Case 2 Nothern Digital

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REAL WORLD CASE 3: ERP HELPS IMPROVE PRODUCTIVITY AT NORTHERN DIGITAL INC. (ndigital.com)
Northern Digital Inc. (NDI) in Ontario, Canada, is a supplier of 3D/6D measurement products. The relatively small company employs 90 people and
generates over $20 million in annual revenue.
The Problem
NDI faced a challenge when rapid growth and aging technology threatened to stand in the way of company goals. Instead of enabling operational
improvements, NDI's existing systems were impeding progress. Existing technology was causing missed deliveries and creating a high number of back
orders. Inventory control was poor and the planning was inaccurate. Customer satisfaction was at risk and internal morale was slipping.
With some customers expecting shipment in as much as nine months and others expecting shipment in as little as nine days or even less, more
sophisticated and accurate planning has been critical.
With almost twenty years in business, NDI has firmly established a reputation for high quality, high performance products. This reputation was at risk.
The Solution
NDI selected an ERP (from Intuitive Manufacturing Systems) based on factors that directly supported corporate objectives. Intuitive ERP provided a
level of system functionality that could immediately improve inventory management and the expandability and flexibility to support NDI's growth.
The ERP includes a complete planning system, automated inventory management, and enhanced technology infrastructure. Equally important was the
system's level of ease of implementation and ease of use.
The Results
After implementing Intuitive ERP, Northern Digital experienced continued success in improving inventory management and increasing revenue. Prior
to implementation, the company struggled to achieve even two inventory turns per year. Inventory turns have now more than doubled and expectations
are that the company will better that in the near future. Since implementation, Northern Digital's revenue has increased from $10 million to over $20
million with little increase in inventory value. In addition, the company has reduced their order cycle time for their flagship product from four months
to four weeks, an improvement of almost 80 percent. This was due to improved planning capabilities facilitated by the ERP application.
Improvements in production control and inventory management have had a direct impact on customer delivery. The Material Requirements Planning
and Forecasting capabilities of Intuitive ERP have allowed Northern Digital to better service their customers. The addition of better planning
capabilities had an immediate positive impact on labor and materials.
"We were able to better understand what was in stock, what we were buying and what was needed," said Tom Kane, Production Manager. "Improved
planning has made a huge difference in improving delivery" (Intuitive 2005).
Ease of use and system scalability has been important in utilizing Intuitive ERP to improve operations. When the system was first implemented, only
five user seats were required. As the company grew, that number increased to twenty-five. Significantly increasing the number of users, and doing so
without a lot of training, allowed the company to expand without worrying about putting constraints on their business infrastructure, supporting the
growth strategy.
For Northern Digital, improving operations is more than just a way to reduce expenses. With the implementation of Intuitive ERP, the company has
found a way to increase the value they provide to customers while also improving financial performance. Sources: Complied from: Managing
Automation (2004) and from ndigital.com (accessed May 2005).
Questions
1. Relate this case to Porter's value chain and to Porter's competitive forces model. Show the ERP's contribution.
2. Enter https://www.aptean.com/solutions/enterprise-resource-planning/ and report on the capabilities of their ERP product.
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Porter's competitive forces model

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2. Enter https://www.aptean.com/solutions/enterprise-resource-planning/ and report on the capabilities of their ERP product.

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