Improve efficiency of Supply Chain Management by utilizing best practices

incorporated in SAP ERP

By
Pratistha Mishra & 500066006

Guided By
Pradeep Saklani, Lead Service and Technical Advising Specialist, GE Oil & Gas India Private Limited

A DISSERTATION REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR

MBA SUPPLY CHAIN MANAGEMENT

OF

CENTRE FOR CONTINUING EDUCATION

UNIVERSITY OF PETROLEUM & ENERGY STUDIES, DEHRADUN
 APPENDIX – II

Acknowledgement

This is to acknowledge with thanks the help, guidance and support that I have received during
the Dissertation.

I have no words to express a deep sense of gratitude to the management of _____________ (the
name of the organization) for giving me an opportunity to pursue my Dissertation, and in
particular ___________________________ (name of external project supervisor), for his able
guidance and support.

I must also thank ________________________ (names of one or two executives of the

organization who were a major help to you) for his/ her/ their valuable support.

I also place on record my appreciation of the support provided by __________ (name of the
Librarian) and other staff of _____________________________ (name of the Library).

Finally, I also thank ___________________ (name of Computer typist) for typing of the
manuscript (if required).
Signature
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Residential Address
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e-mail:

Date
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 APPENDIX – III

A Declaration by the Guide

On Company Letter Head
Declaration by the Guide

This is to certify that the Ms Pratistha Mishra, a student of MBA in Supply chain Management, SAP
ID 500066006 of UPES has successfully completed this dissertation report on “Improve efficiency of
Supply Chain Management by utilizing best practices incorporated in SAP ERP ” under my
supervision.

Further, I certify that the work is based on the investigation made, data collected and analyzed by
him and it has not been submitted in any other University or Institution for award of any degree. In
my opinion it is fully adequate, in scope and utility, as a dissertation towards partial fulfillment for
the award of degree of MBA.

Signature
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e-mail

Date:
Place
List of Figures
Figure 1 SCM Flow Chart ................................................................................................................ 20
Figure 2 Sustainable Supply Chain Management ............................................................................. 21
Figure 3 Integration of SCM and ERP solution ................................................................................ 24
Figure 4 Sample Procure to Pay in Industry ..................................................................................... 26
Figure 5 Standard Procurement and Payment process ...................................................................... 29
Figure 6 Evaluation of proposal........................................................................................................ 31
Figure 7 Supplier Management Process ........................................................................................... 37
Figure 8 Supplier management system of Company ........................................................................ 39
Figure 9 . Logistics management concept (Lambert, Stock & Ellram 1998, 12).............................. 43
Figure 10 Research process flow chart ............................................................................................. 49
Figure 11 Step by step procedure for creating a process map to create model ................................. 52
Figure 12 Categorizing concepts and objectives in the subcategories .............................................. 67
Figure 13 Cost improvement from SAP Ariba ................................................................................... 69
Figure 14 Shows the claims made by Ariba to support the use of guided purchases. .................... 75
APPENDIX – IV
Table of Contents

Contents
Executive Summary ............................................................................................................................ 7
Chapter 1: Introduction...................................................................................................................... 8
Overview............................................................................................................................................. 8
Enterprise Resource Planning ERP ................................................................................................... 11
Background ....................................................................................................................................... 12
Company Background ...................................................................................................................... 14
Purpose of the Study ........................................................................................................................ 15
Research Hypotheses ....................................................................................................................... 17
Chapter 2: Literature Review ........................................................................................................... 19
Literature Review ............................................................................................................................. 19
Procurement..................................................................................................................................... 24
Chapter 3: Research Design, Methodology and Plan ...................................................................... 48
Research Design (RESEARCH STRATEGY) ......................................................................................... 48
Data Sources (DATA COLLECTION METHOD)................................................................................... 53
Questionnaire Design ....................................................................................................................... 56
Interview Procedure......................................................................................................................... 59
Data Analysis Procedures................................................................................................................. 62
Chapter 4: Findings and Analysis ..................................................................................................... 65
Evaluation of Findings ...................................................................................................................... 68
Chapter 5: Interpretation of Results................................................................................................ 69
Interpretation of Results.................................................................................................................. 69
Comparison of Results with Assumptions (Hypotheses) ................................................................ 73
Chapter 6: Conclusions and Scope for Future Work ....................................................................... 77
Conclusion ........................................................................................................................................ 79
Bibliography ..................................................................................................................................... 80
References ........................................................................................................................................ 81
Improving Import Supply chain using Enterprise Resource Planning
(ERP)

Executive Summary.
The objective of the study is to analyze the effects of ERP implementation in
Supply chain management of the organization. Since the successful operations of the
organization is based on the supply chain and the customer satisfaction. Hence an optimal
and efficient management system which can deal with large amount of data with any loss
and performing the operations with ease is required. This study analyzes a technological
and economic perspective on the implementation of ERP software. The study not just
focuses on the technology itself but also on the selection and deployment of strategies and
the effects of the software on organizational efficiency.
Many retail and manufacturing operations are designed to maximize output and
lower costs with little consideration for the impact on inventory levels and distribution
capabilities. The resultant of these factors is creation of a void with respect to an integrated
plan in the organization. There is a definite need for a system through which these different
functions can be coordinated and integrated together and SCM is a strategy through which
such integration can be achieved
The Enterprise Resource Planning (ERP) is growing in the business pipelines where
the businesses are starving to make improvements in their supply chain management based
operations. Enterprise Resource Planning is also considered as an extension of the Market
Requirement Planning (MRP) which is being launched during the 1970s and also the
manufacturing Resource Planning (MRP II) which was introduced in the next decades of
1980s
Chapter 1: Introduction

Overview
Supply Chain Management (SCM) is described as an interlinked network of
channels and nodes of business for distribution options. The SCM involves functions such
as design, planning and execution, control and monitoring of supply chain activities. An
example of such a process is the procurement of material and transforming the material
into finished products, and then the distribution of the final product to the consumer. The
major objective for supply chain management involves building competitive infrastructure,
creating net value for the products, leveraging worldwide logistics and synchronizing
supply with demand measuring performance globally.

The people working in supply chain management have major responsibility for
collaborating and organizing the goods movement with partners, which includes everyone
involved such as customer’s suppliers, third-party service providers, and mediators in the
supply chain. Supply chain activities are not restricted to one sector whether it be
manufacturing or service sector SCM plays a major role in the operations. However, the
architecture of the supply chain and the complexity may vary vastly from different
industries. It also depends on the constant logical improvements towards the understanding
of business performance.

The most important challenge faced by the organization is supply chain visibility
and one of the foremost aspects for improving productivity is to continuous enhancement
of supply chain. This is more relevant in the perception of the food industry, consumer
goods, retail and electronics industries the sectors that are challenged by distributed
operations in different countries, high demand volatility and rapid product appraisal.

A typical example of supply chain operation is explained which involves a single

product. The process usually starts with the procurement of raw material from vendors,
manufactured into finished goods, then transported to distribution centers and finally to the
consumer. As discussed earlier supply chains are always complex which has many end
products with collective components, amenities, and capacities. The flow of material does
not follow simple network, it involves various modes of transportation and the cost of end
product may become exorbitant
The definition of SCM offered by Bernard J. (Bud) LaLonde, Professor emeritus of
SCM at Ohio State University. It states that "The delivery of enhanced customer and
economic value through synchronized management of the flow of physical goods and
associated information from sourcing to consumption.” The definition explains that SCM
integrates not only entities within the organization, but it also involves the involvement of
external partners for reaching the desired results. It also includes other players such as
suppliers, transporters, distributors, customers and finally the consumers.

Organizational setup for SCM related activities has a wide range of functional
areas, such as production planning, material forecasting, and procurement, contracts,
scheduling orders, sales order processing, customer service, warehouse management,
inventory control, inbound and outbound transportation. The above-mentioned activities
are monitored and controlled using the information systems. In reference to the definition
stated supply chain management comprises all the complex activities that carry out goods
movement for transforming the raw material to a finished product for the end-user.

The operations of the departments such as planning, procurement, manufacturing,

marketing, and transportation in an organization take place independently having their own
process objective and mostly these are contradictory. Purchasing department responsible
for negotiating contracts with vendors perform negotiation without analyzing the historical
purchase data. Marketing department focuses on their target of high consumer service and
reaching annual sales target output, which contradicts with manufacturing and
transportation departments. Whereas manufacturing department in an organization is
always intended to increase production and reduce costs, which are done without
considering the capabilities of transportation and distribution department it also has effect
on inventory control.

To overcome this void of non-coordination in the integrated plan of the

organization, SCM system acts as bridge between departments, where these different
functions can be coordinated and integrated. SCM strategy through which such integration
is possible and data between departments is transferred seamlessly. The business analyst
and management experts realized that managing information transfer among operations and
handling relationships between all stakeholders is the key to increase productivity. After
globalization it was mandatory for the management to devise a strategy that would work
flawlessly for import and export of material across borders. SCM integrates this process
and the transfer of information between organizations across countries increased the
efficiency of the transportation system.

The customer satisfaction is the best analytical data for measuring the productivity
and performance of the organization. To achieve that status the company should be
working to meet their clients demand and supplies efficiently. To stay on top of the
business company should work towards customer satisfaction by optimizing the operations
of the organization. That said every employee in an organization is responsible for carrying
out the operations flawless, to achieve that a system is created which would enable the
personnel to have the adequate source of information for continued operations. And in
addition to that business should be provided with analytical data to find possible solutions
to business challenges and work on the solution to optimize the process. ERP provides
solution for supply chain management, the process can be standardized and helps the
management to track all crucial information. With the ERP solution the customer is given
all the updates regarding their orders which helps them for planning their operations which
in turn helps the customer meeting their goals. Hence the customer and the company will
have a successful business collaboration. This also ensures that company has positive
relationship with the customer.

SCM includes all those operations of the organization that is needed for the
integrated operations that brings product to the customer and increases the customer
satisfaction. SCM integrates purchasing, manufacturing process, transportation, and
warehouse management into a combined system. SCM links all the partners in the chain
thereby creating a successful SCM system to coordinate and integrate all the process into
seamless process. The departments integrated are not restricted within the organization it
includes partners like third party companies for transportation, vendors and IT system
support.
Enterprise Resource Planning ERP

ERP system is a fully integrated software application that organizations uses to

carry out day-to-day business activity. The ERP system has a standardized business
practices that are customized for the business needs to perform the daily activities. The
process includes project management, accounting, procurement, manufacturing process
and administration process. ERP systems are designed in such a way that there is constant
flow of data among the business processes. Since the data is transferred to all stakeholders
the process is streamlined and reduces errors in operations. Business are following
globalization that increases the complexity of the critical data flow, to these companies,
ERP is the appropriate solution for management. It’s impossible to ignore the impact of
ERP in today’s business world.

ERP software solutions is the integration that allows for more efficient processing
and eliminates redundant data entry and reconciliation tasks. The functionality of the ERP
system include financial accounting, payroll administration, procurement, logistics, human
resources and sales. And this ERP system also has modules which are used for the planning
activities in the organization such as production planning, material planning, budget
planning and sales forecasting. In addition to these features the system also include data
analytics and automated workflow for approvals, and development tools for customization
of cross functional modules.

ERP system provides assured Data integrity for every transaction performed
throughout the organization, it can be quarterly finance statement to single order
outstanding report. The system provides error proof data reports in the form of
spreadsheets. As enterprise data and processes are corralled into ERP systems, businesses
are able to align separate departments and improve workflow, resulting in significant
bottom-line savings.

ERP systems application are not limited to large firms with complex architecture
but also useful for smaller organization which use the most of the ERP modules for
performing operations of the company. According to the data provided by SAP (the largest
vendor of ERP systems worldwide), the company generated 90% of their revenues from
large multinational organizations but in late 90's & early 2000, 50% of their revenues came
from smaller and mid-size companies.

Background
The world due to the development of globalization the barriers have been removed
which paves way for movement of goods across borders and use human resources from
different countries. In today’s economy components for manufacturing are produced in one
country whereas assembling takes place in another country where the product is then sold
worldwide. An example of the above is manufacturing of mobile phones in that
components of mobile phones are manufactured in Asia, and assembled in America and
then sold to the European market. For this operations to be handled transportation by
different modes of transport are to be handled flawlessly to meet the demands of the
market and stay ahead in the competition.

The food supply industry in India has challenges for management of supply chain
especially with the distribution of the materials to the customers and also the import
process of raw materials. Food supply Company operating here in India has to deal with
the challenges such as increasing cost of raw materials and the costs involving the
transportation of materials. Due to the increase in fuel price and improper planning for
route results in increase in product price and ensuring with timely and cost effective
delivery of products is a challenge in India.

The challenges in supply chain are to attain global standards and coordination for
challenging objectives in the complex network of operations and also to reduce the
variations in the system. SCM system by its continuous development in the business
process optimizes the supply chain process and then develops new methods and tools to
manage the same.

Major factor for SCM success in Supply chain is coordination, by effectively

improving the performance of organizations the process is streamlined. In this context
coordination means integrating different operations of an organization in supply chain,
which are designed to perform certain set of tasks. Most of the problems in supply chain
arise within the departments of procurement and distribution of the materials to the
customers. The challenges in procurement are duplication of purchase requisition creation,
longer time for purchase order processing, end user creating PO without referring to the
contracts. To overcome and develop the constructive business process between
organization, and for decision making for the improvement of supply chain is done by
supply chain system experts.
The major reason for lack of coordination arises in an organization is due to the
interdependency among different members of operations team. Even when every business
follows their own process that has unique challenges for each supply chain operations, yet
the issue arises in basic process remains the same. The major modules in supply chain
which every organization follows are 1. Materials Management, 2. Inventory Management,
3. Warehouse Management, 4. Sales and Distribution, 5. Transportation Management and
6.Information System

The modules in supply chain acts in coordination for uninterrupted daily operations.
However the ERP modules are standardized which are customized for user needs but the
system does not provide flexibility to the users. The end user are to be trained to follow the
process and there are chances the framework does not support extending the feature.
Supply chain management also handles function which include
 Customer satisfaction monitoring
 Customer service and order processing
 Negotiation with vendors.
 Vendor Evaluation
 Vendor Management
Certain functions of supply chain that are used for connecting the company with other
organization which supports the supply chain team in their operations and coordinate the
process. They are third parties
 Third party distribution partner.
 Subcontracting company
 Third party invoice audit
The strategic addition to the ERP system not only focuses on supply chain but also is
extended to customer relationship management. One of the product from ERP system is E-
procurement application. Also called as self-service procurement which enables user to
carry out purchasing operations without hassle. The application for process of procurement
has functionality to that also performs tasks like vendor negotiation and evaluations.

Company Background

GE Oil & Gas was the division of General Electric that owned its investments in
the petroleum industry. The division supplied equipment for the petroleum
industry including drilling, subsea and offshore, onshore, LNG, distributed gas, oil
pipeline and oil storage, oil refinery and petrochemical. GE Oil & Gas also designed and
manufactured surface and subsea drilling and production systems, equipment for floating
production platforms, gas compressors, gas turbines, turboexpanders, high pressure
reactors, industrial electricity generation. GE Oil & Gas also provided pipeline integrity
solutions, sensor-based measurement, inspection, and condition monitoring, controls
and radiation measurement solutions.

The company can’t leverage its worldwide buying power for the raw materials used
in its products, even though each factory uses the same global suppliers, because each
facility negotiates its own deals and prices. The optimization of business process
throughout the entire logistical chain, for the closer linking of international logistics were
the goals of the organization. The major challenge was ineffective integration of
information among the departments which led to the lack of increasing market share,
improving services and reducing costs.

1
Management wanted system to standardize the process and speed up information
flow to improve comparability of results. The company selected SAP to run its order entry,
purchasing, invoicing and inventory control. The key benefits that materialized after
implementing SAP were process optimization, coordination and effective worldwide
logistics, improved ability to meet deadlines, shorter turnaround times from customer
enquiries to delivery, and a shift away from stock oriented to demand driven production.
 However ERP implementations for organization requires the involvement of large
number of users and should combine different data. It is nearly impossible to plan for every
contingency in SAP implementation projects of this size. The company managed to prove
success over series of shortcoming and failures. This led to reach the end goal that made
the company position in the competitive market and made the process easier.

Purpose of the Study

1. How does the Case Company organize the handling of Procurement process?
a) The process of procurement - How do they communicate with suppliers? Is the
procurement process mapped with the SAP ERP standards or customized according
to their needs.
b) What measures are taken to speed up the procurement process with minimal
training to the users? Does ERP system provide solution for the users to carry out
these operations.
c) Strategic approach to types of suppliers. What strategies apply to the different types
of suppliers; marked-based or network-based.

2. Which methods are suitable to improve?

a) Can theoretical approaches to supply chain management and theories on customer-
supplier relationships presented in the theoretical foundation of this study provide
possible methods to improve relationships with their suppliers?
b) Can ERP implementation improve the process of supply chain management and
optimize the process of procurement and distribution

Business case:
 Process of Vendor negotiation which was not standardized and was carried out by
traditional contract method.
 Use of ERP system for strategic approach towards the supplier ensures the
economic advantage of the company in the long run.
 Users and Procurement Managers had challenges with tracking order from the
internal team’s and longer duration to process the same.
 Supply chain management one of major activity was executing transportation
domestic and internationally. In ERP system transportation management was
independent structure which was not in coordination with SCM Modules. Hence the
introduction of central transportation system which facilitated the users to optimize
the import and domestic transportation.
Research Hypotheses

To improve the process of the procurement and data transfer among different
stakeholders in the company
The scope of this thesis is to analyze the role of Enterprise Resource Planning
(ERP) solution for the enhancement of operations within the organization. Currently the
procurement process which has vendor negotiation as highest priority is challenging due to
the non-standardized traditional system. The study is to perform current state examination
on procurement process and material handling for the import of goods from different
countries to India. The transportation management is another challenge for supply chain
management, which are lack of coordination between the different departments which
makes it hard for shipment process
Objectives:
1. Analyzing the role of Enterprise Resource Planning (ERP) in the enhancement of
operations within the organization such as procurement process and material
handling.
2. Analyzing the support of Enterprise Resource Planning (ERP) towards the Supply
Chain Management (SCM) operations.
3. To analyze the transportation related issue and to ensure the cost effective and
reliable transportation service.

The Expected Outcome of the thesis.

This thesis analysis the import supply chain of the company and factors which have
an influence on the performance of the supply chain. At present, the thesis defines the
current practices within the purchasing department and transportation management of the
supply chain. After the analysis of the current state and with existing knowledge, the thesis
study suggests a proposal of how ERP system proposed for the improvement of supply
chain management and to improve the efficiency within the import process.

The aforementioned business case was addressed with the following solutions to
streamline the process of SCM in the organization.
  With Introduction of ERP system SAP Ariba Vendor Negotiation was carried out
with standard questionnaires and process was streamlined based.
 The ERP system introduced a provision of self-service procurement which made
the end users to make purchases without difficulties
 Hence the introduction of central transportation system which facilitated the users
to optimize the import and domestic transportation.

Research Methodology
1. Deductive Research Approach
The research study from available literatures that are available on the impact of
Enterprise Resource Management (ERP) on the Supply Chain Management (SCM) will
help to draw the empirical results and based on the analysis that will contribute in the
future studies on the research.

2. Data Collection
The research study will use the previous literatures that are available on the current
genres of the study. The research study will also assess those literatures that are
individually based upon the interactive studies of Enterprise Resource Planning (ERP)
and the Supply Chain Management (SCM) is also assessed.

3. Result Analysis
The direct results will be empirically drawn where the literatures are directly about
the subject matter while the similar results will be drawn from the results. The result
analysis methodology used for this qualitative research is discourse analysis.
Chapter 2: Literature Review

Literature Review
The purpose of the chapter is explain the theoretical framework related to research.
The research needed some review of some secondary sources to gain perception about
current ideas and knowledge about research work. These theoretical topics contribute to
experiments and methodologies for gathering information from the users.

Supply Chain Management

Supply chain management was defined as a 1strategic coordination of all business
functions within a particular company and across the business within the supply chain and
the major aim was to improve the performance of the company. In other words it is defined
as standard approach used for integrating the vendors, manufacturers, warehouse and stores
for meeting the demand and to satisfy the customers, by supplying with required quantity
and delivered in proper time.

Customers due to their competition in market their strategy towards the business
has been following effective management of end user needs. The customers are following
the Demand planning inventory management and use of third party supply chain
management that requires all contributors in the Supply Chain Management chain to
implement effective time management in handling the supply chain for a competitive
advantage. The effective use of information technology would help manufacturers and
customers to reduce cycle time and improve quality of distribution.

Hence, the supply chain activities of the organization which had main business process of
supplying the product to the end users in precise time, started implementation of ERP
solution for information transfer among the stakeholders. Thus adding value add to the
services offered by the organization with the use of information technology.
The major objective of supply chain management to reach competitive advantages such as:
 Increasing optimal use of inventory space thereby reducing storage costs.
 Reduction in working capital.
 Accelerating cash-to-cash cycles.
1
Journal of business logistics (2001)
The supply chain integration are defined as two types of integration by Cousins and
Menguc (2006). They are
 Internal integration within organization
 External integration across organization
The preliminary level of supply chain integration is intra organizational level, where
different process areas within the company should work on the coordination of the supply
chain process by transferring of vital information among the business process.
The inter organization collaboration is a second level of supply chain integration. The
customers are the foundation of the business success, hence a collaborative long-term
relationship is needed for smooth running of business. The suppliers are also an external
individual who contribute for the growth of the business hence a close relationship with the
suppliers is essential for collaboration.

The integration for organization whether external or internal both plays an major
role in the growth. The integration with the customers is the key to be competitive in the
market. According the supply chain context, external integration is perceived as being
more advanced as compared to internal integration. But the fact according to Newman et
al. (2009), states that external integration would not successful without successful internal
integration. A statement from the author Wen et al. 2007 outlines integrated supply chain
management requires that various departments within an organization are integrated before
the extended enterprise can work together as one.

Inbound Outbound
Vendors/ Consumer /
Storage / Manufacturing storage /
sourcing distribution
Transportation Transportation

Figure 1 SCM Flow Chart

Sustainable SCM

Figure 2 Sustainable Supply Chain Management

The most frequently quoted definition of sustainability comes from the Brundtland
Commission (World Commission on Environment and Development 1987), which defines
sustainability as “development that meets the needs of the present without compromising
the ability of future generations to meet their needs.” However, this definition of the term
is macroscopic in nature and it provides little guidance to organizations on how they can
become more sustainable. A more comprehensible concept for organizational sustainability
is instead the concept of the triple bottom line as presented by Elkington (1998), which
simultaneously considers and balances economic, environmental, and social goals. The
triple bottom line (TBL) suggests that, at the intersection of social, environmental, and
economic performance are activities that an organization can engage in which not only are
beneficial from a social and environmental standpoint, but that also make economic sense
and result in competitive advantage for the firm (Elkington 1998)

Source: Journal of Management Policy and Practice vol. 11(4) 2010

Process in Supply Chain Management
 Customer Relationship Management
 Customer Service Management
 Demand Management
 Supplier Relation management
 Product Development and Marketing
 Order Fulfillment
 Production Planning and Management
 Return management

Customer Relationship Management (CRM):

Customer Relationship Management is a strategy for managing all the company's
relationships and interactions with your customers and potential customers. It enables the
organization’s focus on relationship with individual people such as service users, suppliers
and colleagues. CRM is embedded within the business process to improve the productivity
and also improving your profitability.

Customer Service Management (CSM):

CSM is a term that refers to practices, strategies, and technologies that companies
use to manage and analyze customer interactions and data throughout the customer
lifecycle, with the goal of improving business relationships with customers, assisting in
customer retention, and driving sales growth. Nowadays supplying the material to the
customer is not sufficient, a feedback on the product is taken and the customer experience
is recorded for the product. That data is a vital information for the organization to evaluate
the customer satisfaction and can predict the future sales of the organization.

Demand Management:
The process of determining what might be in demand and planning how to manage
in future is called as demand management. The process of predicting and planning the
demand for products, becomes critical.
Supplier Relationship Management (SRM):
SRM is a systematic approach to assess suppliers’ contributions to your business.
The process of vendor evaluation based on the supply quality and vendors who are part of
your continuous success. SRM tools aides to develop positive relationships with the
vendors and collects data for improving the integration. Major goal of SRM is to
streamline business process between organization and suppliers. The main focus is on
developing a mutual beneficial relationship with all of your suppliers.

Product Development and Marketing:

In today’s economy product development is the key process for company’s growth,
and the amount of effort for commercializing the product is based on the development cost
of the product. To design and develop a product which matches the supply chain process,
the integration with suppliers and customers are the key ingredients for company’s success.
If the integration external organization such as suppliers, distributors are maintained well,
the cost of the product can be optimized and the time to market will decrease substantially.

Order Fulfillment:
The order fulfillment process refers to all the steps companies must take from the
moment they receive an order until the items land in customers. The process of integration
all the necessary activities like distribution vendor management, manufacturing, logistics
and marketing to develop a strategy to meet the customers requirement.

Manufacturing Flow Management:

According to Thomas J. Goldsby, assistant professor of Marketing and Logistics,
The Ohio State University and Sebastian Manufacturing flow management is the supply
chain management process that includes all activities necessary to move products through
the plants and to obtain, implement, and manage manufacturing flexibility in the supply
chain. Manufacturing flexibility reflects the ability to make a variety of products in a
timely manner at the lowest possible cost. To achieve the desired level of manufacturing
flexibility, planning and execution must extend beyond the four walls of the manufacturer.
Return Management:
Returns management can defined as the system/ management strategy which is
capable of handling the challenges faced due to return materials. A cost-effective return
logistics system links the available supply of returns with the product information and also
it should be able to provide information about the product reparability. The major aspects
of return management are speed, visibility and control. The process also involves
information such as how the return materials are to be disposed and recycled.

Figure 3 Integration of SCM and ERP solution

Procurement

Procurement is one of an organization's main operational fields. It is a major cost

center that can be used to funnel all resources into the business. It is the administrative hub
that manages all products procurement, exchanging supplies for further storage with
financial resources. This process generates additional revenue for the company before its
customers without compromising the company's values and integrity. Procurement method
has multiple definitions based on the procurement act of goods and services and their
demand-based planning and storage. Turner defined procurement as a program or process
that supports the overall needs of the organization for the supply of products, services and
processes needed to achieve the organization's goals and tasks.
 Procurement is also defined as the process of obtaining the goods and services that
a company needs to fulfill its model through various tasks such as establishing quality
standards, financing, price negotiation, purchasing, cost analysis, research and selection of
suppliers, inventory control and disposal of waste products such as material packages
(Kolenko & Kolenko 2014.) In addition, procurement is the act of finding, acquiring and
purchasing from external sources the appropriate goods, services or work at the best
possible cost to meet the acquirer's need in terms of quality and quantity, time and location
(Weele 2010). Chartered Procurement and Supply Institute (2013) also defined
procurement as the role of business management which ensures the identification,
procurement access and management of external resources that an organization needs to
fulfill its strategic goals. Procurement is a natural process in which one level of
development takes place before the other in a way that requires each phase to be completed
in order to achieve the desired result. It is a mechanism that identifies market supply
opportunities and develops resource strategies to simultaneously produce optimal supply
outcomes to the business, its shareholders and customers. However, the effectiveness of
procurement is determined by its value and the organization's success. (Turner in 2011)
Figure 4 Sample Procure to Pay in Industry

Material
requirement

Request for quotation

Comparison of quotation

Selecting the vendor

Creating a PO
Send Back to Supplier

No
Operational process

Material / Quality If it’s

Check okay
Good Receipt

Yes

Stock IN and inform to finance team for making

payment
 For a long time, purchasing has been seen primarily as an operational function
without any strategic importance (Baily, Farmer Jessop & Jones, 1994). However, more
attention has been given to the strategic importance of buying in recent years. One
explanation for this might be the outsourcing phenomenon. Companies tend to outsource
a large number of previously part of their own operations (Van Weele, 2005). This
externalization results in costs that were once domestic costs, such as wages and fees,
being external in the form of goods or services purchased. Baily et al. (1994) notes that
over half of its revenue is produced in products, equipment and services by the average
producing company. This means that it most realizes the strategic importance of the
purchase.

The procurement role will typically contribute to the company's competitive

position in many ways other than by saving costs. Van Weele (2005) outlines some of
the following ways:
 Reduction of quality costs. Purchase can reduce production costs by
ensuring a product or service that is not subject to rigorous quality control
from selected providers. Purchasing can also reduce performance costs by
ensuring that the purchased components do not contribute to finished
product complaints.
 Product standardization. By trying to reduce the product range, purchasing
can lead to lower costs. This is done by reducing the number and/or number
of manufacturers of different components
 Contribution to product design and innovation. Industry advances often
come from suppliers and stem from intense interactions between suppliers
and buyers. Through deliberately promoting these experiences,
acquisitions may lead to continued product innovation and enhancement.
 Stock reduction. The procurement will reduce the need for protection
reserves of components by enforcing a strict discipline on the manufacturer
and implementing it. This could include acts such as demanding that the
manufacturer keep a consignment inventory at the factory. Such acts can
reduce the required inventory and thus the capital used significantly.
  Increasing flexibility. If the company is going to give its customers
versatility, it could also have to ask its suppliers to do so. Using EDI or
synchronized data systems, telling suppliers of evolving demand over time
is simpler.

 Fostering purchasing synergy. Most businesses have a structure of a

corporate entity with fairly independent business units. In such a system,
the director of the unit is both responsible for the income and the costs. In
such situations the buyer may make significant savings by combining their
transactions with other devices.

 They mean that strategic purchasing can give a firm a competitive

advantage by enabling the firm to:

 Encourage close working relations with a limited number of providers

 Encourage open communication between supply line partners
 Encourage a strategic long-term relationship orientation for mutual gain.

Chen et al (2004) stated that strategic purchasing will lead to communications and long term
orientation between suppliers, a limited number of suppliers. This ensures that the customer
offers input to the supplier and the offered modifies accordingly leading to mutual benefits
and eventually better financial performance. This will lead to increased receptiveness for the
company.
Procurement process.

Figure 5 Standard Procurement and Payment process

Procurement activity categories

Procurement activities or process can be divided into two categories;
Direct and Indirect procurement activity.

Direct procurement focuses on the management of the supply chain and relates directly to
the production activities of manufacturing enterprises / companies.
Indirect procurement work focuses on the company's procurement organizational tools
for activities including equipment, servicing, repair, advisory and outsourcing.

In the business environment, the term "procurement" is known as supply management as

well. (Cadwell & Davies, 2009; Lewis & Roehrich 2009). Some companies prefer to use the
term supply chain management because the two words are synonymous with and have similar
main features. The supply management concept and procurement are, according to Turner
(2001), synonymous. But supply management seems to be wider from the academic point of
view, as it covers the whole procurement process. The supply management concept can be
defined as using specialist tools, focusing on specific techniques and processes to maximize
effectiveness and adding value to the procurement services of an organization. However, both
activities are primarily concerned with managing external resources for the benefit of the
company and its customers, generating income for the company and adding value for the
customers in general.

Essence of acquisition Turner (2011) proclaims acquisition method as a

value center. During a company, acquisition delivers a large vary of advantages by supporting
the strategic structure objectives. Seven core advantages of acquisition are known. These
include; provide security in terms of raw materials and finish merchandise, lower value of
production, risk reduction, improved quality
of merchandise, bigger additional worth, redoubled potency and innovation (CIPS
2013). Acquisition creates higher gross margin and prevalence over alternative competitors
through managing the ordering, receipt, review and approval of the influx of things into the
organization through the suppliers. Acquisition are effective and profitable if
less economical organization will integrate its philosophy and culture into their system. (Turner
2011, p. 2.) Morledge and Smith (2013) rumored that it's doable to scale back a project cost of
capital by a median of fifty if the acceptable acquisition methodology is adopted. However,
the advantage of acquisition is earned or secured once a strategic acquisition management is
used into associate degree structure system.

Types of procurement

Procurement basically includes two inter-related elements: purchasing and supplying of

goods (Heiserich, Helbeig& Ulmann2011). There are six types of procurement and these include;
1. Single procurement: This is the type of procurement that starts and causes the production
process of the supplier to be activated by specific customers (Heiserich et al., 2011).
2. Stock procurement; supplies are replenished on a threshold level in this form of procurement.
There is a minimum level of inventory that must be maintained after manufacturing has been
completed before the next order from customers is issued. This supply is valuable since demands
can be expected by consumers. The downside, however, is the higher acquisition costs.
3. Vendor managed inventory (VMI): This is a form of procurement where consumers and end-
users have close relationships with the manufacturer and the supplier is responsible for inventory
in the company of the customer. (Arnold, 2009.)
4. Just in time procurement: When the company's stock level is low, it is a procurement form
dependent upon the supply of goods. This kind of procurement is good because the cost and the
balanced system are through.
5. Just in sequence procurement: It is a form of procurement based on a company's successive
supply at a certain period of the necessary products.
6. Ship to line: The supplier's latest added value for the customer's first added process is a
procurement type that requires less logistic measures, goods and raw materials. (Heiserich et al.,
2011).

Figure 6 Evaluation of proposal.

Procurement process/strategy
Procurement strategy can be characterized as a company's planned approach for buying
its necessary goods, raw materials or services, based on factors like timing of procurement,
funding and budgetary assets, anticipated risks and opportunities, etc.

Five key performance factors, including time, costs, efficiency, reliability and
technology, were defined for the procurement process (Turner 2011).
1. Cost: The battle for lower materials costs is undeniably the main driver for the
procurement strategy. In order to win the preference of consumers, business enterprises are
striving to produce cheaper and more distinct product to their potential customers. (Kotabe
1998.) Because the raw materials or products supplied by a particular supplier may be too
expensive, and the same materials are obtainable at cheaper price from other merchants
elsewhere has brought about the integration of procurement strategy to reduce the cost of
acquiring goods.

2. Time: Some of the suppliers are unable to supply the required material or may not be
able to meet the required delivery time due to some difficulties as the availability of capital and
locations. This was why recruitment strategy planning was developed to provide the best
applicant to meet the needs of the company on a timely basis.

3. Quality: Buyers typically stress quality for certain goods. Because the quality of a raw
material or product manufactured by a manufacturer is not acceptable or insufficient to a
consumer, if higher standards are required, to sell his goods to their potential users. In order to
preserve a competitive advantage for others, a firm can adopt a raw material procurement
strategy which satisfies their requirements.

4. Technology: Because some suppliers do not have access to high-tech, which in turn
has affected their reliability as regards the supply of contractual raw material? Some
manufacturers have therefore developed procurement processes to identify reliable suppliers.
The procurement process is carried out by a person responsible for controlling and handling the
inflow into the business of external resources. Approval process is a very complex and important
job in terms of the type of project that a company is carrying out. That business has its own
design, strategy, size and the product portfolio and scope of the market. For example, a
multinational company in France All phases of the procurement process as are any other small or
medium-sized company producing the same product will be employed with several multiple
products. Consequently, each industry relies on its manufacturers, logistics and customers.
Nonetheless, the procurement process generally follows the same methodology given these
differences, but its implementation depends on the scope of the task. Each section or industry
follows a process that serves as a framework work or blue printed for better business results.
Such mechanisms are the mechanism by which assets and activities are strategically oriented
towards the organization's objectives. (Richardson 2007.)

Stages of procurement process Business process strategies are weapons that can be optimized to
be ahead competitors.
1. Identifying business or project requirement: This phase of procurement involves identification
of business needs, stakeholder consultation, risk assessment and the scope of the product
manufacture and service communication systems. Equipment, components, final products and
raw materials may be included in the business materials required. Thus computer programmers,
hazardous waste processors, transport carriers and service providers are part of the service needs.
(Robert, 2011.) This procurement process is mainly intended to meet the whole company
requirement and to get the full support of all stakeholders. Corporate shareholders are split into
two groups, both internal and external. The internal players are the shareholders, employees and
customers, and the external actors are distributors, public agencies and so on. Then, the main
players are the major competitors, primary client groups or target groups and major suppliers
when taking decisions on business strategies. (Van & Walee2010.)

2. Requirement advert: This is a phase in the design of the plan for procurement and the call for
tenders is recognized as well. Various companies require different strategies, which depend on
the scale of the project or enterprise. This phase involves team training, market research and a
clear definition of the goal, purpose or purpose. Whether vendors and tenders accept the business
company's goal of the procurement plan cannot be accomplished. Where all providers are
invited, or a client application is only a limited demand for deals, which are available to only
select distributors, manufacturers or suppliers, the call for tenders is either free.

3. Expression of interest: All suppliers, suppliers or contractors who can guarantee their
performance are clearly interested in tendering here. The aim is to create a shortlist of suppliers
or sellers that are appropriate. (Previously, the President of the Council)
4. Preparation of tender document: At this stage of the procurement, a report is created and
published on the draft e-portal that takes a specialist procurement approach. This paper explores
how manufacturers and vendors take environmental, economic, ethical and social issues into
account.

5. Suppliers or tenderers evaluation and selection: It requires the design of a plan for the
identification, tracking and confirmation of the prequalified contractors. The aim of this phase is
to determine, evaluate and choose the economically most desirable tender (MEAT) that meets
the user requirements and specifications based on factors such as cost, performance, product and
delivery.

6. Contract awarding and negotiation: This means that the deal is signed and awarded to the best
tenderer. The phase includes joining a comprehensive undertaking based on the entire transaction
procurement process (P2P) to ensure that costs and risks are minimized in the sector.

7. Contract implementation and management is the last stage of procurement process

In this phase, the organization will undergo a regular check on the price after granting the
contract to the suppliers based on the appraisal results in order to retain the level of services
accepted by the customers and the suppliers.

Procurement tools
There are five key drivers of supply and procurement management that are important for
the advancement of successful business and must be considered when determining in an
enterprise. These include prices, reliability, energy, trustworthiness and technology. (Turner
2011.) Turner (2011) further explained that the concept, instruments and resources used include
outstanding and successful strategic supply management;
1. Price analysis: This means price comparisons between suppliers and external
benchmarks without direct knowledge of the cost of suppliers.
2. Total cost analysis: The cost of an additional part, such as transportation, charges,
special packages, inventory and quality control (mean time prior to failure), is included.
3. Total cost of ownership analysis: The total cost of the item over the lifespan of that
item shall be included. Such expenses are not limited to, but include:
• Purchase price: money paid in respect of the item
• Cost of purchase: all costs involved to obtain the item such as the employee's time, heat,
electricity, fuel, telephone, rent of buildings or cost, Internet and on-line platforms and services,
engineering and/or execution costs, transport costs, fees, fees etc.
• Final review of lifetime costs: this covers end-of-life costs and material disposal4.
Financial analysis: This includes the analysis of the supplier’s or bidder’s financial proficiency
and capacity using Dun and Bradstreet report (D&B) that shows; credits, delinquency history and
risk of failure or inadequacy by the industry. The analysis also includes investigating the annual
report that shows the cash inflow and outflow, and as well as fiscal reports of the previous year
and the plan for the fourth coming year.
5. Technical analysis: It involves the study of the physical features of the item or
service to boost performance, speed of service and comply with minimum organizational
requirements.

Procurement policy
The procurement policy is the rules and regulations developed by a company to
efficiently control the process of purchasing the required goods and services Policy on
procurement varies across various agencies. The procurement practices for corporations, non-
profit organizations and government organizations. The factors that influence policy building
governing the purchasing of a company are business volume and availability of sellers and
suppliers in making the necessary goods and services accessible are cash influx. Applied to the
general budget of the Union, Parliament and Council. The following are some of the policies:
 1. Contracts cannot be awarded to bankrupted manufacturers or tenderers who are
suspended.
2. A supply company that is convicted of an offense on the basis of its professional
conduct, who’s authorized decision-maker is not granted a contract for business.
3. No contract can be awarded to tenderers not compliant with the obligations they have
to pay social security or taxes in accordance with the legal provisions of the country in which
they have been established or enforced.
4. A manufacturer, a dealer who was subjected to administrative amendment cannot
participate in the procurement activities.

Supplier management process

Three key questions need to be asked in the supplier management process are presented by Van
Weele (2005).

• Which goods would be required to reduce the number of suppliers?

• Which products should be managed with the current number of suppliers?
• Which commodities should be increased by the number of suppliers?
Van Weele (2005) points out that the current trend is to focus sourcing strategies on
reducing suppliers. He also says that supplier reduction should not be an objective, but rather a
means to achieve something else.

Van Weele (2005) suggests the following steps in the supplier management process:

1. Analysis of the deal. All current supplier agreements are evaluated in this phase.
The classification and recognition of all existing contracts could be a challenge
since there can be a significant number of contracts outside the procurement
department. The aim of this stage is to evaluate the price agreements made, to
record actual supplier quality and satisfaction, and to assess the risks and
responsibilities involved.
2. Current and new vendors bid competitively. The purpose is to examine the
whole supply market by inviting other companies to make a bid other than the
 present suppliers. The final result of this stage is a deal with the best provider.

3. Optimization of manufacturer and supply chain visualization relationships. The

first two steps are to choose the most suitable suppliers, while the last and third
step is to make the most of the supplier. Concrete goals and priorities are set in
this phase for reducing costs and rates, improving quality and reducing lead times
and enhancing customer service. Most organizations have groups of specialists
from various disciplines involved in this goal setting process from both sides. The
exchange of ideas for improvement on both sides is one of the main goals of the
activity. In the normal course of this process, distributors have to work most and
are slowly incorporated into the business process of customers.

Figure 7 Supplier Management Process

Retaining and developing the supplier relationship

The relationship between the supplier and the client has traditionally been seen as the
relationship between the customer and the client, since they often decide where they can spend
their money. That kind of relationship in which the consumer can choose which supplier the
customer needs does not mean a healthy, but a more secure relationship if one party is obviously
more dominant than the other.
 This could be true in a market in which many companies offer the same product or
service from which the client can choose. Nevertheless, if the manufacturer is highly specialized
and may be the only product supplier delivering such a good or service, this scenario can be
completely different (Weele, 2010). The author believes that the relationship needs to be
mutually beneficial in order for a business to have a good supplier relationship. All businesses
should benefit from the partnership in this regard. In that respect. When, due to low order
volume, for instance, the manufacturer does not need your business as a customer, the service
costs can be raised or simply refuse to deal with you.

If, by contrast, the buyer notices that the supplier is unable to deliver the goods or
services ordered, the buyer can simply attempt to switch to another supplier that is more willing
to deal with his company. It can often be especially difficult for small businesses to obtain the
vendors comply with their demands, as they often do not have the financial strength of large
volumes, which would make them the strongest party in negotiations. It can also be seen in the
starting interviews. The only way to deal with the situation is with compromise and the quest for
mutual benefit. In a relationship in which the supplier is the stronger party and there is no
possibility of direct pressure on them.

In this way, the purchase department will do his utmost to convince himself of the
advantages of the arrangement, and then analyze it from the viewpoint of the other person
(Lambert, 2008, p. 54). What we are trying to do and how committed are you to achieving your
objective? The buyer may also try to think about it or wants to know and feel the other party. The
"What's the question about them?” The value is unique. Why should they concern themselves
with your goal, and what does your objective mean to them? Would you consider any mutual
benefits, or will it only make your target more difficult to live and work? After the questions
alluded to above are addressed, the buyer can tangibly and easily accomplish the 30 goals by
splitting the end goal into smaller targets. Each of these goals should be determined and reported
Suppliers as partners

In the so-called' equalanced partnership' the relationship between business and its
suppliers or provider of services (Weele, 2010, p. 197), there is a common interest between both
parties in maintaining a stable relationship, without the dominance of either party. All companies
' relationships rely in large part on trust and mutual interests. Both companies are European and
India operating

Both are small companies with less than 15 employees each. To order to keep the
manufacturer up to date with what takes place on the market, future demand forecasting is
particularly important. The manufacturer should take the current business situation into account
and make assumptions about their customer’s behavior. The estimates of your customers allow
them to determine the amount of raw material / goods they must order or inventory. It is
important from the purchasing point of view that component lead times from placement of an
order to the final delivery, for example, can be predicted as accurately as possible. Of example,
purchase forecasts are based in part on sales or predictions

Figure 8 Supplier management system of Company

Inventory Management Process
The activities of the warehouse are analysed and listed out based on the current functioning
business model of the Organization, the activities are listed out, and the number of labour operators
required to do the activity is mapped sand the cost associated with it is also identified. The
objective is to list out all the possible scenarios of the warehouse, so that from the study
perspective, we can get a visibility on the operational activities of the warehouse and mapping
them, which would very useful to apply the research study, since most of the process done in the
warehouse doesn’t have much of documentation , it could be base for further analysis also, so the
activities of the warehouse are as follows

 Inbound Put away

 Outbound Pickaway
 Inventory Work
 Prepping New Orders
 Weight Control and Packaging
 Customising Product Making

1. Inbound Put Away: Shipments entering the plant shall be opened for inbound or export
and then sent to the Warehouse Put away sites. The shipments have been received as full-
sized pallets and the items have been scanned for WMS system entries. Smaller quantities
of product have been transported to small inventory regiments and large quantities are
palletized and brought into larger inventory regiments.

2. Outbound Pick Away: Outbound or export orders are generated, orders made pre-pressed
and palletized, ready for export and ordered by both customers or companies (Make to
Order). Order size ranges from smaller to bigger volumes, which are then palletized with
plastic foil once the items are packaged and fitted.

3. Prepping New Orders: Orders are obtained from the network and then order forms
together with stickers are produced and put on carton boxes. Its primary task will be to
 inspect and produce order forms, labels, conveyor zones, and then another person will have
to machine or manually prepare the cartons and send empty cartons along the conveyor
where they enter the stock.

4. Inventory Work: Inbound finished goods are graded and delivered to warehousing racks
based on the quantities requested, from both export and import shipments. If the amounts
are small, they are transported on smaller storage racks, and if the order volumes are bigger,
they are palletized and placed on larger racks by the Forklift.

5. Weight Control and Packaging: Orders filled at the weight checkpoint in the stock will
be reached by the Weight Control sensor in that the device checks that the carton weight is
not below a specified weight, isolating and checking the carton box per user, fixing it once
solved and then forwarding back to the carrier. Eventually it is distributed at the parallel
packaging station, where the plastic film and carton covers are placed over the items and
then wrapped with tightened plastic bands with the aid of a wrappers.

6. Customised Product Making: Customer personalization mainly retrofits products

according to customer requirements. This activity is more similar to retail customers, where
they are repackaged according to customer requirement. A set of tiny, smaller electrical
fuses with different Current Rating Specifications (A), thus a separate station is generated
in the warehouse for customer-specific orders, and the orders are handled according to
customer requirements and sent to the packing place and placed on the conveyor line
leading into outbound shipment points. This operation takes a lot of time and requires a lot
of human effort and lack of time.
 The activities which are listed below covers almost all the activities which are done by
Operators or Workers working in Logistics Division, the activities of the warehouse are mostly
manually done, or we can say that most of the part requires manual effort, there was less
dependency on the Information systems to make crucial business decisions, the operators are
working in 2 shifts, where most of the work involves working in the primary shift in the morning.
Second shift mostly involves mostly consolidating the outbound export shipments and optimizing
the space in the warehouse for next day. The number of operators working in the warehouse seems
to be higher, In future they are planning to automate some of the activities of the warehouse, just
to reduce the manual dependency to a certain level
Transportation Management
Effective logistics management is the key to improved company profitability and
competitive performance. Logistics leads to the competitive advantage. As shown in Figure 6
below, it is easy to see that each of these components comprises the three elements of the
advertising theory-customer satisfaction, unified initiative, and corporate profit and logistics
relationships. When businesses begin to focus on their basic operating skills, they will expand
beyond production, including logistics. Logistics has now become a big strategic base for
businesses. The five parts that the organization could provide competitive advantages from
logistics were low costs, superior customer service, value added products, efficiency and
creativity.

Figure 9 . Logistics management concept (Lambert, Stock & Ellram 1998, 12)
Benefits of ERP
1. Competitive Market:
ERP technology requires a significant investment, but not investing is also even more costly.
Some manufacturers opt for technology solutions while adhering to proven and true methods of
the past. Manufacturers cannot afford to delay implementation of ERP while investing in ERP
and gaining benefits in their competition.

2. Competence:
An ERP solution removes the need to enter data manually, and redundant tasks are
significantly reduced. The program also streamlines business processes and makes data
collection easier and more efficient for businesses regardless of where they work.

3. Predicting:
The application for business resource management helps the customers and in particular
managers to build more accurate predictions. Because the ERP data is as accurate as possible,
businesses can calculate accurately and make better forecasts.

4. Collaboration:
With each department operating separately from the other, no one wants to run an isolated
business. Departmental cooperation is an essential and often needed part of the company. There
is no reason why departments cannot work together, since the information entered in ERP
systems is centralized and consistent. The program often focuses on almost every aspect of an
organization and thus promotes interdepartmental cooperation.

5. Scalability:
An ERP program can be scaled quickly. This means adding new features to the system, as
changing business needs are easy. Structured ERP systems enable new users and functions to
expand the solution that was initially implemented over time. If your firm is prepared to grow or
requires more resources it should make the software for resource planning easier to grow.
 6. Integrated Information:
Information scattered through different repositories will be difficult; all the information will
be processed in one place. It helps you to incorporate the ERP process with applications such as
the CRM program to keep information secure, reliable and unique. Know customers in one
place, their orders and their own inventories.

7. Cost Savings:
ERP software reduces administrative and operating costs with a single source of reliable,
real-time information. It enables manufacturers to manage operations pro-actively, prevent
disturbances and delays, disconnect data logjams and help users to take decisions faster.

8. Streamlined Processes:
Business operations increasingly become complex as manufacturers expand. Manufacturing
technology automates business operations through divisions, providing those using the system
with reliable, real-time information. Through allowing users to manage complex processes, avoid
reentering data and optimize functions such as output, order fulfillment, and distribution, ERP
improves efficiency and productivity. Efficient streamlined processes.

9. Mobility:
The ERP advantage is that there is access from anywhere to a central database. With mobile-
friendly apps and software, house, workplace, anywhere.

10. Reporting:
Many of the organizational inefficiency is due to inadequate documentation. The technology
for ERP helps to enable and configure documentation. The organization can address complex
data requests more effectively with enhanced reporting capabilities. Customers can also perform
their own documents without relying on IT services to save the client money for other tasks.
 11. Productivity:
An ERP system optimizes the management of processes, thereby increasing employee
productivity. Duplicate task removal, recycling of data and optimization of processes. It allows
users to deal with other urgent projects and activities. The approach was structured to be easy to
use. It is also easier to work.

12. Regulatory Compliance:

The strength of ERP technology is how it taps into regulatory compliance in the
manufacturing sector that is sometimes ignored. Powerful ERP systems will track and control
progress in accordance with regulations across the industry.

13. Flexibility:
The strong, scalable and configurable ERP software systems are new. They are not one-sized
but can be personalized to suit a company's unique needs. ERP systems can also adapt to the ever
evolving demands of a growing company so that when your needs or business changes you will
not have to purchase a new solution.

14. Customer Service:

It can quickly be equipped with a company plan for high quality customer service. Sales and
customer service staff can communicate more easily and enhance interactions with customers by
having quicker, more accurate access to customer information and history.

15. Security:
When a business resource management system is in place, data security is not a concern. The
reliability, stability and information protection of a new system will be enhanced, by integrated
tools and firewalls. Data restrictions can also be improved by solution managers to ensure that
your own software is as safe as necessary.
 16. Better supply chain:
The successful ERP system means better sourcing, inventory, predicting demand, etc.,
basically optimizing and responding to the full supply chain.

Factors critical to success of study

In order to find some success factors a systematic literature review was performed. The
successful implementation of system excellence is mainly responsible for these factors. Different
literacy review success factors (with simplified names for the intended purpose of the surveying)
were recognized as independent variables and the dependent variable is the performance of the
organization. Different variables calculate the quality of the company. Six results are made up of
the independent variables and the dependent variables are categorized within three dimensions
into one of the key "Organizational Efficiency" dependent variables. This theory, which should
be empirically checked, is the theoretical framework.
Chapter 3: Research Design, Methodology and Plan

RESEARCH STRATEGY
The objective of the study is to determine insights about the efficiency of implementing
ERP solution for supply chain management in an organization. To create a model for the study of
company performance the strategy followed was collecting realistic data from interviews. The
study would be helpful in analyzing the impact of ERP system with the recent updates to the
software. And also the study would provide understandings of how system has proved to
overcome the challenges faced by the organization.
Analysis of current data of the organizations performance can be used to identify
predictions for future research. The data gathered in this research is qualitative data and some
parameters are qualitative data.

The research process is the step-by-step process by which the research document is
developed. However, progress can rarely be made step by step. The process of research consists
of the identification, location, evaluation, analysis, development and exchange of ideas. The
primary and secondary origin from which guidelines or proposals are formulated shall be used
for all these activities.
Research Process Flow Chart

Figure 10 Research process flow chart

Strategy used for creating a model.
1. Primary step for creating a model involves identifying the present procurement
process followed by the company. The data is collected is primary data, that was
gathered with some interviews with the purchase managers. To identify the current
procurement process data was collected from the documents followed for every
routine transaction. The standard procurement process for analyzed using the
literature review which explained the optimized procurement process. However the
process in theory may not be always suitable for practical application. The study also
involved collecting ideas for improving the current procurement process for further
development and optimization. An idea and a list of activity was created of all
activities that have to be included in the proposed new process.
2. Second step was to accumulate all the activities into respective groups so that
essential process for the procurement and vendor evaluation can be recognized. The
analysis was required to detect all the connections that was needed to organize the
process in sequential flow.
3. After the process was analyzed it was important for the study to decide which
activities in the process are important for the optimization of the future procurement
process. The decision was made by consulting with the senior purchase and logistics
department management. The aim was to create a system that would be suitable for
the targets of the company. Present activities were also compared with theoretical
models from the literature review.
4. After the significance of all the process and the interrelations were decided. A story
board of overall structure of the model is created, the interview questionnaire and
data materials are created along with the story board.
5. This first draft was presented to a focus group containing procurement personnel
from all countries and with different roles in the organization. The focus group
provided valuable input into the process and the overall structure were adjusted
according to new information that was discovered in the focus group.
6. When an overall structure where established the next phase was to try to place all
identified activities in the new structure. This was done through interviews with
 different persons from the procurement organization who provided their view on
where different activities were to be placed.
7. Once all activities were mapped into the structure it was important to validate the
new structure. Since the model was presented to different levels of users of
department there was different suggestions given by each individual to improve the
process, and thus the model evolved into a standard object.
8. Since the model was formed from inputs of different persons it was necessary for
the model to suit all the personnel’s satisfaction. Hence the final solution were
presented to the group of people interviewed and go confirmation for the same
structure.
9. After the model was accepted all the persons involved in the interview were asked
to provide their tools and templates that they used for performing the activity and
the reports template for analyzing the process. Once these were evaluated the tools
were assessed, so that all the possible solutions relevant for the process can be
obtained
10. Finally after all the necessary tools was finalized then the tools were connected to
the process map and it was integrated into the complete structure. The last step of
the process would be communication sent across the organization.
Figure 11 Step by step procedure for creating a process map to create model
Data Collection Methodology

Data for the study was collected using series of interviews from purchase managers and
consultants who worked for the implementation of the ERP system in the organization. Certain
interviews where collected with representatives of different departments who are the end users
for the products procured. To analyze the performance of self-service procurement for the users
post implementation of add-on module to the ERP system.

The study requires different types of data collection methods such as

 Primary data collection
 Secondary data collection

The questionnaire for interviews were open-ended questions which focused on the study of the
current process and its effectiveness towards the day to day activities of the organization. The
questions would be able to predict the impact of ERP system in supply chain of the organization.
The interview were conducted over online feedback submission and face to face discussion with
the ERP consultants.

Primary data is collected by following the examination strategy and later used for the
analysis. On the other hand secondary data contains of information that was collected and
documented by other resources which was captured for different purpose. E.g. a third party audit
provides a report on the strategy used for maintenance of warehouse which provides insights
about warehouse quality and also the stock present.
Since both data forms are their unique individualities the data collection methods must be
different for data collection types. This thesis will use both primary and secondary data to
address and analyze the research problem, and hence a number of collection methods will be
used.
Primary data is collected by using questionnaires and series of interviews, researchers
also use observations and experiments to collect primary data. The study involves observation
and interviews are important to collect qualitative data. The method for collecting data through
questioning by personal contacts, or creating an online survey for the industry experts.
 Interview is conducted in different ways such as planning and creating the structured
interview questions in advance. The interview can also be semi structured where subject of
interview is decided and the questions are developed during the interview to stay with the
context on the discussion. Unstructured interview is one where no questions are decided the
process is like conversation between two persons on the topic of interest. The interviews can be
executed toward one person or a group. Interviews with purchase department head and project
management team was vital for study to gather correct information. The interviews consisted of
both discussions to obtain as much helpful information as possible and semi structured
interviews.
Both unstructured and semi-structured interview has been carried out. The unstructured
were used in advance when interviewing the buyers in order to get a dialog where the most
trustworthy information was shared. This study was also extended to conducting interviews with
vendors, software providers and also the information technology team. The study was conducted
in the case company and also with SAP and IBM to understand the integration with business and
ERP solution. So that perfect output from the interviews can be collected.

Secondary Data are data that have already been collected by and are readily available
from other sources. The secondary data consists of documents which are essential to understand
the wider sight of the process. Even though documents are not directly involved with the
business process it gave insights for understanding the external applications of the process. For
further understanding of the challenges faced by the organization, the study required to collect
more secondary data.

The data’s from the secondary source gave us the possibility to establish the thorough
understanding of the problems related to the evaluation of ERP-system implementation.
Furthermore, using secondary data is relatively uncomplicated and it gave us the advantage of
exploring the problem area on a step-by-step basis. However, it is always important to be critical
of the information presented in secondary sources, especially since the material might have been
gathered to address a different problem area.
 Moreover, many secondary sources do not clearly describe issues such as the purpose of
a study, how the data has been gathered, analyzed and interpreted making it difficult for the
researcher to assess their usefulness. In order to address this problem I have tried to triangulate
the secondary data by using numerous independent sources. The information about relevant
literature is collected from the databases created by the organization on the previous study which
provides information on ERP implementation and the roadmap for the integration sources of
information was gathered from internal reports and some data from Internet. The literature on
evaluating ERP-systems is very limited, but it was fairly straightforward to find material in the
related field of IT evaluation. Due to the rapid development of the IT sector, in regard to new
products and applications, we have focused on as recent material as possible. In order to get
access to the latest developments in this area a number of articles published in academic journals
and trade magazines have been used.

The secondary data must be analyzed with careful examination because it is just possible that the
secondary data may be unsuitable or may be inadequate in the context of the problem which the
researcher wants to study. By way of caution, the researcher, before using secondary data, must
see that they possess following characteristics:

1. Reliability of data: The reliability can be tested by finding out such things about the said
data: (a) who collected the data? (b) What were the sources of data? (c) Were they
collected by using proper methods (d) at what time were they collected? (e) Was there
any bias of the compiler? (t) What level of accuracy was desired? Was it achieved?

2. Suitability of data: The data that are suitable for one enquiry may not necessarily be
found suitable in another enquiry. Hence, if the available data are found to be unsuitable,
they should not be used by the researcher. In this context, the researcher must very
carefully scrutinize the definition of various terms and units of collection used at the time
of collecting the data from the primary source originally. Similarly, the object, scope and
nature of the original enquiry must also be studied. If the researcher finds differences in
these, the data will remain unsuitable for the present enquiry and should not be used.
 3. Adequacy of data: If the level of accuracy achieved in data is found inadequate for the
purpose of the present enquiry, they will be considered as inadequate and should not be
used by the researcher. The data will also be considered inadequate, if they are related to
an area which may be either narrower or wider than the area of the present enquiry.
From all this we can say that it is very risky to use the already available data. The already
available data should be used by the researcher only when he finds them reliable, suitable
and adequate. But he should not blindly discard the use of such data if they are readily
available from authentic sources and are also suitable and adequate for in that case it will
not be economical to spend time and energy in field surveys for collecting information.
At times, there may be wealth of usable information in the already available data which
must be used by an intelligent researcher but with due precaution.

Questionnaire Design
It is one of the most important and difficult tasks for the researcher to carry out research.
Questionnaire is an autonomous measuring device, although developed by a researcher for
collecting information from the respondents in order to find their attitudes and their opinions in
order to respond to the previously identified research goals.

Because of the detailed nature of this research, the involvement of many respondents at
the end of the analysis is crucial, so that the questionnaire is the viable method. This is because
the interaction process of questionnaires makes it possible to target the participation of a greater
number of respondents, because questionnaires are more widely distributed in order to gain a
wider view.

It would encourage the individual to convey in depth what was presented to the
respondent by providing an open ended questionnaire. It means that the interviewees are free to
respond in their own terms rather than to choose between a numbers of alternatives. This means
that respondents have full control and a direct benefit of their view.
This has advantages in the analysis stage as it would provide an opening in which the respondent
would be able to express their opinion, allowing for a stronger correlation to be gained (King,
2004)

Survey Questions

1. How much are you comfortable with the speed at which your order is processed by
Procurement once your requisition has been approved?
Always Mostly Rarely Never

2. How would you rate the current ERP system?

Always Mostly Rarely Never
Efficient
Reliable
User-
Friendly

3. Can you consider this procurement process gives the best value for money
Always Mostly Rarely Never

4. Time you spend weekly on procuring a material.

Less than 1 hour 2-4 hours 4- 8 hours 8 hours +
Externally
Internally

5. How much time do you spend weekly on arranging the delivery note?
1-3 hours 3- 8 hours 8 – 9 hours 9 hours +
 6. Time taken to generate the report from the system related to PO history, Order status and
Sales order report
1-3 hours 3- 8 hours 8 – 9 hours 9 hours +

7. How familiar are you with the following process

Yes No Required system
support
Finalizing the pricing
procedure.

Completing the
procurement process
and creating delivery
Adjusting the PO and
approval process
Handling with partial
orders and posting
Goods receipt.
Returning Goods

8. Does supporting documentation adequately identify what was purchased and how the
purchase was relevant to department?
Always Mostly Rarely Never

9. Please answer “Yes” or “No”

Do procedures exist to ensure that all goods received are adequate in quantity
and quality to fulfill the department’s requirements for the specific purchase?

Have procedures been developed to determine, prior to placing the

requisition, whether the purchase is appropriate for the account to be charged?
Do the receipts and other supporting documentation adequately identify what
was purchased and how the purchase was relevant to department/public good?
Are all purchases made in compliance as per the company norms?
Are the persons responsible for receiving and inspecting goods received
separate from those responsible for requisitioning goods or initiating
accounting transactions?
Interview Procedure
Qualitative research requires certain phases to be followed for strengthen the interview
protocols. The procedure outlined below may support the quality of data obtained throughout the
entire study.
The interview procedure consists of four phases.
Phase 1: To create an interview question which line up with research topic
Phase 2: Creating an investigation-based conversation
Phase 3: Receiving feedback on interview procedures
Phase 4: Directing the interview procedure.

Phase 1: To create an interview question which line up with research topic

The primary phase focuses on the alignment between interview questions and research
questions. This alignment will increase the purpose of the interview questions for the research
process confirming the purpose. Thereby elimination of unnecessary questions which may not be
in line to the research. The researcher wants planned and essential interview questions because
people have different and complex experiences that may not reveal totally in front of the research
person. Instead, helping participants explain their experiences takes time, careful listening, and
intentional follow up.

Phase 2: Creating an investigation-based conversation

To develop a protocol that promotes a conversation, compose interview questions
different from how you would write research questions. As noted in phase 1, research questions
are different from interview questions. Maxwell (2013) pointed out the functional difference
between research questions and interview questions:
Your research questions formulate what you want to understand; your interview
questions are what you ask people to gain that understanding. The development of good
interview questions (and observational strategies) requires creativity and insight, rather than a
mechanical conversion of the research questions into an interview guide or observation schedule,
and depends fundamentally on your understanding of the context of the research (including your
participants’ definitions of this) and how the interview questions and observational strategies will
actually work in practice.
The questions which researchers formulate are usually theoretical language, but the interview
questions should be expressed in everyday language of the user. The second phase requires
researcher to develop an inquiry-based conversation through an interview procedure. With
a) Interview questions written differently from the research questions;
b) An organization following social rules of ordinary conversation
c) A variety of questions;
d) A script with likely follow-up and prompt questions.

A script was drafted with align to the research question, to support the development of an
inquiry-based conversation. The script can guide the interviewer for the interview to propose and
question during a conversation. So that the interview is like natural conversational style. The
script is written in and format where the participants only hear what is needed for the interview
in accordance with their response. A researcher might summarize what they just learned and
inform the participant that the conversation is now going in a slightly different direction.

Phase 3: Receiving feedback on interview procedures

By the first two phases of interview procedure which is conversational and structured
interview, the results are that information needed for the study which are relevant to the survey
questions. For any activity performed within the organization it is effective only when there is a
feedback for the process. The purpose of obtaining feedback on the interview protocol is to
enhance its reliability, its trustworthiness as a research instrument. Feedback provides the
interviewer with information of how well the participants understood the interviews purpose and
also whether they were be able to interpret the interview questions which it was intended to
serve.
The feedback from multiple sources paves way for analyzing the qualitative research,
because the procedure and process is iterative. The research methodology feedback can give
inputs for improving the interview procedure which is used to gather information which the
study is seeking. Above all the interviewer can take feedback on the procedure before beginning
of the actual interview process thereby the feedback which is provided after the interview can be
used to analyze the procedure qualitative. Hurst et al. (2015) pointed Milagros Castillo-Montoya
to the possible value of this process for qualitative research: “Projects that neglect pretesting run
the risk of later collecting invalid and incomplete data. But, completing a pretest successfully is
not a guarantee of the success of the formal data collection for the study

Phase 4: Directing the interview procedure

While all the three phases of interview procedure are framed according the procedure
framework. The final phase of the protocol is to pilot the interview, even though an interview
protocol has script and standard interview question. The procedure is also inquiry based
conversation. The questions expressed must have clearness, simple and the interviewee must be
able to answer it without difficulty. The researcher has also received feedback on the questions
through close reading of the protocol and think-aloud activities.

The final phase of the interview is to actually conduct and interview in real condition
possible. So any notes or feedback taken during the interview is used to improve the interview
procedure. However that decision is solely based on the interviewee, so this might not be a
mandatory feedback. The process can also involve conducting a pilot interview for the purpose
of gathering feedback on the real interview procedure. In this step, the interviewer conducts
interviews simulating rapport, process, consent, space, recording, and timing in order to “try out”
the research instrument (Baker, 1994).

Through pilot interview procedure you can find realistic sense of how long the interview
takes and whether participants indeed are able to answer questions. In this phase, you take note
of what might be improved, make final revisions to interview protocols, and prepare to launch
the study (Maxwell, 2013). In the event of no pilot research can be afforded then the feedback
phase is crucial for developing the procedure in to a standard form.
Data Analysis Procedures

The data collected for the study was qualitative data, Qualitative data refers to non-
numeric information such as interview transcripts, notes, video and audio recordings, images and
text documents.
Qualitative data analysis QDA
Qualitative data analysis is the range of processes and procedures whereby we move from
the qualitative data that have been collected into some form of explanation, understanding or
interpretation of the people and situations we are investigating.
QDA has the following approach for analysis
 Deductive approach
 Inductive Approach
Deductive approach
Deductive approach is using your research questions to group the data and looks for
similarities and differences. The approach means selection of appropriate hypothesis to analyze
and sort the research problem. The steps involved in deductive approach are
 Theory
 Hypothesis
 Observation
 Confirmation
In this approach various arguments are used to give adequate reasoning for a particular fact and
these arguments are based on definite law, rules and regulations. Reasoning gained through
deductive research approach is based on objective and follows causation.
Inductive Approach
Inductive approach is related with interpretive analysis of data, where based on research
observations a pattern is created and from then a hypothesis is drafted. The inductive research
was formed to overcome the limitations in the deductive approach process. In inductive
approach the process is selected in specific concepts and analyzed as the same principle as for
qualitative approach. In this approach the theory for the hypothesis need not be predetermined
initially, so that this approach gives flexibility to the researchers.
This approach is follows following steps:
  Observation,
 Pattern,
 Tentative hypothesis
 Theory.
In order to develop alternative explanation for inductive arguments it is essential to
observe collected facts and information. The reasoning, collected through inductive research is
based on subjective approach with some definite meaning.

Types of qualitative analysis

 Content analysis
 Narrative analysis
 Discourse analysis
 Framework Analysis
 Grounded Theory

The study follows for analysis of impact of ERP implementation and enhancement requires
Discourse analysis.

1. Discourse Analysis
A method of analyzing a natural conversations which was created using script and
interview questions were drafted. The interviews with the everyday users will be more of
interactive sessions. It is required for the research to refer to the context when interpreting the
message as the same phenomenon can be described in a number of different ways depending on
context.

2. Content analysis: This refers to the process of categorizing verbal or behavioral data to
classify, summarize and tabulate the data.
3. Narrative analysis: This method involves the reformulation of stories presented by
respondents taking into account context of each case and different experiences of each
respondent. In other words, narrative analysis is the revision of primary qualitative data
by researcher.
 4. Framework analysis: This is more advanced method that consists of several stages such
as familiarization, identifying a thematic framework, coding, charting, mapping and
interpretation.
5. Grounded theory: This method of qualitative data analysis starts with an analysis of a
single case to formulate a theory. Then, additional cases are examined to see if they
contribute to the theory.

Analysis in ERP implementation

The study uses deductive approach for analyzing the effects of SAP Ariba
implementation. Since the process of procurement involved was upgraded with new strategies,
which was implementing Ariba solution. The solution provided use of self-service procurement
for purchase managers and project managers, which reduced the procurement time and it also
requires less training for performing the activities.
Also the hypothesis deals with vendor management and negotiation which traditional
system uses using the standard system to overcome the challenges faced by the system an new
implementation was carried out.
Steps of descriptive approach.
1. Theory
A set of interrelated concepts regarding the purchase process in ERP and its
definitions that presents systematic view of events by specifying the variables are
drafted for the study.
2. Hypothesis.
Identification of challenges faced by the standard process was analyzed and to
provide solution for the problem was studied.
3. Observation
This involves creating research methodology where standard interviews were
conducted with respective owners of the process and analyzed using the framework
developed.
4. Confirmation
After research analysis the final thesis which has the compared proving the impact of
Ariba solution implementation.
Chapter 4: Findings and Analysis

Data analysis is the most critical part of any research. This study summarizes the
qualitative data collected. This involves for qualitative research paper, interpretation of SWOT
(Strength, Weakness, Opportunities and Weakness). This data analysis can interpret the patterns
and analyze the outcome for the collected data.

The interpretation of data is analyzed against the theoretical framework of the study
topic. This study uses deductive approach for the study, I have worked deductively (from theory
to data) hypotheses have been developed from the theory. Data collected through survey is
analyzed to test these hypotheses.

Discourse Analysis
Discourse analysis is a term used for a variety of processes that examine or deconstruct
the underlying meanings in speech or other form of communicative text.
Discourse analysis is a qualitative analytical approach which examine the implications of
the use and interaction of language, the contexts and processes of these meanings and practices.
The study of discourses aims at perceiving and classifying the different data processes for
making definitions, networks and activities. Discourse analysis requires different starting points
and disciplinary considerations as theoretical procedure. Many variants emphasize consistent and
strict linguistic observation, communication and interaction, for example.

Additional variations emphasize the intertextuality of meanings and the connections

between genres and discourses in the sense of communication or in a broader historical and
social context or system. The study of micro-level language use and analysis of macro-level
circumstances incorporate a traditional discourses analysis. Critical discussion analysis is the
discourse analysis focusing on power and empowerment production, change in meaning and
negotiations.
 The research focuses in this context on the formulation of strategy by analyzing data from
a real-world case study to establish current methodologies to cover the terminology dimension
by qualitative dataset analysis and discourse analysis of market sample populations.

Notwithstanding the direction of the discourse analysis, the work findings are always
focused on detailed data analysis. Through discourse analysis, you can examine various types of
phenomena: documents, media texts, pictures, films and environments. Their common
philosophical foundations are common factors that unite the various orientations and variations
in the method social constructionism and linguistic.

A speech analysis will be used to clarify the links between the various categories and
strategic activities of each consortium company and the project strategy for Greenfield. The
process in the consortium companies for the choice of relevant decision and wording areas
consisted of describing the aspect of the companies to be examined in the research. At first, the
appropriate functions were determined; but, during the interviews, the process was still open to
adding new functions. The case study approach is applied to identify people who have to be
interviewed within these specific areas once the appropriate decision areas have been identified
and established. Consideration has been carefully taken to cover people in cooperative
companies at multiple levels.

The multiple levels were:

• Interviewees that influence the market and supply chain plan (managers);
• Level B interviewees supervised by Level A; (managers) indirect and contributing
to the design of the strategic approach; and
• Level C interviewees supervised by Level B (supervisors and engineers).

The group of people surveyed were therefore members of the board, the management,
and the managers and technicians at the operational level of the supply chain partners. In the
original choice, only part of the interviews was predetermined. The remainder of the interviews
were selected based on the case study research creation. It was targeted at a minimum of ten
interviews, for a total of 10 qualitative interviews, with one third to level A, with the remainder
to level B and level C, with each company taking part in the sampling guidelines. Some of the
chosen respondents were difficult to interview directly via careful tests, and interviews were
performed by telephone. Selected participants on two occasions were worried about this party
and cannot participate. These participants were replaced in order to ensure the ratio of one third
in each category with comfort and snowball. In order to preserve the credibility of the sample
size, data obtained and subsequent results, the one-third ration was considered necessary in each
classification.

Figure 12 Categorizing concepts and objectives in the subcategories

Evaluation of Findings
In order to recognize external entities, causes, powers, and tie them to the business
environment, the secondary and primary data collected were analyzed. The external structures,
influences and forces are the main drivers in the definition of the essential dimensions that
constitute the first stage of the structure of the supply chain. The concepts are developed through
the application of the content and speech analysis to link secondary and primary data collected in
order to investigate and interpret and conceptualize the findings, elements, factors and forces that
drive the supply chain architecture of the mining sector. This chapter examined the general
impact of regions and industry and how these results can be used to change the company
procurement policy and the supply chain.
The findings led to the conclusion that the participants of the supply chain could expect
their return through the application of a specific business strategy and integrated supply chain
strategy. The results can only direct the process of theoretical building for assessing key
competencies, business models and supply chain networks in this context. The aim of the
analysis in this section was to develop a business strategy framework that anticipates the impact
of the external dimensions.
A Greenfield Supply Chain Architecture was derived from the directive and conventional
case analysis for the definition of external elements, forces and factors that determine the
competitive intensity and attractively of a specific sector. However, it should be stressed that the
external factors and elements differ in a different business environment. Because of the
important differences between business environments (Miller and Friesen, 1978), it is practically
impossible to design a system for worldwide study. The framework proposed instead seeks to
generalize the results of the case study into an architecture of the supply chain that recognizes
that businesses and their supply chains are not lone islands.
Chapter 5: Interpretation of Results

Interpretation of Results

Unfortunately there are many inefficiencies in the world of B2B. Although companies are
moving to boost domestic contact (between departments and employees), others (between buyers
and suppliers) are behind. The number of manually offline transactions is incredible. This
analysis highlights 10 main advantages for SAP's Ariba in the customer-supplier relationships

1. Cost Improvements

Figure 13 Cost improvement from SAP Ariba

2. Source to discover new suppliers

3. Visibility on the relations between expenditure and suppliers also

4. Enhanced Customer Supplier Communication

5. Lower system maintenance costs are provided in the cloud

6. Visibility of supplier order status and end of payment schedule

7. New marketing platform for providers

8. Several distributors already working on the Ariba Network in the food industry

9. Minimizing supply chain risks

SAP ARIBA BENEFITS

Improved computer power, Internet procurement and advanced research contribute to a

revolution in the process of procurement speed, magnitude and efficacy. Acquisition processes
are transitioning to cloud-based solutions for ongoing communications between buyers and
vendors that reduce the need for unreliable phone calls or emails. A few key benefits that SAP
Ariba brings to your Procurement practice:

 Build a Business-to-Business (B2B) simple cloud procurement market, integrated with

SAP SRM and ECC catalog procurement processes.
 Financials, purchase orders and transfers are part of cloud solutions.
 A streamlined procurement process with automated supply chain transactions would help
the internal customers to create a digital Transformation environment that increases
client, manufacturer and customer experience. Concentrate your internal clients on added
value against system problems, corrections, repetitive and inefficient activities.
 The system is always up to date with the Ariba cloud, with no full system
implementation. You may pick which functionality should be modified to ensure it does
not affect the environment of your supply chain.
 Ariba can serve as a catalyst for the thorough clean-up of information and supplier.
Review and reduce your supplier base by eventually reducing suppliers ' electronic
transmits and procurement and performance issues.
 The Content System SAP Ariba can provide both consumers and suppliers with a
cohesive integrated catalog system.
 Ariba is already familiar to many suppliers, thus increasing the training required. If a
manufacturer already uses it, the Ariba system is standardized with few exceptions.
How SAP Ariba is helping to reduce costs and cycle times substantially.

There are 2 main scenarios for Integration with ECC

Procure-to-Pay

"The procurement-to-pay systems allow the buying department to integrate with the accounting
department payable (AP)."

The stream of the process begins in Ariba, where both catalog and non-catalog products need and
purchase orders. This started with receipts of products and invoice transfers and approvals for
suppliers to position a purchase order and the restoration of invoice processing.

SAP ERP replicates the buying reports and ends the process with the reporting of outgoing
transactions in SAP ERP. The integration scenario offers complete transparency with regard to
transaction status by requiring modification and adaptation by the company as reflected in SAP
ERP and Ariba.

Extend the order process in Ariba with receipt of goods and handling of invoices. Ariba triggers
the creation in SAP ERP of an invoice receipt after reconciliation of the invoice.

Ariba digital automation and SAP ERP corporate rules allow a significant increase in order
reliability, clarification on exceptions and significantly improve overall process performance.

Procure-to-Order

Non-stock content can be ordered by building a shopping cart for the Ariba Procure-to-Pay or
Procure-to-Order system.

Cart shopping is done according to pre-defined company rules. A buying order is automatically
created in Ariba if the cart is accepted, and a buying order is automatically triggered by the
integration in SAP ERP. The purchase order can be sent to the supplier from Ariba via fax, e-
mail, EDI or, as an option, Ariba Network. Integration Options connect the systems in the most
optimal way.

 Master Data contains the manufacturer, organization of transactions, payroll, calculation

units, divisions, and general manager.
 Transactional data includes business products such as purchase order, delivery of product,
invoice, CSC, Outline Agreements (CSC) and forwarding services.
 A toolkit to connect ERP to Ariba• Web services include a validity / availability test of
products and items of value.
 OK2Pay–Ariba to ERP email approving payment of the invoice.
Comparison of Results with Assumptions (Hypotheses)

While ERP adopters have failed, they certainly seem to pay for themselves. ERP's
adoption organizations. By 2017, savings in excess of $325 million had been recorded. Most of
these savings are due to changes, particularly in demand provision, in the supply chain. "The old
process consisted of a purchasing department working in a normal process that took time and
involved coordination with various teams. The planner's demand number turns towards the
client, one of the barriers, and the plant says the demand planner doesn't know what he'd do
about saving money. The time taken for the purchasing of a material which required that a
purchase application be made for the customer, which would then go to the buying department
and after approvals had to be issued, was solved and the user could monitor the order himself and
every factory refers to the item in the same way with the implementation of self-service
procurement.
We also apply common processes that simplify operating procedures and allow functions
such as developing training procedures to be centralized. For each factory, training must no
longer be customized. As the same procedures are implemented in each location only once
training materials are required. In addition, any worker can travel to another plant and must not
adapt to local processes.

The vendor assessment and negotiation process was the company's highest priority. The
transportation preparation had to be coordinated because of the case company's multiple
integrations and imports of goods from different companies. The ERP implementation strategy
has paved the way for the challenge

The fact that after the ERP implementation, they employed a Process Development
Director reflects this mindset. The sole responsibility of this individual lies in the connection
between the company and IT and ensuring that workers concentrate on continuous improvement,
rather than just on trying to preserve existing systems.
Effects of ERP Implementation for the challenges faced by the organization.

Measure that are taken to speed up the procurement process with minimal training to the users
Ariba ERP system provide solution for the users to carry out these operations?

One of the solution provided by Ariba is, solutions like guided buying, collaborative
requisitioning and spot quote

The mechanisms concerned with budget evaluation, strategic procurement, project

management and more are also discussed by other approaches. Ariba Spot Offer is connected to
vendors in the Ariba network that already have business with other businesses through the
company's Enterprise Resource Planning (ERP) program. The quotation of suppliers with which
the company does not regularly conduct business can be compared, the best offer selection made
and the purchase order returned to the ERP system of the company.

Guided buying from Ariba is a user experience approach. The solution was based on a
four-fold description of the issue. First and foremost, too many applications confuse consumers.
Second, the purchase process is not always understood by consumers. Second, the correct
element cannot be easily found by users. Consumers don't finally know the vendors chosen. The
approach seeks to provide a user experience that is intimately linked to their personal online
shopping experiences. The systems are integrated with company policies, contracts to suppliers
and other information. Guided shopping incorporates various catalog formats so that the end user
audience can purchase one spot. Guided purchases are said to provide "intelligent guidance to
guide users towards the right products, preferred suppliers and compliant policies," as well as
provide clear insight into the buying costs and to provide a control mechanism for plan holders.

The users of this portal requires minimal training for performing the activities which increases
the productivity of the procurement process. And the data integration between both the systems
are continuous hence the process is streamlined in an efficient manner
Figure 14 Shows the claims made by Ariba to support the use of guided purchases.

Second hypothesis statement involved how the organization is performing negotiation with
the vendors for the signing contract. The process of procurement - Is the procurement
process mapped with the SAP ERP standards or customized according to their needs.

The solution offered by Ariba is collaborative requisitioning. The negotiations will partly
take place within the borders of the Ariba Network with collaborative requisitions. The end-user
can choose more than one manufacturer instead of choosing one to provide the client with a
certain product or service. All listed suppliers are asked for the material and/or service. The
providers must, in their turn, open the customer's application within their own Ariba setting and
can, if interested, provide a proposal to the potential customer. Through choosing a budget for
the product and/or service, the consumer may limit the demand to the providers. In that case, the
suppliers ' plan should not surpass the budget. If the company receives more than one supplier's
proposal, they must compare the proposals and choose the supplier from whom they want the
product and / or service to be purchased. A joint requested solution could potentially improve a
buying department's spending management.
Costs and benefits Analysis

The cost benefit analysis provided by the software system developers that supports
organizations investment in the program based on the set of solutions needed to leverage
opportunities to achieve your desired business results.
Chapter 6: Conclusions and Scope for Future Work

The case of the business is an excellent case study for implementation of ERP because it
includes both successes and failures. Obviously there were breakdowns during the project's
planning phases, but the overall result can be considered successful due to the consolidated
system they now have in place and the amount of money they save due to the ERP Ariba rollout
tool. Other companies can learn valuable lessons that can be applied to their own rollouts by
examining the company's experiences. Some of these examples come directly from the mouths
of managers of companies, while others are conclusions of the case study.

Interpretations from the study

The first lesson that can be learned from this situation is that the right people need to be
involved in the process from the beginning in order for an ERP implementation to be successful.
The company learned the hard way to learn this lesson and was eventually forced to stop the
rollout. Redesigning work processes is simply impossible without involving some of the people
who actually do the work. While it may be possible to argue for "too many cooks in the kitchen"
about ERP implementations, it is certainly better to have more staff than needed and not enough
when the company's future is on the line.

The point that can be gleaned from the case of the organization is that updating and
implementing the application of ERP is not the task that companies must try to force into a
specific timeline. There is no better way of missing things and executing components shoddily
than pushing the timetable of the project to match a defined end date. Again, with the company's
future on the line, it is important to fully define the project's business goals and then create a
timeline to achieve those goals.

A third suggestion for organizations considering the introduction of an ERP is to

concentrate a great deal on practice. Training is one of the key elements of any ERP
implementation, because workers who will use the program will not be ready to do so without it
and the new business processes on a daily basis. Training is often an afterthought, like most
software projects, and typically one of the first items to be cut or reduced when the timeline of
the project begins to slip. Organizations have to resist the urge on ERP projects to do this. It is
important that employees receive training throughout the project early and often.

Fourthly, businesses should spend some time reviewing the reengineering of the business
process in combination with an ERP. Companies often take advantage of an ERP rollout
opportunity to either redesign business processes or adopt best practices across the organization.
During this step, caution should be exercised as re-engineering processes are often not inherently
a wise business decision for the sake of re-engineering. There are periods when it is necessary to
leave processes alone. There are also situations where best practices can differ from site to site.
Treating each facility of the organization to force a new or revamped system is an excellent way
to create a feeling of resentment and resistance within the organization. ERP implementations
give re-engineering processes a great opportunity, but great care must be taken when selecting
which processes are actually changed.

In ERP programs, the fifth general recommendation is a limit on the number of device
customizations. The cost, the schedule and the probability of bugs in the system increase as the
number of customizations requested. ERP systems must be standardized enough to be marketed
to multiple organizations because they are provided by the manufacturers rather than created on
their own. This means either that the software must be customized to meet the needs of an
organization or that the processes of the organization must adapt to the software. As already
suggested, ensuring what processes are wisely re-designed is critical. In accordance with this
recommendation, it is clear that deciding which processes are re-engineered and which code
parts are tailored is a juggling act.

The final recommendation for ERPs is to create a collective plan buy-in. Historically, the
task buy-in by top managers has been strongly emphasized. It's only half the fight, sadly. If the
plan is to be successful, everybody in the company needs to support it. When they do so again,
they should focus on changing business processes and having universal buy-in first and only then
and only then on updating the technology. If they do so again they should focus on this. There is
a big difference. The program and the systems will be used by the end-users. There will be
ethical and retention problems because they are not behind the system.
Conclusion

In summary, SAP Ariba ERP implementations are unlike any other system
implementation that a company will ever experience. Despite the bad press that ERP systems
and their corresponding rollouts receive, it is possible to experience a successful rollout. Often,
as in the case of case company, organizations will encounter major setbacks and difficulties
during the implementation yet still be able to salvage a successful project. The important point
to take away is that the plans must be flexible enough to change mid-stream to overcome
obstacles that appear during the project and organizations must do their homework prior to
beginning an ERP project. Enough companies have gone through implementations that there are
plenty of lessons to be learned if organizations are willing to accept the advice of others. ERP
implementations combine disparate data sources, re-engineer processes, and involve large
numbers of users and locations. It is nearly impossible to plan for every contingency in projects
of this size. The difference between success and failure is an organization’s ability to rally and
work together during difficult times to reach an end goal that will eventually make everyone’s
job easier and the company more competitive.
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