Mid Term Exam

MB 4021 ENTERPRISE RESOURCE PLANNING

Name : Affan S Wijaya
NIM/Tutorial : 19015126 / D

MID TERM EXAMINATION

MB-4021 ENTERPRISE RESOURCE PLANNING
Answer!
1. What are challenges faced by NDPL?

The challanges that faced by NDPL are, if the ERP system is implemented on the
company, it must be considering several factors that related with the ERP system, is
there any problem or not with the ERP system that would be implemented on the
company. Besides that, the company should see what advantages and disadvantages
while ERP systems are implemented on the company, because from the case above,
we can see that Cloud technology offered four various types of model before, from
Infrasructure Service (IaaS), Platform Service (PaaS), Software Service (SaaS), and
Network Service (NaaS). The model that included on Cloud technology are not
working optimally as company hope, because the company have problem int the NaaS
that using different vendor with another service model to provided it. The company
should also faced challanges from Software Service model (SaaS), the SaaS model
should be used to run on suitable format in order to avoiding a problem that comes
from unmacthing format that implemented before through Cloud software, the cloud
vendor who had provided the computing software to NDPL had limited experience
(ex; in garment sector only) and had failed to gauge the requirements of the
pharmaceutical industry. Another problem was that of connectivity between the
parties involved and the availability of the software round the clock. Three parties
were involved in the cloud-based solution: NDPL, the cloud provider and the Internet
provider. Since the cloud provider and the Internet provider were two separate
entities, connectivity issues resulted, which in turn affected the round the clock
availability of the software, meaning that the company faced huge losses and
operational difficulties. Although implementation of ERP appeared critical to the
success of NDPL, the challenge stemmed from whether the company could afford the
cost associated with its implementation.

2. What role can information system play in pharmaceutical industry?

From the case above, we can see that information systems role affects to
parmaceutical industry in connecting one strategic division to another strategic
division in order to make the company system is more effective and efficient, and also
the information system are very useful to solve the problem of the company by
considering many factors and see what the best methods that used. The company can
used the information system to know what customer needs and what customer wants,
after the company know all about what the customer needs and wants in the market,
they must to have a research to know the ingredients of drugs that they got from the
chemist by doing several approach using their order procurement method (such as
Telephone Callers, Executive and Server Window.). On pharmaceutical industry,
Information Systems are needed in many sectors, from the production system and
book order, besides that, they can use the information system to manage their
inventory, to listing their safety stock, searching product that should be in or out from

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stockroom, to track is there any expired drugs product or not, to checking the product
that has been fulfill the requirements, until to manage special delivery for drugs itself.
The things above are good when the company integrate the system between one
sectors to another sectors until got the most effective, efficient, and suitable system
that can be implemented and run appropriately as well as the company hope. The
integrated information system are maintain quality of drugs, because quality is
affecting to the customer satisfactions. The system can also avoiding loss sales
because of expired, like the problem happened before on NDPL company.

3. How has information system, especially ERP, helped NDPL? What has been the
contribution of information system, especially ERP, to the growth of NDPL?

The information system, especially ERP system helped NDPL in effectivity,

efficiency, and cost reduction through several phase. In 2002, the manual system of
order-taking was replaced by a telephone system, where an operator took the orders
from the retailers and immediately transferred the data into the system. This process
reduced the probability of errors. In 2004, with the expansion in business, an excess
of standalone terminals with separate data repositories was creating data redundancy
and inconsistency, so the management team decided to integrate the modules and
centralize the databases. In this way, the purchase orders were sent to the
manufacturing companies, and automatic bill generation began. The same operation
had previously taken eight hours, but the introduction of a computerized system
reduced the time required to 30 minutes, which clearly represented a significant
improvement in time management. New servers were introduced, which took the
server count to four, it is three application servers and one data server. Clients were
introduced, as were wireless local area networks. By 2009, computerization had been
carried out in almost all departments. The companys turnover was US$26.61 million
in 2011, and this amount reached US$38.56 million in 2013. Information systems
aided the steady growth of NDPL which was occurring at a rate of 30 per cent. NDPL
had a fully computerized network for controlling inventory and sales management,
along with a dedicated department for handling payments/collections and accounts
reconciliation. The company was well connected, with suppliers throughout its
dedicated supply chain.

4. According to your understanding of NDPLs operations, how do you think it can

leverage ERP?

From the NDPL ERP system, it is important to deploy the information without any
lacks of information, because of on this case, we are like playing an Information
Game with this ERP system, this systems are implemented step by step from the
beginning until reached by the customer. From the start, we can know that if you want
to calculate how many orders that intermedearies wants and how many orders that
company ask to the suppliers. And from this ERP system, the company know quantity
of order that both of intermediaries and supplier ask, so the company can reducing
loss sales and make a more benefits that their got from the revenue stream. After that,
we move to the invenotory management that has been implemented through ERP
system, company should know how much the product that must be a safety stock,
because if there is too much quantity in stcokroom, it will increase the holding cost of

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inventory management, but if there is shortage in stockroom, there will be a loss sales
because of the quantity doesnt fulfill the customers demand. With ERP, company can
calculate how many products that should be in stockroom as an inventory. Besides the
stocks of product, there is also have an information about the type of drugs, quantity
of drugs, expired date, price of products, etc. All about the information on the
inventory are listed and written in detail to avoiding a mistakes and make an
employee understand about what drugs that is. Another things that we can see from
inventory management is to checking product and mantain the quality of the product
through the quality control method that company have. Next is company continued to
order books that requested by customers, from orders that has been give by sales
division, it continue to order assessment and fulfillment in the stockroom. Before
company going to the next step, they shoud do re checking the product until its ready
to send. Then company have to pick the order by give the final invoice printing to
customer and do package the product before it is delivered to the customer. Its the
normal condition of book order that company usually do.

5. What modules of ERP do you think NDPL needed?

I think, from the case above, NDPL as a distributors company should have several
modules on their ERP, such as Purchasing Order Modules, Quality Control Modules,
Forecasting Modules, Transportation Modules, and Bill of Materials Modules. Start
from the Purchasing Order Modules, when the company are purchasing the medicine
from the chemist, they are have to write it and list the information about the chemist,
from location while company doing order, contact of chemist, type of the
drugs/medicine, quantity of order, until the price that company ask for order the
medicine. Its too many chemist that company approach, if the company doest have
this module, it can be difficult to control above 1500 chemists as a supplier of NDPL.
And this module is also useful while retailer ask for order to NDPL, because retailer is
so important for NDPL to run the business, they can says that retailer is the source of
revenue stream on wholeseller business industries. The module are expected to gain
more relationship between retailer and wholeseller itself (NDPL), if this module are
implemented on NDPL, it will make NDPL be more easier to reach the retailer rather
than company use alternative manual methods. The Second module is Quality Control
Module, the re checking step is not complete without Quality Control, if the module
are used on company, it will reducing the defect product using several methods that
include on Quality Control Module, such as using 6-Sigma method, and another
several methods that can be implemented. The purpose of this module is useful for
increasing sales and reducing loss sales of product. Next module is Forecasting
Module, it can be implemented for forecasting the demand, it have a high advantages
because of before we know the real order from customer, we can predict the demand
for several next month, or year. It useful to be a basic data for the demand, and it can
avoid inventory from the shortage or have an excess demand. Then, company should
have Transportation Modules, if company just have delivery method without
Transportation Module, it not really good because of it doesnt includes all of the
Transportation system and method that used for distributing and delivered the
produucts. Transportation Module are used for distributing the product to retailer
until end customer with the mathematic calculation, and avoid to have slack time in
delivering the product. So it more be effective in operating the transportation and be

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more efficient in due date or delivery time. The last is Bill of Materials Module, the
company know that if they wants to make a medicine, there must be have an
ingredients for the medicine, and company should have the data of ingredients as a
basis to make it, if the data has been witten or listed on the module, its easy for
company to make the medicine from several ingredients that has been recorded
before, if there is any materials for making medicine that company didnt have in
storage or inventory, theyre only just see the Bill of Material Modules to know what
a materials that required to make the medicine, it can make company more easier to
search ingredients as a material for making the medicine.

6. What do you think were the reasons for the failure of the cloud based solution
implemented in 2010?

Because from the case above, we can see that Cloud technology offered four various
types of model before, from Infrasructure Service (IaaS), Platform Service (PaaS),
Software Service (SaaS), and Network Service (NaaS). NDPL became one of the
early adopters of the cloud-based solution, and the management team decided to
introduce cloud-computing in phases. They decided to first source the software
applications (SaaS) and NaaS through the cloud, while they had planned to also shift
the hardware to the cloud in the next phase. The company should also faced
challanges from Software Service model (SaaS), to provide SaaS, the company chose
a cloud vendor that had experience in the garment sector and that had successfully
sourced the IT requirement of the garment business through cloud. The model that
included on Cloud technology are not working optimally as company hope, because
the company have problem in the (NaaS) that using different vendor than another
service model to provided it. After the software was sourced from cloud, however,
NDPL faced many problems, the SaaS was used to run only the retail format, and it
was later extended to 10 stores as a pilot project. From the first day, the company
encountered problems associated with cloud software. From the first transactions, the
new program was unable to read some barcodes to generate an invoice. The software
could not read some items, leading to customer dissatisfaction. Then, the network
refused to support the stores processes, and Network Down was declared, resulting
in the generation of manual bills and invoices. The cloud vendor who had provided
the computing software to NDPL had limited experience (ex; in garment sector only)
and had failed to gauge the requirements of the pharmaceutical industry. Another
problem was that of connectivity between the parties involved and the availability of
the software round the clock. Three parties were involved in the cloud-based solution:
NDPL, the cloud provider and the Internet provider. Since the cloud provider and the
Internet provider were two separate entities, connectivity issues resulted, which in
turn affected the round the clock availability of the software, meaning that the
company faced huge losses and operational difficulties.

7. What is your recommendation for NDPL?

My recommendation for NDPL as pharmaceutical company is, desire a solution to

optimize efficiency, manage compliance, or meet regulation standards, though, there
is a software that will address your needs. In fact, there are fully integrated systems
that manage everything from accounting, distributing, and sales. These systems will
be able to handle your entire product lifecycle from product conception

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through approval and distribution. There are many add-on products designed to
extend the functionality of existing systems in order to handle specific tasks like R&D
management, compliance tracking, or quality control. These are several
recommendation module for NDPL company ;

Formula Tracking :
The production of any pharmaceutical begins with formula creation. Obviously
tracking of formulas is a vital need for your company.

Quality Control :
You likely have several steps of quality control testing in your inventory process. A
module specifically designed to manage quality control activities will give you all the
tools you need to ensure you are delivering the same quality product each time while
complying with regulations.

Compliance Management :
Compliance management functionality available within pharmaceutical ERP packages
are designed specifically to help you meet the requirements set forth by regulatory
agencies

Purchasing and Procurement :

Strong purchasing controls are especially important for pharmaceutical company. A
purchasing module will allow you to track product vendors, setup vendor cross-
referencing for products, track lead times, and vendor pricing variations.

Inventory Control :
One of the aspects that makes inventory management in pharmaceutical company,
unique is the issue of controlling for material and product expiration.

Customer Management :
A strong software system will handle everything from customer acquisition through
post sale, follow up and repeat ordering. As a pharmaceutical company you may have
unique needs in addition to the basic customer management needs of any company.

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