- What motivated Skullcraft to go after ERP even although company possessed just 26 employees?
An Enterprise Source Planning system can be an integrated system which helps the business to control its resources; inventory, procurement, source chain, finance, real human learning resource etc. are several many resources an ERP really helps to manage.
Although, the company got just 26 employees, an ERP system will enhance the managing of resources which is not limited by just recruiting.
The following facts will justify the implementation of the ERP system:
- The company was rivalling Sony in the U. S. headphones market with sales of up to $37 million.
- The company got around 200 to 300 percent twelve-monthly expansion rate.
- The business possessed to handle large amounts of ventures.
- The finance division was using Excel spreadsheets and Quickbooks to control the literature.
- Wide circulation of products.
- No product tracking through supply string till ERP was integrated.
In a nutshell, Skullcraft was a tiny business with ventures comparable to a major enterprise. Thus controlling resources was getting more and more complicated as the business grew in sales and buying an ERP system can help the company maintain its resources in a more efficient way. In addition, as the ERP system was fully hosted, the company did not need to control a separate ERP infrastructure that was a bonus for these people.
- What features brought on Skullcraft to choose SAP's ByDesign?
SAP's ByDesign was a unique system which satisfied Skullcraft's every single requirement. After assessing many systems, Beth Siron decided to go with ByDesign for the following reasons:
- SAP's ByDesign was a fully system hosted system and therefore it did not required additional information system infrastructure to be applied by Skullcraft. The business would use the ERP system over the internet which made it easy for each and every section to use it from anywhere.
- It enabled big business tactics for controlling financials, inventory, customer relations, supply chain etc. in a format accessible to smaller businesses. This is perfect a was the tiny enterprise with twelve-monthly development rate of 200 to 300 percent.
- It helped Skullcraft to observe the products through the supply chain.
- The ERP system was allowed the business to forecast future demand.
Thus, the program did everything a major company's Information System would do but without the additional infrastructure and a team to manage it. These features where simply perfect for Skullcraft which was a small firm with transactions add up to a large organization.
Critical Thinking Questions
- How do you consider Skullcraft could maintain a tiny staff while increasing creation 200 to 300 percent on a yearly basis?
Rick Alden observed a unique home based business in selling high-end radically designed earphones to Skiers and Skateboaders. The company was also the first someone to enable users to switch between music being attentive and mobile phone conversations over earphones.
The cause of the tremendous expansion was the target market and distribution channel. The business first targeted specialty ski and skate shops and then later large retail chains. Specialty retail shops attracted large amounts of extreme sports activities fanatics which put Skullcraft on the map in the headphones industry.
Even with just 26 employees, the company was effectively in a position to manage its operations specially production and distribution. It is not unusually for a company to truly have a tremendous development rate with such a small workforce. If businesses are effectively managed, expansion can be increased without comparable investment in additional resources.
The company may experienced the creation outsourced which makes sense as a tiny labor force cannot produce and maintain such large product demand. In addition, the company might have arranged the goods to the picked up at the manufacturer's workshop and fell at the area of expertise retail stores. Thus by effectively managing the circulation of goods, the business must have had the opportunity to increase its development up to 200 to 300 percent with just 26 employees.
- Do you think Skullcraft is abnormal in its size and needs? How many other businesses is it possible to think of this fit the Skullcraft model?
No, Skullcraft is not strange in its needs and size. It I common for a company to have a tremendous growth rate even with a small size. Many small company offer services to a large quantity of customers. Skullcraft's Rick Alden realized an exceptional business opportunity which became a huge success and helped the company experience a growth rate of 200 to 300 percent each year. Also, the business could effectively take care of and integrate procedures resulting in huge sales while maintaining a small individual capital.
Other businesses that fit the Skullcraft model are:
- IT companies like GoDaddy which provide site services to small and large corporations enterprises can provide a large range of customer using its small size. The progress in internet services allows such firms to remain small and serve large. Thus, investing in an ERP system will allow GoDaddy to control operations better.
- Freight Forwarding businesses consolidate good from various customers into one big box. This helps lessen the expenses of shipping smaller amounts of goods. They use the infrastructure of big businesses and manage operations right at their tables. Also, and ERP system will help freight forwarders to observe the products through the supply chain and mange customer relationships.
- A small logistics businesses manages the operations and uses sources of other organizations to move the goods. Their small size needs large sums of resources. And ERP in a logistics firm with help the employees keep tabs on the goods, manage the finance, maintain customer relations etc.
- Medical firms, architecture firms, making and developing companies and many other IT sector organizations are small in proportions but their needs are huge.
Thus, Skullcraft's size and needs aren't unusual as it's very common for a company to remain small but serve a large quantity of customers which will undoubtedly increase their needs.