The Existing Resource Management System within Peet's Coffee and Tea - Case Study Example

? Case Study: Peet’s Executive Summary This report involves an in-depth research that reflects the existing resource management system within Peet's Coffee and Tea. The report revolves around the case study which highlights the inability of the existing system within the company to meet the rising sales demand. Thus, this incapability posed serious problems for organizations, which deteriorated the performance of the organization significantly. The researcher was assigned with the task to evaluate the alternative options (modification of existing system or implementing a new ERP system) that were available at the company's disposal. After a careful analysis, it has been concluded that implementing a new ERP system is an effective strategy that would be beneficial for the company in various ways, ensuring that the loopholes are eliminated right from the root from where they surfaced. The case study report would reason the adopting and implementing the second option alongside highlighting the advantages of purchasing and implementing new ERP system. In addition to that, the challenges that a company would face while implementing such a system will also be discussed. Finally, an overall conclusion and recommendation will be provided suggesting the ways to tackle such challenges and maintaining the efficiency of the business operations carried out within the organization. Table of Contents Introduction 4 Discussion 4 Advantages of implementing the ERP system 6 Challenges that might occur because of implementing the ERP system 7 Reference List 9 Introduction The report will involve a thorough analysis of the case study in order to determine an optimum choice that can be adopted as a recommended course action. The case studied involves the issues that were recently faced by Peet’s Coffee and Tea. The case study highlighted the inability of the older system or resource management, implemented by the organization, to keep up with the demands placed on them. The problems that surfaced from such a system was not only limited to improper inventory management, but also went to the extent of an improper order management and procurements and other financial activities. Thus, these issues that surfaced called for the necessity to send out a request for proposal (RFP). It was a critical time within the company’s history that necessitated coming up with an optimal course of action that would either focus on modifying the existing system that prevailed within the organization or would establish a new Enterprise resource planning systems that can be implemented efficiently. Thus, the following sections would involve the discussion regarding the alternative options available at the company’s disposal, including the advantages and challenges of adopting such a course of action. Therefore, appropriate reasons will be set forth for supporting the rationale behind implementing the recommended strategy. Discussion The fact that the existing system prevailing within the organization posed numerous problems in the operational activity of the business that resulted in the system’s inability to meet the sales demand, explains the reason why modification of the existing system would not be an efficient and effective strategy. Thus, the alternative option at the company’s disposal is to implement a new Enterprise Resource Planning system that would help the company recover from the existing level of instability. The new system will enable the company to manage all the integral and external business process effectively and independently. This highlights the necessity for bringing about a complete change in the system as modification of the existing system, would not be a viable option that can eliminate all the loopholes present in the company’s resource management framework. An outright change in the system by purchasing and implementing a new Enterprise Resource planning mechanism will enable the company to meet the rising demand for sales in an appropriate manner (Cassidy, 1996). It would help to ensure that total quality management is being done. According to the author, it is the primary requirement of the total quality management mechanism for Enterprise resource planning procedure to be properly implemented with an underlying idea that it will ensure that the business processes are being conducted effectively. The business processes forming the components of the Enterprise resource planning mechanism are: Product planning and product development Inventory management Marketing Order management and Shipping Enterprise Resource planning mechanism provides a conclusive view regarding the core business procedures with the help of common databases which are controlled by the database management system. This system would serve as an effective tool enabling the company to keep a record of the critical business resources such as, production capacity, raw materials and cash. In addition to that, it will also serve as a management tool that will allow the company to maintain the status of the business commitments like, stakes orders, payrolls, and purchase orders, consequently ensuring the enhancement of the total quality management (Cassidy, 1996). According to Chacko (2005), Enterprise Resource Planning mechanism constitutes a series of activities, complimented by multi-module application software which provides efficient assistance to the organization as far as managing its own resources is concerned. It has been noticed in many cases that the ERP system provides extraordinary improvement in terms of increasing productivity, efficacy, superior quality of service and maintenance of a cost effective framework for making apposite decisions. In addition, an effective ERP mechanism facilitates Total Quality management which involves a robust study encompassing all important dimensions of an organization (Schniederjans and Kim, 2003). The author also mentioned that the application, which complements the entire ERP mechanism, also enables sharing of data across departments like, manufacturing, purchasing, storage, accounting and sales. The system ensures a smooth flow of information within business operations and also, efficiently controls the various associations with the external stakeholders. Pai (2011) explained that Enterprise Resource planning would also serve as an efficient accounting tool that serves as an accountant. ERP system if implemented properly would improve the situation of the accountant as well as the accounting department related to subjective cognition of the accountants (Kanellou and Spathis, 2013). The accountants require systematic knowledge regarding information technology, financial accounting and efficient management, after the system is implemented. Majority of the organizations, who have implemented this mechanism, consider this system to be an important tool of management that can be used by organizations in order to combine various organizational systems, thereby formulating error proof results. Maditinos, Dimitrios and Tsairidis (2012) have highlighted some of the important issues that play a crucial role as far as enhancing the efficiency system is concerned. The research conducted by the authors concluded that assistance of external consultants is a vital factor that ensures a successful implementation of the ERP process. In addition, knowledge transfer associated with the technical aspects of the ERP system is also very important for establishing effective communication framework within the business entity, which caters to resolve conflicts that arise between members of the organization. The efficiency of a supply chain management largely depends on how well the ERP system is being implemented (Shatat and Udin, 2012). According to Haug, Pedersen and Arlbjorn (2010), good number of companies remain a part of their parent subsidiary supply chain, particularly those parent corporations who obtain product from its subsidiaries. Therefore, close association in the supply chain network, implementing the ERP system in such organization, becomes relatively easier. Advantages of implementing the ERP system Empirical researches done in the field of resource management have highlighted various advantages that are associated with the implementation of the Enterprise resource planning system. The system provides a comprehensive view of all the significant business processes conducted across all the organizational departments (Seethamraju and Sundar, 2013). In addition to that, the system also enables a company to maintain a lucid and automatic flow of work from one department to another, thereby ensuring a coherent transition as completion of the business processes. Furthermore, since single operating software is used throughout all the departments within an organization, it helps it to avoid the purchase and maintenance of separate software for individual departments. This also gives the company an added flexibility through which it can manage all the departments appropriately. Moreover, there are certain ERP vendors who extend their ERP systems that cater to provide functionalities related to Business Intelligence (Qubein, 2009). ERP also caters to provide additional facilities in terms of centralized security procedures that enable a business entity to trace all business transactions effortlessly. The integration of the ERP system with other systems ensures transparency within the business processes. The ERP system offers extensive visibility and flexibility allowing faster and increased collaboration of departments. The system also serves as an effective tool that helps in sales forecasting, order tracking, revenue tracking and other activities associated with resource management. Another advantage associated with the implementation of the ERP system is that it facilitates the management of globally dispersed enterprise companies. Furthermore, this system offers a highly secured and centralized procedure, which when implemented, will enable the company to track all business transactions that take place through the system easily (OiLeary, 2004). Challenges that might occur because of implementing the ERP system Majority of the companies choose to refrain from adopting and implementing the ERP system within their business processes, particularly because they are aware of the system’s complexity and failures that are associated with its implementation. This fact highlights the paramount importance of selecting an appropriate ERP system which is suitable to the business process and is industry specific. In addition to that, interacting with an ERP vendor, who possesses a successful track record as well as retention rate with other business entities, is also very important (Brazel and Dang, 2008). Another challenging factor that comes in accordance with the adoption and implementation of an ERP system is the need to integrate this system with other types of e-business software like, Customer Relationship management (CRM), Supply chain management (SCM), Information Management System (IMS) and Business Intelligence (BI) and so on and so forth. This gives rise to an even more complex system that at times can become very difficult to handle. The integration of such a complex system with the reward framework is much difficult when compared to its integration with the e-business software applications (Hsu, 2013). According to Khalid, Irshad and Mahmood (2011), companies face various other challenges while implementing the ERP system within their business procedures. The challenges highlighted by the authors are the fact that implementation of the ERP system does not guarantee that a company would be able to realize competitive benefits. The major challenge lies in ensuring the fact that the ERP system would generate positive return on investment. Therefore, a robust analysis of the system and its goals and objectives, expected return and software vendors is very necessary. In addition, another disadvantage, associated with implementing a new ERP system within the business process of an organization, is the time-consuming process involved with it. A lot of patience and effort is required before the benefits of ERP system can be realized as the system takes quite some time to deliver fruitful results. Conclusion and Recommendation The system that currently prevails within the organization has been noticed to have posed problems in the operational activity of Peet’s Coffee and tea. This resulted in rendering the system incapable of meeting the rising sales demand. Pertaining to this particular reason, there is a necessity for complete restructuring of the company’s resource management mechanism instead of a just a mere modification, as this will be ineffective, given the current situation of the company. Over here, by complete restructuring, the researcher means to highlight the need to implement a new Enterprise Resource Planning system, which will enable the company to recover from its existing situation. Besides that, it would also help the company to manage its internal as well as external business operations very efficiently. Having done a research on both the available options, it was seen that although the modification of the existing system would bring about certain improvements within the organization, yet those improvements are limited and the modifications would be inadequate to eliminate all the loopholes in a wholesome manner. In general, business entities consider ERP mechanism to be one of the most vital organizational tools, that is available to a company, by means of which the management can amalgamate different organizational systems and facilitate the processing of error proof production and transactions. Thus, implementation of the ERP system would help the business enterprise to tackle the current issues that are being faced and also, would enable the company to meet the rising sales demand, thereby performing efficiently. Reference List Brazel, J. F. and Dang, L., 2008. The effect of ERP system: Implementations on the management of earnings and earnings release dates. Journal of Information Systems, 22(2), pp. 1-21. Cassidy, M. P., 1996. Streamlining TQM. The TQM Magazine, 8(4), pp. 24-28. Chacko, G. K., 2005. Creating new corporate memories to reinvent IBM: Memory management disequilibria dimensions (MD) 2 Protocol. Management Research News, 28 (5), pp. 1-26. Haug, A., Pedersen, A. and Arlbjorn, J. S., 2010. ERP system strategies in parent-subsidiary supply chains. International Journal of Physical Distribution & Logistics Management, 40(4), pp. 298-314. Hsu, P. F., 2013. Integrating ERP and e-business: Resource complementarity in business value creation. Decision Support Systems, 56, pp. 334-347. Kanellou, A. and Spathis, C., 2013. Accounting benefits and satisfaction in an ERP environment. International Journal of Accounting Information Systems, 14, pp. 209-234. Khalid, S., Irshad, M. J. and Mahmood, B., 2011. TQM Implementation in Textile Manufacturing Industry to Success: Review and Case Study. International Business Research, 4 (4), pp. 242-247. Maditinos, D., Dimitrios, C. and Tsairidis, C., 2012. Factors affecting ERP system implementation effectiveness. Journal of Enterprise Information Management, 25(1), pp. 60-78. OiLeary, D. E., 2004. Enterprise resource planning (ERP) systems: An empirical analysis of benefits. 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