Business Problem: The order fulfillment team has been using several legacy technology systems to manage inventory and distribution. The current systems do not work together, requiring redundant information input and processing. Because of the redundant processes, work is duplicated requiring multiple data entry points and sometimes results in inaccurate and irreconcilable data. There is a constant overage or shortage of supply due to the time it takes for data to get from one point to another. This causes unhappy customers and inventory carrying costs that could be avoided.
Project Description: Replace legacy order fulfillment technologies by implementing a SCM system.
Project Cost: The project will cost approximately $1.2 million including infrastructure and resources to complete the implementation and $250,000 annually to support and maintain the new system with a ten-year lifecycle for the system.
Project Benefit: It is estimated that the implementation of a supply chain management system will improve the order fulfillment processing time and reduce inventory-carrying costs. Implementing the SCM system will also enable the retirement of several legacy systems. Estimated annual cost savings are:
- Data entry staff reduced from 10 FTE to 8 FTE = $100,000/yr savings
- Reduction in inventory carrying costs = $300,000/yr savings
- Improved order fulfillment = 10–20% decrease in order to delivery time. This will improve customer satisfaction and retention
- Improved data accuracy
- Legacy system maintenance retirement savings = $100,000/yr
Using the information that details the primary business goals for the coming year, you will need to demonstrate how implementing the SCM system will help achieve the business objectives.
Note: Customers are retail companies who order from this clothing manufacturer. Assume a ten-year lifecycle for the SCM system.
Using the module readings and the Argosy University online library resources, research methods of developing proposals by applying the balanced scorecard approach. Select two scholarly resources for use in this assignment. You will use these resources to justify your recommendations.
The proposal should include the following:
- Describe the measureable value. This should include a cost-benefit analysis, such as payback period or ROI that relies on tangible measures of organizational value through cost savings, revenue enhancements, or improvements in the speed, quality, or efficiency of key processes that help achieve competitive advantage (note the difference between tangible and intangible measures in this proposal).
- Evaluate and choose alternatives. Make sure to identify any alternatives to the project implementation and provide a justification for each.
- Complete a risk assessment of all risks associated with implementing the project using an enterprise risk management (ERM) model.
- Describe total cost of ownership and include descriptions of implementation project and ongoing maintenance costs.
- Explain the benefits of the project, which include tangible and intangible benefits.
- Fully justify a recommendation with a compelling proposal that aligns to the business goals.
Write a 6–8-page paper in Word format. Apply APA standards to citation of sources.