GROUP
Objective The objective of the project is to provide us with an opportunity to understand how ERP systems are designed, implemented and managed in organizations.
Organization chosen: PepsiCo PepsiCo is a global food and beverage leader with net revenues of more than !" billion and a product portfolio that includes ## brands that generate more than $ billion each in annual retail sales. %t is an &merican multinational food and beverage corporation head'uartered in Purchase,, (ew )or*, +nited Purchase +nited tates, tates, with with interes interests ts in the manufact manufacturin uring, g, mar*eti mar*eting ng and distribution of grain-based snac* foods, beverages, and other products. PepsiCo was formed in $!" with the merger of the Pepsi-Cola Company and /rito-0ay /rito-0ay,, %nc. The company1s products are distributed across acro ss more than #22 #2 2 countries. 3ased on net revenue, revenu e, PepsiCo is the second largest food 4 beverage business in the world. PepsiCo entered %ndia in $5 and in a short period, has grown into one of the largest and fastest growing food and beverage businesses in the country.
Business Functions There are 6 major business functions7 $. #. 9. 6.
8anuf 8anufact acturi uring ng 4 produc producti tion on ale aless 4 8ar* 8ar*et etin ing g /ina /inanc ncee 4 &cc &ccou ount ntin ing g :uma :uman n re resour source cess
Every business regardless of its size must perform the above mentioned four functions to succeed. %t must produce the product or service; mar*et 4 sell the product; *eep trac* of accounting 4 financial transactions 4 perform basic human resource tas*s such as hiring 4 retaining employees.
Area Chosen – ERP (Equipment ervices !anagement an" CR!# ERP $%E! $%E! ERP systems integrate business processes 4 information from entire enterprise. The system helps in coordinating the operation of business functions. ERP systems are software pac*ages that can be used for the core systems necessary to support enterprise systems.
&t the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately 4 automatically updated throughout the entire system. 8ajor ERP software providers are &P, Edwards etc.
Enterprise App&ications Enterprise applications are systems that span functional areas 4 automate processes for multiple business functions 4 organizational areas; they include7 • • • •
Enterprise systems upply Chain 8anagement ?C8@ systems Customer Relationship 8anagement ?CR8@ systems Anowledge 8anagement systems
Focus Area – Equipment ervices !anagement
The entire process of e'uipment installation, trac*ing, movement and subse'uent e'uipment service processes are handled in &P CR8. Bith ERP, businesses can change their supply chains into adaptive supply chain networ*s. &daptive refers to the ability to rapidly sense 4 respond to changing internal 4 eternal conditions. This implementation has helped Pepsi to coordinate business processes and deal with customers to optimize revenue 4 customer satisfaction 4 increase sales. &ll e'uipment and service transactions are eecuted in &P CR8. &ll ervice and e'uipment calls are handled through PepsiCo Call Centre. &ll wor* performed by 3ottlers are initiated and reported via &P CR8. &dditional >ata re'uirements ?hours of service, parts consumed, epenses@ are gathered at time of wor* performed by the bottler ?service and install@. ervice orders are screened through a set of 92D comple business rules before they are set for billing and payment. &P provides ERP suite to PEP% for Eternal ervice 8anagement ?E8@.
Bith Eternal ervices, you have a P< for services with oods Receipt ta*ing place. The oods Receipt is called ervice Entries. %n contrast with goods ?stoc* or non stoc*@ where receiving is typically done by the inventory management group, the ervice Entries are done by business themselves. &ll the e'uipment re'uests are entered in the ERP system and all the data can be viewed by cross-functional departments simultaneously.
PROCE 'E%A)
Create & Maintain Project Survey Outlet
Order Equipment
Receive Goods
Equipment Installation
Equipment Trackin & Servicin
Reportin
teps nvo&ve"
$. The customer places the order for the e'uipment. PepsiCo receives the order and updates the same through &P ERP in the system. #. PepsiCo interacts with the vendor and places the order and updates the same in the system. 9.
Service Orders are Created by Tier 1 Call Center Agents & Tier 2 Analysts Service Orders are Dispatched to Service Providers Follow Up Activities are created assigned to and resolved by the Tier 2 Analyst
!onitoring o" Service #$ec%tion
Service #$ec%tion
Service Data S%bitted & Con'red
(alidation & )eib%rseent
)eporting
H
PEP E! ntegration
l a t r o P M S E o t n i o C i s p e P y b d e r e t n e e r a s t s e u q e r k r o W •
1 p e t S
2 p e t S
* p e t S
( r i a p e R e ' i t " a e R & e i % y l $ n i d r o " " a s e # " t a p s i ! s t s e u q e r k r o r o f l a t r o p s r o t i n o m r e l t t o B •
e " + o s * r e l t t o B o t k " a b s t l u s e r s e t a " i n u m m o C d n a k r o s m r o f r e p n a i " i n # " e ) +
l a t r o P n i n o i t a m r , n o " s e t a e r " r e l t t o B •
, p e t S t n e m e l t t e S t n e m e s r u b m i e R e ' i e " e R •
- p e t S
There is one centralized process dedicated to all e'uipment related activities ?i.e. Preventative 8aintenance, Reactive Repair, new customer conversions, remanufacturing 4 e'uipment procurement@. (ew ERP system and processes provide complete visibility, reporting, and monitoring of all e'uipment related activities. >etailed diagnostics for every fountain dispenser, trong bottler integration and accountability and consolidated data and reporting capabilities are the other benefits provided by the ERP implementation.
.nformation system in PEPS.CO PepsiCo has incorporated the recent advanceents in the hardware and so"tware in"rastr%ct%re in the "or o" wireless delivery devices obile
technology and digital dashboards. They/ve recently shi"ted "ro Oracle which they were %sing as their in"oration syste to SAP. This sees to have been a anageent syste that was delayed "or 0%ite a while. Their re"%sal to ove to a p%blic clo%d has also a proinent anageent decision. n PepsiCO !S helps to recognie ar3et trends in respect o" price designs o" prod%cts "ashion etc. Tiely in"oration o" the ar3et trends enables the copany to "ollow the right co%rse o" action. t "acilitates ar3et planning and control as well. #4ective planning is re0%ired in ters o" prod%ct planning pricing prootion and distrib%tion. S%ch planning will be possible only i" the copany is possessing ade0%ate and relevant in"oration. This is also possible thro%gh !S. t also iproves the 0%ality o" decision a3ing. A properly designed !S li3e theirs s%pplies reliable and relevant in"oration.
Mana$ement .nformation systems /rom /un"tional Perspe"ti'es
Sales Marketin$ F%nctional 5evel 6 5ocating potential c%stoers process orders provide c%stoer s%pport Operational 5evel 6 s%pport ar3et research pricing decisions and sales per"orance Ape$ 5evel 6 onitor trends a4ecting prod%ct & sales planning o" new prod%cts onitoring per"orance o" copetitors
Manufa"turin$ - Produ"tion Systems
F%nctional 5evel 6 anage stat%s o" prod%ction tas3s 3eep %p the re0%isite inventory level Operational 5evel 6 analye & onitor an%"act%ring and prod%ction costs Ape$ 5evel 6 planning long ter an%"act%ring goals technology investents & locating new plants
/inan"e - 0""ountin$ Systems
F%nctional 5evel 6 trac3 7ow o" "%nds in 'r thro%gh transaction Operational 5evel 6 oversee and control 'r/s 'nancial reso%rces Ape$ 5evel 6 long ter investent goals long range "orecasts o" 'r/s 'nancial per"orance
1uman Resour"e Systems F%nctional 5evel 6 trac3 recr%itent and placeent o" eployees Operational 5evel 6 onitor copensation o" eployees
and
analye
recr%itent
allocation
and
Ape$ 5evel 6 identi"y anpower re0%ireents 8s3ill ed%cation level n%ber o" positions9
)ransa"tion Pro"essin$ System %)PS( in PEPS.CO •
•
•
•
t serves operational angers in the sense that it %pdates the with the re0%ired activities on 7oor. ts principal p%rpose is to answer ro%tine 0%estions and to trac3 the 7ow o" transactions thro%gh the organiations. !onitors stat%s o" internal operations and 'r/s relationships with s%ppliers t is the ain so%rce o" in"oration "or other systes
Mana$ement .nformation System %M.S( - !e"ision Support System %!SS( in PEPS.CO •
• • • •
t provides iddle level anagers with report on "actory/s per"orance and onitoring activities and helps in predicting "%t%re per"orance. S%aries and give reports on basic operations %sing data "ro TPS. t enables drill down "acility to chec3 the per"orance level. t is typically not very 7e$ible syste The syste %ses vario%s od%les to gain in"oration "ro data.
Obtainin$ !ata from or$ani2ation*s )PS
E3e"uti'e .nformation Systems %E.S( in PEPS.CO • • • •
This type o" in"oration is priarily %sed by senior anagers. t addresses strategic iss%es and helps in "or%lating long ter plans. :elps in identi"ying what the cons%er/s taste will be in coing years t %ses web portal inter"ace to present the content.
Relations#ip of 'arious systems
ERP systems 'endors #)P vendors into * gro%ps;
ERP 4 automatin$ business pro"esses
Comparison of ine+"ient and e+"ient systems .ne+"ient Customer Ser'i"e
•
•
Do yo% thin3 that one can 3eep the c%stoer on the phone thro%gho%t the process< =o%ld yo% consider this to be good c%stoer services<
Solution to ine+"ient "ustomer ser'i"e •
•
#nterprise syste establishes available to proise 8ATP9 by chec3ing wareho%ses and sched%led an%"act%ring. Price and creditworthiness a%toatically deterined "ro database.
Before ERP
0fter implementin$ ERP
S0P Modules
.mplementin$ ERP P#PSCO nc. has selected SAP/s "%ll !ySAP >%siness S%it to strealine its distrib%tion and delivery processes iprove planning and "orecasting and give better visibility to its global s%pply chain. P#PSCO which an%"act%res distrib%tes and ar3ets Frito?5ays snac3s Pepsi?Cola beverages @atorade sports drin3s Tropicana %ices and B%a3er "oods aied to better lin3 its s%pply chain and inventory data with its c%stoer data. P#PSCO was a great copetitive win "or SAP beca%se soe o" PepsiCo/s s%bsidiaries were already r%nning Oracle "or #nterprise )eso%rce Planning 8#)P9 systes as well as PeoplSo"t and Siebel C)! systes. Pepsico was probably "ed %p with Oracle/s inability to e$ec%te on the integration o" Pepsi/s dissiilar so"tware applications spread across its s%bsidiaries. t/s one o" the better plat"ors when data application and process integration with other non?SAP applications and databases is an iss%e. Copanies are loo3ing to SAP to displace dissiilar systes give geographic locations real tie process visibility and reove process red%ndancies.
Supply C#ain Mana$ement The syste anages relationships with s%ppliers p%rchasing 'rs distrib%tors and logistics 'rs. t anages shared in"oration abo%t orders prod%ction inventory level etc. the goal is to ove correct ao%nt o" prod%ct "ro the copany to point o" cons%ption as 0%ic3ly as possible and at the lowest cost.
P#PSCO a3es s%re that all o" its s%ppliers 8water corn syr%p "ood colorings carbonation plastics etc.9 coe into an appropriate plant so as to 3eep c%stoers satis'ed with no shortages. Too %ch o" additional inventory is avoided which hangs %p reso%rces and cash 7ows. t %ses !ySAP >%siness S%it Applications which helps in co%nicating with s%ppliers and generate "orecast o" deand. @enerally a stoc3 o" %p to 12 days is aintained in the inventory
SAP helps in 'ne t%ning their s%pply chains "ro a se0%ential s%pply chains into adaptive s%pply chain networ3s. Adaptive re"ers to the ability to rapidly sense and respond to changing internal and e$ternal conditions. etwor3 re"ers to ability to have real tie collaboration and coordination across all partners in the s%pply chain. t is a co%nity o" c%stoer "oc%sed copanies that share 3nowledge and reso%rces to intelligently ad%st to changing ar3et conditions.
Customer Relations#ip Mana$ement %CRM( System The syste helps in anaging relationship with c%stoers. t deals with c%stoers e4ectively and eciently to optiie their reven%e and increase c%stoer satis"action. The syste capt%res and integrates c%stoer data "ro all over the organiation analye the data and distrib%te res%lts to vario%s systes and c%stoer to%ch points across the enterprise. P#PSCO/c C)! application has allowed "or conversion "orer dissiilar sales systes into an integrated application sol%tion which gives a coplete view o" their entire cons%er base. C)! applications are %sed in P#PSCO to deterine
pro'table c%stoers discover potential sales opport%nities and iprove c%stoer interaction and relations.
!ata points #ere SCM5 CRM - ERP inte$rate
M.S at PEPS.CO The station cop%ter are lin3ed to P#PSCO/s central cop%ter syste daily to %pdate inventory sales & prod%ction in"oration syste. The anageent believes that they save ann%ally over )s. 12-EEEE per year %st beca%se o" this syste. !S helps P#PSCO/s anagers to recognie ar3et trends in respect o" price di4erentiation o" prod%cts and tiely in"oration o" ar3et trend. #4ective ar3eting planning is assisted in ters o" prod%ct planning pricing prootion and distrib%tion. t helps in ta3ing 0%ic3 decisions and also validating anager/s decisions. t provides reliable and relevant in"oration so that anagers can ta3e e4ective decisions at right tie.
CB.S Ele"troni" !ata .nter"#an$e %E!.(; n"oration e$change between the copanies its s%ppliers and its s%bsidiaries.
!ire"t E3"#an$e !E6( ; n"oration e$change between hand?held cop%ters and stores delivery syste.
)#e !e"ision Maker*s !ilemma The adinistration o" P#PSCO was in dilea; • •
ntegrate the new standalone applications =ait "or their e$isting application %p gradation according to their re0%ireents.
The anageent at P#PSCO chose to go with 'rst alternative. The anageent was dwindling between strategic and tactical decisions.
Strate$i"7 n this the entire syste has to %ndergo >P) 8>%siness )e?process #ngineering9 which poses a treendo%s challenge "or the copany and the res%lts can/t be predicted.
)a"ti"al; it is ore controllable. t is perceived to increase short ter bene'ts decrease ris3 "ast )O. The tactical strategy is what the copany adopted "or.
/is"al Con"erns re$ardin$ implementin$ appli"ations :%ge costs are involved in prod%ct p%rchase and ipleentation. t also involves ntegration o" applications with one or ore applications across the enterprise which is ost tie cons%ing. Data 3eep changing with tie and it/s dic%lt to %pdate the syste then. Tiing o" ipleenting %st be sorted o%t care"%lly. Cost o" %ser training and re? training on addition o" od%les.
Cost "omparison of implementin$ inte$rated Business Suit Solution 's& Point Solution
.nte$ration to t#e system 4 point solutions 's& suite models o'er time
MyS0P ERP7 S0P ne3t $eneration
Fle$ibilty to increentally add the right i$ o" C)! SC! and P5! 8prod%ct li"e cycle anageent9 as b%siness needs evolve. " o4ers a coprehensive b%siness scope and can be the basis "or all ind%stry sol%tions.
M8S0P ERP !ySAP #)P is a so"tware pac3age which cobines world/s best and ost coplete #)P so"tware "%nctionality and addresses the core b%siness so"tware re0%ireents o" edi% and large organiations. SAP et=eaver is a "%ll s%ite o" enabling so"tware technologies incl%ding "%nctionality "or portal in"rastr%ct%re b%siness data wareho%sing e$change integration web application server obile technologies etc. Fro a odern #)P environent it is highly recoended the c%stoers convert e$isting license to !ySAP #)P to bene't "ro additional capabilities. !ySAP #)P is designed to o4er real?tie integration with other SAP prod%cts. Third party applications can be integrated with !ySAP thro%gh SAP et=eaver.
Proposed Enterprise 0ppli"ations Proposed ERP system O%tso%rcing peripheral activities to e$ternal providers can be a cost e4ective alternative. O%tso%rcing non?core b%siness processes s%ch as h%an reso%rces & proc%reent copanies can "oc%s on core copetencies and "ree %p val%able
reso%rces "or "%rther innovation and growth. SAP s%pports >PO services in setting %p services that red%ces costs and iproving process 0%alities.
Proposed SCM system t is proposed to do things as they are doing it right now. Copany needs to 3eep an in"oration syste that will integrate all their s%ppliers to the ain needs. They need to a3e s%re that whatever in"oration they %se in "%t%re can acc%rately predict changing cons%er deands.
Proposed CRM system The copany/s C)! have greatly iproved a"ter trying new variety o" so"tware systes. The integration o" the C)! application across all s%bsidiaries %nder P#PSCO has helped iprove the syste a lot which was not there when they were %sing Oracle PeopleSo"t. C)! applications can be %sed to develop "%t%re ar3eting capaigns to eet the needs and desires o" c%stoers in speci'c areas.
