SERCOM SOLUTION

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SERCOM SOLUTIONOUTSOURCING OPTIONS

GROUP NO.8

Presented BY:Angad Singh 09EM-006Mohit Babbar 09EM-019Kishor kumar 09EM-017Abdul Siddiqui 09EM-042

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OBJECTIVES OF THE CASE

To understand the relationship between Strategy and Action of an organization

How the change in environment effect the strategy and growth of organization

How an organization can build its strategy around its competences

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COMPANY BACKGROUD

SerCom Solutions, headquartered in Dublin, Ireland, was founded in 1978 as confidential Report Printing (CRP)

It is a wholly owned subsidiary of DCC plc which took minority stake in the company in 1984

DCC is one of Irelands leading business support services groups and have annual revenues exceeding $6 billion, with operating profits over $200m.

Company become printech International Group in 1983 and sercom in 1999

By 2004 Sercom solutions focused on provision of supply chain management services

Sercom major area of work meeting the supply chain and manufacturing needs of its customers particularly the Information Technology Systems

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DCC SERCOM

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GROWTH OF THE COMPANY The major factor responsible for the growth of the companyo Strong customer focuso A niche Marketo Investment in modern equipment

Wining a Contract with DEC in 1980, DCC took minority stake in the company in 1984

In 1993 company established a turnkey operation in Scotland

Strategic partnership with kuehne & Nagel (k & N) in 2004

Partnership increase company reach into 600 location across 96 countries

Company become one of the leading suppliers of high quality, outsourced supply chain management solution to blue chip IT and telecommunication corporations in Ireland, Europe and US

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SERCOM CORE ACTIVITIES

Supply chain activitieso Demand forecast managemento Sourcing/procuremento Warehousing/inventory

managemento Logistics managemento Hubbing/bundling of

componentso Website development and

hostingo Component quality

management/screening

Manufacturing activitieso Printingo Software replicationo Regionalisationo Programmingo Assembly and sub-assembly

(including software)

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INDUSTY EVOLUTION

Companies focused on logistics and Inventory management and their key objectives were

o Shorter lead times to marketo Reduce inventory levelso More cost effective and efficient distribution

Sercom develop specialization in Hubbing ( method of moving finish product to the target market in a cost effective way)

Size of the logistics market was worth $1 trillion and growing approximately 4 per cent

Value of industry was $ 50 bn and growing by 15-18 per cent pa

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UNDERSTANDING OUTSOURCING

Outsourcing is a way to reduce costs and eliminate non-value adding activities, which enabled the firm and its managers to focus on their core competencies

Sercom specialize in providing high quality supply chain management solution

Sercom drive substantial economies of scale from printing and packaging activities by supply chain solutions

Sercom provide a variety of supply chain solution and believe “No activity is too small for us, we are not proud”

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SERCOM STRATEGY & TECHNOLOGY Sercom core business was physical fulfillment but internet

development could have represented a substitute for its core business

Fulfillment cycle include receiving customer order, configuring the products to order, shipping and invoicing products to distribution outlets or end user anywhere in the world

Sercom position itself as global provider of e-business solution “everything behind the button”

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Issues in e-commerce approach Sercom customers had limited access to information regarding the

process of components

There was a need for an information system that could facilitate more effective monitoring and management of order status

The bulk order were declining and concurrently sales were moving to a more demand-driven, customization model

In 1999 sercom introduce (MRP) Manufacturing Resource Planning but the system was outdated

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Implementation of ERP

Sercom implement ERP between 2000-2001

An ERP system is an integrated enterprise-wide software package designed to support the key functional areas of the organization like supply chain operation, Human resource management, customer relationship management, business intelligence etc

ERP was delivered to the standard required to contribute to the desired strategy and played role in establishment of strategic partnership

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REASONS FOR SUCCESS OF ERP Successful training of super-users from the implementation team

trainer were people those not only knew the product, but also knew the requirement of their relevant department

Selecting the best people from each department for planning and implementation phase

ERP mapping out the critical functionality of SAP application and its implication for company business process

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SRATEGY AND CUSTOMER

Sercom won the trust of its customers by sercom’s ability to deliver as on promised time, resulting in significant unit cost savings

Their customer base included companies such as - Apple, canon, Dell, IBM, MascSoftware, MapInfo, Medtronic, Nortel Networks, Palm, Symantec and the Math works

Sercom key challenge was the fear faced by customer - that of losing control in handing over some of their business process to an outsider

Sercom insure their customers that “They can retain as much or as little control as they require”

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SRATEGY AND CUSTOMER

Internal audits of the entire system were conducted frequently and provided facility for customers to carry out audits of the system and its processes when requested

To ensure confidence in suppliers company monitored all its suppliers to ensure that deliveries arrived on time and were of quality

Monthly meeting were held with key vendors and weekly summary quality report were provided to each supplier

The information system in sercom was accessible by all customers they could view their account and product information any time

Their major objective was offering ‘’everything behind the buy button”

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BENEFITS OF INTEGRATION Better Integration between their internal information system resulted in

complete automation in supply chain management

The increase efficiencies allowed company to reduce the number of employees

Integration with the transport company has afforded tighter controls on shipping and delivery

Every three month ERP project team meets to discuss any new requirement which give company a competitive advantage on others

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Sercom Strategy & Bottom line Sercom try to broaden its own customers base beyond IT industry

because their traditional customer locate their manufacturing activities in Eastern Europe and Asia

Company target largest multinational manufacturing companies to enhance development of the SCM sector of Ireland

Suppliers in location such as China targeted by company which provides a substantial and rising proportion of manufactured goods

It provide sercom help to meet the requirement of the substantial cluster of ICT companies those already serving their European needs

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LEARNING FROM THE CASE Organization should change its strategy according to the change in

environment, as Sercom shifted from physical fulfillment to e-commerce approach

Organization should build its strategy around its competencies, as Sercom build their strategy around its core competencies which was their supply chain management ability

Organization should keep focus on their customers as Sercom did by ensuring even if they outsource their business they will have full control on their business

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