Erp and case analysis

On
Johnson and johnson

Presented by
Hepsy verghese
Tracy
Himanshu sati
 ERP SYSTEM

Ø Stands for Enterprise Recourse Planning.

Ø Way to integrate data and processes of an
organization into a single system.
Ø ERP major components are Hardware and
Software.
Ø Uses a unified database to store data for
various functions of organization.
Ø Functions such as HR, Supply Chain
Management(SCM) and Warehouse
Management fun are integrated under ERP.
 Integration is a key for ERP
Ø ERP’s main goal is to integrate data and
processes from all the areas of the
organization.

Ø Provide easy access to data and workflow in

the organization.

Ø It creates a single database that employs

multiple software providing different areas of
organization with various functions.
ERP System Concept
 Advantages of an ERP system
Ø A totally integrated system.
Ø The ability to streamline various processes
and workflows.
Ø The ability to easily share data among
various departments in an organization.
Ø Improved efficiency and productivity levels.
Ø Better tracking and forecasting.
Ø Lower cost.
Ø Improved customer service.
 Disadvantages of ERP system
Ø Time consuming.
Ø Expensive.
Ø Conformity to the modules.
Ø Vendor dependence.
Ø Features and complexity.
Ø Scalability and global outreach.
 Some of the ERP modules are
Ø Accounting Management.
Ø Financial management.
Ø Manufacturing management.
Ø Production Management.
Ø Transportation Management.
Ø Sales and Distribution Management.
Ø Human Resource Management.
Ø Supply Chain Management.
Ø E-Business.
 COMPANY OVERVIEW

•Originated in. 1920’s.

•Corporate headquarters-Atlanta
•1988-Genuine parts /NAPA acquired Johnson
industries.
•Largest OEM auto parts distributer in the
country.
•Annual sales-$150m
•It now serves automotive repair facilities
throughout the United States.
•Largest distributers of acdalco, motorcraft
 CHALLENGES FACED
Johnson industries procured
businesses in similar markets.
Contract with JD Edwards
software implementation.
C.D groups audit discovered
following problems in the
implementation.
ØOnly the general ledger module
was implemented with the entire
ØFunctions and duties across the
organization were not
consolidated.
ØNo clear strategy or solution were
defined with regard to
centralization of business
processes.
ØCritical business practices were
distributed across several DC’s.
ØJob duties were duplicated
creating inefficiencies.
ØCreated high degree of
complexity.
ØGeneration of multiple
statements creating multiple
identities.
DRAWBACKS OF CURRENT LEGACY
SYSTEM
No longer supported its needs.-
duplicate and inconsistent
business practices and rules
No support for multi-warehousing
functionality.
Limited ability to smooth slower
moving inventory between
distribution centers.
Absence of automation created
 Solution

New business model implemented by CD

Group which represented Johnson Industries as
a single entity.

The new model used JD Edwards OneWorld in a

centralized footprint, using an NT operating
system and a SQL database to support multiple
warehouses as a standard for all distribution
centers.
 Changes brought in…

Incorporated centralized, critical business

processes (i.e. journal entries, purchasing,
paying suppliers, etc.) in all DCs to ensure
consistent “Best Practices” across the
organization.

Benefits -
enabled customers to receive one statement for
all purchases
Ability to forward all payments to a single
location.
Standardizing customer and item numbers
Step 1 –
RF technology was leveraged to automate the
tracking of inventory movement within a DC

Benefits
–
Inventory balances updated immediately
Eliminating of paper trail and human
intervention required to manually update
inventory.
Step 2 -
Implemented a warehouse location system to
improve inventory tracking.

Benefits –
- provided visibility to inventory on the receiving
dock, in a staging area, in product overflow, or on
the shelf.

Step 3 -
Applied a consistent cycle count program that
validated and maintained inventory accuracy.

Benefits –
- Rebuilt confidence among management regarding
inventory accuracy
Business Benefits -

Streamline future acquisitions

Increase inventory turns and improve
cash flow
Ensure the consistent and timely
application of price changes
Present a single company image to its
customer base
Defer the need for warehouse
expansions
Close the month earlier
• Increased inventory visibility across DCs
and among customer service personnel.

• Johnson Industries received a one-time

reduction in inventory estimated at $7.6M
in annual inventory carrying costs.

• Consolidation of the different IT systems

caused reduced hardware and software
maintenance expenses.

• Incorporation of Best Practices and

standards model reduced
employee training costs.
THANK-YOU