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Headquartered in Billund, Denmark.
LEGO group main products have been the bricks and figures which were originally first made at the end of the 1940's.
Sustained substantial growth since its formation and for most of its history its major manufacturing facilities have been in Denmark. In 2003, LEGO began facing tough competition from imitators and manufacturers of electronic toys. In an effort to reduce costs, the group decided to initiate a gradual restructuring process that continues to this day. Business Intelligence (BI)
Tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better business decisions
“SAP software offered the best combination of standardized processes, yet with the ability to respond flexibly to the changing demands of the toy industry,” comments Esben Viskum.
“The SAP landscape supports all our business processes, such as finance, logistics and sales, and the long-term roadmap is to implement SAP Product Lifecycle Management, integrated with SAP Warehouse Management. As the company grows and rolls out the ‘cookbook’ to new geographies, we will add SAP ERP Human Capital Management to the portfolio, too. The SAP system makes LEGO able to specify offers for certain target groups which in turn will drive loyalty towards LEGO. The four groups are:
Lead Users - Children and adults who is heavily engaged in LEGO (top of pyramid)
One-to-One layer - Group which LEGO keeps an ongoing dialog
The Community Layer - Users of online games, communities, etc.
Active household layer - Have bought LEGO sometime in the past. SAP has several features that LEGO benefit from such as:
“Loyalty management software from SAP, integrated with The LEGO Group’s SAP ERP and SAP CRM platform, helps ensure rewards offered to each group are synchronized with what they value and their level of engagement with the brand.”
With a VIP system based on SAP, consumers can get custom made proposals, offerings and news when they log into LEGO’s website. It is a way of establishing the customers/consumers loyalty (Lauren Gibbons 2011). Data warehouse is full of inaccurate and redundant data
Sales group would enter customer’s name and addresses the same way regardless their location
Could lead to incorrect decisions, products recalls and financial losses
Analysis of data quality often begins with:
Data Quality Audit
Structured survey of the level of completeness of the data information system
Detecting or correcting data in a database that are incorrect or redundant Supports multidimensional analysis
Viewing data using multiple dimensions
Each aspect of information (product, pricing, cost , region, time period) is different dimension
Provides management with an easy interface to generate report on desired queries. E.g. “I want to find out how many sales in Region A are there for Product A in each month.”
System will mine data from the sales database that corresponds to the above query.
Generates a trends graph on how the product sells per month in Region A.
Same data can also be used to generate a different desired query (multidimensional view).
E.g. “How many total sales are made in Region A per month.” Managers can easily use the SAP query tools to obtain reports from the databases, because it does not require any technical skills
Improving database can help LEGO to perform better forecasting and planning. MIS ISSUES SAP’s Product Life Cycle The commitment to SAP applications enables LEGO to consider its key business requirements, two of which – product lifecycle management and warehouse management –
“Product development is critical to LEGO,” says Esben Viskum. “Over time, LEGO had implemented about 25 different systems, all loosely described as legacy. The result was a very inflexible business process, which required extensive programming effort to change, and there was little or no integration with manufacturing operations.
“For example, if we came up with a super product for Christmas, there was no easy way to fast-track production to meet the opportunity while retaining full quality and cost control. By implementing SAP Product Lifecycle Management, the cost and manufacturing implications of product development decisions will be reflected in the financial and production solutions, giving us a complete overview of the business impact. This will help us make informed choices at an early stage, helping us to respond rapidly and effectively to market changes and opportunities.” SAP ERP HCM is an application for personal administration and development.
“Talent Manager” features for handling employees administration,reporting, and travel and time management.
These features helps HR personnel to select the best candidate, schedule their training and creating stimulus plan to retain them.
Lego manager could track employees’ leadership potential,develop their careers, forecast the recruiting of new employees with certain skills. QUESTION 1 Explain the role of database in SAP's Three Tier System There was a need for a flexible and robust IT infrastructure with business excellence and capabilities that could help management better forecast and plan. Lego implemented a SAP’s business suite which is based on a flexible three-tier client-server. Three Tier System THE FIRST TIER (Presentation Layer)
This is the software component with a client interface browser type graphic user interface (GUI). The graphic user interface is between an SAP system and the user. It gets the user input, sends it to application server for processing receives data, formats and output it. The presentation layer resides on a user’s PC, desktop or mobile device.
THE SECOND TIER (Application Layer)
This is where SAP software runs; it consists of at least one or more application server (one computer system) which offers the services to users and a message server responsible for communication between the application servers. In the system, it receives and process client’s requests. In turn these application servers send the processed requests to the database system. The application layer is Scalable as the organization grows larger and more users are added.
THE THIRD TIER (Database Layer)
This consists of a central database system which consists of the database and DBMS (Data Base Management System), it receives the processed client’s request from the second server to the database system which consists of one or more relational database, these rational database contain the tablets that store data on LEGO’s products, daily operations, the supply chain and thousands of employees. The information is then stored and retrieved from the data base system and sent back. A few database systems which you may find with SAP in different implementations are Oracle, Microsoft SQL Server, IBM etc. QUESTION 2 QUESTION 4 Explain why Distributed Architectures are flexible? A distributed architecture system consists of multiple autonomous computers that communicate through a computer network. The computers interact with each other in order to achieve a common goal. Basically, this group of computers would each hold a specific software subset of the global aggregate operating system. Distributed computing is a field of computer science that studies distributed systems. Distributed programming typically falls into one of several basic architectures or categories: client–server, 3-tier architecture, n-tier architecture, distributed objects, loose coupling, or tight coupling.
Distributed architecture enables authorized personnel to have direct access to the database system from the company’s various locations, including those in Europe, North America and Asia.
Distributed architectures such as SAP’s business suites supports databases from different vendors including those offered by Oracle, Microsoft, MySQL and others.
They are optimal for medium to high performance business environments.
Complex application rules can be easily implemented on the application server by authorized personnel.
Separating the application into multiple layers makes it easier to implement re-usable components. A single component in the business layer, for example, may be accessed by multiple components in the presentation layer, or even by several different presentation layers (such as desktop and the web) at the same time. Distributed Architectures Distributed Architecture System What are the main advantages and disadvantages of having multiple databases in a distributed architecture. Explain? The Advantages are:
Fault tolerance: A fault tolerance is a setup or configuration that prevents a computer or network device from failing in the event of an unexpected problem or error such as, power failure, power surge, data loss, system overload, virus etc. By LEGO having multiple databases data can still be obtained from other servers during interruption from one of the data base. This enables the business to save time, retrieve loss data and their daily operations will not be drastically affected. Improved Scalability: ability of a business to expand to meet its business needs. Unlike a single-database system, in which the amount of data that can be stored depends on the limitations of one host and database, a distributed-database system is easily scalable and, therefore, supports growth in LEGO. SAP supports an unlimited number of users as well as data base, application servers and a variety of hardware configurations. It enables an organization to start small and add additional databases or applications or hardware. This would allow to organization to effectively and efficiently add to the network when its needs to expand.
Distribution of workload: enables administrators to distribute the load on various servers, a business function such as logistics can be can be routed to a particular server for load balancing ( division of its activities and processes between computer networks so that it doesn’t get overwhelmed). Open system: from SAP encourages plug and play with hardware from different vendors e.g. Microsoft oracle, used which leads to more competition and lowers cost. This means that the system can connect with other vendor there fore it is flexible. Advantages Disadvantages Security issues: it is more vulnerable to external attacks than single databases and the possibilities of abuse is more possible in multiple databases than a single database as single databases have more control of information. To reduce the chances of unauthorized users accessing sensitive information, Lego would need a control system e.g. Not all information should be available to all level of the organization. Data quality and integrity: since the database is accessible to users remotely, adequate controls are needed to control users updating data and to control data quality especially as the organization grows. With increased number of users accessing data directly, there are enormous opportunities for users to damage the data. Unless there are suitable controls, the data quality may be compromised. The integrity of the information is also relevant since a large number of users could be using the database simultaneously, technical safeguards are necessary to ensure that the data remains correct during operations and business decisions. The main threat to data integrity comes from several different users attempting to update the same data at the same time. The database therefore needs to be protected against inadvertent changes by the users.
Cost of maintaining multiple databases in a distributed architecture: single databases are usually designed to run a number of well-defined, preplanned processes because they are often adjusted to run efficiently for the processes that they were designed for. Multiple data bases are costly to maintain as each server requires a separate operating system. The cost of protecting and securing the servers, upgrades, back ups will be expensive and Lego would have to weigh the benefits of using multiple database over the costs of implementations , restructuring the organization , the as well as maintenance costs Disadvantages Reference List Anonymous (2010).Centralised and Decentralised databases. Retrieve April 10, 2013 fromhttp://searchcio-midmarket.techtarget.com/definition/load-balancing
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Laudon, K. & Laudon, J. (2012). Management Information Systems: Managing the Digital Firm (12th edition). The United States of America: Pearson Education Limited.
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Oreilly. (2001). Oreilly.com. Retrieved April 14, 2013, from Oracle and Sap: http://oreilly.com/catalog/sapadm/chapter/ch01.html
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ShoreTel Architecture (2005). Retrieved April 23, 2013 from http://www.google.com.my/imgres?imgurl=http://www.bluewavevoip.com/bw_images/ShoreTel_Architecture.gif&imgrefurl=http://www.bluewavevoip.com/shoretel_products.htm&h=540&w=720&sz=76&tbnid=JuI0Hrui3SJ1fM:&tbnh=90&tbnw=120&prev=/search%3Fq%3Ddistributed%2Barchitecture%26tbm%3Disch%26tbo%3Du&zoom=1&q=distributed+architecture&usg=__JrBEdVXzkdx9IgLEnCezf6sLbQM=&docid=2h0IlJ_MyX-FOM&hl=en&sa=X&ei=_fd1Uf65A8nIrQe89ICwCw&sqi=2&ved=0CEAQ9QEwAw&dur=348 THANK YOU They create an enterprise architecture that copes with complexities of change in a company. Oreilly. (2001). Oreilly.com. Retrieved April 14, 2013, from Oracle and Sap: http://oreilly.com/catalog/sapadm/chapter/ch01.html
SAP. (2013). Retrieved April 24, 2013, from www.sapinfo.asap.com:
ShoreTel Architecture (2005). Retrieved April 23, 2013 from http://www.google.com.my/imgres?imgurl=http://www.bluewavevoip.com/bw_images/ShoreTel_Architecture.gif&imgrefurl=http://www.bluewavevoip.com/shoretel_products.htm&h=540&w=720&sz=76&tbnid=JuI0Hrui3SJ1fM:&tbnh=90&tbnw=120&prev=/search%3Fq%3Ddistributed%2Barchitecture%26tbm%3Disch%26tbo%3Du&zoom=1&q=distributed+architecture&usg=__JrBEdVXzkdx9IgLEnCezf6sLbQM=&docid=2h0IlJ_MyX-FOM&hl=en&sa=X&ei=_fd1Uf65A8nIrQe89ICwCw&sqi=2&ved=0CEAQ9QEwAw&dur=348
UkrBricks.com (2012). Retrieved April 23, 2013 from http://ukrbricks.com/forum/viewtopic.php?f=7&t=992 UkrBricks.com (2012) LEGO's First Production Line - 1932 Modern Day Competition Changes In 2006, the company announced that a large part of their production would be outsourced to the electronics manufacturing company Flextronics. This came from an analysis of their Total Supply Chain. By 2010, they reduced their workforce from 8300 employees to 4200 employees.
Thus, only their highly skilled workers remained in Denmark while most of their production was outsourced. Production takes place currently in Mexico, Hungary and various places in Western Europe closer to their natural markets. Although LEGO plans to shift their production to low cost countries to reduce on another 1000 jobs by 2013.
LEGO's profits have doubled in the last few years and their restructuring process has led them to expand the company and made its workforce more international. Due to this, their supply chain had to be re-engineered to simplify the production process without reducing on quality. Improved logistics planning allowed LEGO to work more closely with its retailers, suppliers and the new outsourcing companies.
LEGO took efforts on their HR Dept. to play a more responsible role and implement effective policies aimed at retaining and recruiting the most qualified employees from a diversity of cultural backgrounds.
Adapting company changes to this complex environment required a flexible and robust IT system with business intelligence capabilities that would help management perform better forecasting and planning. Changes Current HQ Workshop SAP Business Suite PRESENTED BY 1. MD Faridz B. MD Fadzil
2. Rishab Kumar Juneja
3. Ifenni Leslie Omeokochie
4. Ester Shirley Lolo
5. Afgansyah Reza