Mini Case ERP Helps Productivity at Northern Digital Inc. Northern Digital Inc. (ndigital.

com) in Ontario, Canada, is a supplier of electronic measurement products. The relatively small company employs 90 people and generates over $20 million in annual revenue. The Problem Northern Digital Inc. (NDI) faced a challenge when rapid growth and aging technology threatened to stand in the way of company goals. Instead of enabling operational improvements, NDI's existing systems were impeding progress. Existing technology was causing missed deliveries and creating a high number of back orders. Inventory control was poor, and the planning was inaccurate. With some customers expecting shipment in as long as nine months and others expecting shipment in as little as nine days or even less, more sophisticated and accurate planning was critical. Customer satisfaction was at risk, and internal morale was slipping. With almost 20 years in business, NDI's well-established reputation for highquality, high-performance products was at risk. The Solution NDI selected an ERP system (from Intuitive Manufacturing Systems) based on factors that directly supported corporate objectives. Intuitive's ERP provided a level of system functionality that could immediately improve inventory management and the expandability and flexibility to support NDI's growth. The software includes a complete planning system, automated inventory management, and enhanced technology infrastructure. Equally important was the system's level of ease of implementation and ease of use. The Results After implementing Intuitive ERP, Northern Digital experienced continued success in improving inventory management and increasing revenue. Prior to implementation, the company struggled to achieve even two inventory "turns" (turnovers) per year. Inventory turns have now more than doubled, and expectations are that the company will better that in the near future. Since implementation, Northern Digital's revenue has increased from $10 million to over $20 million with little increase in inventory value. In addition, the company has reduced order cycle time for its flagship product from 4 months to 4 weeks, an improvement of almost 80 percent. This was a result of improved planning capabilities due to the ERP. Improvements in production control and inventory management have had a direct impact on customer delivery. The material requirements planning and forecasting capabilities of Intuitive ERP have allowed Northern Digital to better service its customers. The addition of better planning capabilities had an immediate positive impact on labor and materials. "We were able to better understand what was in stock, what we were buying, and what was needed," said Tom Kane, production manager. "Improved planning has made a huge difference in improving delivery."

Questions for Minicase (Siguiente Semana) 1. For a small company such as NDI, why is an ERP better than SCM applications? 2. Identify the supply chain segments that the ERP supports; be specific. 3. Relate this case to Porter's value chain and to its competitive model (Tutorial #2). Show the ERP's contribution. 4. Enter intuitivemfg.com and report on the capabilities of the company's ERP product. 5. Relate this case to business planning and strategy.

Caso 1. ERP Helps Productivity at Northern Digital Inc. Anlisis FODA Fuerzas

Reputacin de alta calidad Productos de alto rendimiento 20 Aos en el negocio bien establecido

Oportunidades

Adquisicin de un Sistema ERP Facilidad de uso del Sistema ERP La capacidad de planeacin de requisitos materiales y el pronstico del Sistema ERP permite a NDI brindar un mejor servicio. Capacidad para asignar mas usuarios al sistema ERP sin necesidad de capacitacin, lo cual permite mas fcilmente la expansin de la empresa Mejorar control en sus procesos de negocio Reduccin de tiempo en el ciclo de pedidos Implementar otros mdulos de ERP para crear redes de comunicacin en diferentes reas de la empresa Mejorar Satisfaccin de los clientes Mejorar motivacin de sus empleados Planes de produccin mas exactos para poder satisfacer las demandas de los clientes

Debilidades

Envejecimiento de la tecnologa que utilizaban ya que no cumpla con el objetivo de la empresa Los sistemas existentes impedan el progreso de la empresa La tecnologa utilizada estaba causando entregas fallidas y gran nmero de pedidos pendientes Control de inventario pobre y planeacin no exacta

La Tecnologa utilizada no flexibles para adaptar los procesos a las necesidades del negocio La Tecnologa utilizada no es lo suficientemente robusta para soportar los procesos de negocio a largo plazo Su cadena de suministro no es muy eficiente

Amenazas

La tecnologa avanza rpidamente y necesitan innovar Clientes insatisfechos por la inestabilidad en los tiempos de respuesta Tecnologa incapaz de soportar las necesidades de negocio Marca de ERP no contiene un portafolio completo de soluciones de negocio para todas las reas de la organizacin. ERP no tiene actualizaciones peridicas en bugs de software para corregir problemas Competencia con mejores ERP del mercado