Download GTU (Gujarat Technological University) MBA 2019 Winter 5th Sem 3549282 Enterprise Resource Planning Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code: Enterprise Resource Planning Date:29/11/2019
Subject Name: 3549282
Time: 02:30 pm to 05:30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Definitions
(a) Make to order
(b) Business integration
(c) Business modelling
(d) BPR
(e) What is PLM?
(f) Reengineering
(g) OLTP
14
Q.2 (a) Explain with examples the conceptual model of ERP and its
evolution.
07
(b) Compare and contrast the process view of organization. 07
OR
(b)
Explain direct and indirect benefits of ERP?
07
Q.3 (a)
Explain an On-line Analytical Processing (OLAP) in detail.
07
(b)
What is Data Mining? Discuss the advantages of Data Mining.
07
OR
Q.3 (a) Why is product lifecycle management cross functional? What are
the business drivers for the product lifecycle management
application?
07
(b) Describe about the ERP functional modules i) Human capital
Management ii) Financial management iii) Supply chain planning
07
Q.4 (a)
What is meant by ERP life cycle? What are the phases in an ERP life
cycle?
07
(b)
How BPR is connected with ERP. Explain.
07
OR
Q.4 (a)
What are the deliverables and milestones of final preparation and GO
live stage of an ERP project?
07
(b) What are the reasons for which an ERP implementation can turn
out to be a great success?
07
FirstRanker.com - FirstRanker's Choice
Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code: Enterprise Resource Planning Date:29/11/2019
Subject Name: 3549282
Time: 02:30 pm to 05:30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Definitions
(a) Make to order
(b) Business integration
(c) Business modelling
(d) BPR
(e) What is PLM?
(f) Reengineering
(g) OLTP
14
Q.2 (a) Explain with examples the conceptual model of ERP and its
evolution.
07
(b) Compare and contrast the process view of organization. 07
OR
(b)
Explain direct and indirect benefits of ERP?
07
Q.3 (a)
Explain an On-line Analytical Processing (OLAP) in detail.
07
(b)
What is Data Mining? Discuss the advantages of Data Mining.
07
OR
Q.3 (a) Why is product lifecycle management cross functional? What are
the business drivers for the product lifecycle management
application?
07
(b) Describe about the ERP functional modules i) Human capital
Management ii) Financial management iii) Supply chain planning
07
Q.4 (a)
What is meant by ERP life cycle? What are the phases in an ERP life
cycle?
07
(b)
How BPR is connected with ERP. Explain.
07
OR
Q.4 (a)
What are the deliverables and milestones of final preparation and GO
live stage of an ERP project?
07
(b) What are the reasons for which an ERP implementation can turn
out to be a great success?
07
Page 2 of 5
Q-5 (a) Case Study
Nestle SA is the parent company of the candy-making giant and is
headquartered in Switzerland (Konicki, pg 185). In 2000 Nestle SA
decided that it wanted to leverage its size and begin acting like the giant it
is. To do so, it signed a $200 million contract with SAP to roll out an ERP
system to its 230,000 employees in 80 countries around the world (Olson,
pg. 53). In addition to this sum, Nestle SA also committed to an additional
$80 million to be spent on consulting, maintenance, and upgrades (Konicki,
pg. 185). Executives at Nestle SA realized that the company needed to
standardize its business processes if it wanted to be competitive. The
rollout was scheduled to take three years for Nestle SA?s largest sites with
the others to follow. Included in the implementation were the mySAP.com
financials, accounts payable, accounts receivable, planning, production
management, procurement, direct procurement, supply-chain, demand
planning, fulfillment, and business-intelligence modules (Konicki, pg.
185).
Prior to the Nestle SA ERP decision, Nestle UK had already implemented
an ERP system. The British subsidiary of Nestle SA implemented SAP R/3
over a period of five years in 18 UK manufacturing sites (Glick, 7 Days,
pg. 4). This implementation wrapped up in 1999 and was the one of
the UK?s largest ERP systems with over 6,000 users (Glick, Enterprise, pg.
24). As with the Nestle SA deployment, the goals of the Nestle UK
implementation were centred on leveraging the size of the organization as
well as tightening up the supply chain and re-engineering work practices
and processes (Glick, 7 Days, pg. 4).
The third Nestle ERP implementation story involves
Nestle USA. Nestle USA is the $8.1 billion U.S. subsidiary of Nestle
SA. In 1997, Nestle USA began its own ERP project known as Best
(Business Excellence through Systems Technology) (Worthen, pg.
1). Scheduled to run over the course of six years ending in the first quarter
of 2003, this project was budgeted at well over $200 million and would
implement five SAP modules: purchasing, financials, sales and
distribution, accounts payable, and accounts receivable (Worthen, pg. 1-
3). Similar to the other two Nestle divisions, the goal behind this ERP
implementation was unification. Additionally, the project would solve
Nestle USA?s Y2K woes (Worthen, pg. 3). In the case of Nestle USA, the
ERP was part of the vision Nestle USA Chairman and CEO Joe Weller
referred to as ?One Nestle? that would be responsible for ?transforming the
separate brands into one highly integrated company? (Worthen, pg.
2). Prior to the implementation, Nestle USA had nine different general
ledgers and 28 points of customer entry (Worthen, pg. 2). The goal of the
ERP project was to bring these numbers down to one. One of the most
interesting views on the Nestle USA problem is the story of vanilla. Prior
to the ERP implementation, Nestle USA did not act as one
company. Instead, each location acted on its own behalf and was free to
make its own business decisions. ?In 1997, a team examining the various
systems across the company found, among many other troubling
redundancies, that Nestle USA?s brands were paying 29 different prices for
vanilla ? to the same vendor? (Worthen, pg. 2). This situation arose from
the fact that each factory negotiated their own deals with the vendor and the
vendor adjusted the price per factory based on what they thought the factory
would pay. The situation was only worsened by the fact that each factory
referred to vanilla in a different way. While one factory might have referred
to vanilla as 1234, another factory referred to it as 7890. This made it nearly
impossible for individuals at the corporate headquarters to do comparisons
across plants to see manufacturing costs (Worthen, pg. 2).
07
FirstRanker.com - FirstRanker's Choice
Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code: Enterprise Resource Planning Date:29/11/2019
Subject Name: 3549282
Time: 02:30 pm to 05:30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Definitions
(a) Make to order
(b) Business integration
(c) Business modelling
(d) BPR
(e) What is PLM?
(f) Reengineering
(g) OLTP
14
Q.2 (a) Explain with examples the conceptual model of ERP and its
evolution.
07
(b) Compare and contrast the process view of organization. 07
OR
(b)
Explain direct and indirect benefits of ERP?
07
Q.3 (a)
Explain an On-line Analytical Processing (OLAP) in detail.
07
(b)
What is Data Mining? Discuss the advantages of Data Mining.
07
OR
Q.3 (a) Why is product lifecycle management cross functional? What are
the business drivers for the product lifecycle management
application?
07
(b) Describe about the ERP functional modules i) Human capital
Management ii) Financial management iii) Supply chain planning
07
Q.4 (a)
What is meant by ERP life cycle? What are the phases in an ERP life
cycle?
07
(b)
How BPR is connected with ERP. Explain.
07
OR
Q.4 (a)
What are the deliverables and milestones of final preparation and GO
live stage of an ERP project?
07
(b) What are the reasons for which an ERP implementation can turn
out to be a great success?
07
Page 2 of 5
Q-5 (a) Case Study
Nestle SA is the parent company of the candy-making giant and is
headquartered in Switzerland (Konicki, pg 185). In 2000 Nestle SA
decided that it wanted to leverage its size and begin acting like the giant it
is. To do so, it signed a $200 million contract with SAP to roll out an ERP
system to its 230,000 employees in 80 countries around the world (Olson,
pg. 53). In addition to this sum, Nestle SA also committed to an additional
$80 million to be spent on consulting, maintenance, and upgrades (Konicki,
pg. 185). Executives at Nestle SA realized that the company needed to
standardize its business processes if it wanted to be competitive. The
rollout was scheduled to take three years for Nestle SA?s largest sites with
the others to follow. Included in the implementation were the mySAP.com
financials, accounts payable, accounts receivable, planning, production
management, procurement, direct procurement, supply-chain, demand
planning, fulfillment, and business-intelligence modules (Konicki, pg.
185).
Prior to the Nestle SA ERP decision, Nestle UK had already implemented
an ERP system. The British subsidiary of Nestle SA implemented SAP R/3
over a period of five years in 18 UK manufacturing sites (Glick, 7 Days,
pg. 4). This implementation wrapped up in 1999 and was the one of
the UK?s largest ERP systems with over 6,000 users (Glick, Enterprise, pg.
24). As with the Nestle SA deployment, the goals of the Nestle UK
implementation were centred on leveraging the size of the organization as
well as tightening up the supply chain and re-engineering work practices
and processes (Glick, 7 Days, pg. 4).
The third Nestle ERP implementation story involves
Nestle USA. Nestle USA is the $8.1 billion U.S. subsidiary of Nestle
SA. In 1997, Nestle USA began its own ERP project known as Best
(Business Excellence through Systems Technology) (Worthen, pg.
1). Scheduled to run over the course of six years ending in the first quarter
of 2003, this project was budgeted at well over $200 million and would
implement five SAP modules: purchasing, financials, sales and
distribution, accounts payable, and accounts receivable (Worthen, pg. 1-
3). Similar to the other two Nestle divisions, the goal behind this ERP
implementation was unification. Additionally, the project would solve
Nestle USA?s Y2K woes (Worthen, pg. 3). In the case of Nestle USA, the
ERP was part of the vision Nestle USA Chairman and CEO Joe Weller
referred to as ?One Nestle? that would be responsible for ?transforming the
separate brands into one highly integrated company? (Worthen, pg.
2). Prior to the implementation, Nestle USA had nine different general
ledgers and 28 points of customer entry (Worthen, pg. 2). The goal of the
ERP project was to bring these numbers down to one. One of the most
interesting views on the Nestle USA problem is the story of vanilla. Prior
to the ERP implementation, Nestle USA did not act as one
company. Instead, each location acted on its own behalf and was free to
make its own business decisions. ?In 1997, a team examining the various
systems across the company found, among many other troubling
redundancies, that Nestle USA?s brands were paying 29 different prices for
vanilla ? to the same vendor? (Worthen, pg. 2). This situation arose from
the fact that each factory negotiated their own deals with the vendor and the
vendor adjusted the price per factory based on what they thought the factory
would pay. The situation was only worsened by the fact that each factory
referred to vanilla in a different way. While one factory might have referred
to vanilla as 1234, another factory referred to it as 7890. This made it nearly
impossible for individuals at the corporate headquarters to do comparisons
across plants to see manufacturing costs (Worthen, pg. 2).
07
Page 3 of 5
Regardless which Nestle case is examined, the goals behind all three ERP
implementations were similar for all the divisions. That is, in each instance,
there was a driving goal to consolidate the operations of the different
locations so that Nestle could truly leverage their size and buying
power. Additionally, there was a need to centralize and control data so that
the financial, reporting, and forecasting numbers were more consistent and
accurate. As each factory acted as an autonomous unit, Nestle was at a
severe competitive disadvantage and realized that it needed one system
used by all in order to be more efficient and survive in the global economy.
The term ?ERP implementation? has become synonymous with ?nightmare?
in recent years. High profile failures dot the headlines and companies are
often intimidated not only by the high price but also the negative effect
implementations can have on their business. Vendors such as SAP are
working diligently on shaking this reputation and have made great strides
in meeting their goals. ?In 1996, a user could expect to pay six to 10 times
the license cost in consulting charges. These days the external consulting
cost has dropped to typically one to two-and-a-half times the software costs,
depending on how much process re-engineering the user does? (Adshead,
pg. 26). Fortunately for companies considering an ERP implementation
there have been enough done in the past that there are opportunities to learn
from the successes and failures of others. One of the key factors of a
successful implementation is ?don?t try to make the product fit exactly the
way you would ideally like to work or on the other hand assume that people
will completely change their processes to meet the package. The first takes
many years and costs loads, the second meets big resistance? (Adshead, pg.
26). For most businesses there needs to be a middle-of-the-road approach
where individuals realize that the software will not solve every
organizational problem and not every process in the company can be re-
engineered to fit the software. Regardless, savvy project leaders with prior
ERP implementation experience will tell you that there are several pitfalls
to avoid during ERP projects. The first is not to select an ERP package
based on a demo. Choose your package wisely, ask questions, get
references, and do your homework. An ERP package is a costly investment
and you need to be sure you are choosing the package that best fits the needs
of your organization. The second is get management commitment. Not
securing top management buy-in results in an automatic project
failure. Management commitment is often high at the beginning of a project
but begins to wane as the project wears on. It is vital to keep management
interested, involved, and positioned squarely behind the project. The third
is to avoid heavy customization. It is both easy and tempting to customize
ERP packages to fit your exact needs. Unfortunately excessive
customization will haunt you by lengthening the project timeline and by
driving up maintenance costs in the future. The final pitfall to avoid in ERP
implementations is not to underestimate the importance of training. It is
not uncommon that users receive several days of training on the new system
and then do not see the system again for months. Users need in-depth and
on-going training and should even be involved with system testing if at all
possible (Adshead, pg. 27).
Unfortunately for Nestle USA, they did not heed the failures of
others. Throughout the implementation, Nestle USA made several large
mistakes that almost doomed the project. When the project began a team
of 50 top executives and 10 senior IT professionals was assembled to
develop a set of best practices for all Nestle USA divisions. The goal was
to develop these best practices for all functions of the organization. Each
function from manufacturing to sales would eventually be forced to retire
their old approaches and adopt the new best practice that had been
FirstRanker.com - FirstRanker's Choice
Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code: Enterprise Resource Planning Date:29/11/2019
Subject Name: 3549282
Time: 02:30 pm to 05:30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Definitions
(a) Make to order
(b) Business integration
(c) Business modelling
(d) BPR
(e) What is PLM?
(f) Reengineering
(g) OLTP
14
Q.2 (a) Explain with examples the conceptual model of ERP and its
evolution.
07
(b) Compare and contrast the process view of organization. 07
OR
(b)
Explain direct and indirect benefits of ERP?
07
Q.3 (a)
Explain an On-line Analytical Processing (OLAP) in detail.
07
(b)
What is Data Mining? Discuss the advantages of Data Mining.
07
OR
Q.3 (a) Why is product lifecycle management cross functional? What are
the business drivers for the product lifecycle management
application?
07
(b) Describe about the ERP functional modules i) Human capital
Management ii) Financial management iii) Supply chain planning
07
Q.4 (a)
What is meant by ERP life cycle? What are the phases in an ERP life
cycle?
07
(b)
How BPR is connected with ERP. Explain.
07
OR
Q.4 (a)
What are the deliverables and milestones of final preparation and GO
live stage of an ERP project?
07
(b) What are the reasons for which an ERP implementation can turn
out to be a great success?
07
Page 2 of 5
Q-5 (a) Case Study
Nestle SA is the parent company of the candy-making giant and is
headquartered in Switzerland (Konicki, pg 185). In 2000 Nestle SA
decided that it wanted to leverage its size and begin acting like the giant it
is. To do so, it signed a $200 million contract with SAP to roll out an ERP
system to its 230,000 employees in 80 countries around the world (Olson,
pg. 53). In addition to this sum, Nestle SA also committed to an additional
$80 million to be spent on consulting, maintenance, and upgrades (Konicki,
pg. 185). Executives at Nestle SA realized that the company needed to
standardize its business processes if it wanted to be competitive. The
rollout was scheduled to take three years for Nestle SA?s largest sites with
the others to follow. Included in the implementation were the mySAP.com
financials, accounts payable, accounts receivable, planning, production
management, procurement, direct procurement, supply-chain, demand
planning, fulfillment, and business-intelligence modules (Konicki, pg.
185).
Prior to the Nestle SA ERP decision, Nestle UK had already implemented
an ERP system. The British subsidiary of Nestle SA implemented SAP R/3
over a period of five years in 18 UK manufacturing sites (Glick, 7 Days,
pg. 4). This implementation wrapped up in 1999 and was the one of
the UK?s largest ERP systems with over 6,000 users (Glick, Enterprise, pg.
24). As with the Nestle SA deployment, the goals of the Nestle UK
implementation were centred on leveraging the size of the organization as
well as tightening up the supply chain and re-engineering work practices
and processes (Glick, 7 Days, pg. 4).
The third Nestle ERP implementation story involves
Nestle USA. Nestle USA is the $8.1 billion U.S. subsidiary of Nestle
SA. In 1997, Nestle USA began its own ERP project known as Best
(Business Excellence through Systems Technology) (Worthen, pg.
1). Scheduled to run over the course of six years ending in the first quarter
of 2003, this project was budgeted at well over $200 million and would
implement five SAP modules: purchasing, financials, sales and
distribution, accounts payable, and accounts receivable (Worthen, pg. 1-
3). Similar to the other two Nestle divisions, the goal behind this ERP
implementation was unification. Additionally, the project would solve
Nestle USA?s Y2K woes (Worthen, pg. 3). In the case of Nestle USA, the
ERP was part of the vision Nestle USA Chairman and CEO Joe Weller
referred to as ?One Nestle? that would be responsible for ?transforming the
separate brands into one highly integrated company? (Worthen, pg.
2). Prior to the implementation, Nestle USA had nine different general
ledgers and 28 points of customer entry (Worthen, pg. 2). The goal of the
ERP project was to bring these numbers down to one. One of the most
interesting views on the Nestle USA problem is the story of vanilla. Prior
to the ERP implementation, Nestle USA did not act as one
company. Instead, each location acted on its own behalf and was free to
make its own business decisions. ?In 1997, a team examining the various
systems across the company found, among many other troubling
redundancies, that Nestle USA?s brands were paying 29 different prices for
vanilla ? to the same vendor? (Worthen, pg. 2). This situation arose from
the fact that each factory negotiated their own deals with the vendor and the
vendor adjusted the price per factory based on what they thought the factory
would pay. The situation was only worsened by the fact that each factory
referred to vanilla in a different way. While one factory might have referred
to vanilla as 1234, another factory referred to it as 7890. This made it nearly
impossible for individuals at the corporate headquarters to do comparisons
across plants to see manufacturing costs (Worthen, pg. 2).
07
Page 3 of 5
Regardless which Nestle case is examined, the goals behind all three ERP
implementations were similar for all the divisions. That is, in each instance,
there was a driving goal to consolidate the operations of the different
locations so that Nestle could truly leverage their size and buying
power. Additionally, there was a need to centralize and control data so that
the financial, reporting, and forecasting numbers were more consistent and
accurate. As each factory acted as an autonomous unit, Nestle was at a
severe competitive disadvantage and realized that it needed one system
used by all in order to be more efficient and survive in the global economy.
The term ?ERP implementation? has become synonymous with ?nightmare?
in recent years. High profile failures dot the headlines and companies are
often intimidated not only by the high price but also the negative effect
implementations can have on their business. Vendors such as SAP are
working diligently on shaking this reputation and have made great strides
in meeting their goals. ?In 1996, a user could expect to pay six to 10 times
the license cost in consulting charges. These days the external consulting
cost has dropped to typically one to two-and-a-half times the software costs,
depending on how much process re-engineering the user does? (Adshead,
pg. 26). Fortunately for companies considering an ERP implementation
there have been enough done in the past that there are opportunities to learn
from the successes and failures of others. One of the key factors of a
successful implementation is ?don?t try to make the product fit exactly the
way you would ideally like to work or on the other hand assume that people
will completely change their processes to meet the package. The first takes
many years and costs loads, the second meets big resistance? (Adshead, pg.
26). For most businesses there needs to be a middle-of-the-road approach
where individuals realize that the software will not solve every
organizational problem and not every process in the company can be re-
engineered to fit the software. Regardless, savvy project leaders with prior
ERP implementation experience will tell you that there are several pitfalls
to avoid during ERP projects. The first is not to select an ERP package
based on a demo. Choose your package wisely, ask questions, get
references, and do your homework. An ERP package is a costly investment
and you need to be sure you are choosing the package that best fits the needs
of your organization. The second is get management commitment. Not
securing top management buy-in results in an automatic project
failure. Management commitment is often high at the beginning of a project
but begins to wane as the project wears on. It is vital to keep management
interested, involved, and positioned squarely behind the project. The third
is to avoid heavy customization. It is both easy and tempting to customize
ERP packages to fit your exact needs. Unfortunately excessive
customization will haunt you by lengthening the project timeline and by
driving up maintenance costs in the future. The final pitfall to avoid in ERP
implementations is not to underestimate the importance of training. It is
not uncommon that users receive several days of training on the new system
and then do not see the system again for months. Users need in-depth and
on-going training and should even be involved with system testing if at all
possible (Adshead, pg. 27).
Unfortunately for Nestle USA, they did not heed the failures of
others. Throughout the implementation, Nestle USA made several large
mistakes that almost doomed the project. When the project began a team
of 50 top executives and 10 senior IT professionals was assembled to
develop a set of best practices for all Nestle USA divisions. The goal was
to develop these best practices for all functions of the organization. Each
function from manufacturing to sales would eventually be forced to retire
their old approaches and adopt the new best practice that had been
Page 4 of 5
developed. Concurrently, a technical team was charged with the task of
implementing a common data structure across the company (Worthen, pg.
2). By the time the implementation began in 1999 Nestle already had
problems with its employees? acceptance of the system. Most of the
resistance met by the project team was traced back to the fact that ?none of
the groups that were going to be directly affected by the new processes and
systems were represented on the key stakeholders team? (Worthen, pg.
3). This was only the start of Nestle USA?s problems. By early 2000, the
implementation had turned into a disaster. Employees did not understand
how to use the new system and did not understand the new work processes
they were being forced to adopt. Divisional executives were just as
confused as their employees as they had been left out of the planning and
development of the new system and were less than willing to assist in
straightening out the mess that had developed (Worthen, pg. 3). The result
of this was that morale plummeted and turnover skyrocketed. In fact,
?turnover among the employees who forecast demand for Nestle products
reached 77 percent? (Worthen, pg. 3).
Nestle USA?s implementation problems did not stop with employee
issues. Technical difficulties began to emerge as well during the rollout. In
the rush to beat the Y2K deadline the project team had overlooked the
integration points between the modules. This meant that the different
modules could not talk to each other. So if a salesperson gave a discount
to a customer and entered it in the system, the accounts receivable portion
of the system did not know of the discount. The result was that the customer
would pay their bill but invoice appeared as though it were only partially
paid (Worthen, pg. 3).
By June 2000, Nestle USA was forced to halt the rollout and the project
manager was removed from the project and reassigned
to Switzerland (Worthen, pg. 3). Nestle USA gathered 19 key stakeholders
and executives went on a three-day offsite retreat to discuss the future of
the project. Out of this meeting came the revelation that they would need
to redefine the business requirements of the project and then shape the
project timeline around the requirements rather than to shape the timeline
around a predetermined end date (Worthen, pg. 3-4). This process took
until April 2001 and resulted in a detailed blueprint for the project team to
follow. A director of process change was hired to act as a liaison between
the project team and the different functional divisions (Worthen, pg.
4). With all of these items finally resolved, the project was able to
continue. The last rollouts were scheduled to be completed in the first
quarter of 2003 (Worthen, pg. 1).
Although there were bumps in the road for Nestle USA?s ERP
implementation, it certainly seems to be paying for itself. As of 2002,
Nestle USA claimed they had already realized a savings of over $325
million (Worthen, pg. 1). Most of these savings came in the area of supply
chain improvements, specifically demand forecasting. ?The old process
involved a sales guy giving a number to the demand planner, who says,
?Those guys don?t know what the hell they are talking about; I?m going to
give them this number?. The demand planner turns [that number] over to
factory, and the factory says the demand planner doesn?t know what the hell
he?s talking about. Then the factory changes the number again. With SAP
in place, common databases and business processes lead to more
trustworthy demand forecasts for the various Nestle products. Furthermore,
because all of Nestle USA is using the same data, Nestle can forecast down
to the distribution center level? (Worthen, pg. 4).
FirstRanker.com - FirstRanker's Choice
Page 1 of 5
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER III ? EXAMINATION ? WINTER 2019
Subject Code: Enterprise Resource Planning Date:29/11/2019
Subject Name: 3549282
Time: 02:30 pm to 05:30 pm Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Definitions
(a) Make to order
(b) Business integration
(c) Business modelling
(d) BPR
(e) What is PLM?
(f) Reengineering
(g) OLTP
14
Q.2 (a) Explain with examples the conceptual model of ERP and its
evolution.
07
(b) Compare and contrast the process view of organization. 07
OR
(b)
Explain direct and indirect benefits of ERP?
07
Q.3 (a)
Explain an On-line Analytical Processing (OLAP) in detail.
07
(b)
What is Data Mining? Discuss the advantages of Data Mining.
07
OR
Q.3 (a) Why is product lifecycle management cross functional? What are
the business drivers for the product lifecycle management
application?
07
(b) Describe about the ERP functional modules i) Human capital
Management ii) Financial management iii) Supply chain planning
07
Q.4 (a)
What is meant by ERP life cycle? What are the phases in an ERP life
cycle?
07
(b)
How BPR is connected with ERP. Explain.
07
OR
Q.4 (a)
What are the deliverables and milestones of final preparation and GO
live stage of an ERP project?
07
(b) What are the reasons for which an ERP implementation can turn
out to be a great success?
07
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Q-5 (a) Case Study
Nestle SA is the parent company of the candy-making giant and is
headquartered in Switzerland (Konicki, pg 185). In 2000 Nestle SA
decided that it wanted to leverage its size and begin acting like the giant it
is. To do so, it signed a $200 million contract with SAP to roll out an ERP
system to its 230,000 employees in 80 countries around the world (Olson,
pg. 53). In addition to this sum, Nestle SA also committed to an additional
$80 million to be spent on consulting, maintenance, and upgrades (Konicki,
pg. 185). Executives at Nestle SA realized that the company needed to
standardize its business processes if it wanted to be competitive. The
rollout was scheduled to take three years for Nestle SA?s largest sites with
the others to follow. Included in the implementation were the mySAP.com
financials, accounts payable, accounts receivable, planning, production
management, procurement, direct procurement, supply-chain, demand
planning, fulfillment, and business-intelligence modules (Konicki, pg.
185).
Prior to the Nestle SA ERP decision, Nestle UK had already implemented
an ERP system. The British subsidiary of Nestle SA implemented SAP R/3
over a period of five years in 18 UK manufacturing sites (Glick, 7 Days,
pg. 4). This implementation wrapped up in 1999 and was the one of
the UK?s largest ERP systems with over 6,000 users (Glick, Enterprise, pg.
24). As with the Nestle SA deployment, the goals of the Nestle UK
implementation were centred on leveraging the size of the organization as
well as tightening up the supply chain and re-engineering work practices
and processes (Glick, 7 Days, pg. 4).
The third Nestle ERP implementation story involves
Nestle USA. Nestle USA is the $8.1 billion U.S. subsidiary of Nestle
SA. In 1997, Nestle USA began its own ERP project known as Best
(Business Excellence through Systems Technology) (Worthen, pg.
1). Scheduled to run over the course of six years ending in the first quarter
of 2003, this project was budgeted at well over $200 million and would
implement five SAP modules: purchasing, financials, sales and
distribution, accounts payable, and accounts receivable (Worthen, pg. 1-
3). Similar to the other two Nestle divisions, the goal behind this ERP
implementation was unification. Additionally, the project would solve
Nestle USA?s Y2K woes (Worthen, pg. 3). In the case of Nestle USA, the
ERP was part of the vision Nestle USA Chairman and CEO Joe Weller
referred to as ?One Nestle? that would be responsible for ?transforming the
separate brands into one highly integrated company? (Worthen, pg.
2). Prior to the implementation, Nestle USA had nine different general
ledgers and 28 points of customer entry (Worthen, pg. 2). The goal of the
ERP project was to bring these numbers down to one. One of the most
interesting views on the Nestle USA problem is the story of vanilla. Prior
to the ERP implementation, Nestle USA did not act as one
company. Instead, each location acted on its own behalf and was free to
make its own business decisions. ?In 1997, a team examining the various
systems across the company found, among many other troubling
redundancies, that Nestle USA?s brands were paying 29 different prices for
vanilla ? to the same vendor? (Worthen, pg. 2). This situation arose from
the fact that each factory negotiated their own deals with the vendor and the
vendor adjusted the price per factory based on what they thought the factory
would pay. The situation was only worsened by the fact that each factory
referred to vanilla in a different way. While one factory might have referred
to vanilla as 1234, another factory referred to it as 7890. This made it nearly
impossible for individuals at the corporate headquarters to do comparisons
across plants to see manufacturing costs (Worthen, pg. 2).
07
Page 3 of 5
Regardless which Nestle case is examined, the goals behind all three ERP
implementations were similar for all the divisions. That is, in each instance,
there was a driving goal to consolidate the operations of the different
locations so that Nestle could truly leverage their size and buying
power. Additionally, there was a need to centralize and control data so that
the financial, reporting, and forecasting numbers were more consistent and
accurate. As each factory acted as an autonomous unit, Nestle was at a
severe competitive disadvantage and realized that it needed one system
used by all in order to be more efficient and survive in the global economy.
The term ?ERP implementation? has become synonymous with ?nightmare?
in recent years. High profile failures dot the headlines and companies are
often intimidated not only by the high price but also the negative effect
implementations can have on their business. Vendors such as SAP are
working diligently on shaking this reputation and have made great strides
in meeting their goals. ?In 1996, a user could expect to pay six to 10 times
the license cost in consulting charges. These days the external consulting
cost has dropped to typically one to two-and-a-half times the software costs,
depending on how much process re-engineering the user does? (Adshead,
pg. 26). Fortunately for companies considering an ERP implementation
there have been enough done in the past that there are opportunities to learn
from the successes and failures of others. One of the key factors of a
successful implementation is ?don?t try to make the product fit exactly the
way you would ideally like to work or on the other hand assume that people
will completely change their processes to meet the package. The first takes
many years and costs loads, the second meets big resistance? (Adshead, pg.
26). For most businesses there needs to be a middle-of-the-road approach
where individuals realize that the software will not solve every
organizational problem and not every process in the company can be re-
engineered to fit the software. Regardless, savvy project leaders with prior
ERP implementation experience will tell you that there are several pitfalls
to avoid during ERP projects. The first is not to select an ERP package
based on a demo. Choose your package wisely, ask questions, get
references, and do your homework. An ERP package is a costly investment
and you need to be sure you are choosing the package that best fits the needs
of your organization. The second is get management commitment. Not
securing top management buy-in results in an automatic project
failure. Management commitment is often high at the beginning of a project
but begins to wane as the project wears on. It is vital to keep management
interested, involved, and positioned squarely behind the project. The third
is to avoid heavy customization. It is both easy and tempting to customize
ERP packages to fit your exact needs. Unfortunately excessive
customization will haunt you by lengthening the project timeline and by
driving up maintenance costs in the future. The final pitfall to avoid in ERP
implementations is not to underestimate the importance of training. It is
not uncommon that users receive several days of training on the new system
and then do not see the system again for months. Users need in-depth and
on-going training and should even be involved with system testing if at all
possible (Adshead, pg. 27).
Unfortunately for Nestle USA, they did not heed the failures of
others. Throughout the implementation, Nestle USA made several large
mistakes that almost doomed the project. When the project began a team
of 50 top executives and 10 senior IT professionals was assembled to
develop a set of best practices for all Nestle USA divisions. The goal was
to develop these best practices for all functions of the organization. Each
function from manufacturing to sales would eventually be forced to retire
their old approaches and adopt the new best practice that had been
Page 4 of 5
developed. Concurrently, a technical team was charged with the task of
implementing a common data structure across the company (Worthen, pg.
2). By the time the implementation began in 1999 Nestle already had
problems with its employees? acceptance of the system. Most of the
resistance met by the project team was traced back to the fact that ?none of
the groups that were going to be directly affected by the new processes and
systems were represented on the key stakeholders team? (Worthen, pg.
3). This was only the start of Nestle USA?s problems. By early 2000, the
implementation had turned into a disaster. Employees did not understand
how to use the new system and did not understand the new work processes
they were being forced to adopt. Divisional executives were just as
confused as their employees as they had been left out of the planning and
development of the new system and were less than willing to assist in
straightening out the mess that had developed (Worthen, pg. 3). The result
of this was that morale plummeted and turnover skyrocketed. In fact,
?turnover among the employees who forecast demand for Nestle products
reached 77 percent? (Worthen, pg. 3).
Nestle USA?s implementation problems did not stop with employee
issues. Technical difficulties began to emerge as well during the rollout. In
the rush to beat the Y2K deadline the project team had overlooked the
integration points between the modules. This meant that the different
modules could not talk to each other. So if a salesperson gave a discount
to a customer and entered it in the system, the accounts receivable portion
of the system did not know of the discount. The result was that the customer
would pay their bill but invoice appeared as though it were only partially
paid (Worthen, pg. 3).
By June 2000, Nestle USA was forced to halt the rollout and the project
manager was removed from the project and reassigned
to Switzerland (Worthen, pg. 3). Nestle USA gathered 19 key stakeholders
and executives went on a three-day offsite retreat to discuss the future of
the project. Out of this meeting came the revelation that they would need
to redefine the business requirements of the project and then shape the
project timeline around the requirements rather than to shape the timeline
around a predetermined end date (Worthen, pg. 3-4). This process took
until April 2001 and resulted in a detailed blueprint for the project team to
follow. A director of process change was hired to act as a liaison between
the project team and the different functional divisions (Worthen, pg.
4). With all of these items finally resolved, the project was able to
continue. The last rollouts were scheduled to be completed in the first
quarter of 2003 (Worthen, pg. 1).
Although there were bumps in the road for Nestle USA?s ERP
implementation, it certainly seems to be paying for itself. As of 2002,
Nestle USA claimed they had already realized a savings of over $325
million (Worthen, pg. 1). Most of these savings came in the area of supply
chain improvements, specifically demand forecasting. ?The old process
involved a sales guy giving a number to the demand planner, who says,
?Those guys don?t know what the hell they are talking about; I?m going to
give them this number?. The demand planner turns [that number] over to
factory, and the factory says the demand planner doesn?t know what the hell
he?s talking about. Then the factory changes the number again. With SAP
in place, common databases and business processes lead to more
trustworthy demand forecasts for the various Nestle products. Furthermore,
because all of Nestle USA is using the same data, Nestle can forecast down
to the distribution center level? (Worthen, pg. 4).
Page 5 of 5
In addition to saving money, Nestle USA has also been able to come
together as one organization. The problem of 29 different brands of vanilla
has been solved and now with common databases each factory refers to
vanilla in the same manner. They also use common processes that simplify
operating procedures and allow for the centralization of functions such as
developing training procedures. Training no longer needs to be customized
for each factory. Since each location follows the same procedures, training
materials only need to be developed once. Additionally, any Nestle USA
employee could relocate to another factory and not have to adjust to local
processes.
Nestle UK experienced similar successes with their ERP
implementation. They were able to recoup the money spent on the system
in only two years (Glick, 7 Days, pg. 4). Further, like their American
counterpart, Nestle UK has experienced reduced inventory levels, tighter
control on inventory, and a more disciplined attitude toward business
processes (Glick, 7 Days, pg. 4). Most importantly, the ERP
implementation at Nestle UK helped to foster a ?culture of continuous
improvement? (Glick, Enterprise, pg. 24). ?Improvement priorities are
clear: first, the internal opportunities; second, business-to-business; and
third, business to consumer? (Glick, Enterprise, pg. 24). This attitude is
embodied by the fact that following the ERP rollout they hired a process
development manager. This person?s sole responsibility is to act as a bridge
between business and the Information Technology department and to make
sure that employees stay focused on continuous improvement rather than
simply trying to maintain existing systems (Glick, Enterprise, pg. 24).
(a) What is the need of implement ERP for nestle? 07
(b) What are the hurdles company face during implement of ERP? 07
OR
Q.5 (a) What are the implement strategies in different countries? 07
(b)
Is the implementation of ERP successful or failure for Nestle? 07
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This post was last modified on 19 February 2020