With upwards of 20 stores and operations across multiple countries, Guaranteed Shoe Company should expectedly have supply chains that involve even more countries, staff, and business partners. This renders it necessarily difficult, resource-intensive and laborious to ensure the business runs effectively, especially given the automated online ordering. Enterprise Resource Planning Systems (ERP) offer a backbone in the integration and automation of internal information systems and business processes across the logistics, manufacturing, distribution, accounting, human resources and finance functions of the organization.
It offers seamless support for internal processes and integration with external business partners to ensure that value is delivered to the customers. For instance if a client places an order for shoes that are unavailable at a store, the system can have the shoes shipped from other stores, and/or make an order from the supplier without the involvement of staff. Similarly, while the company, currently has to stock products in the stores, determine how fast they move before deciding on the pre-order amount and/or discontinue the product, this can now be done automatically. It is possible to determine how well individual products sell, and ERP systems’ automatic inventory management systems enable the company to automatically re-order more and/or make other decisions regarding the stocks. The system aggregates customers’ orders, handles purchasing and accounts payables, scheduling, order tracking, inventory control and warehousing, distribution/shipment and accounts receivables.
According to O’Brien & Marakas (2010), ERP systems create commerce platforms, backed up with additional support capabilities that include streamlined inventory management, warehouse management and flexible pricing, strengthened back office and core applications (e.g. finance and accounts receivables). Other benefits include increased visibility into the Guaranteed Shoe Company’s supply chain and ease operational scalability. Since the company is headquartered in the US and has 20 branch offices across the world, decision-making is heavily dependent on the ability for the senior managers to get excellent quality information on the company’s performance. With ERP systems, this information is readily available and continuously updated, which means that managers do not have wait for reports from the branch offices before they can a decision.
This way, the system ensures quality and efficiency in the internal processes, cost reduction, provision of real-time cross-functional information to support decision-making, and organizational agility in responding to varying consumer needs. These systems transform Guaranteed Shoe Company into one giant store, despite the geographical dispersion. However, while the company already has a website that allows automated ordering, order processing, and management, it does not have a proper ERP system, which does, however, offer it considerable value. However, the company needs to be alive to the issues associated with the implementation of ERP systems, which owing to their complexity present a considerable risk of implementation failure. Improper implementation may result in catastrophic disruptions. If the company chooses to implement the systems, it is critical to plan, customize the system to the firm’s functions, and manage the change process effectively. This frees up the staff to concentrate on other activities, such as customer service, while at once making the firm’s functional business practices easier for the company, which is critical given the company’s global operations.
