Enterprise resource planning - Essay Example

ERP final project Introduction The headquarters of Coffee Beanery is in Flushing, Michigan in the United s.It has chains of coffee shops that operate in the territories of US and other continents such as Asia and Europe. This company was established in 1976 by Julius Shaw and JoAnne Shaw. They were offering or rather selling to the consumer coffee and had their first store located in Dearborn in Michigan. The company has significantly grow and expanded in that by 2007, it had approximately more than 130 franchise within the US and more than 20 outside US in countries such as Cyprus, Bahrain, China, UAE, and South Korea. In the company’s model, the franchisees are provided with the concept of the stores which encompass coffee bars, retail store specialty, café stores, and kiosks among others. The café stores were introduced in 1997 where the menu was expanded to include products such as soups, bakery goods, sandwiches, and salads. These stores were quite distinct from the earlier operational stores due to increased requirements in terms of the space of the floor, equipment, staff, as well as location which was to be outside structures such as malls. Products and services Coffee Beanery offers products such as coffee that has been freshly brewed, tea, espresso, as well as specialty drinks. In fact, it has the globe’s highest quality standards in terms of coffee specialty. In addition to the above, the company also sells tea bags, goods that are baked, coffee beans that are gourmeted, soups, fresh salads, sandwiches, coffee machines, and branded mugs. Furthermore, the company also sells franchises related to coffee shops. It obtains its revenue and income from the sales of products and equipment to these franchisees (Bloomberg Para 1). Products/Services Provide Value to Your Customers The mission, vision and values of the company are geared towards providing the consumers with the best specialty coffee and related products. They illuminate the strategies and values of the company that guide their work, employees and relation to customers. Moreover, they are integral facets of growth and success of the company. The values of the company enable the company to focus on providing the customers with quality services since delivering quality services to the customers help in creation of customer loyalty (Coffee Beanery Para 2). Mission To not only set but also maintain quality and ethics at high standards in all operations. To provide products of coffee that are delicious, as well as providing the customers with services in an excellent and reliable manner. To earn the trust of the stakeholders such as clients partners, employees, and the community. To connect people and inspire them, as well Vision To be not only established but also a business coffee partner that is trusted To lead in provision of quality, service, innovation, and in the market To be among the respected and admirable business ventures in the industry Values The company highly values integrity, honesty, reliability, and excellence. In addition, it embraces open mindedness, listening and caring, and innovation. The size of the Enterprise: Employees and locations This business venture was established in 1976 and it has its headquarter is in Flushing, Michigan in the US. It sells specialty coffee and products related to coffee to its clients. Besides the coffee products, it also deals with other products such as soups; sandwiches et cetera as had been illuminated previously. The number of employees recruited by the company is relatively small (approximately from eleven to fifty) though through franchising it has fledged some of its operations beyond the US. The workers are highly valued due to the fact that when workers are motivated at work place, their performance are likely to be of quality. In turn, the provision of customer service is likely to enhance by the motivated workers (Coffee Beanery Para 2). Competitive arena The company has been able to differentiate itself from other companies offering similar products (competitors) by focusing of provision of provision of high quality and standard products of coffee as well as other products. In addition, the company also focuses in providing the customers with effective service in order to gain leverage from its competitors. This is achieved through diversification of products to consumers. The diversification of these products manifests in such a way that besides the brewed coffee the consumers can also enjoy products such as salads, sandwiches, soups at its stores and café. Innovation is also highly embraced as it is one of the core values of the company. The structure of the organization The head of the company is the CEO who doubles up as the president of the firms. Below the position highlighted above is the position of the vice president of the Real Estate. It also consists of the vice president of the franchise sales and development, executive vice President and chief financial officer, vice president of new business and development, and vice president of brand building and system support, and director of training. It also has a franchise sales representative and broker representative. The company also has managers who have been delegated with duties, responsibilities, and powers of making decisions concerning the operations of the organization. The structure is appropriately set up to with the aim of ensuring the expectations and needs of the clients are fulfilled. However, despite the fact that the powers of the operations of the company being solely on the managers, the CEO and the vice president act or rather serve as the overall management of the organization. The different structural levels are well coordinated by integrating the relationships of tasks. It enables the management to coordinate the activities of the organization inclusive of controlling of the workers with the aim of achieving the goals and objectives of the firm. The layout of responsibilities within the companies structure help in ensuring that the services and the products offered to the customers are of high quality and satisfactory. In addition, it has provided this firm with the leverage of diversifying its products beyond coffee related products which has significantly increased the level of revenue and income of the organization. Besides, the employees’ contribution towards the community due to the flexibility of the structure has been positive (Fentura Financial 6). The competitive arena of Coffee Beanery is aligned in such a manner that it commensurate with the structure organization. It enables the organization to comprehend the customers’ needs, diversification of the products offered, and maintenance of standards that are high. Technology It is not clear if the company uses “Level Schematic of Major Information Systems” to determine the flow or dissemination of information. Nevertheless, the company holds to technology use during production. It uses the system of POS. The POS helps guiding the designing the stores in relation to the sales realized on daily, weekly and even monthly basis. The program is a tool to the store management in terms of franchising (Franchising .com Para 3). Market consideration The development of forecast The development of forecast is crucial for the company to identify the needs of the consumers and the kind of products that are likely to satisfy these needs. In addition, it provides the company with the leverage of tackling the multiple demand sources especially in reference to franchising. The historical sales data that the company obtains from the archives are used for the prediction of the prediction of demand for the products and services of Coffee Beanery. Different tools are also employed by this business venture to forecast the future market trends and ideal locations for the company stores as well as franchising. These forecasts are ideal in the determining the availability of locations for the purpose of expansion, the types of products to include in the process of diversification of customers needs, and the prediction of the trend of future demand. The success of the prediction is evident in the level of income that the company has been generating. The successful sale of coffee shop franchise can be attributed to the ability of the company to accurately predict the dynamics of the market especially within the US. Purchasing and Inventory Management The diagram below gives estimation for an inventory management in case of a start up franchise since Coffee Beanery Company also deals with sales of coffee franchise shops. However, the startup franchisees also depend on business experience as a requirement and business and training (Lerpold 162). Initial Investment Retail Store without Food Name of Fee Low High Initial Franchise Fee $27,500 $27,500 Opening Inventory and Supplies $8,000 $30,000 Equipment Fixtures, Signage & Leasehold Improvements $200,000 $325,000 Grand Opening, Advertising $3,500 $3,500 First Months Rent & Security Deposit $3,000 $15,000 Training Expenses $3,000 $5,000 Brand Building Fee 2% of Gross Sales Royalty Fee 6% of Gross Sales Miscellaneous Opening Costs $3,000 $5,000 Additional Funds-Working Capital $20,000 $60,000 Total Estimated Initial Investment $272,000 $475,000   Retail Store with Food Name of Fee Low High Initial Franchise Fee $27,500 $27,500 Opening Inventory and Supplies $12,000 $30,000 Equipment Fixtures, Signage & Leasehold Improvements $250,000 $375,000 Grand Opening, Advertising $3,500 $3,500 First Months Rent & Security Deposit $3,000 $15,000 Training Expenses $3,000 $5,000 Brand Building Fee 2% of Gross Sales Royalty Fee 6% of Gross Sales Miscellaneous Opening Costs $3,000 $5,000 Additional Funds-Working Capital $20,000 $80,000 Total Estimated Initial Investment $326,000 $545,000   Kiosk Name of Fee Low High Initial Franchise Fee $13,750 $13,750 Opening Inventory and Supplies $6,000 $12,000 Equipment Fixtures, Signage & Leasehold Improvements $45,000 $125,000 Grand Opening, Advertising $3,500 $3,500 First Months Rent & Security Deposit $3,000 $10,000 Training Expenses $3,000 $5,000 Brand Building Fee 2% of Gross Sales Royalty Fee 6% of Gross Sales Miscellaneous Opening Costs $3,000 $5,000 Additional Funds-Working Capital $20,000 $40,000 Total Estimated Initial Investment $101,250 $218,250   Co-Branded Store Name of Fee Low High Initial Franchise Fee $5,000 $5,000 Opening Inventory and Supplies $5,000 $25,000 Equipment Fixtures, Signage & Leasehold Improvements $20,000 $160,000 Grand Opening, Advertising $2,500 $2,500 First Months Rent & Security Deposit $3,000 $10,000 Training Expenses $2,000 $3,000 Brand Building Fee 2% of Gross Sales Royalty Fee 6% of Gross Sales Miscellaneous Opening Costs $3,000 $3,000 Additional Funds-Working Capital $25,000 $50,000 Total Estimated Initial Investment $65,550 $267,250   Conversion of Coffee Store Name of Fee Low High Initial Franchise Fee $5,000 $5,000 Opening Inventory and Supplies $5,000 $25,000 Equipment Fixtures, Signage & Leasehold Improvements $20,000 $160,000 Grand Opening, Advertising $3,500 $3,500 First Months Rent & Security Deposit $3,000 $10,000 Training Expenses $2,000 $3,000 Brand Building Fee 2% of Gross Sales Royalty Fee 6% of Gross Sales Miscellaneous Opening Costs $3,000 $3,000 Additional Funds-Working Capital $20,000 $40,000 Total Estimated Initial Investment $61,500 $250,375   Other Fees Type of Fee Amount Cooperative Advertising Amount to be established by local cooperative but the franchisor may require up to 2% to be paid to local cooperative without vote. Warehouse Purchases The franchisee is required to purchase coffee products from the franchisor. The amount will vary depending upon the store sales and other circumstances. Training Reasonable charge based upon a per diem charge of $350 per day plus expenses. National Convention Fee $200 Transfer To New Or Existing Franchisee Reasonable expenses not to exceed 25% of the then current initial franchise fee. Renewal $1,500, subject to the right of the franchisor to increase the fee on a uniform basis in the future. Marketing Fee (Sale Of Franchise) 2.5% of gross sales price, less inventory. Minimum Inventory Varies under circumstances depending on the location of the store, as well as its sales. Maintenance Of Store And Insurance Reasonable charge. Reinstatement Fee $2,500 Costs And Attorney’s Fees Will vary under circumstances. Audit Cost of audit, understatement plus interest. Interest Lesser of 1.5% per month or highest contract rate of interest allowed by law. Indemnification Will vary under circumstances. Advertising & Promotional Materials Reasonable costs. Leaseholds And Rental As provided by the sublease. Source: (Franchise Direct): http://www.franchisedirect.com/coffeefranchises/coffee-beanery-franchise-06709/ufoc/ Importance of inventory Management to the Enterprise It is very crucial for organizations or companies to keep inventories. The Coffee Beanery inventory above is crucial for this particular company in the projection of the financial details of franchising of its coffee shops. Besides, the above inventory for the franchising business, the company also keeps its inventory concerning the production of coffee products inclusive of other products that it has diversified with the aim of providing the consumers with entirely all their needs. The advertisement fee tends to vary from one media channel to the other. The management is also cognizant to the fact that during the periods of high demand for the company’s products, the inventory should be capable of meeting the expectation of the consumers. Moreover, there level of the inventory should be a certain point to remedy situations such as the demand exceeding the power of supply which consequently may result into shortage. How the Inventory turns Trended over the Last 5 Years Inventories 2011 2012 2013 2014 2015 Finished goods 64.4m 54.5m 200.3m 965.4m 975.2m Raw materials 64.4m 54.5 200.3m 965.4m 975.2m Work in progress 0 0 0 0 0 The company has maintained the above inventory for the past five years. The trend illustrated above has been significantly increasing showing an increase in demand for coffee products besides the increasing sales (Franchise Direct). Top Management Understand that Inventory is a Symptom, Not an Illness The management comprehends the importance of the management inventory. It is taken as the symptom not an illness. When the demands for the product are high, the inventory is crucial in the satisfaction of the demand. Excess demand exceeding the suppliers’ power may result into not only the shortage of the material but also the products for the maintenance of a certain level of the inventory. Sales and Operation Planning The sales and operation planning of Coffee Beanery Company is vital in ensuring that the products and services rendered to the customers are not only of high quality but of high standards as well .It has operation procedures that are standardized, as well as inculcated by both the staff and the management for the purpose of ascertaining that there is quality of services and goods. These procedures encompass the operations of the business, the processing of the products, and concentric customer service (BizQuest Para 2). The management inclusive of the employees is mandated with the task of ensuring that the coffee and coffee related, as well as other food products that the company offers such as soups, salads, and sandwiches are appropriately processed and meet the hygienic conditions or requirements. Besides, they are also obligated with the responsibility of ascertaining that the expectations of the customers are adequately met with the aim of elevating the image of the company and branding it as well. The best quality of brewed coffee and franchising services of the company evidently indicate that the company is complying with is sale and planning procedures adequately. The company has infiltrated several segments of market across the world as it operates in countries like China and South Korea (BizQuest Para 3). Scheduling Scheduling activities of the company has been a vital element since its inception. It is useful in the sub-optimization of the time and cost spent in the process of production. In addition, the scheduling of the operations of this company has been significant in the optimizing the efficiency of the process of production. The approach that the company employs in scheduling tends to vary depending on the circumstances especially while franchising the coffee shops though in most cases it incorporates the forward scheduling approach which involves planning the delivery of the production materials at opportune time. It enables the company its available resources and planning of the process of production. The modalities of the production schedule that Coffee Beanery often employs are aimed towards improving the provision of customer experience and services to the clients, improving the quality of the products offered, and increasing the company’s profit margin while reducing the production cost inclusive of the process of selling the franchised coffee shops. The assessment of the quality improvement is carried out through the analysis of the returns and customer rejections of the products and services. The required materials for planning The planning for the material requirement is useful in tackling of the abrupt changes that may occur during the production process without interference with the balance of the demands of the customers and the production that had already been predicted. It entails the synchronization or rather the integration of the system of the management inventory and process of production for the purpose of accurate production of the according to the stipulated plan (Lerpold 162). Management of the enterprise The company is an independent business that is family owned despite the fact that it has continued to grow for 29 years both in the US as its domestic market and internationally too. The system of managing its stores involve the use of designed innovative system that guides these store in terms of daily, weekly or even monthly sales. The system also incorporates the cost incurred on goods, schedule and expenses related to payrolls. In the modernization of the applications of the business and modalities of supporting decisions related to long term planning and investments encompasses the use of business process of management as a strategy. The assessment of the company help in the infiltrating new markets, dealing with cases of customer dissatisfaction, and the training of the workers on the modern business practices (Franchising .com Para 5). Enterprise Education and Training The start out of the Coffee Beanery Company franchisees involve the use of highly trained professional who conduct training. The training consist of classroom training for a time span of 21 days, making visits in terms of training, and training during the opening of the on-site. The national convention of the company also entails continuing education. Education The education helps in providing awareness and comprehension of not only the objectives of the company but also the desired behavior of the staff or workers. The training especially onsite and classroom training have proved to be success in instilling skills to the employees. The skills instilled in the employees are vital in the addition of value of the services rendered to the clients with the aim of gaining competitive leverage over rivals. The training programs provide the platform of conveying information related to the mission, vision and values of Coffee Beanery Firm, as well as its policies. It gives the theoretical base of the company’s operations. Moreover, it is a vital element of management system knowledge. The education instills or rather inculcates both the understanding and the awareness of the desired behavior and objectives. Orientation Orientation familiarizes the employee with the culture and policies of the organization. Besides, it also aids the workers in the comprehension of the beliefs, values and adoption of appropriate acceptable behavior. The company also relies hugely on the experience of its employees for continuous strengthening of the firm’s management. It also provides the employees with the cutting edge when dealing with complex situations (Franchising .com Para 4). Training Training is used for the development of employees’ talent and skills for effective and efficiency in job performance. Experience It allows the continuous improvement of the management activities, as well as helps in strengthening the management’s other elements of knowledge. It provides the employees with the edge in dealing with work and situations efficiently. The more experienced an employee is, the better the services offered to the customers. Conclusion The production of beverage drinks has been very competitive and companies are incorporating different approaches. Coffee Beanery Company since its inception as a family business in 1976 has been able to overcome several hurdles in the competitive business climate. The company was stated solely for the production of specialty coffee though its growth has significantly been positive as it has diversified its operations into sales of franchise coffee shops and provision of other products such as sandwiches salads, and soups among others. The structure of the company consist of the CEO at the helm of the companies affairs who is aided by the vice presidents of various departmental operations and managers. The company also highly values its employees and customers. In fact, its operations are customers centered or concentric. It conducts education and training for its employees with the aim of improving the quality of services and products offered to the clients. In addition, it has employed different strategies and approaches in spreading its market funnels across the domestic market (US) and international market, as well. Work Cited: Coffee Beanery. Our Company. 2015. Web on 27th May 2015< http://www.theperfectcoffeecompany.com/our-company/our-team/> Franchising .com. Coffee Beanery Ltd., The Franchise Opportunity. 2015. Web on 27th May 2015 BizQuest. The Coffee Beanery Franchise for Sale. 2015.Web on 28th May 2015 Bloomberg Business. Company Overview of the Coffee Beanery Limited. 2015. Web on 29th May 2015 < http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4527781> Lerpold, Lin. Organizational Identity in Practice. 2007.New York Routledge. Coffee Beanery. The Perfect Coffee Company. 2014. Web on 29th May 2015 < http://www.theperfectcoffeecompany.com/our-company/mission-vision-values/ Fentura Financial. Fentura Financial Inc. 2014. Web on 29th May 2015 < http://www.fentura.com/pdf/proxy.pdf Franchise Direct.The Coffee Beanery Franchise Cost & Fees.2013. Web on 16th June 2015 Read More