Q 1.

Smooth implementation of an ERP software in an organization is called ERP life cycle,

which comprises a number of phases, such as,
Pre-evaluation screening: Short-listing from several available ERP systems. Considering an
ERP, concentrated on increasing the company’s operating efficiency, can identify and
distinguish the complex business process and link the global logistics division by providing
quick responses to customer demands to its server.
Package Evaluation: A deep analysis of all the shortlisted ERP systems to select the final
system. We can start by finding and documenting the critical business processes, inflection
points and key performance indicators. This will help us to pinpoint the right ERP solution, as
well as the appropriate specialists needed as we go through this important transition. A similar
case demo by the final two shortlisted providers can be useful to have a final impact on selecting
the ERP provider.
Project Planning Phase: It is a very critical phase, where the complete list of the requirements
needs to be listed and presented to the provider to develop an ERP as per the growing demands
of the company. A timeline has to be set for completing the different phases of the project step
by step. The planning phase must involve developing a contingency plan, identifying control
measures and deciding methods for evaluating the ERP system, tested and planned migration of
data from the old to the new system. In addition, since the company is into designing and
manufacturing, several layers of security must be planned for data encryption.
Gap Analysis: It is used to tell the provider about the current status of the organization in terms
of IT infrastructure and the future goals it plans to achieve, this will help the organization to
anticipate any functional gaps and come up with solution or the budget to bridge them.
Re-engineering: This involves the complete restructuring of the business processes, technology,
functions, etc. and particularly, enhancing the effectiveness of its global logistics and provide
quick responses to customer demands. The re-engineering will also look at ways to reduce cost
and improve efficiency across the supply chain.
Configuration: It is also called the functional phase of the ERP implementation life cycle. In this
phase, we must map out specific plan of how to install, configure and optimize the system for the
working environment, at this stage an ERP system is synchronized with the existing system of an
organization. Plans are bound to change (at least slightly) during this process so always keep the
major needs and end goals in mind. Plan a complete back up of the old system, just in case
something goes wrong.
Implementing Team Training: In this phase, the implementing team is trained for implementing
the ERP system successfully in the organization. Generally, the key users are given full training
and then the key users, train the other users. The IT team needs an extra session of training to
know how to handle any technical problems that may arise in the future.
Testing: System and user acceptance testing is a key phase of the implementation process. In the
testing phase, the ERP system is verified by creating real situations. The team must test all
different scenarios in all the areas, such as design integration, production interface, inventory,
sales, after sales, etc., if the ERP system is unable to pass the testing phase, the required changes
should be made in the system.
Go-Live: In this phase, the ERP system is made available to all the users in the organization,
another round of testing would generally be advisable at this stage, to find out any bugs. After
which the old system is totally replaced by the new ERP system.
End-User Training: In this phase, the end users are identified and segregated into groups, so that
they can be trained by the key users to work on the new system. Any errors or system hanging
must be reported immediately, to fix the issues.
Post-Implementation: Unfortunately, you can’t just install your ERP system and never touch it
again. Advanced ERP implementations require time and attention beyond the initial installation.
This includes upgrades to your system and general maintenance. It is advisable to take a
maintenance contract, to avoid any disruption of work.

The choice of ERP vendor is critically important to the success of the project. ERP software
vendors need to be evaluated along dual pathways. The first is the more obvious one, is their
ERP product the right fit for this organization and business model. The second is, the vendor’s
culture the right fit for your culture. Determining the fit of the software product for the business
is the more important decision, but should also be the most objective. Unless we can hope to
secure some strategic advantage with an unusual ERP solution, tried and true should be the rule.
The vendor should be able to put users in front of you from your industry who make you feel
positive about the strengths of the product. If we cannot find exact industry overlap, then we
need to find process similarity, but in any case, we need to talk to the people who have used that
particular ERP product over time. Construct a basic numerical scorecard around the critical
features we need, and use it, and trust it when comparing products. Be careful when someone
with no particular track record in the industry tries to buy market entry with a noticeably low
asking price, and remember that there is no amount of money in the company sufficient to fix a
bad ERP solution. We must always pick a vendor who will be around for a while, and supports
on-going development for the products and services.

Q 2. McDonald’s is the world leading retailer with more than 33,000 restaurants in 118 countries
serving more than 67 million customers each day. In India, the first outlets of the chain threw
open their doors to the public in Delhi and Mumbai in 1996 within one month of each other.
McDonald’s is present in 40 cities with 250 restaurants and servers 6,50,000 customers daily.
The strength of McDonald’s India employees amounts 9,000 people including restaurant staff.
But the surprise lies in its unique and intricate supply chain network which is managed by just
five people across the country. Including the quality assurance people, this figure rises to just
eight people who are responsible for its efficient supply chain Indian Territory. It was from 1990
onwards, expert teams happened to be in India to check the strength of India’s logistic industry,
the reliability of its transport sector, and resource availability.
The McDonald’s supply chain has a total of 40 suppliers which is both critical and multi-layered,
there are two categories in food ingredients and supply, Tier-1 and Tier-2 suppliers. In Tier-1,
there are 14 core suppliers that provide processed products. In Tier-2 there are growers and
processors. The flow of ingredients is from Teir-2 to Tier-1, who processes them. Some
internationally famous foreign players like McCain Foods India are also the part of supply team.
Now, the fleet of refrigerated trucks specifically maneuvered for variability of McDonald’s
products transport these processed foods to the company’s Distribution Centers. These are Multi-
temperature and single temperature trucks where 250 McDonald’s Indian restaurants are
provided on time fast delivery. This is not unidirectional, it also includes the significant aspect of
return logistics. Hence the empty bottles and racks are available for further processing. Plastic
crates are used for buns to ensure their quality. With four Distribution Centers across the country
all 250 restaurants are served effectively and every new outlet addition is capably handled by
these DCs within ten days in the country. The Noida and Mumbai DCs are primary Distribution
Centers owned by the company. The other two distribution centers are in Bengaluru and Kolkata
are housed in leased properties. The system that is used to manage link between Restaurant and
DCs is a hub-and-spoke model where the DCs act as hubs. McDonald’s transportation has been
completely outsourced and since 80% is refrigerated truck movement, the company has a
dedicated fleet which transports their goods.
The company has a 100% outsourced supply chain, which is a rare case in industry giants. But
McDonald’s has complete control over its functioning. The performance of outsourced
companies is monitored on Key Performance Indicators (KPI). The figure highlights the
suppleness of its supply-chain under three principles to which the company adheres
unwaveringly, the principles of trust and collaboration between the brand, the owners or
operators, and the suppliers. Relying on local players, most of the suppliers are local. For
suppliers to remain in the main stream, the terms of work are very rigorous. It’s a whole lot of
responsibility with qualitative assurance lies on suppliers. A company’s stellar credential are not
enough, the suppliers job does not end when the product leaves his premises, rather it ends only
when the customer consumes it.
McDonald’s has no legally signed agreements with its suppliers, it is a simple handshake
relationship, with the suppliers. The policy with suppliers is very clear, one product-one supplier
relationship. The policy has been proven as long-term relationships at every time. The fast food
chain sells 30 or 35 independent Stock Keeping Units (SKUs) at its outlets. With various
combinations, there are 100-150 SKUs which are sold to customers. Limited SKUs have ensured
speedy service and ease to maintain stock keeping. The major demand is fulfilled by 14 core
suppliers and whenever addition is there in restaurant line those 14 suppliers are the first choice.
The entire distribution of McDonald’s products in India is handled by Radhakrishna Foodland
Pvt. Ltd, the only distribution partner. RKFL manages the four DCs and since it has a transport
division, handles the truck movement in the supply-chain right through the country. McDonald’s
exhibits control on its distribution partner to meet its standards of cold, clean and on-time
delivery. Any item required, is sourced directly from RK. There are only two products, buns and
Cokes, which are sent directly to the restaurants. As with its suppliers, McDonald’s has no
legally documented Service Level Agreements (SLAs) with RKFL. For distribution partner also
McDonald’s has set KPIs.
Demand forecasting for long term is based on an efficient concept known as 31Q system-3
stands for the three years that the fast food will keep checking its plans, 1 represents the detailed
forecast of the next year and Q symbolizes the quarterly monitoring of these forecasts. While
preparing annual budget suppliers becomes a part of budgeting process. Usually, the restaurants
give a three-day to one-week forecast to the DC. The DC, in turn, has a three-month rolling
forecast with the suppliers which enable them to plan their production schedules meticulously.
With 250 restaurants scattered across the country, lead times for delivery assume critical
importance. Every restaurant manager knows the exact time of arrival of each product which
enables the supply chain team to work backwards to ensure timely distribution. With a maximum
inventory of ten days in its system, McDonald’s maintains an efficient inventory turn ration of
36.

Auditors worldwide are also trained on its SQMS and DQMP programs. Independent auditors
then audit plants and warehouses and allot scores to McDonald’s facilities globally to ensure
highest standards. McDonald’s Supply Chain is quite uniquely handled with least number of
employees on McDonald’s payroll. The control on outsourced entities is commendable. With
ever growing business of fast food McDonald’s has laid down its systems efficiently and
expanding at enormous speed. The model can be replicated in other sectors as well.

Q 3. a. Big Bazaar comes under the Pantaloon Retail India Limited (PRIL). PRIL was early to
realize the potential of the huge middle-class population in India. In 1997, they launched Big-
Bazaar a hypermarket with over 1,70,000 products as the first offering in value retailing
segment. PRIL have introduced the concept of seamless malls in India through the new format
Central. Big Bazaar is a chain that stocks all home need products under one roof; spread over
30,000 square feet of land, across different cities in India. It has been positioned as ‘Is se sasta
aura cha kahin nahi.’(Nothing cheaper and better anywhere) indicate the value of stores. Big
Bazaar stocks over 2,00,000 products that include apparel, food products, home appliances and
cosmetics. Products are cheaper than the market price by as much as 5 to 60% while the price
difference on the other products varies between 5 to 20%. On Oct, 2001, they launched ‘Big
Bazaar’ as offering in the value retailing segment. By removing inefficiencies from the
distribution chain, we are able to unleash attractive savings, which are passed on to the
consumer.
Big-Bazaar is India’s first hypermarket in the discount store format. Big-Bazaar provides more
than 2,00,000 items which are sold at a discount to the maximum retail price. Price is the
principal value proposition at these stores. A big driver of the Big Bazaar is the product variety.
This is achieved by selling wide range of products and through the ‘Shop-in-Shop’ format. They
believe this is a win-win situation as the customer is assured of product availability, the shop
owner can benefit of the in structure and they enjoy assured income without needing to stock
inventory. Also, the shop-in-shop offering is able to increase the customer traffic in to the stores.
The Big-Bazaar has been positioned to the customer as a place where the customer can shop for
each and everything for which if goes to a market. The number of Big-Bazaar stores has
increased from 4 in 2002 to 21 in Oct 24, 2005.
They have also launched private label initiative in Big-Bazaar. Understanding of the apparel
industry, decades of experience and a vertically, integrated structure provides with more
compelling reasons to expand the number of private labels. They have launched a full range of
accessories to supplement the apparel business including imitation jewelry, sunglasses, watches,
mobile phones, etc. Analysts attribute the success of PRIL to cheaper sourcing of products and
lower distribution cost. Pantaloons sourced its products through ‘consolidators.’ There was a
consolidator for each product category. These consolidators were responsible for procuring
quality goods at the cheapest possible price, and were paid commissions on their sale at the store.
The consolidator directly dealt with manufacturers, and as a result the distribution cost could be
slashed as no intermediates were involved. In addition to discounts on products through the year,
Big Bazaar also held events such as ‘Kitchen Mela’, ‘Trouser Mela’, etc. to attract customers.

Q 3. b. China Merchant Bank (CMB) was established in 1987 in Shenzhen. With current assets
over US$50 billion and with US$43.5 billion of deposits, it ranks as the 6th largest bank in China.
Banker’s journal ranked CMB 187th in the top 1000 biggest banks in the world in 2002.
CMB can map the results of customer profitability analyses back to their channels to determined
high-value branches, or to specific geographical areas to extrapolate high-value cities or
neighborhoods to target. Changes in a customer’s profitability over time can also uncover
previously unknown customer behavior patterns. Many banks use profitability analysis to the
creation of new services, or discarding of old ones. CMB is likely to target particular customer
segment, e.g. mass affluent rather than mass market and will try to differentiate itself from
existing competitors. Consider, for example, customers of CMB who only use the CMB for a
checking account. An analysis reveals that after depositing large annual income bonuses, some
customers wait for their funds to clear before moving the money quickly into their stock-
brokerage or mutual fund accounts outside the bank. This represents a loss of business for the
CMB. To persuade these customers to keep their money in the bank, CMB can use DM tools to
immediately identify large deposits and trigger a response. The system might automatically
schedule a direct mail or telemarketing promotion as soon as a customer’s balance exceeds a
predetermined amount. Based on the size of the deposit, the triggered promotion can then
provide an appropriate incentive that encourages customers to invest their money in the bank’s
other products. Finally, by tracking responses and following rules for attributing customer
behavior, DM tools can help measure the profitability and ROI of all ongoing campaigns.

Data Warehouse (DW) empowers banking institutions to provide Internet-based financial

solutions to their retail and commercial customers via a cost-effective service. DW offers profit-
generating opportunities to its clients through secure, reliable, and scalable products and
services. The DW technology is rapidly becoming the new medium for financial services. Many
financial services firms outsource their software and hardware development to computer
companies. The DW technology makes it possible for large global financial services firms to
reach the most remote local markets, but also for small specialized niche banks to reach their
customers worldwide.
The Internet is a leading marketer to a fundamental paradigm shift from mass marketing to
personalize marketing. Databases, cookies and telecommunications technology make it very easy
and cost-efficient to mass-market personalized services. Personalization on the Internet refers to
the ability of customers to receive personalized information or visit a website with a home page
customized for them. Through the use of databases, it is able to store information about its
visitors and provide a personalized, free service for them, reminding individuals of important
events, such as birthdays, personal data. The concerns that people have over the collection of this
data will naturally extend to any analytic capabilities applied to the data.