Please help me make a solution to this case study. I am being asked to design the risk management steps that would have avoided the disaster encountered by the chocolate firm.

Analyze the following phases of the chocolate firm's ERP system project:

• Steps of the design phase.
• Steps of the systems implementation and conversion phase.
• Steps of the operation and maintenance phase.

Based on your analysis of each phase of the ERP system project described in this case study, design the risk management steps that would have avoided the disaster encountered by the chocolate firm had they already been in place at the beginning of the project.

• Length:Submit between 8-10

Case Study The largest premium chocolate manufacturer has B2B and B2C customers. It implemented the Enterprise Resource Planning (ERP) as its centralised database in 1999. It is a practical application for inventory management. This case study focuses on value adding to the supply chain via information sharing and information quality. Several informationsharing issues have been identified. They include lack of understanding of ERP's potential, IT skill gap, resistance caused by legacy of previous systems and a disorganisation in transportation. Theories examined in this report focus on information quality and information sharing. Although certain information is considered to be confidential and commercially sensitive, recent research in management underlines the benefits of sharing business intelligence. The main tools are concepts that recognise collaborative planning, forecasting, and replenishment to develop a mutual interest for partners and customers. Implementation of the theories requires time. However, time is not at disposition. The necessity to implement a strategy with immediate result can offer a consensus between shortterm and longterm necessities. Recommendations include the creation of a training department. The purpose of this is to encourage a collaborative planning approach amongst all participants of supply chain. It is of utmost importance for this firm to monitor its performance, and surface problems to the board's attention as soon as possible. In conclusion, this firm's has several areas of concern, such ass disorganisation in transportation and training of employees. On the other hand, it is in its early stage of collaborative planning and a wonderful product. Introduction This report focuses on value adding to the supply chain via information sharing and information quality. Information is one of the most significant factors for a business to gain competitive advantage by improving communication and processes to produce quality goods and services. This case study examines the operation of Chocolate company subsequent to its implementation of the Enterprise Resource Planning (ERP) system in 1999. Specific problems are identified and solutions are recommended for process improvement to add value to the supply chain. Background The chocolate firm was established in 1900 in Pennsylvania. Its client base is B2B and B2C. Its head office and distribution centre are located in Philadelphia and Chicago, prime manufacture is in Guadalajara, Mexico 7. Supply of raw materials does not pose a leadtime problem, however, transportation from the Guadalajara factory to Chicago distribution centre and transit bottleneck have contributed to lead time. This firm has implemented the Enterprise Resource Planning (ERP) as its centralised database in 1999. Problem Identification A number of information sharing and information quality issues have been identified: Lack of understanding of ERP's potential Many researchers have suggested that information sharing can substantially improve overall supply chain performance(Scott & R, 1991)(bowersox & closs, 1996)(Closs & A, 1998)(Shapiro, 2001).Management does not understand how ERP can potentially assist this firm in maintaining quality information and information sharing, e.g. sales orders, inventory control, delivery and forecasting demand. Such information sharing can improve transaction efficiency and reduce information delay along supply chain, create value so participants can gain competitive advantage(Handfield & Jr, 1999). IT Skill Gap The impact of not understanding ERP's potential was compounded by inadequate training provided prior to implementation. Employees are unable to use ERP confidently and data entry errors affect information quality to ensure information flow and forecasting accuracy. Legacy of Previous Systems And Experience Cause Resistance There is a legacy and negative experience with previous systems implemented. Although some employees embrace ERP's implementation and actively use the software, others have resisted this change. The IT skill gap has also contributed to the resistance in using the software. Therefore, information sharing is ineffective as supply chain management (SCM) depends on what, when, how and with whom information is shared (Chizzo 1998;)(Finch, 2006)(Holmberg, 2000) Parallel Ordering System. Some employees use a parallel ordering system of fax, phone, and email. This firm is unable to analyse the ordering history in the system to forecast demand accurately (Finch, 2006). The parallel ordering system undermines the quality of information sharing, particularly in aspects of accuracy, timeliness, adequacy, and proper information formatting(Gustin & Daugherty, 1995)(Closs & Goldsby, 1997)(Monzcka & Petersen, 1998)(Moberg & Cutler, 2002). Appendix A indicates significant problems in information flow and forecast accuracy, particularly in the areas of warehousing, distribution and customer services. Task 2 in Appendix B indicates employee resistance in using the ERP software and parallel ordering system are the major causes of delays in the supply chain. As a result, this firm is incapable of generating value in providing quality customer services. Poor customer services can become a product loser that will repel this firm's customers(Finch, 2006). Excessive Transportation LeadTime This firm has 138day leadtime. The sharing of information and coordination of strategies among firms in a supply chain can both reduce total logistics costs and enhance value delivered to the customer(Cooper & Ellram, 1997) (Brewer and Speh 2000). Good information sharing is important for creating effective collaboration or strategic alliances (Dyer & Singh, 1998)(Handfield & Jr, 1999) (Henriott, 1999)(Mariotti, 1999). Supply chain partnership as a relationship between two independent members in supply channels, such as customers and manufacturers, or manufacturers and suppliers, through increased levels of information sharing, can achieve specific objectives and benefits in terms of reductions in total costs and inventories(Yu & Yan, 2001). In this organisation case, it can build relationship with transportation providers, raw material suppliers, B2B, and B2C customers for collaborative planning, forecasting, and replenishment(Finch, 2006).(Novack & Langley, 1995) (Jones 1998). Theory Quality Management Quality management is used to break down barriers between departments. Capacity of suppliers should be used to their potential. The most frequently used framework for guiding improvement is Shewhart's Plan, Do, Check, Act (PDCA) cycle(Finch, 2006). What is Quality Management? For inventories: Quality management is matching production to demand in a short period. High level of standardisation and shorter delivery period reduce holding costs. Relationship with suppliers is primordial to the level that they work like a single entity. Its disadvantage is that any external events can stop production, especially when production is matching demand of the next half days. This organization appears to have adopted this theory. However, the failure is internal rather than not being able to develop and maintain a relationship with suppliers. For capacities: Quality management means all processes are redesigned to eliminate unnecessary steps in production. Equipment configuration is arranged around the most efficient flow of production. Procedures are standardised for training purpose to eliminate errors from deviation. With the help of automation, this process will maintain a constant quality of production. Its disadvantage is that the equipment has limited flexibility when changes in process occur. It also has to accommodate a maintenance schedule outside peak production. This firm redesigned its processes when it implemented the ERP system in 1999. However, it has failed to communicate the redesign to ERP users and update their job descriptions to reflect the new requirements. For facilities: Organisational setting is likely to approve small independent production with limited interference with other production. This will reduce handling damage and processing error during shipping. This firm has put this theory in practice successfully with no complaint of inventory stock out. For employees: Quality management empowers employees to control their environment and take responsibility of their work. This allows them to correct error directly to the source. They can become multiskilled in all procedures; that subsequently generates value for employee and employer. In this company case, this is the area of incompetence in ERP users and coordination of transportation. Quality management is responsible for driving improvement and selfeducation programs. This is to ensure that employees have the adequate skills to perform their task, or just to keep uptodate with technology. This is a failure of this company's management; it is noticeable in several areas of the company that employees do not have the sufficient capability to work competently to generate value in the supply chain. Business Intelligence Information Quality This theory is applicable to this firm; its incorrect data is not the only cause of error. Analysis suitability and data interpretation (Appendix B refers) are more likely to affect the accuracy of forecasting. Information is distributed in several formats to meet each purpose. This will reduce the risk of inadequate reading and understanding. Collection of information is not only about the "customer". It is a twoway communication; customers can have information from the supplier like capacities and technology at their disposition. Converters could use the same principle to adjust their performance to the supplier demand. Harmonisation of data may enhance the quality of information. To eliminate the risk of data corruption, business intelligence will benefit by disconnecting this process from inhouse providers. A separate business entity would reduce the risk of forecast bias and conduct a neutral analysis. Relevance and accessibility should result in obtaining the right information from the right person at the right time. This setting will also provide a constant flow of uptodate information. Information Sharing As a general practice, this firm shares information internally only. However, in recent months, it has begun to think whether this is in the best interest of the supply chain. Information sharing requires a relationship that is well established. Trust is a common objective of partners. They must share forecast information of their performance with other general information of where and what the business focus is. This forms the foundation of building a trading relationship for becoming a preferred supplier. Information sharing is a longterm investment that requires a large amount of resources, particularly capital. It also has the purpose to inform investors of future profits. Its most significant strength is reducing error of corporate group thinking or coalition, by sharing corporate views with a wider perspective even outside the industry. Corporate guidance needs to encourage acceptance of other opinion of in the supply chain. As a new way of doing business, despite the perception of many organisations that, disclosure of information represents a loss of power(Berry & Towill, 1994). Collaborative Planning Forecasting and Replenishment This new collaborative approach intends to improve relationship by planning processes and sharing information. Information flow does not occur from A to B and subsequently to C, but instead A provides information to B and C at the same time. This has the advantage of bringing forward forecast difference to members in an early stage. A supplier is not seen as a separate entity; in contrast it is a member of an entity. This collaboration does not focus on what is needed, but rather only, on how information is supplied. The benefit is to have a component that fits into an assembly line without any adjustment. This synchronisation not only affects the physical product but also the forecast approach that uses the same data(Finch, 2006). It is the first application that this firm has made in collaborative planning, not in totality, just enough for demonstrate an interest. Quality of Tools Utilised Detecting cause of transportation, the following tools are used: "Process flow chart" is demonstrated in the task table shown on top of Appendix B(Finch, 2006). This is the first step to identify problem areas. The "Cause and effect chart" is used to give a wider picture of the relationship between the causes identified and its resulting impact (Appendix D). The top part of the diagram has no identified problem; it is the graph in black(Finch, 2006). The second part of the graph in multi colour shows the transportation problem. In the last graph, the areas in red represent the stake of workforce, customer, and shareholders. A "Pareto chart"(Finch, 2006). is used to identify error of entry data, which is not the only problem (bottom bar chart in Appendix B refers). Lastly, Appendix E contains a few timeliness formulae to numbering waiting period of customer ordering. Process Improvement Transportation is a major area needing improvement. This company does not have transport problems to bring raw materials to the factory. However, the rail network surrounding Chicago is saturated and becomes a bottleneck. B2B relationship with one of the rail operators, Armstrack, is working satisfactorily. This company and its supply chain trading partners are currently negotiating to establish an alternative transport route in Edwardsville, 450km away from the railway bottleneck. It is close to the highway circuit. This new arrangement should eliminate the merchandise in transit into the bottleneck. The second area of improvement is to reduce leadtimes delivery to customers. A new distribution centre is under construction, using the same configurations as three other warehouses (fact). This will be in operation in May 2008. Warehousing distribution is in a short drive to the consumer. The Chicago warehouse will distribute the city areas only. Thirdly, transportation will use tracking system software to complement the existing ERP system to follow the physical merchandise movement. From converter to manufacturer, and manufacturer to distribution centres. Both softwares should be used to monitor its performance, identify problems, and remove barriers for a smooth flow of merchandise. Finally, the parallel ordering system can be removed only by creating a choc within the company. This helps this firm identify and select employees to use ERP, and develop a synergy around the technology. All those improvements require time to reach their potential. However, the financial loss of US$1.5 billion is significant. This firm needs a quick solution to the following associated problems as below: B2B requires more than one delivery per month. Two weeks' delay for B2C is already a sale lost. The existing factory is in operation, sited in the middle of its geographical market share. A percentage of its capacities could used to handle small batch orders to reduce the maximum lead time to two or three days for both B2B and B2C. This configuration can be set in a Ushape operating cycle format(Finch, 2006). Implementation Two approaches are recommended to restore stock market performance. Until the implemented program is functioning effectively and the quick temporary measures can cease. Quick Temporary Fix A survey to identify the current skills level and knowledge of the ERP users (see Appendix B) indicates younger employees have higher awareness to embrace the technology. Therefore, these people are more likely to accept a 6month offer to develop their skills in a peerhelp workshop to support in areas where ERP is not performing well. They will provide mentoring and coaching to their local colleagues. Secondly, proficient ERP users can provide accurate information to the factory for prompt delivery. Program Implementation (LongTerm) Transportation of finished products suffers long delivery; therefore, stocking products closer to the customer will be desirable. The Chicago warehouse has reached its maximum capacity. This has caused the whole system to move into a turbulent path. The new warehouse in Edwardsville will rectify this issue. Some employees have already completed training to manage the new installation in both software systems (ERP and tracking systems). Partial use of the system will not motivate employees to embrace the change. The temporary quick fix will still leave a huge gap in the knowledge. Providing inhouse training or organising training with an external training provider to overview, narrow the full potential of ERP's. Collaboration with the rail transporters is already at an early stage of Collaborative Planning Forecasting and Replenishment (CPFR). It is good practice to show mutual benefit to other supply chain participants. However, toplevel negotiation is time consuming. It is possible that implementation will take a decade to reach its full collaboration. Recommendation A problem affects the HSY index in the stock market. It is recommended that the temporary solutions act as compensations to the current situation until program implementation is operational. The first area is to deliver as fast as possible by using all available derivatives to get around problems. B2B and B2C can use part of the US plant to produce small batches to offer good customer service. Secondly, it is recommended to create a department that oversees all training that the organisation needs to ensure employees stay abreast with the changing workplace environment. Thirdly, this firm should develop a collaborative partnership with all suppliers, by using the transportation problem to show both partners using the CPFR approach can benefit from strategic alliances. Finally, this firm should create a department with the function to monitor overall performance, to report to the board at an early stage of the nature of problems arising. Adjusting solutions may prove to cause inconvenience and affect employee, however, this disadvantage will be outweighed by the reduction of risk that the problem may cause major disturbance to this firm's core business. Conclusion This report examines a number of operational issues this firm's faces regarding information sharing and information quality, such as realising ERP's potential, ERP literacy, resistance caused by a legacy of previous systems, use of a parallel ordering system and excessive transportation lead time. Various theories are covered in identifying and addressing these issues. Suggested solutions include reducing transport leadtime, and improving ERP user competency. Building strategic alliances along the supply chain are recommended to improve information sharing, information quality, efficiency, effectiveness, to add value at the supply chain. This firm's CEO commented, "It is hard to get people to change the ways they work so that the system will function correctly." This highlights the importance of change management to achieve the desired human behaviour for a business to succeed. Such changes require longterm commitment of all levels of the business and along its supply chain. Implementing changes is costly; management must ensure the benefits outweigh the costs before making decisions to change