Just Sofas (JS) had begun the year full of promise with anew facility, restructu
ID: 448878 • Letter: J
Question
Just Sofas (JS) had begun the year full of promise with anew facility, restructured manufacturing process, and high hopes for its new ERP system. Most of the domestic furniture manufacturers had long since gone overseas,but JS believed being close to the customer gave it a competitive edge. The workers had rallied behind President Ruffner’s idea of guaranteed four-day deliveries on customer orders. And for a while, the promo had worked.Then orders began pouring in and the scheduling system imploded.It was for just such a case that Ruffner had sought outan ERP system—to automatically handle customer orders, factory schedules, and supply chain coordination as demand varied. Ruffner had carefully chosen the ERP software package used by all the large corporations he knew of, reasoning that if successful companies had chosen this vendor, who was he to choose otherwise. Implementation had proceeded carefully as well, one might say painstakingly slow, as the IT staff started with the finance module and worked down through sales and marketing,order fulfillment, production planning, MRP, capacity planning, and finally scheduling. Actually, the scheduling module was still having the kinks worked out and the bill of materials file had not been updated to the current catalog offerings, but everything else seemed to be work-ing fine.Ruffner had included statements about the ERP system in his earnings reports for the past three quarters, noting that “productivity wanes as new IT system is being impel-mented,” “earnings down as company adjusts to new or-dering system,” and “scheduling glitch causes backlog of customer orders.” For this quarter, he was trying to put a more positive spin on "only 5% of orders shipped on time due to incomplete jobs waiting for materials that were not ordered as they should have been." He supposed a more innocuous "new scheduling system still not up to speed"would suffice. What Ruffner really wondered was if the company could survive another year like this one.
1 .What capabilities of an ERP system would be useful for a company like Just Sofas?
2 .Describe the environment under which the ERP system was being implemented. Was due diligence conducted in choosing the ERP vendor?
3 .Does Ruffner understand the relationships between strategy and operations? Why or why not?
4 .What problems contributed to the disappointing results of the ERP system? How would you suggest that Just Sofa proceed next year
Explanation / Answer
1. The capabilities of an ERP system that would be useful for a company like just sofas are:-
a. Integration:- ERP integration helps to analyze, monitor, and even conduct the majority of data-driven tasks. Integration also allows our business to track, collect and analyze data on all tasks, records, information and activities performed within the system.
b. Automation and Process Management:- ERP helps to manage everything from payroll, accounting and invoicing, to manufacturing, reporting, and sale statistics.
c. Tracking:- ERP provides comprehensive tracking capabilities. ERP capabilities allow us to track sales, production statistics, deliveries, procurement, and staff productivity. It will help just sofas to deliver sofas to its end customer on time.
2. The environment under which the ERP system was being implemented was the sales of the sofas were doing well but less number of order were placed. The delivery of ordered sofa takes four days to reach its final customer. The scheduling module was still having the kinks worked out and the bill of materials file had not been updated to the current catalog offerings.
The company was very close to customers but was unable to get orders up to its potential. The company was having long processing time as well due to which the product reaches to its end customer takes long time. In order to integrate all its process as well as to gain the insight of market ERP was implemented.
4. The problems contributed to the disappointing results of the ERP system are the scheduling module was still having the kinks worked out and the bill of materials file had not been updated to the current catalog offerings. This was a major setback for the ERP system. Only 5% of orders shipped on time due to incomplete jobs waiting for materials that were not ordered as they should have been. The main purpose of implementation of ERP was to ship orders on time.
Just sofa should focus to improve its scheduling part as it was hurting them more. The company should also focus on time delivery of products.
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