Erp Helps Productivity at Northern Digital

1760 Words Apr 26th, 2010 8 Pages
Case Study 7.1.: ERP Helps Productivity at Northern Digital Inc.

Question: 1. For a small company like NDI, why is an ERP better than SCM applications?
Answer:
ERP supports internal supply chain within an enterprise, while SCM applications support just certain part of internal supply chain. Therefore, for small companies like NDI, it’s more efficient and effective to implement one system, namely ERP, instead of more SCM systems.

Further, ERP software support several functionalities for supply chain management, and small companies like NDI could choose which functionalities they would like to implement, i.e. to support by IT advantages.

Also, unlike SCM applications, ERP system of new generation provides new opportunities for
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Therefore, implementing ERP NDI has increased the overall efficiency of the company. In this way, the production costs fall down. Additionally, it increases order quantities, which decreases production costs per unit. These facts ensure costs advantages compared with other companies in the same industry.

Second factor is the bargaining power of suppliers. The fact that the ERP system allows NDI to forecast better its demand contributes to a precise forecast for material. This ensures on-time deliveries. On the other hand, the increase of ordered quantities affects increase in the ordered quantity of materials. This fact ensures lower prices for material.

The third point is the bargaining power of customers. The software improves the relationship with the customers. The profits of the buyers are proving after sales information, on-time deliveries. Additionally, the satisfied customers increase their orders. As a result, the revenue of NDI increases.

Forth is the threat of substitute products or services. The use of ERP provides NDI with information about sales ensures communication with customers and gives information about their needs. Good relations with customers decrease the probability that customers will prefer substitutes.

Fifth, the rivalry among existing forms in the industry endangers the company’s profitability. Producing efficiently ensures the firm a head position in front of its competitors. Delivering on time their orders gives an advantage to

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