers, it is imperative for HNG group to have an effective system of supply chain for procurement of order, order processing and delivering the musical instruments with the stipulated time frame. With the expansion the number of customers of the organization will increase. The company has enhanced the information technology of the organization. This can be achieved by the implementation of the ERP system. The ERP modules will integrate the various process of the organization. The modules of ERP must be compatible with the business process. The various functional departments of the business will be integrated by the implementation of the ERP system. But the implementation of the ERP system in the organization is a costly affair. The organization has to make lump sum investment to make the venture successful. On the other hand the business of HNG group will be successful by effective customer relationship management. The sales of the organization will increase. The CRM system of the organization will be successful by effective performance of the core team of the organization. The core team of the organization has to manage the employees in an effective manner. They have to identify the need of the customers and at the same time they have to address to the queries of the customers in an effective manner. This will make the customers satisfied with the relationship management process of the organization. The organization will be able to meet its objectives. The performance of the organization will improve. The organization will be able to manage the change in the business process in an effective manner. The CRM module along with the ERP module will be a successful investment of HNG group.
While writing the report I realized the importance of supply chain management for increasing the effectiveness of performance of the organization. The expansion plan of HNG group will be successful with the implementation of effective supply chain management system. I came to know that it is imperative for HNG group to maintain a database of the customers in order to improve their CRM strategies. I discovered that the supply chain management will be successful if it is backed by advanced information technology. Thus in this context I realized that the implementation of the ERP module will be necessary. The ERP system will keep a database of the customers. I came to know that the ERP module will help to track the orders. The procurement of the order can be made in a successful way by implementing ERP. I have known from my research for the report that the ERP module will simplify the business process in the organization. It came to my realization that even a small business cannot succeed with effective customer relationship management. It is important to improve the performance of the organization. I have come to know that the business of HNG group will succeed only if it is able to implement CRM and ERP in the organization in an effective manner. Earlier I had realized that the open source support system is not available to small organization. But the research for the report changed my thought process and I understood the importance of open source for small organizations.
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