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…show more content…
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
BUSINESS PROBLEM_SOLVING CASE
Summit Electric Lights Up With a New ERP System
1. Which businesses processes are the most important at Summit Electric Supply? Why?
The businesses processes that are most important at Summit Electric Supply would have to be ERP
software from SAP. Also SAP’s Net Weaver BW data has also became important to Summit
Electric Supply. These processes are important because it helped Summit Electric stayed more
organize and be able to control how much was needed to be produced and distributed. The system
was able to connect over 19 locations. Summit had to advance these processes to satisfy their
business requirement. They would had to do updates on a daily bases instead of weekly due to the
fact that if they did weekly it would cause delays. The “Batch management” was also a process
that became important as well. The process was able to track that how much a supply was being
needed as a batch instead of a single product making it easier to know how much was being
sold. These processes pretty much modify and made Summit Electric more significant.
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 still used their old systems.
The few problems they with coming across with was the fact that the old system cause them to
have delay with their supplies. Also the system was complicated because the system would
separate different categories where it made it difficult to combine when needed. The business
impact from the problems it had was that the system was not able to keep up with the business. It
limited the business where it was only able to handle a few range of numbers and location as well.
It caused delays and time consuming task that was not needed to take as much time as it did.
3. How did Summit’s ERP system improve operational efficiency and decisions making?
Give several examples.
Summit’s ERP system improves operational efficiency and decisions making by advancing
operations. It made it faster to build and distributed their 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 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 old system made it too time
consuming. For example collecting and reviewing all the invoices would take up to a month and
Summit would have stacks of papers of the copies of the invoices to give to their vendors. Now
the new system has improved it where they are able to produce more quickly and they are able to
view them more often. In return once the vendors are done and response back their chargers would
already be two to three months old. Also this cost lost revenue for Summit. 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 they are to view things more easily from
the system on how its operations and now it is simpler on making decisions off of it.
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 that customers to feel that they can provide that they have
produced products the customers want and sent to them in a short time period. Also customers can
track how much wire they order and 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 charger backs.
The old process for handling charger backs had flaws in it where the company was losing money
and sometime barely making any profit. When processing charger back, 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 charger back and which manufacturer with enough
documentation of the contract. There was a lot of manual work involved. The would have to go
through the customers invoices for detailed manufacturers to identify which charger back they can
claim. They would have to put the charger back in Microsoft Excel spreadsheet. The new process
for handling charger backs was more efficient. It automactically review Summit’s billing activity
for the day and the compares it to all charger backs agreements loaded in the SAP system by the
end of every day. Anytime there is a match in the system they are able to claim. The system is then
able to create a separate charger back document outside the consumer invoice. The systems is able
to process charger back more quickly and are able to be review in the same day. Since it is fully
automated, the company increased its claim by 118 percent over the old system.
Case 12: Submit Electric
Light Up with a New
ERP system
Q1. Which business processes are the most
important at Summit Electric Supply? Why?
Net Weaver Business Warehouse
SAP Net Weaver offer users many advantages for all aspects of business process
management and supports the entire life cycle of business processes, from planning,
implementation, and monitoring, to optimization. In the case of Summit Electric, this
protocol was designed to make “better use of data in their ERP system.” Net Weaver
software helped Summit Electric evaluate profitability from its “sales channel” from
consumers, sales, and manufacturing. Using business intelligence (BI) solutions,
Summit Electric has focused on sales order quotes, to supplier performance, and
delivery times.
Paybacks and Charge backs
For Summit Electric keeping track of the vendor cost recovery programs, validity dates,
and associated SKUs using outdated legacy systems was a daunting task; complexity
creates costs and errors. As Summit Electric grows exponentially, they needed an ERP
system that measured orders and inventory at the growth pace and also reduce costs and
errors. With this software solution, Summit Electric can capture charge back data;
manage claims, control varied and changing charge back agreements. The application
ultimately changes paybacks and charge backs management to a systematic and
effective methodology.
This application also helps Summit Electric to:



Continually create and manage agreements to maximize charge back recovery
Communicate with vendors electronically (Web or email)
Produce separate charge back audit trails (activity reports), and other timely reports.
Q2. What problems did Summit have with its old
systems? What was the business impact of
problems?
Summit Electronics is a major corporation, which began in 1977. It developed it’s own
legacy information systems in the 1980’s, but the rapid growth of the business quickly
outpaced its IT systems – and this left a very high degree of outmoded systems with
high fragmentation. For example, the legacy system built exclusively for sales entries
and purchase orders is completely separate from the system, which handles back-end
reporting.
The problem with this type of system is that integration and response time suffer greatly.
Batch processing the data from the two systems into an integrated database was a
manual process which drained efficiency. The system was only able to handle a certain
finite number of locations and only had a limited number range for documents which
created a problem of having to reuse numbers from period to period. This created not
only confusion but the company was also unable to process financial updates and
nightly inventory numbers in the space of time they had. Clearly, they needed to update
their systems with a major overhaul, but they had built and organized most of their
business around the existing legacy systems.
Q3. How did Summit’s ERP system improve
operational efficiency and decision making?
Summit realized its home grown legacy information system built in the 80’s could not
keep up with the business processes. Understanding the challenges of integrating a new
ERP system and mindful of its priorities, Summit selected the SAP/ERP system. The
new system requirement needed to provide the ability to view and manage sales and
distribution, material management, scalability, inventory management and financial
reporting system.
Advertisements
REPORT THIS AD
The new ERP system improved operational efficiency, by running smaller and frequent
inventory update throughout the day; instead of at night- which caused delays. The new
ERP system provided accurate information of shipping orders, which Summit was able
to ship immediately.
To replenish wire and cable, the ERP batch material management system identified the
customer, purchase amount, length of wire and product manufacturer. To secure
inventory for special customers, with long term projects, Summit created a “parentchild” warehouse relationship in the ERP system to secure the material in inventory as
well as on premises.
To better manage its finances and order system, Summit implemented the SAP’s / Net
Weaver BW data warehouse and business intelligence solution to better understand the
ERP data. By integrating the Net Weaver, Summit was able to analyze the profit of each
sales person, manufacturer, customer and branch. In using the SAP software, Summit
was able to improve its ROI, by automating sales tax and charge back’s. The
SAP/Paybacks and Charge back’s application was able to identify the billing activity,
if there was a charge back, the SAP system would automatically submit the information
to bill the charge back. The ability of having the SAP/ Payback and Charge back’s
allowed Summit to increase its charge back claims of up to 118%, increasing its revenue
as a percentage of sales.
Summit’s decision making for implementing the new ERP system was based on the
growth of the organization, the complexities of processing orders, analyzing finances
and back end reporting. Once the new ERP/SAP was in place, Summit’s management
was able to focus on sales orders and quotes, supplier performance and delivery
schedule. As well, have a better understanding of the organization as a whole. The new
SAP/ERP has allowed Summit to run its operations with flexibility, and allow the SAP
to operate efficiently. The new ERP system allowed management to have a greater
vision for making decision and managing its operations.
Q4. Describe two ways in which Summit’s
customers benefit from the new ERP system.
Firstly, customer can rely on the company for their needs and products- the company
now more efficient. The company wants that customers to feel that they can provide
that they have produced products the customer want and sent to them in short time
period.
Second is to accommodate large customers with long term job sites. SES sets up
temporary warehouse on site to supply these customers with its electrical products.
Create “parent – child” warehouse relationship to be able to work with customers. If
the SES office has more than a few temporary on site warehouses, the warehouse can
be controlled like subparts of the main SES warehouse. It helps to prevent anybody
from selling the consigned inventory into the warehouse.
Q5. Diagram Summit’s old and new process for
handling charge backs.
Charge back is the return of funds to a consumer. The chargeback mechanism exists
primarily for consumer protection. For the distribution company, charge back occurs
when the supplier sells a product at a higher price to the distributor than the price they
have set with the end user.
Old process
For handling charger backs had flaws in it where the company was losing money and
sometime barely making any profit. Processing charge back has to compare the sale to
contract. A distributor can have up to hundreds maybe thousands of contract. SES need
to identify the charge back and which manufacturer with enough documentation of the
contract or a lot of manual work. SES need go through the customers invoice with
detailed manufacturers identified and put the charge back in Microsoft Excel.
New process
For handling charge backs had flaws more efficient. It automatically review Summit’s
billing activity for the day. All charge backs agreements loaded in the SAP system by
the end of every day. There is a match in the system and they are able to claim. New
process is able to create a separate charge backs document outside the customer invoice
and able to process more quickly with review in the same day. SES increased its claim
by 118% over the old system.