CHAPTER 7: Summit Electric Lights Up With a New ERP System

BUSINESS PROBLEM_SOLVING CASE

Summit Electric Lights Up With a New ERP System

1.      Which businesses processes are the most important at Summit Electric Supply? Why?
The businesses processes that are most important at Summit Electric Supply would have to be ERP software from SAP. Also SAP’s Net Weaver BW data has also became important to Summit Electric Supply. These processes are important because it helped Summit Electric stayed more organize and be able to control how much was needed to be produced and distributed. The system was able to connect over 19 locations. Summit had to advance these processes to satisfy their business requirement. They would had to do updates on a daily bases instead of weekly due to the fact that if they did weekly it would cause delays. The “Batch management” was also a process that became important as well. The process was able to track that how much a supply was being needed as a batch instead of a single product making it easier to know how much was being sold.   These processes pretty much modify and made Summit Electric more significant.

2. What problems did Summit have with its old systems? What was the business impact of those problems?

There were a few problems that Summit went through with when they still used their old systems. The few problems they with coming across with was the fact that the old system cause them to have delay with their supplies. Also the system was complicated because the system would separate different categories where it made it difficult to combine when needed. The business impact from the problems it had was that the system was not able to keep up with the business. It limited the business where it was only able to handle a few range of numbers and location as well. It caused delays and time consuming task that was not needed to take as much time as it did. 

3. How did Summit’s ERP system improve operational efficiency and decisions making? Give several examples.

Summit’s ERP system improves operational efficiency and decisions making by advancing operations. It made it faster to build and distributed their supplies on time. With the old system the Summit had to do a huge amount of manual work. The employees would have to go into details with customers just to find specific manufactures to identify a product. Once they have done that they would have to put it into Microsoft excel spreadsheet. The old system made it too time consuming. For example collecting and reviewing all the invoices would take up to a month and Summit would have stacks of papers of the copies of the invoices to give to their vendors. Now the new system has improved it where they are able to produce more quickly and they are able to view them more often. In return once the vendors are done and response back their chargers would already be two to three months old. Also this cost lost revenue for Summit. The ERP system has helped provide tools to help the company evaluate the sales channel with what-if scenarios. For example, now that the company uses this tool, they are now able to evaluate profitability by the branch, sale person, customers, and manufacture. Now they are to view things more easily from the system on how its operations and now it is simpler on making decisions off of it.

4.         Describe two ways in which Summit’s customers benefit from the new ERP system.

One way that the Summit’s customers are benefitting from the new ERP system is that they can rely on the company for their needs and products. The company is now more efficient with the new ERP system. The company wants that customers to feel that they can provide that they have produced products the customers want and sent to them in a short time period. Also customers can track how much wire they order and which manufacture it came from. Large customers that have long-term job sites are benefitting from the new system as well. The company built temporary warehouses on-site to supply the customers with its electrical products. They create what they call parent-child warehouse relationship to be able to work with the customers. That means that if a Summit’s office has more than a few temporary on-site warehouses than the warehouse can be controlled like subparts of the main Summits warehouse. With this system, it helps to prevent anybody from selling the consigned inventory into the warehouse.

5.         Diagram Summit’s old and new process for handling charger backs.    

The old process for handling charger backs had flaws in it where the company was losing money and sometime barely making any profit. When processing charger back, you have to compare the sales to contract. This means that a distributor can have up to hundreds maybe thousands of contracts. They have to identify the charger back and which manufacturer with enough documentation of the contract. There was a lot of manual work involved. The would have to go through the customers invoices for detailed manufacturers to identify which charger back they can claim. They would have to put the charger back in Microsoft Excel spreadsheet. The new process for handling charger backs was more efficient. It automactically review Summit’s billing activity for the day and the compares it to all charger backs agreements loaded in the SAP system by the end of every day. Anytime there is a match in the system they are able to claim. The system is then able to create a separate charger back document outside the consumer invoice. The systems is able to process charger back more quickly and are able to be review in the same day. Since it is fully automated, the company increased its claim by 118 percent over the old system.