CaseStudy

ERPPurchaseDecisionatBenton
ManufacturingCompany
PresentedBy
AhmadArdiansyah Zein
Araro Jireh Tulus
Bambang Wijarnako
RajaBadal Muda Sedang
Bagus Tirtayasa

The Content

About Company
ERP & Information System Framework
ERP Study
The Proposal
The Pros
The Contras
Cost and Benefit Analysis
Recommendation

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

About Company

U.S. manufacturer of a varied line of

customer durables
Net sales almost $1 billion (1998)
Operating profit about $180 million (1998)
5,200 employees
7 factories
57 distribution centers locate(North America)
40% Market Share

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

About Company

Business Challenge
The Industry deman is growing slowly and the
structure of the Industry is undergoing rapid
change as formerly independent dealerships are
being acquired by large chains.

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

About Company

Bentons Strategic Focus

Customer-driven new product development
The acquisition of new business which
complement existing ones
International expansion
Emphasis on the Continoues improvement
approach

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP & Information System Framework

ERP Enterprise Resource Planning

An ERP system is a comprehensive set of software
modules that integrate a companys financial,
human resources, operations and logistics, and
sales and marketing information system, storing
the data for all these systems in a central database so
that data are entered only once and the results of
each transaction flow through the system without
human intervention

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP & Information System Framework

ERP

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP & Information System Framework

How ERP software plays important role in
success of a business ?

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP & Information System Framework

ERP Modules
Manufacturing : engineering, capacity, workflow
management, quality control, bills of material,
manufacturing process, etc
Financials : Account payable, account receivable, fixed
assets, general ledger and cash management, etc
Human Resources : Benefit, training, payroll, time and
attendance, etc
Supply Chain Management : Inventory, supply chain
planning, supplier scheduling, claim processing, order
entry, purchasing, etc
Customer Relationship management : To processes
implemented by a company to handle its contact with its
customer
ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP & Information System Framework

Advantages of ERP system

A Totally integrated system
The ability to streamline different processes and workflows
The ability to easily share data across various departments in an
organization
Improved efficiency and productivity levels
Better tracking and forecasting
Lower costs
Improved customer service

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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ERP & Information System Framework

Disadvantages of ERP system

Customization in many situations is limited
The need to reengineer business processes
ERP systems can be cost prohibitive to install and run
Technical support can be shoddy
ERPs may be too rigid for specific organizations that are
either new or want to move in a new direction in the
near future

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP Study

Walter S. Henry (Benton President and CEO)

to Adam T. Meyer and Jerry L. Cook
ERP seems to be the direction that our
industry is going, and we probably need one
too. However, I dont know the specifics of
what an ERP system involves or what it might
bring to the company, so I want you to do a
quick study and determine whether ERP is for
us, and if so how we should approach it.

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

ERP Stiudy

4 Major ERP Software vendor (SAP, JD

Edwards, Oracle and PeopleSoft)
financially stable
Support Global Companies
Full line of Highly Integrated Modules
Leader in Research and Development
There are a number of Tier 2 vendors
Not suitable for long-term partnership.
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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

The Proposal

The Study team is convinced that Benton

Should Replace their legacy Back Office
system with an ERP System.
We believe that information technology is crucial
to survival in todays competitive environment. Our
present systems are growing old and hard to
maintain, and will have to be replaced in the next
few years. ERP systems have much more
functionality and much better integration than our
internal IT staff can possibly provide, so we have to
use them just to keep up with our competitors who
are starting to install them (Meyer)
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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

The Proposal

Additional Reason, Benton management has

established strategic-business plan that cannot
be realized without an ERP System.

International expansion
Mergers and acquisitions
Use of IT as a strategic weapon
Integration with suppliers and customers
Reduction of operational costs
Product line expansion
Process standardization across different
units of the company
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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

The Pros

Various Modules
Finance/ Accounts, Human Resource Management, Manufacturing,
Marketing / Sales, Supply Chain / Warehouse Management, CRM,
Project Management, etc

Can be used across all-departments

Automatic and coherent work-flow
More Secure
Using centralized security policies, and can tracks all occured
transactions

E-commerce Integration
Can be integrated with other systems through an API
(Application Programing Interface)

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
CaseStudy

The Contras

The cost of ERP Software is too high

Planning Customization Configuration Testing Implementation

Take a long time to be deployed

1 3 years

ERP systems are generally difficult to use and

learn
Difficult to migrate existing data to the new ERP
systems

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Cost and Benefit Analysis

The Costs
The purchase price of the application
Investing in new hardware
Installing the program on a companys computers
Performing technical tests to ensure compatibility and
performance
Training all employees on how to use the system
Altering working procedures
Importing files into the new system
Maintenance costs

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Cost and Benefit Analysis

The Costs

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Cost and Benefit Analysis

The Benefits
Streamlining processes, reducing labor costs
Reducing the size of inventory needed in stock,
freeing capital up for other investments
Improving reliability, creating better customer
experiences
Implementing technology, possibly reducing the
number of employees needed
Crafting a scalable solution, letting a business
capitalize on future growth

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Cost and Benefit Analysis

The Benefits

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Cost and Benefit Analysis

Cost And Benefit Analysis

Because the IRR is equal to 20% (Match with Bentons criteria for
Investment) and the NPV is Positive (=US$ 156,046.83) so the
proposal should be proceed to the implementation phase.

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ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Recommendation

Recommendation
Acquired an ERP system as quickly as possible
Setup clear requirement for the ERP
Interview the ERP vendors
Prepare employee for the all possibility
Train and re-Train staff

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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Thank You
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11/26/2013

ERPPurchasesDecisionatBentonManufacturingCompanyInc.
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CaseStudy