INTRODUCTION

In the third quarter of 2008, Delectable Foods Unlimited (DFU), the U.S. based manufacturer of

candies and complementary confectioneries (headquartered in Baltimore, Maryland) announced

that its revenues rose to US$3 billion as compared to US$1.5 billion in the third quarter of 2007.

The firm's management and stakeholders were pleased with this development as DFU's revenues

and profits for the third quarter of 2007 as well as for the year of 2007 as a whole had been

adversely affected due to the problems related to the firm's enterprise systems implementation

experience involving an enterprise resource planning (ERP) system and a DFU supplier portal

via an extranet featuring a supplier relationship management module of a supply chain

management software suite.

According to CEO and Chairman of DFU Dawson Carlyle, "Unfortunately, our foray into the

deployment of complementary enterprise systems introduced unexpected shipping challenges

during 2007." What started it all was DFU's initiative to upgrade its IT infrastructure at the heart

of its business operations by deploying the ERP software suite from SAP and JDEdwards'

Supplier Relationship Management module of its larger supply chain management software

suite, and some of the ERP modules were implemented as per the schedule by the firm in

January 2007. However, the remaining modules which were to be implemented by April 2007

were delayed and were implemented only by July 2007. This overlapped with the time when the

firm starts processing big orders for the forthcoming Halloween, Thanksgiving, and Christmas

seasons.

ISSUE 2: DFU's JDEdwards Supplier Relationship Management Software Implementation

Via a Portal

To enhance its competitiveness in the industry, DFU also sought to implement JDEdwards'

Supplier Relationship Management (SRM) Software via an extranet portal connecting DFU with

its suppliers. The SRM software is an important feature of the JD Edwards supply chain

management software suite. The SRM software would create information exchanges and

linkages between DF and its top or tier-1 suppliers. DFU wanted to take advantage of the

following features of the SRM software:

1) Purchase Order Processing Features

While acknowledging purchase orders from DFU, its top suppliers often change order

information such as payment terms and carrier information. DFU needs to be made aware of the

changes and approve them to ensure that the changes meet DFU's business requirements

2) Supplier Inventory Inquiry

DFU's suppliers can use self-service feature of the portal to review a variety of inventory

information, such as general item information, item quantities, and reorder points. A supplier

may want to review inventory to determine when an item needs to be reordered and to review

items for which the quantity is lower than safety stock.

3) Receipt Inquiry

The SRM - Receipt Inquiry program enables both suppliers and DFU to review multiple receipts

at once. They can review the various statuses of the receipts and use links to other programs to

process the receipts further and inquire about payment information.

4) Payment Inquiry

DFU's suppliers can use a self-service feature on the portal to review the payment information

entered on the SAP ERP Accounts Payable system.

5) Understanding Supplier Release Schedules

DFU's suppliers can also use the portal to review planned and released supplier schedules. The

schedule provides suppliers with advance notice of requirements and helps suppliers to forecast

DFU's future needs.

DFU's Enterprise System Deployment Challenges

DFU's IT project team informed suppliers that they may have to invest in more updated

networking hardware to support the extranet portal connection with DFU. Also, on account of

many newspaper and media stories of rampant hacking of corporate networking systems for

industrial espionage within the industry, DFU decided to put in place robust security measures

for its supplier portal extranet. The IT team used the advice of an outside security firm for the

appropriate security measures to use. DFU wanted to share the costs of securing data

transmissions with participating suppliers. The security services vendor DFU has in mind will

provide a package of multi-layered security services that will provide a robust protection to DFU

and suppliers it intends to link up with. This package consists of the following services:

1)use of a virtual private network (VPN) tunnelling that would encrypt messages

2)additional encryption using digital signatures and certificates

3) an intrusion detection system using Cisco Systems' "Intrusion Prevention System"

product

The software packages involved in these three components of the security package from the

vendor have very specific network hardware requirements. Only hardware with more recent

networking software and with certain processing and transmission capabilities will work well

with the proposed security package. DFU justified this expense by saying that it is in the best

interests of both DFU and the supplier to protect the data that is being exchanged and that

splitting the costs is a fair arrangement in order to avail of the high level of protection they

should strive for.

DFU started this initiative with its top three suppliers. DFU thought that piloting the extranet

with these three suppliers was a good way of testing the system before rolling it out to all its 100

or so ingredient suppliers. DFU's top supplier called Natural Sugars Inc. (NSI), a Canadian firm,

provides DFU with a rare natural ingredient that is a sugar substitute, has a very convincing

natural sugar taste without the calories and health hazards posed by sugar substitute products like

Aspertame. NSI, however, has older networking equipment which could still be used to meet the

technical requirements of DF's supplier portal which will use an extranet, according to its

network administrator. NSI's CIO Mr. David Waller didn't want to spend more money and

invest in new networking equipment because of recent overall firm budget cuts in NSI. Mr.

Waller decided that the IT Department would allocate money, instead, to cover the costs of the

extranet security package that DFU wanted to implement for its supplier portal.

DFU's other two suppliers participating in the pilot abided by the technical and cost sharing

requirements of the extranet. They are much larger firms with relatively new networking IT

infrastructure and didn't have the same issues faced by NSI.

DFU's IT project team tested this extranet initiative using the three types of tests (i.e.,

developmental, alpha, and beta tests) using "dummy data" and everything appeared to be in

order. All three supplier firms participated in these tests prior to the conversion phase.

Three months into the pilot implementation phase of the extranet, DFU experienced problems in

its data exchanges with NSI. NSI reported that it made suggested changes to purchase orders

initially forwarded by DFU, which DFU never acknowledged or approved. Thus, these

purchases orders were not fulfilled or acted upon by NSI, resulting in unfulfilled or delayed

orders altogether. DFU's procurement department, on the other hand, reported not having

received the suggested changes in order quantity, unit price, or delivery dates suggested by NSI

via DFU's supplier extranet.

DFU also designed the supplier portal in order to give suppliers accurate information about

which invoices have already been paid by DFU. This is very important in motivating suppliers

to service DF promptly and in cementing a trusted long-term relationship. Suppliers will be able

to view which invoices they have forwarded to DFU have been partially or fully paid. Within

the three pilot months, however, NSI reported inaccurate data about which invoices have already

been paid by DFU. The amounts paid shown on the extranet do not match the direct deposit

amounts received by NSI's bank (i.e., NSI receive payments from DFU via bank-to-bank

transfers).

ISSUE 2 QUESTION (Supplier Relationship Management Module of its JD Edwards

Supply Chain Management System):

Analyze what happened with the DFU's implementation of its supplier portal via the

extranet specifically with its Canadian supplier, Natural Sugars, Inc., using the SDLC

conceptual framework. Where did things go wrong and which SDLC phases were

involved? Briefly explain what should be accomplished in the specific SDLC phase

involved. What should the IT Project team have done instea