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Erp

How ERP implementation builds’ world famous Supply Chain: Virtual Integration: When ERP fits the Dell's Direct model: The introduction of enterprise resource planning (ERP) software improves the coordination between firms. Before ERP, the each function in value chain had separate organization with separate information system. Each function performed its own tasks thus not globally optimizing the whole value chain. ERP builds the "electronic nervous system" to links all units together and increases overall productivity. In some cases, firms found that they could eliminate most inventories by shifting to faster but more expensive transportation alternatives (e.g. air cargo) that replenished supply just in time. Simply put, ERP allowed information to replace inventory. The emergence of the Internet facilitated more and more information sharing between firms, extending the benefits of ERP from the value chain of an individual firm to the entire value system of firms and their suppliers and customers. ERP can be a vital component in controlling complex supply chains and in the fast developing world of e-business and B2B electronic exchanges. Dell Computer's success in reducing inefficiencies establishes it as a model for many other companies. The Dell Model Dell's success is based on realizing the strategic power of the supply chain. The core of the Dell model is to deal directly with and sell directly to the customer, and build products to order. Dell collapses the value chain and eliminates two significant cost components: the retailer's mark-up and the costs and risks associated with carrying large inventories of finished goods. Texas-based Dell is the world's largest personal computer maker. Founded in the mid-1980s by a university student, Michael Dell, the company leads the sector with annual growth rates of 30 to 40 per cent. Dell has achieved its success in large part due to its highly efficient value chain integration approach, supported by ERP and - more...