Summit Electric Lights Up with a New ERP System

Summit Electric Supply Co. Inc. is an independent wholesale distributor of electric industrial electrical equipment and supplies headquartered in Albuquerque, New Mexico. This company was founded in 1977 and employs well over 600 employees and generates an annual sales revenue upwards of $400 million according to recent reports. As per the latest reports this company operates in 5 states with a service center in Dubai, Sales at Houston and marine division in New Orleans.

                The primary products distributed by Summit include motor control, wires and cables, lighting, wiring, power protection equipment’s etc. The company procures the goods from the manufacturer and supplies it to the customers and thus effectively acting as an agent between the two parties. Since the incorporation of the company in 1977 the business has grown briskly and this exposed serious limitations with the legacy systems that were in place for sales, purchase and back-end reporting orders. The legacy systems used only a fixed number of unique identifiers and also was limited to a fixed number of locations and this meant that the staff had to reuse these numbers. Another challenge that Summit faced was that these legacy systems were unable to compile and integrate the sales and purchase orders and instead had to be done manually. As the business grew and the orders grew exponentially and processing a nightly inventory was impossible in the limited time. The other major issue was that the company lacked business intelligence tools that could generate reports for identifying growth areas and evaluate profitability. Apart from these issues there was also an issue where the business was losing return on investment (ROI) from a flawed chargeback process. There are usually thousands of chargeback agreements between the distributor and the supplier and every time a chargeback is invoked, the right supporting agreement and deal should be identified with the legacy process it was done manually. All these chargeback agreements had to be reconciled with the appropriate chargeback agreements which took them an entire month after which this enormous physical copy had to be handed to the vendors who would pour over it for the next two months. In some cases some chargebacks were missed invariably thus resulting in a lost revenue opportunity.

            All the above major issues drove the need for Summit to go shopping for a new ERP system. They soon partnered with the German company SAP for the integration of their business process using the Enterprise resource planning (ERP) system because SAP comparatively had more experience dealing with distribution business. The main priority with this new ERP system was scalability and inventory visibility. Summit needed the ERP system to handle a large number of stock keeping units (SKUs), expedited order processing, unique delivery models, distributed inventories and product handling among other regular functions. Inventory management was one of the top priorities because the company needed to know how much of each unit was available in the warehouses and when should they order the suppliers to replenish the stocks. A overcome this issue and stay current on the inventory, Summit had the updates run more frequently in periodic intervals. Summit also had another business model in which temporary warehouses were setup at the job sites for large clients thus expediting the delivery of its products at a convenience. Though the inventory was owned by summit, the units in this temporary inventory should not figure in the standard inventory. This issue was addressed by introducing a parent-child warehouse model thus preventing the sale of the units in the subparts of the main warehouse. Summit

Also implemented SAP’s Net Weaver BW data warehouse solution to use the data for better business intelligence reporting and analysis.

            The main advantage of implementing the SAP business model was the significant ROI after implementing the SAP Paybacks and Chargebacks application, which at the end of each business day reconciled the billing activities and compared them against all the chargeback agreements and when there is a match the system creates a separate chargeback document and can even submit the information to the vendor with the appropriate chargeback document. This new system even had the capability to create consolidate chargebacks on a daily and monthly basis thus eliminating the cumbersome process of compiling using excel sheets. With the implementation of this system alone Summit was able to increase the chargeback claims to over 118 percent over the legacy system thereby boosting revenue.

            Summit has tried to maintain a lot of flexibility in the new system while operating in the SAP business model because recreating the legacy systems can be time consuming and expensive and at the end of the day IT used to serve the business needs with practicality and efficiency.

References:

Management Information Systems: Managing the Digital Firm (13th ed.). Laudon & Laudon, J. P. Prentice Hall.

Summit Electric Supply Finds the Right ERP Fit, 2011: Dave Hannon: SAP Insider

Timeline: https://www.summit.com/about-us/Summit-Electric-Supply-History

AVOIDING A FUTURE OF CRIPPLING CAR CONGESTION

Bill Ford, the chairman of Ford Motors, spoke at the 2012 Mobile world congress where he outlined a plan for connected cars to help avoid traffic congestion. Connected cars he explained are vehicles linked to various mobile networks and intelligent systems and capable of M2M communication (Efraim Turban, 2013). During his address in Barcelona, Ford explained to the delegates that the number of cars on the world’s roads is forecasted to grow from 1 billion now to up to 4 billion in the next few years and The proposed solution to avoid the potential problem of a global gridlock due to overcrowded road network is to create a global transportation network that utilizes communication between vehicles, transport infrastructure and individual mobile devices. The proposal is called “Blueprint for Mobility”, and Ford’s idea takes the idea of in car connectivity beyond using it just for navigation and in car entertainment. The idea is to look at vehicles on the road in a similar we look at smartphones, laptops and tablets and as pieces of a much bigger, richer network. These intelligent cars have a lot of untapped potential and could be used in the creation of an interconnected transportation system where cars are intelligent and can talk to one another as well as the infrastructure around them. This mobility solution proposes to avoid a future prospect of global gridlock, a never ending traffic jam that wastes time, energy and resources and even compromises the flow of commerce and healthcare (Efraim Turban, 2013). There should a drive to make cars talk to each other outside the same brand. They need to be interconnected and they can’t discriminate based on model. We need standardization while providing competitive advantages of one brand over another, because at the end of the day this is what will sways one consumer towards one particular brand. Bill Ford suggests that No one company or industry will be able to solve the mobility issue alone and the speed at which solutions take hold will be determined largely by customer acceptance of new technologies.

                This blueprint sets short and long term goals for significant reductions in the company’s global environment footprint, and seeks to visualize what the transport networks will look like in 2025 and beyond. Such as (Ford, 2012):

1.       Near term goals: 5-7 years

- Ford is attempting to develop innovative in car mobile communications and driver interfaces  

- The Developmental of vehicle to vehicle warning systems are also in progress

- Ford is also developing an efficient driving experience with limited autonomous functions which has better connectivity.

 - There is progress being made in the development and definition of new vehicle ownership models like the zip car initiative.

2.       Mid Term goals (2017 – 2025)

- Ford will be introducing semi-autonomous driving technology in the next couple of years.
- There will also be a significant increase in the interactions between the individual cars.
- Technology will be enabled to utilize the cloud interfaces and vehicle to infrastructure communication
- Integrated transport network, will feature cars plugged into public databases for exchanging information.
- To help manoeuver city streets there will there will an introduction of 1, 2 and 3 passenger vehicles.

3.       Long Term goals (2025+)

- A single connected network will be developed which will attempt to weave in the where pedestrian, bicycle, private car, commercial and public transportation traffic and thus altering the transportation landscape.
- Development of smart vehicle which will have the capability of fully autonomous functions.

- Push for a greater use of connected and efficient shared services with the development of a true network of mobility solutions.
 

Everything in the Blueprint is achievable in the future based on existing technology we have today. However the key challenges is in making the offerings affordable and attainable to all customers and finding ways for all stakeholders the auto industry, governments, technology companies and more to make the adaptations needed to the transportation infrastructure.

THE GOOGLE UNIVERSE

Google ranks just a notch below Microsoft Corporation at #3 on the Forbes most valuable brands. With a brand value of 65.6 Billion dollars, This Company is one of the biggest organizations in the technology domain. Google was primarily known for its internet search based offering, however the company has diversified in the recent years into offering a variety of products such as messaging (Gmail), blogs, videos (YouTube), mapping (Google Maps), Social networking, Operating systems (Open Handset Alliance), Readers, Cloud based services etc. which has enabled it to be become one of the market leaders in its segment.

            Founded in 1998 by Larry Page and Sergey Brin who were students in Stanford University’s Ph.D. program, the Google search engine became popular due to the development and the application of the new Algorithm called the PageRank™ algorithm which rendered the search results based on the popularity or the importance of these page. The popularity index was defined by the number of backlinks the page had. This was a revolutionary breakthrough for Google and users found that the search results from Google were helpful than from the other search engines at that time. Per the Statistical Portal (statista) “In 2014, Google's ad revenue amounted to almost 59.06 billion US dollars. That year, advertising accounted for 89.5 percent of the online company's total revenues”. Though a major chunk of the revenue at Google is generated by AdWords, It is also investing heavily in the non-Google websites and other products such as sharing services, Cloud based services, Analytics etc.

            Contrary to the other corporate technology firms, the culture at Google is that it is relaxed, creative and inspires diversity and a work ethic which compliments the Google motto of “Don’t be evil”. The employees have access to free food, health club, fitness classes, free haircuts etc. The business model at Google can be classified broadly into B2B (Business to Business market) where most of the revenue is generated from by having corporates display custom ads and also Google sells its services like search, analytics and mapping tools to be integrated into the existing infrastructure at the organizations. Under B2B model, Google has two types of business models called as Manufacture/Direct Sales (Where company sells and supports the product) and Value added reseller model (Where authorized resellers offer the products along with installation and support assistance). The other business model is the B2C (Business to Consumer) model to offer attractive products to the end users who ultimately use the search engine or App store to buy or use any of the advertised products and finally B2G (Business to Government) model where the company promotes its products like the search appliance, Calendar, document drive and reader etc. to big government agencies and other corporates. This is a good strategy since the organizations do not have to develop the software’s from scratch and thus saving millions of dollars and since Google meets all the Federal Information Security Management Act (FISMA) standards, the company is now eligible to bid for projects with major government agencies.

            However since it is now a huge organization dealing with tons of user generated data, Google has had its fair share of concerns with privacy, Anticompetitive and ethical issues. For companies like Google and Facebook, Information is the currency in which they trade. Google has been subjected to strict regulations in the European Union on the matters of privacy. Since Google creates individual profiles based on the internet habits and information available, it is therefore subjected to stricter privacy rules. In 2006 Google had a conflict of ethics while operating in China where as per the directive of the Chinese government, certain keywords and websites were blocked. But later in 2009, Google experienced a series of cyber-attacks which and after which the company started redirecting its searches to its Hong Kong data center which served the search results without any censorship. This resulted in a face-off with the Chinese government and eventually Google had to cease operations in China albeit for a small part of business run by non-google websites.

            Like other big organizations, Google has been charged with antitrust laws for uncompetitive behavior like predatory pricing where most of the Google services are free as a long term strategy for attracting customers who would eventually use it to buy products from the partner websites. Some anticompetitive practices per Fairsearch.org (FairSearch, 2011) are deceptive display, search manipulation, unfair treatment of advertisers etc.  Google also had situations where its ethical motto “Don’t be evil” has not always been followed like in the case of China, Google street view. Ad pricing practices, copyright infringement in the case of Google books where after a digitized copy of the book is loaded into the Google library the original copy ceases to be available in the public domain. This is to create a monopoly on the e-books and prevent other companies from creating similar digital libraries.

            Regardless of all these privacy and ethical issues, the company is a tremendous success with a progress corporate culture and an innovating mentality. The company is a pioneer in its field and constantly thrives to bring new products to the market which are available for free to the individual users and for a company which is still young, the management of ethical, technology and business culture is relatively better than similar organizations.

ORGANIZATIONS WOW CUSTOMERS WITH SOCIAL CUSTOMER SERVICE

Organizations have come a long way since the musician named Dave Carroll once launched an online media attack on United Airlines, Inc. (UAL) which had damaged his expensive guitar during a layover at the Chicago’s O’Hare Airport. Dave was convinced that UAL was not interested in settling the claims and was instead trying to wear the customers down. He uploaded YouTube videos which was shared across multiple online media platforms and hence went viral. Millions of viewers watched these videos and thus generating blog spots, new stories and even a business case was done on this phenomenon by the Harvard School of Business. This eventually forced UAL to settle the claims with Dave. This is just an instance of how the companies can make or break depending on the online presence and the feedback from these social media outlets.

                Thanks to the fear of the backlash and to have a bigger online presence, organizations are now investing in better customer service and are taking the consumer feedback seriously. The use of social technologies has gone beyond marketing and is now used in the customer service domain and the companies have realized that the cost of retaining the customer is lesser than bringing one onboard. Before the age of social media, most consumer feedback was through phone and e-mail, however now the consumers can directly provide their feedback on the official company sites and the companies will try and address it as best as they can. The feedback is taken very seriously by most companies because traditionally a negative feedback would be shared with just a handful of people, but after the advent of social media it can now be shared with tens of hundreds of people effectively discrediting the company and causing a bad reputation.

                Zappos is an organization which has used the social media outlet to its benefit and has changed the face of the customer service industry. Zappos is an online shoe retailer and it employs a highly trained 10 member customer service specialist after a careful screening and interview process. The company does not use an automated script to help customers and instead the customer service representative will be a real person at the other end to help the customers. These representatives are highly trained in addressing the issues of the customers patiently. The customers also reach out to the Zappos team on Twitter and the representatives have even helped them find the products with the competing retailers. This culture at Zappos has helped it maintain a very positive and customer friendly approach. We have examples of other corporates who take customer service seriously, like in the case of Comcast which has a bad reputation of dealing with the customers, however the company did a complete turnaround under the leadership of Frank Eliason. Comcast realized the potential of social media and proceeded to address the concerns of people who had mentioned Comcast in their complaints on Twitter and this was going beyond their official complaint channels. The customers received surprise calls from Comcast inquiring about the issues and also these innovations helped it mend the reputation online. There are still a few frustrated customers but this is natural for a company providing services to millions of people. The good thing is that the company has acknowledged the value of social media and are heading in the right direction.

                Cisco is one of the pioneers in the field of networking products and also has a huge online presence using social channels. Cisco uses social channels to interact and help its own customers and also using this expertise have developed a service application called the SocialMiner which helps companies monitor the blogs, and social medias like Twitter, Facebook etc. and then provide data to the service agents who can fix the issue as they emerge. This is considered a very important innovation since the issues can be proactively identified based on the trends in the conversation of the social media. Also this app allows the conversations to be archived for analysis at a later point to prevent service disruptions and problems in the system. 

DATA VIZ IPAD APP IMPROVES AMERICA FIRST’S PERFORMANCE

According to Efraim Turban (Efraim Turban, 2013) “Data visualization, or data viz, is the gathering of complicated information into readable graphics”. This is a term used to display massive amounts of data in a structured and systematic way which is reader friendly and lets the manager drill down to details of the rendered information. America First Credit Union is a member-owned, nonprofit financial institution which is the 11^th largest credit union in the U.S and has more than 100 full service location. This financial institution founded in 1939 had an issue while presenting massive data pertaining to market position, risks, performance etc. to the executives in a concise and cost effective way. This led the America First to use data visualization apps which could be accessed from portable mobile devices. In 2010 due to the economic recession, the bank lost more than $ 9.1 million as a result of which there were massive spending cuts and in late 2010 they started replacing laptops with iPads which were half the price of a laptop and also the $25 service fees was significantly lesser than the service plans for laptops. The change started at the top level with the chief financial officer, network manager and the controller replacing their laptops with iPads.

                The main challenges that the executives at America First Credit Union faced were the presentation of the data for analysis and decision making. The pdf’s of information dense excel sheets were emailed to the executives and there was delays in interpreting the data due to the versioning, data format and visualization. The National Credit Union Administration (NCUA) needed all credit unions to undergo an examination which could provide the data regarding the performance, monitoring, auditing and risk factors which could eventually help the company to manage risks. To understand the internal controls to manage risks the managers needed a comprehensive view of all the associated risks, a view of how the risks were changing and also a concise view on how they were accessing risk. The main reasons to adopt mobile based data visualization tools were 1) The mobile interface was user friendly and did not need any formal training, 2) The financial reports can be formatted to be viewable on mobile screens and is portable, 3) This solution was cost effective and half the price of a conventional solution on a notebook. 4) Huge amounts of data could be handles with content rich displays 5) Using an iPad enabled users to leverage the existing functionality with the devices such as the security features (read biometrics), hand gestures, specialized portrait and landscape views, touch screen feature etc. The projected benefits included: 1) Easy understanding of different types of risks and cost across geographies, 2) Improve the decision taking ability due to the availability of business intelligence, 3) Easy understanding of the overall health of the credit union with regards to any projected risks or existing assessments. After testing several free versions of mobile visualization tools, the company zeroed in on Roambi designed by app maker MeLLmo and in July 2011, the company rolled out the enterprise version to 47 users who used iPads. The main advantage with the adoption of Roambi was that it was inexpensive and could be easily interfaced with Oracle’s Essbase.

                The mobile app based visualization system was a hit at America First Credit Union because it provided a lot of additional features such as heat maps which depicted performance based on the geographical area, size etc. The software was scalable and with the introduction of cloud there was no necessity of buying any hardware except the iPad itself. The software could also be integrated easily with the data silos like IBM, SAP, Oracle, Box, Salesforce etc. The managers receive the most current data financial assessments as soon as the data was compiled. Additionally the managers could use the tool to check the business opportunities and the performance of a particular location or branch. The software used the latest industry standard security like the 256 bit AES and protocols such as SSL 3.0/TSL 1.0. The distribution of these reports could be controlled with user file permissions and it could also be integrated with single sign on and SiteMinder etc. This mobile app provide three main feature which are Analytics – which converts documents into content rich displays, Cardex – (Efraim Turban, 2013)“This features users pull up and flip through pages of reports, for example, to view sales by region or market segment. These reports can be swiped, tapped, or zoomed to drill down into the data, change time frames, or manipulate data” and Flow – which  renders visualization  into reports.