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Help me to finish my part of a group activityThis is a continuous report based on the first report made by our group previouslyAnd my part of questions is the second question shown in the picture.You need to answer both a and b and there should be like 600words totallyAnd for the technology that is going to be used for our business, you can chose from the lecture notes I sent you.Please read the first report very carefully make sure you are writing the same thing.All the work must be originalTurnitin report is required exp.jpg experimental_activity.docx week_6___expenditure_cycle___pdf.pdf Unformatted Attachment Preview Experimental Report 1 1. Business Narrative Food Delicious is a modern expanding business, which creates a platform that allows farmers and high end restaurants to connect with each other. The platform allows restaurants to attain the highest quality ingredients, supplied directly from farmers, whilst farmers are able to sell their product directly to the customer. Food Delicious is a three year old business. We started off being an online website and last year made an investment to develop our own app for apple and android products. We work like an online agent between farmers and customers, but without being involved in the sales process ourselves. Our customers are able to jump online or the app, choose the desired products they require. The minimum order size required by a customer is $1000 for logistical purposes. Food Delicious will add 10\% on top of the total sale price as our commision, which will cover all costs like logistics and maintenance. From the time an order is placed, the customer can expect to receive their product within 1-2 days. A monthly tab will be opened up for customers, with limits on monthly spending limited to how much credit a customer has available, and monthly payments required. Farmers will also receive monthly payments for their products. Our farmers have been carefully selected by our scouts, and have all food safety and quality assurance certifications, to ensure the integrity of our product. To meet all quality expectations, all products are thoroughly inspected before delivery to meet the customers needs. Food Delicious has its own delivery service. The reason for this is to keep the integrity of the products at all times, so that all parties are satisfied with the end outcome. 2. Elevator Pitch Target Customer Food Delicious’s target market is for high end restaurants. Due to logistical and maintenance costs, Food Delicious has to implement the $1000 minimum order size in order to be a profitable organisation. Due to this, Food Delicious has been aggressively marketing and advertising its service towards higher end restaurants, who have larger and stronger financial positions compared to other restaurants. Customer need Food Delicious’s customer needs are very self explanatory. Our customers require the highest and freshest of quality ingredients for their high end restaurants. With current systems and processes in place, Food Delicious can assure that we meet their required needs. Product Name The Product name is Food Delicious. We act as the link between farmers and customers, through our online website and mobile app. So essentially the name of our product is Food Delicious. Market Category Food Delicious essentially is a food delivery service. We are therefore classed in the same category as other food delivery services like Uber Eats, Deliveroo and etc. We can also in certain criteria be classified as a product delivery service, like Amazon, Alibaba and etc. Key Benefits The Key Benefits for Customers is the ease of doing business. The ease of doing business, combined with our quality and freshness of our products is guaranteed, allowing customers to save time. Key Benefit for farmers is also the ease of doing business, with guaranteed monthly payments. Competition Our main competition is other food delivery services. Other competition include companies like Woolworths and Coles. Any business that sells fresh produce is our competition. Product Unique Differentiator What makes our product unique from our competitors is the ease of doing business for all parties involved. For farmers its a simple way to connect with their customer base, while for our customers, its an easy way of sourcing fresh produce. l 3. Which Enterprise Systems does Food Delicious Use? Considering the nature of the business, Food Delicious is using both Supply Chain Management (SCM) and Customer Relation Management (CRM). 3.1. Why should the company use the systems? 3.1.1. Why CRM fits the company CRM, to Storbacka, is a core business discipline which aims to maintain the profitable relationship of the company with customers. For a service firm which depends on Online and Face-to-face distribution channels like Food Delicious, strategic CRM is the most compatible for such a market-orientation business (Buttle 2019). This system can increase the satisfaction of the customers, in this case farmers and restaurants’ owners, by prioritising all the needs and wants as well as improving the quality of service. It allows firms to have an insight into the customers, the reasons why they purchase some specific products, what promotions should be given to different recipients, and in turn, builds a strong customer retention. For example, employees can check the data and see if a product is ordered frequently, then offer the restaurant some complementary additives but under a prudent analysis to avoid loss. Food Delicious is a young and enthusiastic company which is on a rapid growth. With the number of customers increasing every month, the amount of data also escalates. CRM now can help with storing information, analysing market trends, tracking customers enquiries in a common platform, etc. Even though we can get these functions using the ERP system, it is too complex for a service-based firm which does not require multi-step management. ERP is also costly and takes a long time to modify (Cin7 2017). CRM, on the other hand, can reduce the expenses and impacts related to human factors (Kharchenko 2017). Employees also get benefits from using CRM as it optimises the internal work and makes it easier to communicate with customers. Ultimately, the company will get better sales and profits from satisfaction of both customers and employees. 3.1.2. Why SCM fits the company Since Food Delicious is acting as an intermediate to supply high quality food from farmers to restaurants, an application of the SCM system is significant. SCM, as defined by Ellram and Cooper (1993), is an integration of managing all the distribution channels from distributors to final customers. The system enables company to monitor inventory, warehouse, logistics, procurement, etc. For instance, company will know when a product is nearly running out of stock to make a backorder accordingly, quickly respond to a customer’s requirement to avoid delays, or track an order’s process. 3.1.3. CRM and SCM integration Food Delicious is using both CRM and SCM systems to boost sales and profits, at the same time have a strict tracking on order processing. As a fresh food supplier, we want to gain and maintain loyal customers by ensuring that all of our products are delivered on time and in the best quality. To do so, an integration of CRM and SCM systems is needed. Supply chain can use the information provided by CRM to meet the expectation of the customers, for example, their frequently ordered items or specific requirements when shipping products. SCM also provides marketing and sales departments with logistics data so that they know which items are in lower or higher demand to offer discounts or promotions respectively. Moreover, applying both the systems enhances the company’s capability of predicting market trends hence responding quickly to the change and demand of customers. Overall, implementing CRM and SCM concurrently helps Food Delicious to meet the needs and wants of customers, increases the company’s profit as well as competitive advantages. 3.2. What are the advantages and disadvantages of your company using these systems? 3.2.1. Advantages 3.2.1.1. Raised level of Output Using SCM software Farm Delicious can expect to benefit directly from a raised level of output. SCM software works to improve the communication and collaboration between the vendors (the farmers) and the business (Farm Delicious) (SolutionDot 2015). The advantage of a raised level of output will allow Farm Delicious to take on a larger client base as it will be able to satisfy larger requests for raw ingredients. 3.2.1.2. The ability to mitigate against risks associated with delivery One of the main functions of Farm Delicious is the delivering the raw ingredients from the farmer to the client. Implementing SCM software would allow the business to mitigate against a lot of risks associated with time delays in the delivery process due to lack of supply (NIBusiness Info 2020). For example, the use of such software could act as a preventative control against late shipment and other logistical errors. Additionally, the SCM software could act as a detective control against logistical errors in supply allowing Farm Delicious to determine who and what caused the error. 3.2.1.3. The ability to monitor vendor relationships The relationships that Farm Delicious has with its vendors is of an utmost importance, it relies heavily on the ability of its vendors to be able to provide them with the quantity of ingredients demanded as well as the ability to maintain a level of quality. By using SCM software the relationship between vendors can be monitored and different vendors can be compared to each other (Lowe 2018). This ability allows Farm Delicious to determine the level of reliability of its vendors, the company would then be able to make informed decisions on which suppliers it promotes to its clients and keeps and which it may remove from its database. 3.2.1.4. Less Client attrition Farm Delicious is additionally implementing CRM software, the first advantage to the use of such software to their business is less client attrition. It is a much more profitable practice for a business to retain its client base than to be constantly renewing a client base due to client attrition (Burez, Van Den Poel 2007). Directly Farm delicious will benefit from the ability to retain a customer base which indirectly will benefit their profitability. 3.2.1.5. Better segmentation Farm delicious primarily aims to focus their business efforts towards high end restaurants, implementing CRM software will better allow the business to reach this segmentation. CRM software allows business to categorize client data which in turn allows the business to create target lists. These lists allow a business to make more targeted marketing efforts which allows the business to reach its segment effectively (Plaksij 2020). 3.2.1.6. The ability to better serve its customers Most importantly and beneficial to Food Delicious, CRM software would allow Food Delicious to better serve its customers. The use of this software will allow the company to keep vast stores of information on every interaction that the customer has with the company (Salesforce 2020). This information can then be used to predict the purchase habits of customers allowing the business to prepare for their requests. In the case of Food Delicious this means that the business will be able to ensure that supply is ready and available for the customer, resulting in a much more efficient delivery process. Additionally, the data stored gives Food Delicious the ability to cross sell to its clients. Having a deep understanding of its customers needs and wants means that the business can suggest similar products or suggest new products that they are likely to appreciate. By doing this Food Delicious is able to potentially increase its sales revenue whilst keeping levels of customer satisfaction high. 3.2.2. Disadvantages Disadvantages of CRM System Record Loss In some cases, the CRM system significantly depends on the remote Internet Connections to store the clients information. As a result, the organization will lose control of the customers details. Loss of records in the organization will worsen in a situation where an outrage occurs (Pitta, 2019). Food Delicious will considerably face challenges in retrieving the farmers information. Suppose the organization retreats to a small manageable CRS system; it will have a limited number of customers in their records. Thus, high possibilities of losing a significant amount of profit in the form of income to the firm. Overhead Costs Food Delicious will incur extra costs if it adopts a local CRM software. The firm will incur additional charges that are always linked to the management of the software. Some of the management overhead costs that the Food Delicious will incur by using a social CRM software include professional services such as software developers to consistently update the system and the expert system administrators to run the software for the firm (Pitta, 2019). Requires Training Food Delicious will likely expand its services in case the number of its clients increases. The increase in the number of clients supplying to the organization will lead to the expansion of the firm. Thus, a high possibility of expanding the CRM system. The development will require training for the staff to handle the system to adapt to the developed method (Pitta, 2019). Hence, Food Delicious will incur extra training costs to train its personnel and managers. The large CRM systems have additional features that require extra training—thus lowering down the profits of the firm by spending on the practice of the staff. Disadvantages of SCM Ineffective supply chain management systems have a variety of disadvantages for Food Delicious. Some of the limitations of SCM comprise inadequate professional human resources, time, and high investment costs (Verhoeven, Sinn, & Herden, 2018). In some circumstances, it is also challenging to build trust. Increased Investment Costs The introduction of SCM by Food Delicious in its operation will compel the organization to spend extra costs to accommodate the system. Although the firm can minimize the charges, the SCM system will still incur costs of training its procurement officers on the culture of the organization when procuring equipment and other farmers produce from the farmers (Verhoeven et al., 2018). All the expenses that Food Delicious will spend in the SCM system will considerably lower its profits. 4. Bibliography Burez, J. & Van Den Poel, D., 2007. CRM at a pay-TV company: Using analytical models to reduce customer attrition by targeted marketing for subscription services. Expert Systems With Applications, 32(2), pp.277–288. Buttle, F., Maklan, S., 2019, Customer relationship management: concepts and technologies, 4th edn, Routledge, New York. Ellram, L., Cooper, M., 1993, “Characteristics of supply chain management and the implications for purchasing logistics strategy”, International Journal of Logistics Management, pp.1-10. Kharchenko, N. 2017, “CRM for Agriculture Business: How Can It Increase the Efficiency of Your Business?”, Customer Think, viewed 15 April 2020, Lowe, H., (2018) 5 Key Benefits of Supply Chain Management Select Hub URL: https://www.selecthub.com/supply-chain-management/5-core-benefits-supply-chainmanagement-software/ (Accessed 15/03/20) NIBusiness Info., (2020) Supply chain management software NIBusiness Info URL: https://www.nibusinessinfo.co.uk/content/benefits-supply-chain-management-software (Accessed 15/03/20) Plaksij, Z., (2020) CRM benefits: How CRM improves customer relationships Super Office URL: https://www.superoffice.com/blog/crm-benefits/ (Accessed 15/03/20) Salesforce., (2020) The 6 Biggest Benefits of CRM Salesforce URL: https://www.salesforce.com/au/hub/crm/benefits-of-crm/ (Accessed 15/03/20) Simon 2017, “3 reasons you don’t really need ERP”, blog post, Cin7 Blog, viewed 15 April 2020, Smith, T., (2014) 8 Benefits of Customer Relationship Management Software Insights From Analytics URL: http://www.insightsfromanalytics.com/blog/bid/374342/8-benefits-of-customerrelationship-management-software (Accessed 15/03/20) SolutionDot., (2015) Top 5 Benefits of Supply Chain Management Software That will Double Your Business SolutionDot URL: https://solutiondots.com/blog/benefits-of-supply-chainmanagement/ (Accessed 15/03/20) Storbacka, K. 2000, “Customer Profitability: Analysis and Design Issues”, in J. N. Sheth & A. Parvatiyar (eds), Handbook of Relationship Marketing, Sage Publications, pp. 565 586. Pitta, S. (2019). Digital dentist: Providing specialized care through effortless technology: Exploring the feasibility of digitalization in enhancing CRM in dentistry (Doctoral dissertation, Dublin Business School). Retrieved from https://esource.dbs.ie/bitstream/handle/10788/3814/mba_pitta_s_2019.pdf?sequence=1&isAllo wed=y (Accessed 16/03/20) Verhoeven, P., Sinn, F., & Herden, T. T. (2018). Examples from blockchain implementations in logistics and supply chain management: exploring the mindful use of new technology. Logistics, 2(3), 20. Retrieved from https://www.mdpi.com/2305-6290/2/3/20/pdf (Accessed 16/03/20) Expenditure Cycle Dr. Ali Amrollahi Expenditure Cycle Overview and Key Objectives ➢ The expenditure cycle consists of all events that are involved in the purchase of goods and services and the payment for these goods and services ➢ A key consideration is the need to balance the supply and demand for products with cash flow considerations Source: supplychain247.com Strategic Implications of the Expenditure Cycle ➢ A well controlled expenditure cycle can provide a competitive advantage by providing high quality products and services which in turn translates to an opportunity for higher product pricing ➢ Failure to correctly manage purchasing can lead to systemic problems that impact revenue and production ➢ Poor payment practices can damage cash flow and supplier relationships Expenditure Cycle Process Activities Determine demand for goods Order Goods Receive goods Pay for goods Technologies Underpinning the Expenditure Cycle ➢ ERP (Enterprise Resource Planning) o Improves the integration of enterprise - wide data ➢ EDI (Electronic Data Interchange) o Enables the exchange of data between two separate computer systems Revenue in 2019: $514,405,000,000 A few years ago, Wal-Mart affected a huge change in the EDI (Electronic Data Interchange) approach to business-to-business transactions. Although EDI had been around for many years, the technology had advanced to allow it to be conducted for free over the Internet. It announced to its 10,000 small and mid-size suppliers that the suppliers had one year to begin using Internet EDI (EDIINT AS2). Some call Wal-Mart the market maker for Internet EDI. Technologies Underpinning the Expenditure Cycle - Continued ❖ RFID (Radio Frequency ID tags) o A small tag attached to an item that can be scanned. Expedites stock handling ❖ SCM (Supply Chain Management Software) o Improves the planning and execution of orders through supplier and customer integration Data and Decisions in the Expenditure Cycle Expenditure cycle activities require access to: ✓ Inventory ✓ Demand ✓ Availability ✓ Supplier data ✓ Purchase order data ✓ Accounts payable data Expenditure Cycle Business Decisions Expenditure Cycle Business Decisions Strategic Level: o o o Purchase consolidation How IT can improve efficiency & accuracy Identifying where inventories should be held Operational Level: o Determining optimal inventory level o Supplier selection (quality, service & price) o Cash flow considerations Determine Demand for Goods ➢ Key activities: o o Collect requests Create purchase requisition Table 10.3, page 461 summarises these activities Ordering Goods ➢ Key activities: o o Choose the supplier Create the purchase order Table 10.4, page 466 summarises these activities ➢ Key activities: ✓ Accept the delivery ✓ Record goods received Receiving Goods Table 10.5, page 470 summarises these activities Receiving Goods Paying for Goods ➢ Key activities: ✓ ✓ Approve the payment Make the pa ... 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