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In today's information-driven world, organisations need to effectively coordinate resources and manage information flow across their overall organisational processes. ERP system forms the backbone infrastructure that determines how competent an organisation operates (Caruso, 2003). "It [ERP system] overcomes the inefficiencies of independent systems and non-integrated data by providing integrated data to support multiple business functions" (Sumner, 2005, p.3). According to Louis Columbus, a senior analyst with AMR Research, "ERP systems have transitioned from being an enterprise-wide system for financial reporting to becoming a synchronization point of suppliers, fulfillment, customer relationships and services. As a result, they are critical to companies being able to change their go-to-market strategies and stay responsive to the market" (Columbus, 2009).
According to Gerald et al, "Oracle E-Business is the only end-end business application that runs entirely on the Internet, supporting e-business across manufacturing, supply chain management, customer relationship management, business-business, financials, projects, human resources, and business intelligence functions" (2001, p.xxiii). Exploiting the capability to run on the Internet, Oracle E-Business suite provides accessibility features such as screen readers, accelerator key functionality, etc, that help people with disabilities (Zasowski et al, 2008). In the recent time, Oracle has made several acquisitions of some of the major enterprise software companies such as JD Edwards, Siebel and PeopleSoft. This strategic move has given Oracle E-Business suite the competitive advantage over the leading the ERP software in the market (Hamerman, 2008; Jacobson et al, 2008, Oracle, 2005). Oracle E-Business Suite runs on a single global platform and integrates with Oracle's Fusion Middleware, to enable enterprises to extend and run other Oracle and non-Oracle secure and decision-making applications that include business integration, business intelligence, master data management, and identity management (Oracle, 2009).
Oracle E-Business suite provides a wide range of modules that are tailored to incorporate the best practice functionalities and processes for specific industry sectors. In manufacturing, it offers modules such as Oracle Project Collaboration application, Oracle Advanced Product Catalog, Oracle Sourcing and Manufacturing, Oracle Production Scheduling, etc. that provides support for full mix-mode, lean and flexible manufacturing. Companies in the discrete manufacturing industry, such as the automotive manufacturers exploit the use of E-Business suite to provide support for suppliers with long lead times thus, improving their efficiency in make-to-stock, assemble-to-order, engineer-to-order, etc, manufacturing operations without compromising quality. According to Simon Bragg, director of research for ARC Advisory Group, "Oracle is the most experienced ERP supplier when it comes to support for advanced Lean manufacturing functionality...[and]...has the best vision of how to apply lean thinking to enterprise processes" (Oracle, 2005).
Today, more than 300 automotive industry firms run Oracle E-Business applications that help them transform their business, overcome their productivity challenges to effectively achieve the business strategic objectives. Specifically, Oracle E-Business Suite's Automotive Solutions help automotive enterprises in; collaborative product development and control on product time-to-market, increased global spend visibility, increased throughput, lower inventory and waste management, OEM-specific Just-In-Time (JIT) production and enhanced customer service (Oracle, 2005).
"Since 1995, Dana Corporation, a global leader in the design, engineering, and manufacture of value-added products and systems for automotive, commercial, and off-highway vehicles, has used the Oracle E-Business Suite to efficiently respond to customer demand, globally source materials, flexibly manufacture products, and ensure on-time delivery" (Oracle, 2004).
Describe the ERP System
Oracle E-Business Suite is a collection of integrated business applications that enables enterprises to efficiently manage their overall business activities such as relating with customers, procuring materials, manufacturing products, delivering services, shipping of orders, collecting payments, planning etc (Oracle, 2009).
The suite includes standard enterprise management applications such as Asset Lifecycle Management (ALM), Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) Product Lifecycle Management (PLM), Supply Chain Management (SCM) Manufacturing Resource Planning (MRP), Human Resource Management (HRM), Finance, etc that is built on Oracle integrated information architecture (ICS, 2006).
Figure 1 illustrates some of the typical business functions and departments Oracle E-Business Suite cuts across.
Figure 1 - Adapted from: [ICS, (2006) "Meet the Unique Requirements of Your Industry"]
Unlike traditional application software which automates only departmental business processes, Oracle E-Business Suite enables enterprises to integrate and automate seamlessly all parts of their business activities onto a single global information platform - coordinating and consolidating information across departmentally, line-of- business domains or geographically located boundaries (ICS, 2006). "With Oracle E-Business Suite's depth of product functionality and breadth of product offering, you can take your business further by automating processes across the enterprise" (exforsys.com, 2009).
E-BusinessSuitealso supports Oracle's Fusion Middleware, an application which enables enterprises to extend and run other secure and decision-making applications that include business integration, business intelligence, master data management, and identity management that facilitates effective strategic and operational decision-making as well as increasing business value."Organizations that use the Oracle E-Business Suite as a strategic ERP application often have two objectives - to increase the business value of the Oracle E-Business Suite and reduce their total cost of ownership" (Quest Software, 2009).
According to Gerald et al, "Oracle E-Business is the only end-end business application that runs entirely on the Internet, supporting e-business across manufacturing, supply chain management, customer relationship management, business-business, financials, projects, human resources, and business intelligence functions" (2001, p.xxiii). They claim that by exploiting the power of the Internet, Oracle E-Business Suite operates on a short cycle time and allows high customization capability. Being an Internet-based system,Oracle E-Business Suite applications are either Forms-based or HTML-based making it easier to exploit the Internet-Web features and most importantly, integrating several accessibility features such as screen readers, accelerator key functionality, etc, that help people with disabilities (Zasowski et al, 2008).
Oracle E-Business Suite current version is the E-Business Suite R12 which was released on 31 January 2007. The version is supported to run on a selection of server platforms such as IBM Mainframe, Linux (SUSE, Red Hat, Debian/Ubuntu), Novell Netware, Unix (Solaris, AIX), Window Server, etc (TEC, 2009).
In addition to E-Business Suite, and following the recent acquisition of some of the major enterprise software vendors such as JD Edwards, Siebel, PeopleSoft, Oracle also offers other ERP packages; Oracle's JD Edwards EnterpriseOne and Oracle's PeopleSoft Enterprise 9.0.
The E-Business Suite R12 Technology stack is based on a 3-tier - Client, Application, and Database - logical architecture as shown on Figure 2.
Figure 2 - Adapted from: [Chan, (2009) "E-Business Suite Technology Essentials"]
Describe its application to an industry
Oracle is committed to the automotive market, as it is with all of the industry markets where Oracle displays strong market and technology solutions" (Oracle, 2005).
The Primary goal of any manufacturing system is to take various inputs such as manpower, material , machine, measurement and methods and convert these inputs into products as output. In order to achieve this it is important for the business to choose its manufacturing processes, it may be project manufacturing, Discrete manufacturing, Repetitive manufacturing, Flow manufacturing or Process manufacturing (Gerald et al, 2002).Regardless of which manufacturing methodology, Oracle E-Business Suite allows the manufacturing industry the ability to optimize their production capacity; starting from sourcing, procurement and management of raw materials through to realizing the final finished product. Built on information centric architecture, E-Business Suite provide an integrated set of tailored applications that utilizes the same set of data for efficient analysis and competent decision making. This provides the automotive industry customers the capability to effectively address their business challenges (Oracle, 2005)
Oracle's e-Business Suite provides the following key benefits in addressing the challenges that the automotive industry enterprises face.
Collaborative Product Development
Problem: One of the key challenges the automotive industry encounters is trying to address the need for a more coordinated and collaborative effort amongst their series of LOB in introducing new product design and developing existing products in the market. Mainly, an automotive enterprise wants to reduce the time-to-market on the new product designs and focus more on developing products that are inline with the customer needs. Requiring timely information and effective communication, this function is typically achievable in an environment where there is continuous and early collaboration of the stakeholders in defining the performance goals, consumer preferences, possible cost alternatives, etc throughout the overall development process. However, an inherent barrier in the way the automotive value chain is organized prevents this from happening, thereby posing challenges to the enterprises in meeting the overall product development objective. (Oracle, 2009)
Oracle's solution: Oracle E-Business Suite provides sets of solution that facilitates collaborative product development such as Oracle Project, Oracle Advanced Procurement.
Oracle Project Collaboration, a part of Oracle Project in the E-Business Suite, provides a web-based collaborative workplace that addresses the unique challenge of bringing together globally dispersed team members located locally, globally, internally and/or externally within the manufacturing organization and allows them the capability to raise and resolve issues, make changes, share documents, track and communicate their working progress in real-time mode. "Oracle Project Collaboration eliminate delays in the transfer of time-sensitive project information and enables team members to collaborate and communicate more easily in their efforts to review and complete project work"(Oracle, 2009). In essence, it enhances a controlled and collaborative effort of effective decision-making and planning amongst the stakeholders towards the overall process of product development.
Oracle Advanced Product Catalog is another application that is very useful to the manufacturing companies. It provides an internet based project management platform to maintain information and control the structure of a product throughout its lifecycle. Oracle Advanced Product Catalog is integrated with Oracle Sourcing and Oracle Manufacturing to support the manufacturing company to work in parallel with the Line-Of-Business (LOB) in reducing time-to-market and successfully outsourcing projects. "Using information from the Product Catalog, Oracle Manufacturing allows streamlining the release-to-manufacturing process, automatically updating vital information such as items and bills of material changes as well as propagating and executing engineering change requests, and Oracle Sourcing is able to drive the procurement, planning, and design execution systems, enabling support of the entire identification-to-contract process" (Oracle, 2009)
Increase visibility of global spend
Problem: Manufacturing companies make profit by their ability to obtain their production materials and services at a low cost. In automotive industry, it is a major challenge with companies spending more as a result of their inability to maintain a competent and dynamic record of vendors and suppliers from which they can effectively bid, source and/or procure materials and services at the least possible cost. (Oracle, 2009)
Solution: Oracle E-Business Suite provides a fully integrated sourcing and procurement solutions tailored to provide extensive functionalities that help the automotive industry manage and control their supply process. Oracle Procurement includes Oracle Sourcing solution to provide a collaborative and negotiation platform with the suppliers. By the virtue of this feature, it enables companies to improve relationships with its global supply-base, strengthening the bargain power and thus, significantly increasing efficiency in sourcing, reducing costs in purchasing and increasing the business value. "With one system that handles all types of spend (direct, indirect, services and so on) - with full integration for the entire cycle - a company can include more of its spending under more beneficial agreements, while reducing the administration requirements and cost. The net benefit is improved margins and operations" (Oracle, 2009).
Increase throughput, lower inventory and waste
Problem: In the past, the Japanese automobile industry had gradually evolved mass production system to today's lean manufacturing system by improving the inventory management, operational mode and customer services in a bid to reducing waste, saving costs and adding more business value (Bessant & Tidd, 2007). Agile manufacturing process has been introduced to mitigate the issue of increasing fluctuations in demand and shorter product lifecycle. According to (ref Oracle), "Unfortunately, most ERP systems do not support agile manufacturing, forcing companies to create extensive workarounds or disable significant portions of their manufacturing applications to effectively leverage agile manufacturing processes in their operations" (Oracle, 2009)
Solution: Oracle's Discrete Manufacturing provides support for full mixed-mode agile manufacturing. It allows the use of Kanban, work-orderless completion and back-flushing operations approach for inventory management system. More so, the solution also provides automotive companies the support for make-to-stock, assemble-to-order (ATO), engineer-to-order (ETO), or other environment - without necessarily compromising the core functionality of any of the manufacturing methods.
Additional solution provided by Oracle upgraded version of 12.1 for Automobile Industry includes:
(Oracle, no date)
- â€¢ Maximizing the value by connecting and optimizing supply, demand and design chains with the new Value Chain Planning solutions in Supply chain management.
- â€¢ Expect quick return on Investment by effective managing pay for performance on a global scale with Oracle Incentive Compensation.
- â€¢ Increased operational efficiency and inventory management excellence to compete with the fast paced and challenging business environment with Oracle Warehouse Management.
- â€¢ Improvement in the HR, talent management analytics, project analytics and federal financial Analytics would achieve fast time to value by reducing the consumption time and lowering the total cost of ownership with analytics.
- â€¢ Improve visibility to estimated costs and make better sourcing decisions with Oracle Landed Cost Management (LCM)
Oracle E-Business suit is the only software that can provide end to end process automation, and a unified information architecture for immediate access to quality business information. The applications in Oracle E-Business Suite are build on unified information architecture, it consolidates data from both Oracle and non-Oracle applicationsand sets a definition of the customers, the suppliers, the partners, and also the employees across the entire enterprise. The application of the E-Business suit can provide the business with current performance metrics, financial ratios, profit and loss summaries and other important information that is required by the departments across the organisation. Oracle's integrated application also reduces the IT expenses because of the reduction for the need of software integration, data translation, and software customization, while the company achieves rapid online delivery; secure, reliable, online services with global availability; and a scalable solution that can grow along with the needs of the company. Whether the business implements the whole of E-business suit or choose to implement just a few modules, the business will benefit from making better decisions with better information, reduce IT expenses and run the business more efficiently and effectively. (Oracle 2001 - 2002)
List of members
- Amaka. Azike (ITMOC)
- Donald Nnama (EBIN)
- Kiran Uppoor (EBIN) - 09226249
- Sagar.Paliwal (EBIN) - 09332065
- Shalom. Wilfred (EBIN) - 09260846
Process: The team interacted with each other mainly through Google Doc, messenger and skype. The group work i.e. report and presentation was split between the team members, each one was responsible for the information provided keeping in mind the depth of research and analysis. The team met on a regular basis to keep track of the quality of the work done by every individual and to ensure that the deadlines were met
Presentation: Amaka. A and Sagar. Paliwal
Report and Case Study: Donald. Nnama, Kiran Uppoor and Shalom Wilfred
Usefulness of exercise
Amaka. Azike:This exercise was so informative as I was able to know about how an ERP system works. The experience and knowledge gained on working about ERP in automobile industry was enormous. During the research performed for presentation, I gained immence knowledge on the various ERP systems available in the market. I did come to know about how different businesses choose the ERP systems based on their requirements.
Donald. Nnama: This exercise was very useful in terms of both the academic knowledge acquired and the skills developed. Generally, the initial searching for ERP system and application to an industry (topic) brought to my awareness the wide variety of ERP systems and vendors available in the market. In analysing the ERP system into this report, I understood how ERP system has proven to be a valuable management tool in modern day enterprises. This exercise gave me the opportunity to correlate consolidate the practical knowledge gained from the SAP laboratory session with the theory gained from extensive researching of the topic. In essence, I took time alongside developing this assignment to understand and carry out research on some of the confusing concepts that I came across in the laboratory session.
Besides the academic knowledge learnt from this exercise, it helped in acquiring and developing skills such as effective team-working approaches, efficient researching and comprehensive writing skills and importantly, standard referencing in academic work.
Kiran. Uppoor: The Oracle ERP has widen my knowledge on Oracle ERP for an automobile industry. My contribution was mainly focused on application of ERP to automobile industry. What I learnt from this exercise is that the various functionality can be collaborated on a real time basis which in turn leads to smooth running of the industry.
Sagar. Paliwal: Working on the ERP project was very interesting. The project was able to state the importance of an ERP system in a company. It was through this project that the significance of an ERP system in automotive industry became clear. The way in which the project was managed was also very interesting. By dividing up the tasks between ourselves, we were able distribute the tasks equally and effectively. We all did our equal share of data mining and collaborated on the final results.
SAP - E business as a course seemed challengingly interesting. The project required a detailed background research on an ERP provider and its contributions to a particular industry. As a team we selected, Oracle and the manufacturing industry. My contributions to the team were in terms of the raw data mining, the preparation of the presentation slides and presenting the team during the presentation
Shalom. Wilfred: Working on this report gave me a detail understanding of the Enterprising Resource Planning and its implementation in business to accomplish higher productivity and smooth work flow. While working on Oracle ERP E- business suite, it gave me an overview of the other existing ERP systems offered by different companies. When I asked myself "Why Oracle", the research on the different Companies led me into learning that all ERP systems somehow or the other have drawbacks. I was surprised to read that SAP the giant is not flexible enough and that Oracle is more customizable when compared to SAP.(Goldman, A. 2009)
The SAP workshop was particularly interesting because it gave us a practical experience of how the system works. I enjoyed the blend of theory, research and practice of using and understanding the ERP system.
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- Alex Glodman, 2009, "SOA exec criticizes SAP, Oracle ERP front ends" [Online]. Available at: http://blog.internetnews.com/agoldman/2009/05/soa-sap-oracle-fiorano.html assessed on 10th December 2009
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Source: Bertini Comercio, 2007 [Online]
Accessible via: http://www.bertini.com.br/en/cases_arvinmeritor.htm
Accessed on - 9th December 2009
Case study on Arvin Industries Inc. and Meritor Automotive, Inc
ArvinMeritor was formed in 2000, it is the outcome of merging two companies with complementary product lines, a strong presence in the worldwide automobile and has a technology tradition of almost 100 years. The company has developed a unique method to manage its business by foreseeing and exceeding its customers needs, and fostering excellence and job satisfaction. The company now seeks to become the main player of a wide range of products and services in the automotive industry. As a global provider of integrated automotive systems, modules and components, ArvinMeritor provides original equipment manufacturers (OEMs) and replacement markets with technological solutions for small vehicles, trucks, buses and off-road vehicles.( Bertini Comercio, 2007)
Some of the challenges faced by the company are (Bertini Comercio, 2007),
- The need to substitute old applications for a secure and reliable system
- To keep a technological infrastructure based on the best practices
- To upgrade the Oracle E-Business Suite Applications, from version 11.0.3 to 11i.
- Interfaces of the Legacy Systems of the company with Oracle E-Business Suite Applications
Solutions to these problems include (Bertini Comercio, 2007)
- By eliminating redundancies, rework and waste there was a significant reduction of expenses
- Brought increase in productivity and agility in the processes through restructuring the staff
- Provided the facility to extract information that is reliability
- It improved stock management by reducing errors and saving resources
- Increased the reliability of data by utilizing new tools for decision making.
- It brought more control and also the increased management capacity.