Erp Systems
CASE 3 ERP Purchase Decision at Benton Manufacturing Company, Inc.
MIS 6330
In case study III-4, titled “ERP Purchase Decision at Benton Manufacturing Company, Inc.,” describes in detail what a major manufacturing company experiences while considering a substantial investment with the implementation of an ERP (enterprise resource planning) system. Among the company’s management personal opinions vary, some doubt the need of such a system while others support and justify the expense. The question at hand; whether or not to implement a costly system with a lengthy transitioning phase? In his attempt to answer this question, Walter McHenry, CEO and President of Benton Manufacturing has formed a two man team to investigate and further research the negative and positive possibilities of and ERP system. We will explore the company’s background, component / analysis, and finally our conclusion / recommendation.
Background Benton Manufacturing Company, Inc., is a U.S. manufacturer of consumer durables with reported net sales in 1998 of nearly $1billion and operating profits of almost $180 million. In North America alone, the company operates 7 factories and 57 distribution centers while employing 5,200 people. Recently, through the acquisitions of several companies Benton’s product lines have expanded offering their thousands of independent dealers a broader selection. In the past, Benton Manufacturing enjoyed a 40% market share. However, as more independent dealerships are being acquired by large firms the traditional relationships between Benton and its dealers have shifted causing the profit margins to diminish. With the increased competition efforts to stave off the current pressures have also increased. The company implemented a Continuous-Improvement strategy that resulted in a 25% increased productivity, 30% inventory reduction, freed factory space, and reduced cycle time.
In order for Benton Manufacturing, to continue as an industry leader and keep
MIS 6330
In case study III-4, titled “ERP Purchase Decision at Benton Manufacturing Company, Inc.,” describes in detail what a major manufacturing company experiences while considering a substantial investment with the implementation of an ERP (enterprise resource planning) system. Among the company’s management personal opinions vary, some doubt the need of such a system while others support and justify the expense. The question at hand; whether or not to implement a costly system with a lengthy transitioning phase? In his attempt to answer this question, Walter McHenry, CEO and President of Benton Manufacturing has formed a two man team to investigate and further research the negative and positive possibilities of and ERP system. We will explore the company’s background, component / analysis, and finally our conclusion / recommendation.
Background Benton Manufacturing Company, Inc., is a U.S. manufacturer of consumer durables with reported net sales in 1998 of nearly $1billion and operating profits of almost $180 million. In North America alone, the company operates 7 factories and 57 distribution centers while employing 5,200 people. Recently, through the acquisitions of several companies Benton’s product lines have expanded offering their thousands of independent dealers a broader selection. In the past, Benton Manufacturing enjoyed a 40% market share. However, as more independent dealerships are being acquired by large firms the traditional relationships between Benton and its dealers have shifted causing the profit margins to diminish. With the increased competition efforts to stave off the current pressures have also increased. The company implemented a Continuous-Improvement strategy that resulted in a 25% increased productivity, 30% inventory reduction, freed factory space, and reduced cycle time.
In order for Benton Manufacturing, to continue as an industry leader and keep