Management Information Systems

Managing the Digital Firm Canadian 7th

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 Managing the Digital Firm, Seventh Canadian Edition

CHAPTER 9

Enterprise Applications to Manage

Supply Chains and Respond to
Customers
LEARNING OBJECTIVES
After reading this chapter, you will be able to answer the following questions:

1. How do enterprise systems help businesses achieve operational excellence?

2. How do supply chain management systems coordinate planning, production, and
logistics with suppliers?
3. How do customer relationship management systems help firms achieve customer
intimacy?
4. What are the challenges posed by enterprise applications?
5. How are enterprise applications used in platforms for new cross-functional services?

Teaching Suggestions
The opening case illustrates how Allan candy needed, as an independent company, the
ability to improve its benefits to customers, including speed to market. Allan candy
needed to manage both its upstream and downstream production and distribution
processes and have real-time access to inventory, production, and distribution (e.g.,
customer, invoicing) data. The company’s managers also needed easy access to real-time
financial data. These needs are met by enterprise applications.

Section 9.1, “Enterprise Systems”

This section introduces enterprise systems and explains the benefits and disadvantages of
installing them. There have been success stories as well as horror stories about companies
who have used enterprise systems. Figure 9-1 is a good way to diagram how enterprise
systems work. Use Table 9-1 to discuss various business processes that enterprise
systems support. This table shows students how an enterprise system permeates every
functional area in a business.
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Section 9.2, “Supply Chain Management Systems”

Section 9.2 goes into great depth about supply chain processes and how information can
help managers control the supply chain better. Have your students give you examples of
following the supply chain with retail purchases that they make. It discusses the increased
difficulties of managing global supply chains and how using the Internet can improve the
flow of information. Be sure to point out the management challenges of effectively
implementing a successful supply chain system.

WINDOW ON MANAGEMENT: CANADA POST AUTOMATES

DATA ENTRY WITH SAP

Case Study Questions:

1. Why is it hard for Canada Post to automate data entry into its SAP systems?
What business processes are involved?

1) Data had to be loaded into the SAP system, and required that there was
software written to convert existing data into a format acceptable for the SAP
system. This took time and money.
2) There were data entry errors caused because data had to be manually input
into SAP from existing Excel spreadsheets
3) The manual data entry took time and was not an effective use of employee’s time.

2. Why were management, organization, and technology factors responsible for

Canada Post’s problems with automating data entry?

Management: Management eventually recognized the inefficiencies associated

with manual data entry.

Organization: The data entry was separated from the user groups and therefore the
clumsiness of the data entry may not have been obvious to these managers

Technology: Foremost, the problems were associated with an aging technological

architecture

3. How did implementing the Winshuttle software change the way Canada Post
handled data entry?

Winshuttle allows Canada Post to shuttle data between MS products like Excel
and Access into SAP applications. There is no need for programming or any IT
support. Users in functional units (like Organizational Planning) could automate
data entry, saving time and allowing for more timely data for management.

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4. Describe two processes that were improved by implementing the Winshuttle

system?
Payroll processing was improved; Canada Post can make salary revisions and for
time and schedule management in a timely manner.
Customer credit ratings could be undated in a timely manner, allowing for better
billing and receivables processing.

Section 9.3, “Customer Relationship Management Systems”

As the book states, “…the Internet and electronic commerce have put more power in the
hands of customers.” A good example you can use to explain this statement is the
increased amount of information available on the Internet about automobiles, their
pricing, and availability of purchasing options. You can also point to the availability of
online banking and loan merchants as a way to demonstrate the ability to comparison
shop for monetary products. Since everyone has been a customer, you can discuss
personal horror stories and how companies could have prevented them by having a good
CRM system in place. This is a good time to actively engage Marketing majors in the
class. They may have already taken a marketing class with CRM or may be planning to
take one in the near future.

Section 9.4, “Enterprise Applications: New Opportunities and Challenges”

This section explains the difficulties of implementing CRM, SCM, and enterprise
systems and integrating them with other systems. New business processes must be built
on enterprise-wide service platforms. The trend toward next-generation enterprise
applications includes open source and on-demand solutions – popular solutions with
small and medium-size businesses that can’t afford expensive licensing fees.

The text mentions Salesforce.com’s “Ideas” application that essentially replaces the
outdated suggestion box. The Web site has an excellent demonstration of the product that
you can direct students to at http://www.salesforce.com/products/ideas/ .

WINDOW ON TECHNOLOGY: CUSTOMER RELATIONSHIP

MANAGEMENT HEADS TO THE CLOUD

Case Study Questions

1. What types of companies are most likely to adopt cloud-based CRM software
services? Why? What companies might not be well-suited for this type of software?

Small to mid-size companies that lack the know-how or financial resources to

successfully build and maintain CRM applications in-house are most likely to use
cloud-based CRM software services. Smaller companies are moving toward open-

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source cloud computing that lets them make their own changes to the application
source code to fit their particular situation. When using this type of software service,
small- and mid-size companies can customize applications by creating, modifying or
deleting business logic without extensive programming.

Large companies may not want to take advantage of cloud-based CRM software
services if they are concerned about maintaining control of their data and security.
Most cloud-based computing services do not make a guarantee that data will be
available 100 percent of the time. There are also service-level agreement issues that
larger companies may want to avoid.

2. What are the advantages and disadvantages of using cloud-based enterprise

applications?

Advantages: Reduced costs; access to software that may be too sophisticated or

cumbersome for in-house development; access to best practices industry-wide; ability
to merge legacy systems with newer systems or merge databases together.

Disadvantages: Security risks; risk of losing control of data; availability issues;

service-level agreement issues.

3. What management, organization, and technology issues should be addressed in

deciding whether to use a conventional CRM system versus a cloud-based version?

Management: Employee training; number of employees needed for each system

type; switching costs associated with each system type.

Organization: Costs associated with each system type; organizational changes in the
way the business will operate under each system type; changes in employee job
functions and responsibilities that may require new organizational learning.

Technology: Degree of complexity involved in each system type; technological

changes involved with each system type; changes in data management; ability or
inability to customize each system type.

Review Summary

1. How do enterprise systems help businesses achieve operational excellence?

2. How do supply chain management systems coordinate planning, production, and

logistics with suppliers?

3. How do customer relationship management systems help firms achieve customer

intimacy?

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4. What are the challenges posed by enterprise applications?

5. How are enterprise applications taking advantage of new technologies?

Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.

Analytical CRM 292 Partner relationship management

Bullwhip eff ect 283 (PRM) 289
Churn rate 293 Pull-based model 286
Cross-selling 290 Push-based model 286
Customer lifetime value Social CRM 295
(CLTV) 292 Supply chain 281
Demand planning 284 Supply chain execution
Employee relationship management systems 284
(ERM) 289 Supply chain planning
Enterprise soft ware 279 systems 284
Just-in-time strategy 283 Touch point 288
Operational CRM 292

Review Questions

1. How do enterprise systems help businesses achieve operational excellence?

Define an enterprise system, and explain how enterprise software works.

Enterprise software consists of a set of interdependent software modules that support

basic internal business processes. The software allows data to be used by multiple
functions and business processes for precise organizational coordination and control.
Organizations implementing this software would have to first select the functions of the
system they wish to use and then map their business processes to the predefined
business processes in the software. A particular firm would use configuration tables
provided by the software to tailor a particular aspect of the system to the way it does
business. Table 9-1 describes some of the major business processes supported by
enterprise software. These include financial and accounting processes, human resources
processes, manufacturing and production processes, and sales and marketing processes.

Describe how enterprise systems provide value for a business.

Enterprise systems provide value both by increasing operational efficiency and by

providing firmwide information to help managers make better decisions. Large
companies with many operating units in different locations have used enterprise

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systems to enforce standard practices and data so that everyone does buisness the
same way. Enterprise systems helps firms respond rapidly to customer requests for
information or products. Manufacturing is better informed about producing only what
customers have ordered, procuring exactly the right amount of components or raw
materials to fill actual orders, staging production, and minimizing the time that
components or finished products are in inventory.

Enterprise software includes analytical tools for using data captured by the system to
evaluate overall organizational performance. Enterprise system data have common
standardized definitions and formats that are accepted by the entire organization.
Enterprise systems allow senior management to easily find out at any moment how a
particular organizational unit is performing or to determine which products are most
or least profitable.

Companies can use enterprise systems to support organizational structures that were
not previously possible or to create a more disciplined organizational culture. They
can also improve management reporting and decision making. Furthermore,
enterprise systems promise to provide firms with a single, unified, and all-
encompassing information system technology platform and environment. Lastly,
enterprise systems can help create the foundation for a customer-driven organization

2. How do supply chain management systems coordinate planning, production, and

logistics with suppliers?

Define a supply chain and identify each of its components.

A supply chain is defined as a network of organizations and business processes for

procuring materials, transforming raw materials into intermediate and finished products,
and distributing the finished products to customers. It links suppliers, manufacturing
plants, distribution centers, retail outlets, and customers to supply goods and services
from source through consumption. Supply chain management is the integration of
supplier, distributor, and customer logistics requirements into one cohesive process.

Explain how supply chain management systems help reduce the bullwhip effect
and how they provide value for a business.

The bullwhip effect occurs when information about the demand for a product gets
distorted as it passes from one entity to the next across the supply chain. It can also result
from “gaming,” as purchasers present manufacturers or suppliers with a false picture of
consumer demand. It can be dealt with by reducing uncertainties about demand and
supply when all of the supply chains have accurate and up-to-date information.

Define and compare supply chain planning systems and supply chain execution
systems.
Supply chain planning systems enable the firm to generate demand forecasts for a
product and to develop sourcing and manufacturing plans for that product. They help
companies make better operating decisions such as determining how much of a
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specific product to manufacture in a given time period; establishing inventory levels

for raw materials, intermediate products, and finished goods; determining where to
store finished goods; and identifying the transportation mode to use for product
delivery. One of the most important functions is demand planning, which determines
how much product a business needs to make to satisfy all of its customers’ demands.
These functions are referred to as order planning, advanced scheduling, demand
planning, distribution planning, and transportation planning.

Supply chain execution systems manage the flow of products through distribution
centers and warehouses to ensure that products are delivered to the right locations in
the most efficient manner. They track the physical status of goods, the management
of materials, warehouse and transportation operations, and financial information
involving all parties. These functions are referred to as order commitments, final
production, replenishment, distribution management, and reverse distribution.

Describe the challenges of global supply chains and how Internet technology can
help companies manage them better.

Firms use intranets to improve coordination among their internal supply chain
processes, and they can use extranets to coordinate supply chain processes shared
with their business partners. Using intranets and extranets, all members of the supply
chain can instantly communicate with each other, using up-to-date information to
adjust purchasing, logistics, manufacturing, packaging, and schedules. A manager can
use a Web interface to tap into suppliers’ systems to determine whether inventory and
production capabilities match demand for the firm’s products. Business partners can
use Web-based supply chain management tools to collaborate online with suppliers
and customers. Sales representatives can access suppliers’ production schedules and
logistics information to monitor customers’ order status. The Internet has introduced
new ways of managing warehousing, shipping, and packaging based on access to
supply chain information that can give companies an edge in delivering goods and
services at a reasonable cost.

Distinguish between a push-based and pull-based model of supply chain

management and explain how contemporary supply chain management systems
facilitate a pull-based model.

In a push-based model, production master schedules are based on forecasts or best

guesses of demand for products, and products are “pushed” to customers. In a pull-
based model, actual customer orders or purchases trigger events in the supply chain.

In contemporary supply chain management systems, the Internet and Internet

technology make it possible to move from sequential supply chains, where
information and materials flow sequentially from company to company, to concurrent
supply chains, where information flows in many directions simultaneously among
members of a supply chain network. Members of the network immediately adjust to
changes in schedules or orders.

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3. How do customer relationship management systems help firms achieve customer

intimacy?

Define customer relationship management and explain why customer

relationships are so important today.

Customer relationship management: a business and technology discipline that uses

information systems to coordinate all of the business processes surrounding the firm’s
interaction with its customers in sales, marketing, and service.

Importance of customer relationships: Globalization of business, the Internet, and

electronic commerce have put more power in the hands of customers. Companies are
realizing that their only enduring competitive strength may be their relationships with
their customers. Some say that the basis of competition has switched from who sells
the most products and services to who “owns” the customer and that customer
relationships represent the firm’s most valuable asset.

Describe how partner relationship management (PRM) and employee

relationship management (ERM) are related to customer relationship
management (CRM)?

CRM systems capture and integrate customer data from all over the organization,
consolidate the data, analyze the data, and then distribute the results to various
systems and customer touch points across the enterprise. Companies can use this
customer knowledge when they interact with customers to provide them with better
service or to sell new products and services. CRM systems integrate and automate
many customer-facing processes in sales, marketing, and customer service, providing
an enterprise-wide view of customers. These systems track all of the ways in which a
company interacts with its customers and analyze these interactions to maximize
customer lifetime value for the firm. CRM extends to a firm’s business partners who
are responsible for selling to customers.

The more comprehensive CRM packages contain modules for partner relationship
management (PRM) and employee relationship management (ERM).

PRM uses many of the same data, tools, and systems as CRM to enhance
collaboration between a company and its selling partners. If a company does not sell
directly to customers but rather works through distributors or retailers, PRM helps
these channels sell to customers directly.

ERM software deals with employee issues that are closely related to CRM, such as
setting objectives, employee performance management, performance-based
compensation, and employee training.

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Describe the tools and capabilities of customer relationship management

software for sales, marketing, and customer service.

Customer relationship management systems typically provide software and online

tools for sales, customer service, and marketing. Refer to Figure 9-9 for a diagram of
the business processes that CRM software supports for sales, marketing, and service.
Capabilities include the following:

Sales:
• Sales force automation modules in CRM systems help sales staff increase their
productivity by focusing sales efforts on the most profitable customers, those who
are good candidates for sales and services.
• Provide sales prospect and contact information, product information, product
configuration capabilities, and sales quote generation capabilities.
• Enable sales, marketing, and delivery departments to easily share customer and
prospect information.
• Increase salespeople’s efficiency in reducing the cost per sale as well as the cost
of acquiring new customers and retaining old ones.
• Capabilities for sales, forecasting, territory management, and team selling.
• Supports direct-marketing campaigns by providing capabilities for capturing
prospect and customer data, for providing product and service information, for
qualifying leads for targeted marketing, and for scheduling and tracking direct-
marketing mailings or e-mail.

Customer Service:
• Provide information and tools to make call centers, help desks, and customer
support staff more efficient.
• Includes capabilities for assigning and managing customer service requests.
• May also include Web-based self-service capabilities.

Marketing:
• Support direct-marketing campaigns by providing capabilities for capturing
prospects and customer data, for providing product and service information for
qualifying leads for targeted marketing, and for scheduling and tracking direct-
marketing mailings or e-mail.
• Includes tools for analyzing marketing and customer data. Identifies profitable
and unprofitable customers, designs products and services to satisfy specific
customer needs and interests, and identifies opportunities for cross-selling, up-
selling, and bundling.

Distinguish between operational and analytical CRM.

Operational CRM includes customer-facing applications such as tools for sales force
automation, call center and customer service support, and marketing automation.

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Analytical CRM includes applications that analyze customer data generated by

operational CRM applications to provide information for improving business
performance management. Applications are based on data warehouses that
consolidate data from operational CRM systems and customer touch points. The
database serves online analytical processing, data mining, and other data analysis
techniques. Provides information related to customer lifetime values.

4. What are the challenges posed by enterprise applications?

List and describe the challenges posed by enterprise applications.

Enterprise applications are very difficult to implement successfully. They require

extensive organizational change, expensive new software investments, and careful
assessment of how these systems will enhance organizational performance. Enterprise
applications require both deep-seated technological changes and fundamental changes
in business operations. Employees must accept new job functions and responsibilities.
They must learn new work activities and understand how data they enter into the
system can affect other parts of the company. Enterprise applications introduce
switching costs that make it very expensive to switch vendors. Multiple organizations
will share information and business processes. Management vision and foresight are
required to take a firm- and industry-wide view of problems and to find solutions that
realize strategic value from the investment.

Explain how these challenges can be addressed.

Enterprise applications create new interconnections among myriad business processes

and data flows inside the firm (and in the case of supply chain management systems,
between the firm and its external supply chain partners). Employees require training
to prepare for new procedures and roles. Attention to data management is essential.
Management must understand the impact that implementing enterprise applications
will have on every facet of the business. Executives must not underestimate the time
and costs of implementation, not just on the organization but also on customers,
suppliers, and business partners.

5. How are enterprise applications used in platforms for new cross-functional

services?

Define a service platform and describe the tools for integrating data from
enterprise applications.

Service platforms integrate multiple applications from business functions, units, or

partners to deliver a seamless experience for customers, employee, managers, or
business partners. They provide complete information to everyone involved in a
process from beginning to end. The service platforms can be further integrated into an
enterprise-wide composite process.

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The applications can be integrated with older legacy applications and systems from
other vendors through the use of middleware, XML, and Web services tools. Portals
provide frameworks for building new composite services and presenting them to
users as though the information is coming from a single source.

Discussion Questions
1. Supply chain management is less about managing the physical movement of
goods and more about managing information. Discuss the implications of this
statement.

The information obtained through a supply chain management system can be used to
make better decisions regarding purchasing, production, and logistics. Information
helps to reduce the bullwhip effect that comes about from not having enough
information or accurate information. Information can help supply chain planning
systems generate forecasts and supply chain execution systems manage the flow of
products through the supply chain to delivery. Supply chain management systems
facilitate communication with all members of the chain.

2. If a company wants to implement an enterprise application, it had better do its

homework. Discuss the implications of this statement.

Most students should agree that adopting an enterprise system is a key business
decision first and foremost. CEOs and top executives must lead the change in the
cultural climate. A firm understanding of business processes and the reorganization of
those processes is essential to a successful implementation. Involving all parties,
including end users, is also crucial to the success of such an undertaking. Creating a
collaborative working environment is a key component. Also, the organization must
realize how much time, money, and personnel resources will be required by the
implementation of an enterprise application.

3. Which enterprise application should a business install first: ERP, SCM, or

CRM? Explain your answer.

Because each of these applications are so powerful in changing the way an

organization works implementation is an extreme challenge for any business. The
decision about which to install first depends on individual organizations. A business
may decide to go with just a CRM system or a SCM system first to gain experience in
the implementation process. Some issues a business or organization needs to consider
include:
• Expenses associated with purchase and implementation
• Deep-seated technological changes
• Fundamental changes in the way the business operates
• New organizational learning

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• Understanding just how much organizational change is required

• Determining possible switching costs should the organization change to a
different vendor
• Understanding how the organization uses its data and how it will be organized
under the new system
• Keeping customizations to a minimum

Hands-On MIS Projects

Management Decision Problems

1. Toronto-based Mercedes-Benz Canada: 55 car dealers provided customer data on
an ad hoc basis. No real incentive for dealers to share information with the company.
How could customer relationship management (CRM) and partner relationship
management (PRM) systems help solve this problem?

Comprehensive CRM packages contain modules for partner relationship management

(PRM) and employee relationship management (ERM). PRM uses many of the same
data, tools, and systems as CRM to enhance collaboration between a company and its
selling partners. If a company does not sell directly to customers but rather works
through distributors or retailers, like Mercedes-Benz Canada does, PRM helps these
channels sell to customers directly. It provides the ability to trade information and
distribute leads and data about customers, integrating lead generation, pricing,
promotions, order configurations, and availability. It also provides tools to assess its
partners’ performances so it can make sure its best partners receive the support they
need to close more business.

PRM systems could provide dealers with information that Mercedes-Benz Canada
gathers from other sources to help boost customer contacts and sales. In turn,
Mercedes-Benz Canada could make it easier for dealers to report customer
information to the home office and provide incentives for those that do so. The
system could be set up to provide management with more timely information on
dealers that do not provide information (perhaps via digital dashboards) and give the
company an easier way to reach out to those dealers via a Web site, email, or online
audio- and videoconferencing.

2. Office Depot: The company tries to offer a wider range of office supplies at lower
costs than other retailers by using just-in-time replenishment and tight inventory
control systems. It uses information from a demand forecasting system and point-of-
sale data to replenish its inventory in its 1,600 retail stores. Explain how these
systems help Office Depot minimize costs and any other benefits they provide.
Identify and describe other supply chain management applications that would be
especially helpful to Office Depot.

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Supply chain management systems provide organizations with more information and
tighter controls over the upstream and downstream portions of the supply chain. The
information can alert managers and executives to those areas of the supply chain that
may bog down the rest of the channels. Because Office Depot receives effective
information through its supply chain management system and passes that to suppliers,
it knows how many units of product customers want, when they want them, and when
they can be produced. Components arrive at the moment they are needed for
production (at suppliers), and finished goods are shipped as they leave the assembly
line. Office Depot’s SCM system also helps it avert the bullwhip effect because
information about product demand is less distorted. That reduces the chances of
holding excess inventory, warehousing, and shipping costs.

SCM applications that would be especially helpful to Office Depot are:

• Demand planning: Determines how much product Office Depot needs to have
suppliers produce to satisfy all of its customers’ demands
• Supply chain execution system: Manage the flow of products through distribution
centers and warehouses to ensure that products are delivered to the right locations
in the most efficient manner. Information from this system can be shared with
logistics and transportation partners to improve shipping and reduce costs.

Improving Decision Making: Using Database Software to Manage Customer Service

Requests

Software Skills: Database design; querying and reporting

Business skills: Customer service analysis

The solution file would usually have three tables for Accounts, Requests, and Service
Representatives (the Prime Service representative providing the requested service). One
can determine which service requests on a specific date require the highest priority by
creating a report that sorts service request data first by date (in ascending order) and then
by size of account (in descending order).

Improving Operational Excellence: Evaluating Supply Chain Management Services

Software Skills: Web browser and presentation software

Business skills: Evaluating supply chain management services

Trucking companies no longer merely carry goods from one place to another. Some also
provide supply chain management services to their customers and help them manage their
information. In this project you’ll use the Web to research and evaluate two of these
business services.

Investigate the Web sites of two companies, UPS Logistics and Trans-X Logistics, to see
how these companies’ services can be used for supply chain management. Then respond
to the following questions:

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1. What supply chain processes can each of these companies support for their clients?

UPS Logistics Trans-X Logistics

http://thenewlogistics.ups.com/guide/
UPS-16Ways-Guide-PDF-US.pdf
UPS Supply Chain Solutions has assembled
a comprehensive portfolio of services,
which, as stand-alone or bundled together,
create innovative supply chain solutions for
multiple industries. As a single source
provider, we give you online system
visibility and one point of access to help
you manage your shipments.
Our service categories include:
▪ Freight Forwarding
▪ Customs Brokerage
▪ Logistics & Distribution
▪ Trade Management Services
▪ Technology
▪ E-Commerce Solutions
▪ Financing Solutions
▪ Global Services
With the rise of global commerce, we're
uniquely positioned to help you make use of ▪ Intermodal
the latest technology and ideas to streamline ▪ Logistics
your supply chain.
http://www.transx.com/services/
logistics.cfm
Improve your operational efficiency by
putting TransX’s logistics service TX
Logistics, to work for your business. TX
Logistics provides complete third party
logistics solutions from warehousing to
comprehensive transportation management,
all fully integrated with TransX’s full slate
of transportation services. As experts in
supply chain management, we can help you
identify opportunities to improve
efficiencies and reduce costs, and then put
into action operational plans that deliver
measurable results.
Services offered:
http://www.transx.com/services.cfm
▪ Truckload
▪ LTL
▪ Specialized Services
▪ Flat Deck
Customs Brokerage

2. How can customers use the Web site of each company to help them with supply
chain management?
From the UPS website http://www.ups-scs.ca/services/LogisticsDistribution.html
Logistics & Distribution

UPS Supply Chain Solutions is your one source for comprehensive logistics services. Our
established operations around the world offer supply chain redesign and re-engineering,
customer care solutions, transportation and inventory management, warehousing
operations, systems integration, reverse logistics and more - all custom-tailored to the
individual needs of our clients. Our in-house consultants and operations experts provide
valuable experience and expertise in a wide variety of industries, including:
▪ Consumer Goods
▪ Financial
▪ Healthcare
▪ High Tech
▪ Telecom
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Customized solutions, measurable results

Optimizing an entire supply chain -- from suppliers to end-users -- is a complex task

requiring broad service capabilities and industry expertise. UPS Supply Chain
Solutions brings together all these and more, to serve the changing needs of the many
large, global companies who are our clients.
Our solutions begin by working with you to evaluate and fully understand your
supply chain requirements and business objectives. We apply our proven resources
and our developed network of "best-in-class" service providers to implement a
seamless solution that meets your specific business goals. Our process monitors your
supply chain's performance, and allows you to measure your gains on an ongoing
basis. By carefully re-engineering and managing your supply chain operation, we can
ensure that your goals are met - from improved customer service to reduced capital
investments.”
UPS provides software to manage all the aspects of a supply chain. For example,
information on customs brokerage is at: http://www.ups-
scs.ca/Services/CustomsBrokerage.html
Similar links provide detailed information on the services provided by ups.
At Trans-X, customers can create an account, track shipments, estimate costs, request
quotes and pickups, and find forms such as claim forms, custom forms and bills of
lading.
A video of customer tools is at http://www.transx.com/customertools/tour.cfm

3. Compare the supply chain management services provided by these companies.

Which company would you select to help your firm manage its supply chain?
Why?

While Trans-X provides the forms, UPS provides the software to allow an integrated
software solution for supply chain management.

UPS provides an integrated package for SCM; Trans-X provides forms and shipment
tracking but nothing more. For a company that does not deal with suppliers, then
Trans-X might be adequate; otherwise UPS provides more tools and online resources.

CASE STUDY: BLUEWATER POWER SEES SMOOTH SAILING

AHEAD
1. What problems was Bluewater Power encountering as it merged? What
management, organization, and technology factors were responsible for these
problems?

Bluewater Power was created in late 2000 aftre a merger of six local utilities. At
around the same time government deregulation brought about new multiered billing
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and cost structures. The IT teacm at Bluewater realized its legacy system could no
longer support the new requirements. They issued a RFP that listed the requirements
for the software. Once proposols were evaluated, SAP’s ERP and the SAP for
Utilities portfolio were chosen.

Management: Mergers and government requirements led to the need for more
sophisticated billing and supply modules.

Organization: Mergers were an important driver of the need for a new system.

Technology: The legacy system was not adequate to allow for changes caused by
government changes brought about by deregulation.

2. How easy was it to develop a solution using SAP/ERP software? Explain your
answer.

The President and CEO of Bluewater said that they “experienced minimal disruption
during the implementation. We were able to generate bills and continue offering
quality service, without customers noticing that we were in the midst of transforming
our business.” The company also employed an SAP consulting firm, the accounting
firm Deloitte, to work with them to ensure a smooth implementation. This suggests
that Bluewater was able to use the ERP software with little need for customization.

3. List and describe the benefits from the SAP software.

Since implementation, the company has better control of data. This results in
• increased confidence in regulatory compliance and financial information
• more visibility and greater cost control across operations
• improved statistical tracking which means it now has insight into consumer
trends, allowing the utility to further enhance customer satisfaction and plan its
growth strategy
• tighter controls to ensure correct time and materials along its supply chain.
• With the system in place, Bluewater Power has been able to respond quickly to
frequent, urgent regulatory changes in a cost-effective and prudent manner—
without disrupting business or cash flow. This provides the company with a
sharper competitive advantage over its competitors.
• the time it takes to complete wholesale settlements and complex bill generation
has been cut in half
• Further, Bluewater has reduced inventory by up to 15 percent and decreased
write-offs by up to 15 percent
• The company has also reduced the time to count inventory by 30 percent.
• The company has streamlined its procurement and construction processes and
plans for managed work-order activities.
• Technicians also have the functionality they need to handle repairs, maintenance,
inspection, measurement, and customer service—all within the ERP system
Copyright © 2015 Pearson Canada Inc.
170
 Managing the Digital Firm, Seventh Canadian Edition

• On the customer end, the change provides the transition to a smart grid, which can
offer opportunities for conservation and flexibility. Internally, smart meters will
fundamentally change how Bluewater Power interacts with its customers and how
its staff is structured. Specifically, the system will enable customer service
representatives to more efficiently handle the increased call volume anticipated
with time-of-use billing, which became mandatory in fall of 2011.

4. How much did the new system solution transform the business? Explain your
answer.

The improvements mentioned above will result in decreased costs and greater
revenues from an increased customer base.

In addition, the improved business intelligence will allow Bluewater to further

improve customer retention and operational efficiencies.

They have a competitive advantage over their competition, in being able to respond
quickly to changes in regulations.

5. How successful was this solution for Bluewater Power? Identify and describe the
metrics used to measure the success of the solution.

We can say that the ERP system was successful although the case does not offer any
metrics. Bluewater should use ROI and costs as a percentage of sales as a metric for
assessing the financial impact of SAP software. Costs categories should include costs
of goods sold, overhead and administration, warehousing costs, IT support, and
delivery.

6. If you had been in charge of the SAP ERP implementations, what would you
have done differently?

The implementation of the ERP software went well; we assume this is because there
was no need for extensive customization. Bluewater adopted the best-practice
business processes embedded in the SAP software. We also assume that there was
adequate testing for all users and that there was sufficient management support.

Copyright © 2015 Pearson Canada Inc.

171
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 O. platensis, 473;
O. segmentatus, 473
Opiliones (= Phalangidea, q.v.), 440
Opisthacanthus, 307
Opisthoparia, 244
Opisthophthalmus, 307
Opisthothelae, 386
Opopaea, 394
Orchestia, 139;
hermaphroditism, 104;
O. gammarellus, 137, 139;
habitat, 211
Orchestina, 394
Oribata, 467
Oribatidae, 457, 458, 459, 460, 462, 467;
anatomy, 459
Orithyia coccinea, 524, 540
Ornithodoros, 469;
O. megnini, 469;
O. moubata, 469;
O. talaje, 469;
O. turicata, 469
Ornithoscatoides, 374
Orometopus, 226, 245;
O. elatifrons, 230
Ortmann, on Brachyura, 181 n.;
on bipolarity, 200;
on crayfishes, 213;
on Pycnogons, 513 n.
Ostracoda, 107;
pelagic, 202
Oudemans, 528 n.
Ovary, of Cladocera, 44, 45;
of Danalia, 132;
of Spiders, 332
Oxynaspis, 88
Oxyopes, 419;
O. lineata, 419
Oxyopidae, 419
Oxyptila, 412
Oxyrhyncha, 191 f.;
habits, 192;
enemies, 192;
habitat, 198
Oxystomata, 185 f.;
respiration, 186, 187

Pachycheles, 170;
P. panamensis, distribution, 202
Pachygnatha, 407;
P. clerckii, 407;
P. degeerii, 407;
P. listeri, 407
Pachygrapsus, 196;
P. marmoratus, 193, 194, 196
Pachylasma giganteum, 91
Pachylomerus, 388
Pachysoma, 69
Pagurian, 180;
eyes of deep-sea, 149, 150
Paguridea, 171
Pagurinae, 180
Palaemon, 164;
excretory glands, 13;
fresh-water, 212;
P. serratus, 158, 164;
Bopyrus parasitic on, 133
Palaemonetes, 164;
P. antrorum, habitat, 210;
P. varians, 161;
distribution, 212
Palaemonidae, 159, 164
Palaeocaris, 115, 118
Palaeophonus, 294, 298
Palamnaeus, 307;
P. swammerdami, tarsus, 304
Palinuridae, 167
Palinurus, 165, 167;
habitat, 198, 202;
P. elephas, 167;
P. quadricornis, embryo, 165
Pallene, 505, 537;
P. attenuata, 541;
P. brevirostris, 510, 524, 537, 541, 542;
P. dimorpha, 538;
P. emaciata, 541;
P. empusa, 541;
P. grubii, 538;
P. languida, 537;
P. longiceps, 538;
P. novaezealandiae, 537;
P. producta, 542;
P. pygmaea, 537, 541;
P. spectrum, 542;
P. spinosa, 537
Pallenidae, 537
Pallenopsis, 506, 511;
P. holti, 542;
P. tritonis, 542
Palp, of Pycnogons, 507
Palpal organ, 322, 378
Palpebral lobe, 227
Palpigradi, 258, 422
Palpimanidae, 323, 325, 398
Palpimanus, 398
Panamomops diceros, 405
Pandalidae, 164
Pandalus, 164;
P. annulicornis, 164
Pandinus, 307
Panoplax, 195
Pantopoda, 501 n. (= Pycnogonida, q.v.)
Panulirus, 165, 167
Parabolina, 232, 247
Parabolinella, 247
Parabuthus, 298;
P. capensis, 298, 299
Paradoxides, 222, 232, 236, 247;
P. bohemicus, 246
Paragaleodes, 429
Paralomis, 179, 181
Paranaspides, 117;
P. lacustris, 117;
distribution, 210;
habitat, 210
Paranebalia, 242
Paranephrops, 157;
distribution, 213
Paranthura, 124
Parantipathes, Synagoga parasitic on, 94
Paranymphon, 507;
P. spinosum, 542
Parapagurus, 180
Parapallene, 537
Parapeneus, 162;
P. rectacutus, 159
Parapylocheles scorpio, eyes, 149
Parasiro, 448;
P. corsicus, 448
Parasites, in Tardigrada, 484
Parasitic castration, 100, 136
Parastacidae, 157;
distribution, 213
Parastacus, 157;
distribution, 213
Paratropidinae, 387
Paratropis scrupea, 387
Parazetes auchenicus, 533
Pardosa, 417;
female carrying young, 341;
P. amentata, 417, 418;
P. lugubris, 418
Pariboea spinipalpis, 534
Parthenogenesis, in Phyllopoda, 32;
in Cladocera, 44, 46, 49;
 in Ostracoda, 108
Parthenope, 193;
P. investigatoris, 192
Parthenopidae, 193
Pasiphaea, 163
Pasiphaeidae, 163
Pasithoe, 532;
P. umbonata, 535;
P. vesiculosa, 535, 541
Pasithoidae, 532
Patten, 270, 271, 277
Patten and Redenbaugh, on Limulus, 266, 270, 272
Paturon, 319, 320
Peckham, 376, 377, 378, 381, 382
Pecten, 328
Pectines, of Scorpions, 302, 302;
function of, 299;
of Glytoscorpius, 294
Pedicle, 317
Pedipalpi, 258, 308;
habits, 309;
external structure, 309;
legs, 309;
internal structure, 310;
alimentary canal, 310;
nervous system, 311;
classification, 312
Pedipalpi (appendages), 263, 303, 309, 321, 422, 426, 433, 440, 458
Pedunculata, 84
Pelagic Crustacea, marine, 202;
lacustrine, 207
Pelops, 467
Peltiidae, 63
Peltogaster, 95;
structure, 95;
males, 99;
castration caused by, 100;
P. curvatus, castration caused by, 100;
P. sulcatus, 95
Peltura, 247
Peneidae, 162
Peneidea, 158, 162;
metamorphosis, 159
Penella sagitta, 74
Peneus, 158, 162;
metamorphosis, 159, 159, 160, 161
Pentanymphon, 504, 537
Pentaspidae, 87
Pentastoma, 488 n.;
P. denticulatum, 489, 494;
P. emarginatum, 489;
P. serratum, 489
Pentastomida, 258, 488 f.;
structure, 489;
habitat, 488;
life-history, 488, 493;
hosts of, 496, 497
Pephredo hirsuta, 535, 541
Peracantha, 43, 53;
alimentary canal, 43
Peracarida, 114, 118
Pereiopod, defined, 110;
reduced hind, in Galatheidea, 168;
 in Hippidea, 170;
in Paguridea, 172;
in Dromiacea, 184;
in Oxystomata, 185
Periegops hirsutus, 393
Peroderma cylindricum, 75
Petrarca bathyactidis, 93
Pettalus, 448
Pezomachus gracilis, parasitic in cocoons of Spiders, 367
Phacopidae, 249
Phacopini, 243
Phacops, 223, 232, 235, 249;
P. latifrons, 227;
P. sternbergi, 248
Phaeocedus braccatus, 397
Phagocytes, in Danalia, 132
Phalangidea, 258, 440 f.;
habits, 441;
external structure, 442;
internal structure, 444;
nervous system, 446;
classification, 447;
British species, 453
Phalangiidae, 449
Phalangiinae, 450
Phalangium, 444, 450, 526;
mouth-parts, 443;
P. balaenarum, 502;
P. cornutum, 450;
P. littorale, 501;
P. opilio, 445, 446, 450, 526
Phalangodes, 449;
 P. armata, 449;
P. terricola, 449
Phalangodidae, 448
Phanodemus, 535
Phidippus, 421;
P. morsitans, 365, 421
Philichthyidae, 73
Philichthys, 73;
P. xiphiae, 73 n.
Phillipsia, 251;
P. gemmulifera, 250
Philodrominae, 413
Philodromus, 413;
P. aureolus, 413;
P. margaritatus, 413
Philoscia muscorum, 129
Pholcidae, 336, 401
Pholcus, 320, 401;
P. phalangioides, 401
Phoroncidia, 404;
P. 7–aculeata, 318
Phoroncidiinae, 317, 404
Phosphorescence, of Copepoda, 59;
relation to eyes in deep-sea Crustacea, 150, 151
Phosphorescent organs, of Euphausiidae, 145;
of Stylocheiron mastigophorum, 151
Phoxichilidae, 539
Phoxichilidiidae, 538
Phoxichilidium, 506, 512, 520, 521 n., 523, 525, 538;
P. angulatum, 520;
P. exiguum, 541;
 P. femoratum, 508, 524, 538, 540;
P. globosum, 540;
P. mollissimum, 517;
P. olivaceum, 540
Phoxichilus, 505, 512, 539;
P. australis, 539, 540;
P. böhmii, 539;
P. charybdaeus, 514, 515, 539;
P. laevis, 537, 539, 541;
P. meridionalis, 539;
P. mollis, 539;
P. proboscideus, 532;
P. procerus, 539;
P. spinosus, 505, 508, 510, 537, 539, 541, 542;
P. vulgaris, 539
Phreatoicidae, 136;
distribution, 211, 217
Phreatoicidea, 136
Phreatoicopsis, 136;
distribution, 211
Phreatoicus, 136;
distribution, 210, 211, 217;
P. assimilis, habitat, 210;
P. typicus, habitat, 210
Phronima, 140;
P. sedentaria, 140
Phrynarachne, 414;
P. decipiens, 374, 414
Phrynichinae, 313
Phrynichus, 313
Phrynidae, 309, 310, 312
Phrynopsis, 313
Phrynus, 312
Phryxidae, 130
Phyllocarida, 111, 242
Phyllocoptes, 465
Phyllopoda, 19 f.;
appendages, 24 f.;
alimentary canal, 29;
vascular system, 29;
nervous system, 30;
reproductive organs, 31;
habitat, 32;
genera, 35
Phyllosoma, larva of Palinurus, 166
Phytoptidae, 464
Phytoptus, 464 n., 495 (= Eriophyes, q.v.)
Pickard-Cambridge, F., 352
Pickard-Cambridge, O., 318, 321 n., 323 n., 359 n., 372, 374, 380,
385, 401 n., 436, 438, 450, 451, 452
Pillai, 375
Pilumnus, 191
Pinnotheres pisum, 195
Pinnotheridae, 195
Pipetta, 514, 533;
P. weberi, 533
Pirata, 417
Piriform glands, 335, 349
Pisa, 193
Pisaura mirabilis, 416
Pisauridae, 416
Placoparia, 251
Plagiostethi, 443, 447, 449, 452
Plagula, 317
Planes minutus, habitat, 202
Plankton, characters of, 203;
fresh-water, 207, 216;
Cladocera in, 50
Plastron, 316
Plate, on Tardigrada, 481, 482, 484
Plator insolens, 415
Platoridae, 415
Platyarthrus hoffmannseggii, 129
Platyaspis, 121
Platybunus, 450, 451
Platycheles, 535
Plectreurys, 393
Pleopod, defined, 110
Pleura, 234 f.
Pleurocrypta microbranchiata, 133
Pleuromma, 59;
P. abdominale, 59;
P. gracile, 59
Pliobothrus symmetricus, Pycnogon larvae in, 523
Pocock, 298, 308 n., 312, 328, 329, 425 n., 534 n.
Podasconidae, 130
Podogona, 258, 439
Podon, 54
Podophthalmata, 112
Podoplea, 61
Podosomata, 501 n. (= Pycnogonida, q.v.)
Poecilotheria, 390
Poisonous hairs, of Spiders, 365
Pollicipes, 84;
fertilisation, 86;
P. cornucopia, 85;
P. mitella, 85
Pollock, 340
Poltyinae, 410
Poltys, 410;
P. ideae, 318
Polyartemia, 36;
antennae, 26, 28;
range of, 34;
P. forcipata, 36
Polyaspidae, 84
Polycopidae, 109
Polygonopus, 539
Polyphemidae, 54;
appendages, 42;
ovary, 47;
reproduction, 49
Polyphemus, 47, 54;
P. pediculus, habitat, 206, 208
Polysphincta carbonaria, parasitic on Spiders, 368
Pompeckj, on Calymenidae, 244
Pompilus, 368
Pontellidae, 60
Pontoporeia, 137;
distribution, 212;
P. affinis, 138;
P. femorata, 138;
P. loyi, 138;
 P. microphthalma, 138
Porcellana, 168, 170;
Zoaea, 168;
P. platycheles, 170
Porcellanidae, 170;
habitat, 198
Porcellio, 129
Porcupine, 540
Porhomma, 406
Porocephalus, 488 n., 495;
P. annulatus, 490, 496;
P. aonycis, 496;
P. armillatus, 496;
P. bifurcatus, 496;
P. clavatus, 496;
P. crocidura, 496;
P. crotali, 496;
P. geckonis, 496;
P. gracilis, 496;
P. heterodontis, 496;
P. indicus, 496;
P. lari, 496;
P. megacephalus, 497;
P. megastomus, 497;
P. moniliformis, 497;
P. najae sputatricis, 497;
P. oxycephalus, 497;
P. platycephalus, 497;
P. proboscideus, 493, 494;
larvae of, 493, 494;
hosts of, 496;
P. protelis, larva, 495;
P. subuliferus, 497;
P. teretiusculus, 489, 491, 492, 492, 497;
P. tortus, 497
Portunidae, 191
Portunion, 134;
P. maenadis, 134;
life-history, 135, 136
Portunus, 191
Potamobius (= Astacus), 157;
distribution, 213
Potamocarcinus, 191;
distribution, 213
Potamon, 191
Potamonidae, 191
Praniza, larva of Gnathia, 125
Prawn, 151, 153, 158, 164, 198;
fresh-water, 212, 214
Pre-epistome, 443
Prestwichia (Euproöps), 275, 278, 279
Preyer, on anabiosis in Tardigrades, 484
Prionurus, 298, 299
Prismatic eye, of Trilobites, 229
Procurved eyes, 316
Prodidomidae, 395
Prodidomus, 396
Proëtidae, 251
Proëtus, 251;
P. bohemicus, 248
Prokoenenia, 423;
P. chilensis, 423;
P. wheeleri, 423
Prolimulus, 279
Promesosternite, in Limulus, 264
Proparia, 244
Prosalpia, 450
Prosoma, of Arachnida, 260;
of Limulus, 260, 263;
of Eurypterida, 285;
of Scorpion, 301
Prosthesima, 397
Prostigmata, 471
Protaspis, 239, 239, 240
Proteolepas, 94;
P. bivincta, 94
Protocaris, 243
Protolenus, 247
Protolimulus, 279
Protolycosa anthrocophila, 383
Przibram, on regeneration in Crustacea, 156
Psalidopodidae, 164;
habitat, 204
Psalidopus, 164
Psalistops, 389
Psechridae, 399
Psechrus, 399
Pseudalibrotus, 137
Pseudidiops, 388
Pseudocuma, 121;
distribution, 215
Pseudocumidae, 121
Pseudoniscus, 279
Pseudopallene, 511, 537;
 P. circularis, 540;
P. spinipes, 537 n.
Pseudoscorpiones, 258, 430 f.;
habits, 430;
external structure, 431, 432;
internal structure, 433;
development, 434, 435;
classification, 436;
British species, 438
Pseudo-stigmatic organs, 467
Pseudozoaea, larva of Stomatopod, 143
Pterocuma, 121
Pterolichus, 466
Pteronyssus, 466
Pterygometopus, 249
Pterygotus, 283, 291, 292;
P. osiliensis, 290
Ptychoparia, 247
Pucetia viridis, 419
Pupa, of Cirripedia, 81, 82
Purcellia, 448
Pychnogonides, 501 n.
Pycnogonida, 501 f.;
body, 505;
chelophores, 505;
palpi, 507;
ovigerous legs, 507;
glands, 511;
alimentary system, 513;
circulatory system, 516;
nervous system, 516;
eyes, 517;
 integument, 518;
reproductive organs, 519;
eggs, 520;
development, 520;
habits, 524;
systematic position, 525;
classification, 528 f.;
British species, 540 f.
Pycnogonidae, 539
Pycnogonum, 503, 539;
P. australe, 540;
P. crassirostre, 540;
P. littorale, 501, 540, 541;
P. magellanicum, 540;
P. magnirostre, 540;
P. microps, 540;
P. nodulosum, 540;
P. orientale, 540;
P. philippinense, 540;
P. pusillum, 540;
P. stearnsi, 540
Pygidium, 235
Pylocheles, 180;
P. miersii, 173
Pylochelidae, 180;
habitat, 204
Pylopagurus, 180;
relation to Lithodidae, 177, 178
Pyrgoma, 92

Rachias, 388
Railliet, on classification of Pentastomids, 495
Ranina dentata, 188
Raninidae, 188
Rastellus, 320, 387
Ratania, 68;
mouth, 63
Réaumur, 360
Recurved eyes, 316
Red spider, 455, 472
Red-water, 456
Regeneration, of Crustacean limbs, 155, 156
Regillus, 414
Reichenbach, on embryology of Astacus, 12
Reighardia, 495, 497;
hosts of, 497
Remipes, 171;
R. scutellatus, 171
Remopleurides, 232, 247;
R. radians, 229, 248
Reproduction (incl. Breeding), of Cladocera, 43 f.;
of Anaspides, 116;
of Lobster, 156;
of Limulus, 274;
of Spiders, 365; of Ticks, 461;
of Pycnogons, 520
Reproductive (generative) organs, of Crustacea, 15;
of Phyllopods, 31;
of Cladocera, 43;
of Arachnids, 257;
of Limulus, 271;
of Scorpions, 305;
of Spiders, 333;
of Solifugae, 428;
of Phalangidea, 446;
 of Acarina, 461;
of Tardigrada, 482;
of Pentastomida, 492;
of Pycnogons, 519
Respiration, of Crustacea, 16;
of Anaspides, 115;
of Albunea, 170;
of Corystes, 170, 189
of Birgus, 174;
of Oxystomata, 186, 187;
of Catometopa, 194, 195;
of Arachnids, 256.
(See also Respiratory organs.)
Respiratory organs, of Arachnids, 256;
of Limulus, 269, 270;
of Eurypterids, 288;
of Scorpions, 305;
of Spiders, 336;
of Tardigrada, 482;
of Pentastomida, 491.
(See also Respiration.)
Rhagodes, 425, 429
Rhagodinae, 429
Rhax, 429
Rhipicentor, 469
Rhipicephalus, 469;
R. sanguineus, 470
Rhizocephala, 95 f.;
compared with Monstrilla, 66;
with Anelasma, 89;
castration caused by, 100;
males, 106;
association with Entoniscidae, 136
Rhomphaea, 402