Johnson Industries

Erp and case analysis On Johnson and johnson Presented by Hepsy verghese Tracy Himanshu sati

ERP SYSTEM Ø Stands for Enterprise Recourse Planning. Ø Way to integrate data and processes of an organization into a single system. Ø ERP major components are Hardware and Software. Ø Uses a unified database to store data for various functions of organization. Ø Functions such as HR, Supply Chain Management(SCM) and Warehouse Management fun are integrated under ERP.

Integration is a key for ERP Ø ERP’s main goal is to integrate data and processes from all the areas of the organization. Ø Provide easy access to data and workflow in the organization. Ø It creates a single database that employs multiple software providing different areas of organization with various functions.

ERP System Concept

Advantages of an ERP system Ø A totally integrated system. Ø The ability to streamline various processes and workflows. Ø The ability to easily share data among various departments in an organization. Ø Improved efficiency and productivity levels. Ø Better tracking and forecasting. Ø Lower cost. Ø Improved customer service.

Disadvantages of ERP system Ø Time consuming. Ø Expensive. Ø Conformity to the modules. Ø Vendor dependence. Ø Features and complexity. Ø Scalability and global outreach.

Some of the ERP modules are Ø Accounting Management. Ø Financial management. Ø Manufacturing management. Ø Production Management. Ø Transportation Management. Ø Sales and Distribution Management. Ø Human Resource Management. Ø Supply Chain Management. Ø E-Business.

COMPANY OVERVIEW

•Originated in. 1920’s. •Corporate headquarters-Atlanta •1988-Genuine parts /NAPA acquired Johnson industries. •Largest OEM auto parts distributer in the country. •Annual sales-$150m •It now serves automotive repair facilities throughout the United States. •Largest distributers of acdalco, motorcraft

CHALLENGES FACED Johnson industries procured businesses in similar markets. Contract with JD Edwards software implementation. C.D groups audit discovered following problems in the implementation. ØOnly the general ledger module was implemented with the entire

ØFunctions and duties across the organization were not consolidated. ØNo clear strategy or solution were defined with regard to centralization of business processes. ØCritical business practices were distributed across several DC’s.

ØJob duties were duplicated creating inefficiencies. ØCreated high degree of complexity. ØGeneration of multiple statements creating multiple identities.

DRAWBACKS OF CURRENT LEGACY SYSTEM

No longer supported its needs.duplicate and inconsistent business practices and rules No support for multi-warehousing functionality. Limited ability to smooth slower moving inventory between distribution centers. Absence of automation created

Solution New business model implemented by CD Group which represented Johnson Industries as a single entity. The new model used JD Edwards OneWorld in a centralized footprint, using an NT operating system and a SQL database to support multiple warehouses as a standard for all distribution centers.

Changes brought in… Incorporated centralized, critical business processes (i.e. journal entries, purchasing, paying suppliers, etc.) in all DCs to ensure consistent “Best Practices” across the organization.

Benefits -

enabled customers to receive one statement for all purchases Ability to forward all payments to a single location. Standardizing customer and item numbers

Step 1 – RF technology was leveraged to automate the tracking of inventory movement within a DC

Benefits – Inventory balances updated immediately Eliminating of paper trail and human intervention required to manually update inventory.

Step 2 Implemented a warehouse location system to improve inventory tracking. Benefits – - provided visibility to inventory on the receiving dock, in a staging area, in product overflow, or on the shelf.

Step 3 Applied a consistent cycle count program that validated and maintained inventory accuracy. Benefits – - Rebuilt confidence among management regarding inventory accuracy

Business Benefits Streamline future acquisitions Increase inventory turns and improve cash flow Ensure the consistent and timely application of price changes Present a single company image to its customer base Defer the need for warehouse expansions Close the month earlier

• Increased inventory visibility across DCs and among customer service personnel. • Johnson Industries received a one-time reduction in inventory estimated at $7.6M in annual inventory carrying costs. • Consolidation of the different IT systems caused reduced hardware and software maintenance expenses. • Incorporation of Best Practices standards model reduced employee training costs.

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