Case Study 2 Meeting 4

1. GROUP MEMBERS
1. Arni B. Hj. Morshidi P14D461P
2. Anisah Bt Ismail P14D389P
3. Syarifah Rohaya Bt Wan Idris P14D397P
4. Dayang Adelina Bt Hj Abang Muan P14D394P
5. Norhana Aini Bt Saini P14D398P

3. Top wholesale distributors
of industrial electrical
equipment and supplies
3 divisions:
Global export – Houston
Marine – New Orleans
Sales - Dubai
Founded in 1977 in
Albuquerque, New
Mexico
A “middle man”

4. • A legacy information system
not keep up with the business
• Done manually
• Only handle a fixed number of locations
and limited of numbers used on
documents
• IS Department
• Had to use the same range of
document numbers over again every few
months

5. • Summit needed a system that
could handle a very large number
of SKUs
• Changed to new system ERP provided by
SAP
•That would require improve its business
process and the way people worked.

6. • Which business processes are the most
important at Summit Electric Supply?
Why?
Question 1
• What problems did Summit have with
its old systems? What was the business
impact of those problems?
Question 2
• How did Summit’s ERP system improve
operational efficiency and decision
making? Give several examples.
Question 3

7. • Describe two ways in
which Summit’s
customers benefit from
the new ERP system.
Question 4
• Diagram Summit’s
old and new process
for handling
chargeback.
Question 5

8. Question 1
• Which business processes are the most
important at Summit Electric Supply?
Why?
SUPPLY CHANGE MANAGEMENT (SCM): the active
management of supply chain activities to maximize
customer value and achieve a sustainable competitive
advantage.
• Summit Electric Supply is one of the top wholesale
distributors of industrial electrical equipment and supplies in
U.S.
• Distributes products that include motor control, wire and
cable and etc.
• As a “middle man” – obtains finished goods from
manufacturers and sell them to electrical contractors working
on projects
• Handle a very large number of SKUs transaction in a very

9. Question 1
• Which business processes are the most
important at Summit Electric Supply?
Why?
ERP System
• A packaged
business
software
system that
enables a
company to
manage the
efficient and
effective
use of its
resources.
SAP Application
• SAP is a core ERP
application and the
best practices
function in sale and
distribution, materials
management, Human
Resources and
Financials and its
knowledge in
distribution business.
• SAP’s NetWeaver
support Summit
Electronic more
organize and be able
to control how much
was needed to be
produced and
distributed.
• It’s useful for business
intelligence reporting
and analysis.
Batch Management
• It is a software
that treats a
wire reel a
batch rather
than single as
single
products.
• It used to cater
high demand
for wires and
cable
products.

10. Question 2
• What problems did Summit have with
its old systems? What was the business
impact of those problems?
Separate systems
Used separate systems for orders
and financial
So that, the data could not be easily
combined for business intelligence
reporting and analysis
Done manually
The integration between
sales entries and purchase
order and back-end
reporting.
Only handle a fixed number of
locations and limited range of
numbers that could be used on
documents
I.S Department had to use
the same range of
document numbers over
again every few months.

11. Question 2
• What problems did Summit have with
its old systems? What was the business
impact of those problems?
The Impact
The system was not able to keep up with the fast
growing business.
Limited
Not able to handle the volume and complexity of the company’s chargeback
agreements and reporting capabilities were limited

12. Question 3
• How did Summit’s ERP system improve
operational efficiency and decision
making? Give several examples.
 ERP improved operational efficiency and give
scalability and the ability in Summit’s business
process
 Especially in supply chain areas like sales and
distribution, inventory management and
financial reporting system-as the company
expected strong growth in these areas.

13. Question 3
• How did Summit’s ERP system improve
operational efficiency and decision
making? Give several examples.
• It’s running smaller and frequent inventory update throughout the
day, instead of a night-which caused a delay.
• New system provided accurate information of shipping order, which
Summit’s was able to ship immediately.
Running more frequent inventory
updates
• To replenish wire and cable, the ERP batch material management
identified the customer purchase amount, length of wire and
product manufacturer.
• Each time a customer buys a length of wire, the length is entered
into the system to track how much of the “batch” was sold.
Adapting the inventory tracking
process

14. Question 3
• How did Summit’s ERP system improve
operational efficiency and decision
making? Give several examples.
• To secure inventory for special customers, with long term projects,
Summit created a “parent- child” warehouse relationship in ERP
system to secure the materials in inventory as well as on premises..
Changing how inventory is
managed at job sites

15. Question 3
• How did Summit’s ERP system improve
operational efficiency and decision
making? Give several examples.
• To make a better manage its finance and ordering system, Summit implemented
the SAP’s/NetWeaver BW data warehouse and business intelligence.
• By integrating the NetWeaver, Summit was able to analyze the profit of each sales
person, manufacturer, customer and branch.
• Using SAP software, Summit was able to improve its ROI, by automating sales tax
and chargeback’s.
• The SAP/Paybacks and Chargeback’s application was able to identify the billing
activity, if there was a chargeback, the SAP system would automatically submit the
information to bill the chargeback- increase its chargeback claims of up to 118%.
• Summit decision making for implementing the new ERP system was based on the
growth of the organization, the complexities of processing orders, analyzing
finances and back and reporting.
• Once the new ERP/SAP was in place, Summit management was able to focus on
sales and orders and quotes, supplier performance and delivery schedule.
• The new SAP/ERP has allowed Summit to run its operations with flexibility and
allow the SAP to operate efficiently.
• The new ERP system allowed management to have a greater vision for decision
making and managing its operations
Business intelligence

16. Question 4
• Describe two ways in which Summit’s
customers benefit from the new ERP
system.
Customer can rely on the company for their
needs and products
• The company now more efficient
• The company wants that customers to feel that they can
provide that they have produced products the customer
want and sent to them in short time period.
To accommodate large customers with long
term job sites
• SES sets up temporary warehouse on site to supply electrical products.
• Create “parent – child” warehouse relationship – to able to work with
customers.
• The warehouse can be controlled like subparts of the main SES warehouse.
• It helps to prevent anybody from selling the consigned inventory into the
warehouse.

17. Question 5 • Diagram Summit’s old and new process
for handling chargebacks.
 Chargeback is the return of funds to a
consumer.
 The chargeback mechanism exists primarily
for consumer protection.
 For the distribution company, chargeback
occurs when the supplier sells a product at a
higher price to the distributor than the price
they have set with the end user.

18. Question 5 • Diagram Summit’s old and new process
for handling chargebacks.
Look through
customers
invoices
Identify specific
manufacturer which
Summit chargeback
could claim
Input data
manually in
Excel
spreadsheet
Submit paper
copies of
invoices to
vendors
Received
responds
from vendors
End of
process
OLDPROCESS

19. Question 2
• What problems did Summit have with
its old systems? What was the business
impact of those problems?
NEW PROCESS
All chargeback
agreement
loaded in SAP
system
System review billing
activity and do a
matching to create a
separate chargeback
documents
Automatically submit
the information and
chargeback document
to identified vendor
End of
process