Abstract摘要

ERP（企業資源規劃）系統是一個管理平臺，提供通過系統化的管理思想的信息技術的基礎上的決策。 ERP系統已經成為現代化企業的操作系統，因為它與信息技術和先進的管理理念相結合。它符合有效分配資源的理念，能最大限度地發揮的要求。本文概要：分析了乳制品行業雀巢的戰略位置，通過五力模型，管理策略，并分析了在實施ERP的過程中的一些問題。

ERP (Enterprise Resource Planning) System is a management platform providing decisions by systematic managing ideas on the base of information technology. ERP System has become the operating system for modern enterprise since it combines with information technology and advanced managing idea. It meets the requirements of effectively distributing resources and maximizing the fortune. This paper outline: analyze Nestlé’s strategy position in dairy product industry by five forces model, management strategy, and some problem in the process of implement ERP.

 

Contents目錄

 

I.introduction to the report

context

1. Analyze Nestlé’s strategy position in dairy product industry

 

2. From dividing power to concentration of power

 

3. Enterprise Resource Planning System

 

4. ERP implementation project

 

III.Conclusion

References

 

I. Introduction引言

ERP的目標是集中信息和管理市場的程序，周密的策略，價格策略，服務，銷售，推廣和預測等方面的問題。其實，信息系統提供了更多決策上的支持，但決策是人的主觀意識和活動。隨著信息系統的發展，傳統的結構上的決策支持系統尚未滿足需要，該系統將提供更智能化的服務。

The target of ERP is concentrate information and management in aspects of market programmed, advisement strategy, price strategy, service, sales, promotion, and forecast. Actually information system provides more support for decision making, but decision making is people's subjective consciousness and activities. With the development of information system, traditional structure decision-making support system has not already satisfied need, and the system will provide more intelligentize service.

 

ERP is new conception under market environment; it embodies a range of revolutions of management method and idea. ERP uses leap produce type to carry out global market promotion strategy and concentrate market promotion. At the same time it makes use of new technology opening and engineering design management module, let enterprise located in enterprise network under new market environment. Information system makes enterprise got information quickly and decision exactly.#p#分頁標題#e#

 

II. Context目錄

 

The annual gross sales of nestle company is near about 47,700,000,000 U.S. dollars. About 95% sales come from food. So the nestle group company is the biggest food manufactory. It is also one of the biggest multination companies in the world. The most famous products of nestle are chocolate sticks and instant coffee. It owns abundant product series suit for local market and culture. Currently, nestle company has more than 400 factories in 60 countries of the world. The produce and sale of total product is completed by 200 departments. 98% of nestle sales comes from abroad, is called "most internationalize of multinational group"(Turbit, 2005).

 

This paper outline: analyze Nestlé’s strategy position in dairy product industry by five forces model, management strategy, and some problem in the process of implement ERP.

 

Analyze Nestlé’s strategy position in dairy product industry

 

Five forces model putted forward by Porter. It is a kind of effective tool for analyzes enterprises competition of the same industry. Five forces of this model include the threat of substitute products, the threat of the entry of new competitors, the intensity of competitive rivalry, the bargaining power of customers, and the bargaining power of suppliers.Industry attraction is key factor of enterprise profit ability. Competitive strategy is the source of competitive law of enterprise’s industry attraction. Any industry of international and domestic, no matter producer or service provider, all law of competitive will be embodied by these five competitive forces (Deck, 2001). Therefore, Porter’s five forces model is a analyze tool when an enterprise makes competitive strategy. These five forces will decide how industry profit power is. For example, the bargaining power of supplierswill influence original materials cost and other cost; the intensity of competitive rivalry will influence price and competitive cost; the threat of the entry of new competitorswill restrict price, and invest for recovery incursion. If the enterprise can influence industry competitive advantage in the aspect of five forces, then enterprise will improve industry attraction by the root, thus change industry competitive law can help the enterprise gain the final success. We can easily get to undersstand with the help of following table.

 

Enterprises are competitve if:

 

Methods:

 

The threat of substitute products is lower to influence the old brands

 

The relative price and performance of substitues are less attractive.

 

Reduce the threat of new entrants

 

Co-operate with strong company(i.e.coca-cola company) and share market with them#p#分頁標題#e#

 

Bargaining power of suppliers is controlled

 

Take an important position in the market, such as Motorola, Nokia, etc.

 

Bargaining power of customers is affordable

 

To produce the new series and satisfy the customers’ needs

 

the intensity of competitive rivalry is strong enough

 

To assure the quality of the products and provide good service.

 

Except for purchasing power and currency turmoil and other factors after the deduction, the revenue of Nestle in 2007 rose 7.4% than 2006. This is the year that the company 's revenue target overcome more than 5% to 6% consecutively.Workers from Nestle's Maggi brand also disclosed that they planned to increased 17 percent, to 12.20 Swiss francs per share, shareholders dividends from the previous year's 10.40 Swiss francs per share, at last year's board.Nestle Group stated that the company's net income in 2007  rose 16% than the year 2006 , to 10.65 billion Swiss francs, or about 27.81 Swiss francs per share, exceeding 10.2 billion Swiss francs Average forecasted by analysts. In addition, the Nestle Group's annual sales income  in 2007  had grown by 9.2 percent than the growth in 2006, reaching 107.6 billion Swiss francs.

 

The figures embodied that, the Nestle Group have received good havest by carrying out strategies correctly.

 

In the industry of dairy Products, new competitor is influenced by scope economy, products differentiation, sales branch channel, and anticipate revenge. The scope economy of dairy products industry mainly means stock and produce. Original milk price has big influence for cost of dairy products enterprise. Nestle company controlled abundant milk resource of good quality and low price. Therefore, the intense competition of milk source takes big obstruction for the new entrant. Scope economy of the stock raised entry barrier. In the aspects of produce, milk farm use product line can takes professional management and lower total cost of transport. Nestle group owns advanced milk cow-farming technology, automatic facility, and global milk intelligence factory. The scope economy which produces aspect makes nestle group acquire big income. The good brand is main choice object of consumer. Because good brand takes good quality, so the customers build up definite loyalty. Thus the new competitor will face special risk. Once they enter failure, they will lose capital. Some magnate of dairy products, like nestle, their sales branch channels have been perfected. For the new competitors, they want to get sales branch channels, not only need human resource, material resources, and financial resources. They still need accumulation of experience. These factors will be a wall for the new competitors(Davis, 1999).#p#分頁標題#e#

 

Soya-bean milk is main substitute product for dairy products industry.  For the consumer that allergic to milk, soybean milk is better choice. On the other side, price of milk is higher than soybean products. Actual substitute products take some forces to milk industry, but it is still small(Sood, 2002). The supplier product is main input in the dairy products industry. The supplier don’t need competitive with other substitute products. Otherwise, the supplier group can still performance realistic intimidate of forward integration, so the bargaining power of supplier will be increased. The direct behavior is some country’s milk-cow price rise continually, original milk price as well as higher. In the supermarket, have various brands of dairy products. This is not only providing abundant information for customers, and still make the customer conversion cost lower. Therefore, the bargaining power of customer is stronger.

 

2. From dividing power to concentration of power從分權到權力集中

 

The principle of original dividing power weakens effective of cost control plan. But dividing power is reasonable. The nest company has many manufactories in the world, and the operating revenue of above 98% comes from an international market. The company think that this is satisfactory to the different taste of market in everyplace. The style is the best way for close with native consumer. In addition, after purchased company, the nest is generally depending on original leadership. It is for preventing conflict in the process of integration.

 

However, dividing power takes big power to division company manager in different countries. The cost is not controlled. Division manager of nestle group is in charge of material purchasing, new product opening, produce, acquiring company, and capital investment. This is conductive to promotion of nestle, because of division manager saw local market exactly. But from aspects of cost control and management efficiency, it takes some disadvantages to company. An interior research shows every candy and ice-cream manufactory ordered original sugar by oneself. If each factory buys same kind of product from same supplier, the supplier gives different price for each manufactory. For example, Nestle American Company gives more than 20 prices for same supplier when it purchases vanilla. As a result headquarters of Nestle can't follow purchase cost of original materials.

 

For solving this problem, leadership of Nestle Company integrated management power of each country manufactory to region level, and unify management of same kind of produce give to "strategic business section". At the same time, the logistics management is tightened. Nestle company CEO Peter Brabeck said: We have already taken leave of dividing power federation that constituted by independence market. We are becoming a global company which dividing power in decision-making aspect, because we believe any consumer isn't a global consumer. We think only have native consumer, but in the logistic aspect, we have already became more globalization. This is a big change in our companies management.According to new dividing power principle, the funds allocate, develops, brand management, core talented person management etc., they are controlled by the headquarters. But the product development, market expand and advertise, these management power still reserve in the local manager.#p#分頁標題#e#

 

Anyway, whatever dividing power or concentration, a competitive enterprise requires that every member must obey the rules and do their best to serve the enterprise. Because only if everyone has done good jopb, can the whole enterprise achive success finally. As an international enterpaise, Nestle own many manufactories all over the world. This leads to the difficulties of concentration of power. As a result, dividing power becomes the best choice for the big Nestle Group. In this, holding a conference or meeting usually is very necessary for the leaders from all the different places to share their experiences of managing the Branch conmpany in different place. Through discussing together, they can find what are the problems and what’s the best methods to them. It is also helpful for going ahead together, which can assure the quality of the Nestle products effectively. The follwing is the statement of the Nestle chairman, from which we can find a good business Nestle is dealing with, although it faces many paoblems. Sduch as, from dividing power to concentration of power.

 

The famous Nestle announced that sales reached 45.4 billion pounds in the first eight months of this year, which has achieved an increase by 9.1%, compared with the same period last year. In addition to acquisitions, price growth and the impact of currency fluctuations, the actual growth rate is 4.6%. The Chairman Peter Brabeck-Letmathe of Nestle said the strong growth in their sales momentum has continued into 2006's third quarter. We are still in the face of price increases of raw materials and fuel. But generally speaking, I am satisfied with the company's sales of organic dairy products. Organic milk, ice cream sales has grown by 5.4 percent, this rate is to remove the acquisition of the growth.

 

In addition, following given a diagram which indicates the relationship among the leaders of the Nestle Group.

 

                        The chairman of Nestle

 

                                ↓

 

                        The General manager

 

                           ╱   │……  ╲

 

                         the    the          the

 

branch   branch    …  branch

 

manager   manager       manager

 

From the diagram, we can find that the chairman lied on the top of all the people, that is, who is the concentration of power and holds the direction of the whole group. On the other hand, there are many branch managers who own dividing power. Only when all of them devote themselves to the enterprise ,can the whole group get progress. And their relationship is just like a Christmas tree, they are tied together closely. So from dividing power to the concentration of power, each step makes sense.#p#分頁標題#e#

 

3. Enterprise Resource Planning System企業資源規劃系統

 

ERP System can be defined from three facets: managing idea, software, managing system.

 

ERP System is a systematic standard for enterprise management proposed by Garter Group Inc. The nature of ERP is the managing idea towards supply chain developing from MRP II(Manufacturing Resources Planning).

ERP System is the software with the soul of ERP managing idea. It takes client server, RDS, technology towards object, 4GL, net communication, etc. into practice.

ERP System is the enterprise resources managing system integrating enterprise managing idea, operating flow, basic data, resources, hardware and software, etc.

 

The execution of ERP is a key process but usually is neglected by the enterprise. The successful application of ERP must be guided under scientific methods. The typical execution for ERP consists of 5 stages:

 

Work in prophase

This is a very important phase influencing the result of the project but always neglected. In this stage, the top leaders and the members of the ERP project must be taught with the principles and ideas of ERP. They are required to evaluate the current managing flow of the enterprise and diagnose the problems. The selection of the software is also the key issue in this stage. The demand of the enterprise must match well the function and idea of the software. Especially the software usually can’t meet all the special requirements of the company, in this situation, appropriate supplement should be conducted. It is indispensable to learn the environment of the execution, the situation of a country and the special requirements of the business. The environment acts as the base of flow and function, meanwhile the selection of ERP must comply with “localization” and “customization”.

 

Preparation of execution

In this stage, the static data and parameters needed should be set up. They are input before the running of the ERP System. A great deal of work should be done to analyze the information of finance, demand, technics, repertory, etc. in order to confirm the data and parameters.

 

The organization of the ERP System should be established since it is a systematic engineering. From top to bottom, the three-level organization can be leaders, executing group and operating group.

 

Simulation and customization

After primarily mastering the software, simulation is operated in order to solve the actual problem. Since the test and simulation will expose the problem of the system, it is necessary to enact working norms and regulations in reaction.

 

Switching operation

You must select the corresponding steps according to the condition of the enterprise. Modules can be carried into execution at one time, or one or two executed in advance. In this stage, all clients must use the terminal at their own posts.#p#分頁標題#e#

 

New system operation

After the application of the new system, the execution is far to complete but shift to the stage of performance estimation and support. This is because that you need summarize the result of the execution as well as complete a self-evaluation. The further direction of the work is enacted. You should be aware that with the development of the competition, new demands will emerge and the improvement for the ERP System must be conducted to face the challenge.

 

Finally, the 5 stages of ERP execution are closely associated. It is unwise to enter the next stage when the current work is not well done. Moreover, the training of software, programmer, simulation and operation, customization, etc. must be carried through the execution. Personnel must make full sense of the software and hardware of the ERP System in order to ensure its smooth application.

 

4. ERP implementation projectERP實施項目

 

In 1997, the Nestle American Company started to implement ERP project under SAP helping. This ERP project code name is BEST (Business Excellence through Systems Technology). Project implementation time is 6 years, and cost of budget is near about 210,000,000 U.S. dollars. From a long-term point of view, the ERP system may bring interests for Nestle Company. But in a short- term, the situation isn't optimistic. This project tries to execute centralization management. It will touch from originally scatter type of company culture, so the risk is very big.

 

Development work begins from July, 1998. Three SAP modules and one Manugistics module are requested to complete before 2000. Although company makes a schedule in advance, but because of some code modifications and computer thousand years problem, at while of the rush complete mission, and then appeared a great deal of new problem. A most thorny problem of them is treachery mind in the different stratum. Employee's treachery mind came from an importance mistake when project opening: primary benefit group have no some members which direct influenced by new system and business processing. So some results always make the leadership of sale department and other sections dissatisfied, because of they have no materiality of relation with this kind of change.

 

At the beginning of 2000, the project implementation sinks into confusion. The worker doesn't know how to use new system, even don't know what new work processing is. No one wants to study the new way of business operation. The company's morale is very low. The flow rate of employee who predicts a product need flows is 77%. And plan maker doesn't wish and can't also abandon a familiar electronics form, but change direction complicated Manugistcis module. At the time that complaints increase, the ERP implement appeared stagnation and retreat.

 #p#分頁標題#e#

At this moment the project appeared a technique problem again. In order to resolving for thousand year’s problem, time of insect problem is very urgent. Those peoples who responsible push revolution faced very big pressure. The project ignored integration point between two modules. They don't know how to co-operate work in each section. Although all purchase sections use code, system and process in general. Their systems have no concentrated with finance department, plan department and sale department. For example, sale personnel may have already offered a discount for a big customer. When sales input this result to new system, but the financial receive personnel don't know this information. After that customer press the discount rate payment, the financial receiver thinks this customer just pays one part of amount, there is also debt. The original brand management is a kind of chaos management style. And the process of integration is very hurried. Project group ignored integration in push process.

 

At the end of 2000, the project has grounded. After discussion, all members of project group think revolution need to restart. Company analyzes need of business, and then makes a finish date. In the mean time the project group got two conclusions: first make sure project get support of each section manager. Second ensure all employees know time, reason and style of this kind of change(Worthen, 2002).

 

III. Conclution結論

On the first period of nestle company implement ERP, nestle company executive leadership makes a hasty decision. They decide final complete ERP in 2000, but ignore some organization benefit that influenced by new operation process. As a result users reject ERP; company's employees have no morale, and the rate of employee flow rise. On the second period, nestle company leadership decide to pause ERP project implementation on June 2006, and abandon time in advance. They investigate user's reflection for revolution. The leadership of nestle company get a conclusion about ERP: very important soft implementation is not related with software-self. The five aspects as following must be paid more attention:

 

Don’t set up a deadline. First company analyze department must estimate need of project and investigate users’ reflect conditions, and then determine time of complete project.

 

Company must renew estimate of budget on time. In the long process of project implement, often happen unexpected something. In a certain term complete an expected target is a good implement style for entire project. Company leadership should often check up on work of implement. It will decrease risk of project implementation.

 

ERP is not related with software. Actually implement a new software system is very easy, but the part of most difficult is how to let people accept new business processing system.#p#分頁標題#e#

 

No one like to change processing of conversant, particularly when company can't make sure future. Company should keep a opening communicate channel in the process of implementation. It will take convenience on first exhibition. It can also check degree of users support. 

 

Remember an integrated point in the process of implementation. It is not only simple to install new system. You need to make sure each section can communicate and co-operate each other.   .  

 

IV. References文獻參考

Davis, J. (1999, February). Netflix builds business by pushing ERP envelope. InfoWorld, 21(5), 52. Retrieved August 14, 2006 from ABI/INFORM Global database. (Document ID: 38684826).14, 2006, from ABI/INFORM Global database. (Document ID: 74682063).

 

Information Technology – 5th ed. New Jersey: Pearson Prentice Hall.

 

Songini, M. L. (2005, September). King County Ready To Restart ERP Effort. Computerworld,39(36), 14. Retrieved August 14, 2006, from ABI/INFORM Global database. (DocumentID: 895559261).

 

Sood, B. (2002) An ERP and a steely resolution. Network Magazine. Retrieved August 14, 2006from 

Enterprise Resource Planning 10

 

Turbit, N. (2005, June 27) ERP Implementation - The Traps. The PROJECT PERFECT White Paper Collection. Retrieved August 14, 2006 from

 

 

Williams, S. (2002, September). His Side of the mattress. CIO, 15(23), 38-40. Retrieved August 14, 2006, from ABI/INFORM Global database. (Document ID: 180882711).

 

Worthen, B. (2002, May). Nestle's ERP Odyssey. CIO, 15(15), 62-70. Retrieved August 12, 2006, from ABI/INFORM Global database. (Document ID: 120992055).

 

Kenneth, C.L., & Jane, P.L., 2002, “Information Systems for Management”, Person Custom.

 

Kerzner, Harold, 2003, Project Management: A Systems Approach to Planning, Scheduling, and Controlling, 8th Ed., Wiley.

 

James，A.O., 1999, “Management Information System”, McGraw-Hill.

 

Byars. L. L., 1991, strategic management: formulation and implementation 3rd edition, Harper Collins Publishers, New York.

 

Efraim, T., Ephraim, M., & James, W., 2002, “Information Technology for Management”, John Wiley and Sons, INC.