ERP/AIS in Chappelli Cycles Manufacturing.

Understanding the business process

Discuss about the Implementation Of Erp/Ais In Manufacturing Firm Chappelli Cycles.

“Chappelli Cycles” based out of Sydney, Australia is a manufacturing company which manufactures bicycles and few other accessories since its inception in 2010 (Chappelli, 2018). Report is based and focused on for selecting Accounting Information System (AIS)/Enterprise Resource Planning (ERP) which will help in making conversant decision regarding investments in information system for Chappelli Cycles. Also the processes for selecting suitable AIS/ERP is discussed in detail which will help the client in dealing with the business requirements and the challenges faced in the various business processes of manufacturing bicycles and other accessories.

Manufacturing industry is highly competitive in nature and the demanding market is becoming challenging for the manufacturers, meeting the demand is the most crucial element and also having a competitive edge is required for long term sustainability (Mogre and Kanoija 2013). To attain this there should be automation and flexibility in processes, well managed inventory is required, and lastly good planning. AIS/ERP providers for manufacturing industries are available in market which acts as a catalyst in streamlining the manufacture processes and utilizing resources in an effective manner, these systems also helps in cutting down the costs, optimizing inventory level and providing the management level with transparent reports for better allocation of tasks (Exact, 2018).

Nowadays manufacturers are giving more attention to invest in area of information technology in respect with the modern ERP manufacturing software, it comprises of all business records from the manufacturing of the product till it reaches final consumers, so that business functions relies upon a single database and accurate provides real time information (Kimberling and Bjeszcat, 2018). On one hand ERP software have numerous benefits for manufacturing sector, but it is also important to seek the latest ERP software provider which is giving latest and upgraded platform to work upon and maintain database in such dynamic way that it solves most of the issues and provides its users with friendly interface to work upon and generate fruitful results. It is a crucial decision for manufacturers when they decide to invest in these ERP systems because if the ERP implementation fails to produce any results, it will incur great cost to company and will result in wastage of resources and time (Sheikh, 2003).

In manufacturing industry there is product assembly process, quality assurance process and maintenance process (Pnmsoft, 2016). In the case of bicycle manufacturing as client is Chappelli Cycles the above mentioned process can be considered as the broader or common processes as they apply in all sorts of manufacturing, further sub processes are diversified according to features of the product which is being manufactured and also depends upon manufacturer to manufacturer because everyone have their own resources i.e. majorly machines on the basis of which processes are structured accordingly.

Raw material acquisition

Bicycle is known to be most economic means of transportation, manufacturing of it sounds easy because it is thought that just assembling few parts onto the frame will do it, but it is not easy as it sounds (McLaren, 2006). Overall these are the major components:

Raw material acquisition
Manufacturing
Transportation

In bicycles major raw material is for the frame from which is being made, it can be based upon using a single metal or a combination of two or more metals. Majorly the aluminum alloy is preferred because it creates strong frame and main thing is it is affordable, as it is being the major part which holds on everything primary materials are aluminum, steel, natural rubber, and synthetic rubber (Herlihy, 2004). Aluminum alloy is for the frame, steel is used for making the chain, and rubber is mainly for the tires but also for some smaller parts also like the brake shoes (Cogdell and Luna, 2016).

After the manufacturing part the process cycle moves towards manufacturing in which smelting, hydro-foaming, anodizing, and chain polishing is done. In smelting objects made from metal are melted so that they can be molded into something new, for instance creating a bicycle frame from the aluminum (Herlihy, 2004). Hydro-foaming, process in which smelted aluminum alloy is sliced in shape of thin sheets of metal and put around into tubes which are in hydraulic press, filled with water, rust preventives, drying agents, lubricants, and bactericides (substance which kills bacteria) is applied pressure which molds the metal into desired shape, when the process is finished tubes are welded into desired bicycle frame. (Cogdell and Luna, 2016)

Anodizing is a small process in which wheels or rims of the bicycle made from same process of hydro-foaming are dipped in sulfuric acid, by which corrosion is prevented then they are dried with help of air and holes are made to insert the spokes in the rim. Chain polishing is done by making a paste out of water, ceramic and silica powder which helps in providing greater strength to the bicycle chain. (Cogdell and Luna, 2016)

Last task in manufacturing process is of transporting the bicycles to the company shops and other dealers; this is done through use of logistics. After transportation is done and bicycles reaches to described locations they are out in market for sale to their potential customers, further work or process of management teams to work upon sales, marketing, financing and all other aspects. (Cogdell and Luna, 2016)

Manufacturing

When a company is intended to invest into an IT solution i.e. ERP/AIS, it becomes necessary for business to look upon the fact that solution supports needs of business to develop products and services (Ray, 2011). Role that business requirements play is that of gathering process and developing of requirement document which commutes to high level or top level that what expectation are from new system that is needed to be fulfilled (Hay, 2003). Mainly purpose of business requirements is to:

Clearly understands needs of stakeholders (user of AIS/ERP).
Clarification what system is delivering and expecting what can or cannot be delivered.
Helps in providing a proper framework for what business is looking and understanding its purchase decision.
Managing scope of development of IT in the organization through implementation or purchase of ERP/AIS platform.
Briefing technology service provider about solutions that are to be present to satisfy needs of business.
Product comparison is to be done while buying IT solutions or ERP/AIS and also communicate pricing decisions.
Basis must be present for product functionality testing.

Business requirements is simply penning down functions which are desired that system should perform, still gathering encompasses structured process (Gross, 2012). For conducting business requirement analysis five step approach is needed to be followed in which first step is identifying key stakeholders i.e. identifying right people in organization who are going avail the services of ERP/AIS. Second step is capturing requirements from stakeholders acknowledged earlier in step first by means of interviewing, using cases, workshops, and observations (Robertson and Robertson, 2012).

Third step is record and categorize all requirements after they have been gathered so that it helps analyze, review, and prioritize requirements accordingly, it can be done through few ways like on the basis of functional and non-functional requirement; another can be on the basis of generic sub headings for example: user requirements, reporting requirements, security requirements and so on. Lastly they can be categorized on the basis of sub-headings which related to function of solution for example: ERP system having headings under name of inventory management requirement, procurement requirement and so on which relates directly (Hay, 2003).

Fourth step in approach is analyzing and prioritizing requirements in which reviewing helps in deciding whether requirement is critical or non-critical, mandatory or not, highly desirable, desirable or optional. Fifth step is of validating requirements i.e. checking all requirements with shareholders and drafting all final discussed and assessed requirements. This described that how the business requirement is developed when it comes to executing IT solution in organization for its development (Robertson and Robertson, 2012).

Operational challenges are easily solved in manufacturing industry through ERP; nowadays a great potential power strategy for manufacturing firms is implementing ERP which enhances company’s growth by reducing costs and streamlining processes in long run (Leon, 2008). Business of any industry is aiming at working digitally across the world and adapting digital transformation inside organization, manufacturing ERP should be geared up and ready to power latest technologies available at factories (Hoffer, 2013). Few system necessities which can be put up to present needs, advantages, and future of ERP in world of manufacturing.

Transportation

First thing that a manufacturing ERP should be Internet of Things (IoT) friendly, strongly connected ERP provides manufacturers ability through which it can relate business processes, external data, and third party applications. ERP enabled with IoT can sync factory of Chappelli Cycles with its factory outlets or exclusive stores, it can provide real time alerts in factory (Leon, 2008). For instance: suppose during hydro-foaming process molding is displacing from actual desired design, ERP will straight away provide an alert. Such ERP’s can also control inventory if programmed accordingly, it will not waste a single drop of any fluid or chemicals used in processes nor allow any automatic machine to do so.

Second system necessity can be that, it would be amazing if it is power-driven through Artificial Intelligence (AI) because it can enhance manufacturing through countless different ways like voice activated AI can help manufacturer in depth data analysis. AI tools which will be integrated can provide assistance on streamlining of processes and save time of analyzing big data manually and also cost which automatically optimize manufacturing procedures (Leon, 2008).

Third system requirement which sounds crucial is ERP agility; it is because in global era of hyper speed and fast connected world, main concern of the manufacturer is fast and efficient production, they are making business models but it does not lasts for much longer time because of pace of change is so fast and they cannot foresee what there next business model is going to be. ERP systems very smartly cope up with business agilities no matter product configuration is changed or customers are new, partners have switched or suppliers have changed (Leon, 2008). For instance: Chappelli Cycle plans to start a whole new product line, if ERP is enabled very quickly company can refine raw material order processing, categorize new product accordingly, it can also send update to sales team when it is transported so that they can aware customer about new product.

Fourth requirement expected from ERP system is that it should provide support for customizations, although ERP providers try to give finest software which can cope up with most of challenges but still after a certain time span there comes a time when software is needed some additions or changes in system itself which are not too big but manufacturer cannot change whole ERP for them, so manufacturer hires third part vendors or developers for this (Hoffer, 2013). If ERP supports this customization features it benefits its users, though soon time will come when customizing the ERP would not require any IT programming skills and user on its own will be able to make changes (Leon, 2008).

Developing Business Requirements

Fifth and final requirement from the ERP system that comes into the picture is of mobile ERP, as mobile phone or cell phone have become a necessity it can also be handful at workplace in many different ways like users can access data from mobile phones by means of mobile friendly ERP applications, manager can track down purchase orders and plan the assembly process accordingly, tracking of shipments can be done in few clicks, notifications and alerts can come on the go, and silly time consuming problems can be straight away resolved. Manufacture can maintain great pace with ERP systems as they connect everything with one single database, soon ERP will not only improve business procedures but will play a vital role in making recommendations through AI support (Leon, 2008).

After determination of system requirements; company is required to select appropriate vendor which can provide and fulfill needs with better efficiency, for this effective ERP/AIS assessment a simple six step practice can be done for appropriate software selection. Firstly both general and industry specific ERP packages must be identified on basis of business and budget needs, then creating a list of eight to ten vendors will be sufficient who suits needs and demand. Secondly, shortlisting from the compiled list on basis of major requirements that package must comprise will be good because evaluation between two to three potential vendors will help in better decision (King, 2016).

Third step will be conducting an analysis in detail of potential vendors and prioritizing needs from ERP package, after that demo scripts must be created to check that software links with business procedures of each vendor. Then requisition of proposal from vendor is awaited in which all capabilities of software, costs, and strategy which is proposed for implementation is presented. Fourthly, it is important to involve key users during demo and evaluation of each vendor so that business requirements which in demo scripts can be assessed in quantitative (Hollander, 2000). Fifth step is assessing not only functional but also technical capabilities of software provided by vendors in terms of scalability, integration with system because technical factors are also crucial (King, 2016).

Sixth and last step after evaluation and assessments is to take right decision on basis of input that vendor has put through during demonstration, strengths and weaknesses all together among potential vendor gives best result and also suits all essentials must be chosen (Hollander, 2000). Selecting suitable ERP package is a vital decision that an organization takes as it can have either positive or negative impacts on finances as future is uncertain, but success of ERP takes organization to whole new level of business and software packages last for minimum ten years and more (King, 2016).

Determining the Suitable AIS/ERP provider

Dynamic market conditions forces organization to meet tight delivery schedules collaborating with cost targets, competitors tries to push their products faster in market with maintaining quality standards and keeping an eye on costs. Keeping up in competitive market by fulfilling customer demands a step ahead is required, without negotiating on quality and also reducing time to market, pouring down operational costs, it is all possible by simple means of visibility in supply chain (Monk and Wagner, 2012).

ERP system has ability to forecast on basis of boardroom decisions, customers, supplier, and planned operations can be accessed at a single place, it can assist on volume of production and can also foresee and manage customer anticipations. Believing that work can be done manually as it is been done earlier, but ERP proves to be quicker than manual reporting tools. Even also it can use analytics to input feedbacks in strategy creation which proves handful in closing loop of operational efficiency, analytics also binds data from every source and presents into actionable insights (Peatfield, 2017).

ERP improves transparency when supply chain management is integrated; manufacturer and its supplier have visibility in activities including customers which can track down order statuses, specifications are defined well, and overall clarity of whole supply chain prevents mistakes and penalties related with them. When quality issues are faced it is majorly due to human errors; ERP eliminate errors and mistakes by automating numerous procedures in supply chain, efficiency is increased but also cutting down of labor cost is a vital positive element through its automation abilities (Peatfield, 2017).

Manufacturer efficiency is not only increased by automation of ERP but also with the fact that how fast your product reaches out to market, if supply chain gains access over vital information it can provide potential customers and hidden opportunities in market through connecting globally with customers, suppliers, and stakeholders which makes manufacturer to adapt and react accordingly. Also few of potential risks of quality issues, logistics threats can also be controlled, fundamentally out dated software platform cannot provide proper push to compete against integrated solutions which are being provided nowadays (Peatfield, 2017).

For every manufacturer or any business efficiency matters a lot, although many focuses on boosting revenue instead of finding ways that can increase efficiency of business procedures, after technology is implemented it is crucial to evaluate its effects and results. For evaluating the client few below mentioned are very crucial, first is production efficiency because it is major business of client and ERP implementation was done to minimize costs related with production and optimum use of resources is achieved by lesser wastage, less use of energy and other vital resources. Second element that describes that efficiency is increased in product efficiency, which is measured seeing quality stability, improved productivity also tends towards positive response in context with technology implementation (Nordmeyer, 2017).

Conclusion

According to a survey across twenty seven countries which was conducted by Kaspersky Lab found that 21% manufactured faced problem of intellectual property and suffered huge losses, it was also seen that Malware was major common cause because of vulnerabilities in software at manufacturing firms which cause data loss incidents. ERP binds operations, data, technology, everything we can imagine but risks do associate with these IT solutions, as manufacturer trying to get ahead from competitors can end being last one also if implementation is being done for sake of trend or without analyzing processes for it is implemented (Gambale, 2014).

Some risk is also of interface not being very easy going and hard to understand, there can be many reasons for this like improper demo from software vendor, lack of training in organization which implemented ERP. Another threat is wrong software selection, reason can be numerous but every ERP software is different and their features are diversified it becomes problematic for organization if they have invested in wrong one. Another crucial threat is of customization feature, vendors provide this feature but they do not share any security risks involved with it, as soon the user or organization tries to customize their ERP great risk of data security comes in picture (Jeff, 2015).

Organizations fear during implementation of ERP because they risk failure and few read stories of high failures and consequences. But regardless of being risky they can prove to be a game changer if keeping few guidelines in mind when they are implemented to prevent risks. First thing is that organization must analyze ERP implementation as a business transformation initiative, when they treat them as technology up gradation they lack crucial things in analyzing and creates risks (Phillips, 2013). Second thing is to take a certified expert advice over before implementation, because concerned persons in organizations themselves do not know what actually ERP is and this creates a loop hole for ERP failure in most of organizations (Panorama, 2018).

Thirdly, during the process of ERP implementations mostly organization makes a team who look after from the selection to implementation of ERP as it is not a one day process, so ensuring that team remains intact up till end because if not so it gives rise to disruption, as team knows all internal and external elements which are involved and they are crucial. Fourthly, another thing which can be done is hiring a technical resource; this is because all technical things can be managed related with different projects as it is not possible to hire consultants for every project undertaken by company (Panorama, 2018).

References

Conclusion

The report concludes that how technological improvement plays a vital role in organization success and how upgrading onto new software platforms i.e. ERP proves to be fruitful in many ways. Report takes Chappelli Cycles a manufacturing firm as the client and defines importance of ERP implementation, report initially defines overview of business process which is being involved in organization. Further process of developing business requirement during a technological change or upgrade is explained and what is the best way to conduct it in an organization is defined in the report, also determination of system needs is thrown light because it is an important part during implementation of software platform

Later on report lays emphasis on vendor and software selection procedure i.e. how client and also other organization should move on with this part while choosing right and efficient ERP/AIS vendors who provide all needful features in their software. After that report mentions of three major ways that other manufacturers or companies uses to boost their efficiencies after implementing an ERP/AIS technology in respected organizations, in this it mentions about making analytics as a strategy, supply chain automation helping to act as a strategy for various manufacturers, and also how ERP provides global access for pushing products into market with more captivity, larger market share, and tapping hidden opportunities.

Lastly, evaluation of efficiency after technology being introduced in client organization and crucial basis being taken to do the needful, it includes production and product efficiency how ERP results in controlling wastage, optimizing resources, reduction in costs, stability in quality, and improvements in productivity. Potential risks and security breaches which are involved when new technology is implemented are discussed further in which malwares is found to be most common threat overall and vulnerabilities of data losses which causes problems to manufacturer related with intellectual property rights theft and others like these. Guidelines are provided in the end for risk mitigations after ERP system is adhered in organizations which defines what attitude should be kept towards new software platform being introduced and how to deal further as procedures move on with time.

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