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Lara Bed’s – headed for disaster or master plan for enterprise system
Lara Beds has grown to become a 15M revenue company with 50 employees in various departments. There is the design department, designing new products and working closely with the second department; Sales and Marketing. Sales and Marketing also take care of the sales and the relationships with the customers. The third department, Procurement, is responsible for the inventory planning and sourcing of the necessary beds. Finally, there are also a 2- person HR team and an Accounting and Finance department.
Lara Beds also operates its own warehouse which has another 15 employees both part- and full time. The Sales and Marketing department is split into Marketing and Sales. The marketing side focusses on obtaining new customers and increasing market and brand awareness, whereas sales focusses on the actual customer retention and the sales themselves. The sales associates will be in direct contact with the customers, ensuring orders are communicated to all necessary departments within Lara Beds.
Besides obtaining new customers and ensuring sales, the sales and marketing department also work closely together with the design department. They will collaborate on new products, sharing insights from the market and direct customer feedback. The procurement department is also part of the design discussions, as suppliers need to be selected for new designs, and the product should be attractive to ship and produce without too many issues along the supply chain. The design process is working relatively well for all departments involved, communication at times can be a tad bit complicated due to not everyone being available at the same time.
However, recently the requests from the sales and marketing team have gotten less structured and conflicting. The recent conflicts in
the requests from the Sales and Marketing department to the Design department, are likely to be due to the department having grown the most over the past 2 years. Additionally, there has been a tremendous shift in customers from wholesale and retail to online retail, which operates much more on a business to customer bases rather than a B2B basis. Furthermore, due to the number of new online sales channels opening up and at the rate they are growing the business it has been hard to keep up with the number of incoming phone calls on a day to day basis. Especially if the online retailers work with the drop-ship model, where individual “1customer orders are fulfilled from Lara Beds’ own warehouse, as they are receiving calls about individual sales and after-sales. Lara has been at a loss on how she is supposed to manage all these individual businesses and has been hiring an account manager for each online retailer so far. Now that she has had 6 new employees start over the past 24 months, things have gotten a bit turbulent in the office and warehouse. The employees have started to compete with each other, by for instance taking the last stock for their individual online retailers in cases of overselling. The warehouse has had its own set of increasing challenges over the past year, such as: many different picking lists coming in, with different sub sets of information, hand written notes on there, and no idea what orders to pick before which ones. On top of that, the sales team responsible for the different retailers has been pushing to get their orders picked before the others so all orders are fulfilled as soon as possible and the stock is still available. Furthermore, the new online retailers bring many opportunities to the table, such as expansion to new foreign markets, increased brand awareness and overall fast growth. This brings its own set of complexities to the table, with new requirements per customer and client who are all interested in variable product specifications, such as different merchandising and product descriptions and measurements on site. As all this data is stored in various excel sheets, PDFs and regular sheets of papers across different departments, it can take up to a day for a sales agent to find the correct information for the client and communicate this. This has lead to dissatisfied
customers, delays in sales and is overall a source of stress for the entire company. Lara talked to all departments and she has realised the current operations have come to a point where she can no longer grow the business sustainably in its current state. She understands each department is facing its own challenges and also in between departments there is a lot of information that gets lost in translation or never even reaches the table. She has started looking into different solutions and she has realised that the only way forward is the implementation of an ERP. It is a costly and not entirely without its risk, but she is positive that by taking the right approach Lara Beds will gain a lot from the implementation of such a system, through the different functionalities of the ERP that Lara is considering. Finally, the implementation of the ERP system will also be examined.
Each department within Lara Bed’s is looking for different functionalities in the new ERP system. To a certain extent there is overlap, but not all functionalities are on every single departments wish list. In the upcoming paragraphs it will be explained what functionalities are taken into consideration in drawing up the short list, how it will affect Lara Bed’s and what departments specifically will be affected.
Integration with different online and offline retailers:
This is one of the main necessary functionalities for the ERP. It should allow for integration with the different retailers, which in turn allows for faster and more reliable order processing, better inventory management, faster invoicing, and a one-source of truth for all customer orders. This will support the sales team in after- sales follow ups if necessary. The integration will affect the sales department the most in their day to day job.
The demand planning functionality has been requested by the procurement department, the warehouse team and the marketing &
sales department. Firstly by the procurement team, as they want to have more visibility into historic sales across all platforms as well as start to use a more sophisticated forecasting tool. Second the warehouse team has requested this as they are sick and tired of having to notify the procurement team of stock running low.
Thirdly, the marketing and sales department have noticed their top sellers running low on stock and even out of stock at times of high demand, and no sales means no business. Now, the demand planning & forecasting functionality should be adaptive to what sales are coming in, seasonality as well as what is currently in the warehouse and on the water. In order for this functionality to know what is in the warehouse, the warehousing team has requested the following functionality.
Warehousing – data tracking of movement within the warehouse:
The warehousing department requested a system in which they could omit the paper documents that are currently in use completely. No longer picking lists on paper, no longer running around the warehouse not being able to find the last product that should still be available. But instead a hand gun with a location assigned to it that shows the optimal route for the picker to pick the products. Once the picker arrives at the product, scans the location code, scans the product and like that ensures the correct product is picked and it can no longer be picked by someone else. The warehouse manager mentioned how important it was to him that the system is easy to understand but also ensures for high accuracy in the picking process, since during high season some temporary staff might have to come in. Finally, he also wanted a dispatch note related to each of the orders once the carriers have taken the product. Since once it it out of the warehouse, most customers can start receiving their invoices.
Change Management Lara realised early onward that the change will not only affect all Lara Bed employees, but also external
partners and therefore relationships. Understanding this has allowed her to ensure the necessary change management principles are put into action before, during and after the implementation of the ERP. Before the go live date, Lara has been vocal about the upcoming changes. She has been the one explaining the importance of the new system for the future of Lara Beds, as well as been giving first hand insights into the selection process and how everyone’s departments heads are being involved. She has setup coffee breaks for everyone to come by as well as suggested all managers to pick this up with their employees individually during development sessions. Her enthusiasm and clear communication about the project are most likely going to support successful implementation of the project. Furthermore, Lara has been committed to not only let the message come from her but also from all departmental heads who are in close contact with each of the employees. Besides clear communication about the project, all departments and employees also receive an abundance of trainings on how to work with the new system prior to launch. The trainings should also be a platform for feedback and questions. By creating more of a workshop like environment, Lara aims to set clear expectations with all employees on what their “new” roles will look like, to ensure everyone understands that they will not become obsolete. Other trainings that will be given are focused as well on cross functional collaboration, team bonding, and overall career development. By including those two pieces Lara aims to show that ERPs are an important part of todays job market and that cross functional collaboration is still an important part of the Lara Beds’ company culture. Finally, to ensure the ball does not get dropped after implementation Lara is committed to have regular debriefings with all department heads and individual employees if necessary. She has assured that everyone can come to her directly if the changed role does not suit them any longer. Furthermore, Lara aims to have clear KPIs for the implementation of the ERP. Meaning that whenever a new milestone is achieved, for instance a business process has sped up times two, two months after implementation, she will ensure communication and make this something to
celebrate and make everyone feel included. Though the first months after implementation will be a bit rough, Lara believes that by doing all of the above Lara Beds will come out of this project stronger than before and ready to grow the business sustainably again.
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