STUDENT PAPER SUBMISSION FORM

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1 STUDENT PAPER SUBMISSION FORM This form must be completed in its entirety and must accompany the submission Author(s) highest education level: Undergraduate student Title of Submission PIMS vs. ERP systems: A study based on applications Author(s) Please list all authors followed by their permanent address (1)_Samantha Weinberg wesa1103@stcloudstate.edu (2)_Allen Ikem ikal1101@stcloudstate.edu (3)_BriceHeld hebr1007@stcloudstate.edu (4)_YipengLiu liyi1201@stcloudstate.edu Primary Author Name Samantha Weinberg Permanent Address (NOT a school address) Eagan, MN Cambridge Drive _ Permanent wesa1103@stcloudstate.edu Permanent Telephone Number (NOT a school Number) (651) Educational Institution St. Cloud State University APICS Terra Grande - Heartland District Chapter Affiliation St. Cloud State University Chapter

2 1 Allen Ikem, Brice Held, Samantha Weinberg, Yipeng Liu Samantha Weinberg 4642 Cambridge Dr. Eagan, MN (651) Samantha Weinberg (B.S., St. Cloud State University) is currently an undergraduate student in Operations Management at St. Cloud State University, St. Cloud, Minnesota. St. Cloud State University Chapter. APICS ID # Allen Ikem. State same as for Samantha Brice Held (B.S., St. Cloud State University) is currently an undergraduate student in Business Management at St. Cloud State University, St. Cloud, Minnesota. St. Cloud State University Chapter. APICS ID # Yipeng Liu State same as for Samantha All are currently full-time undergraduate students at St Cloud State University

3 2 PIMS vs. ERP Systems: A Study Based On Applications Our focus is on Product Information Management Software (P.I.M.S) and how smaller companies such as the St. Cloud Husky Tech Store benefit from using PIMS software instead of larger ERP applications. This paper will be focusing on the advantages and disadvantages that PIMS has over the larger ERP systems.

4 3 Customer requirements are essential in any business, small or big. Having the right inventory and the right time is crucial in order to satisfy the demand of that business's products. Living in the high-tech society, there is a plethora of software developed to help businesses kept track of inventory and therefore being able to meet the customer s needs. With some much software out there it is hard for companies to choose the appropriate one for their size of business. Product Information Management Software (PIMS) is ideal over larger Enterprise Resource Planning software when it comes to small business applications. The cost of the large ERP systems is too much for small businesses and unnecessary as their businesses often don t have as much inventory or the need for the software. PIMS is a more cost effective and efficient than larger ERP software in small business applications. In this paper, PIMS will prove to be the ideal choice for smaller businesses over larger ERP systems. Discussion will start by the advantages and disadvantages about cost effectiveness, efficiency and small business applications. Then the benefits of small business applications will then be further discussed as it pertains to the Husky-Tech Store on campus at St. Cloud State University.

5 4 ADVATAGES AND DISADVANTAGES OF PIMS VS. ERP SYSTEMS Cost Effective Product Information Management Software is important to any business. First reason it is important to a business is that there is no wasted time on double or multiple data entries (Hiiemaa, 2014). PIMS uses a central interface to enter and update business information. After it is processed into the computer it is transported automatically into other areas including logistics, suppliers, and warehouses. This is very efficient because it reduces time by automatically sending it to multiple areas in the business. This means less labor for a business by saving someone from sending it to all those different areas in a business. PIMS lets a company know the real time market performance on each product/service. This is extremely beneficial to any business because it keeps the business updated on what is going in and out. If a company has all their products into the systems it will help them with ordering purchases. Knowing what is on hand for a business is critical for ordering. PIMS plays a major advantage of strategic planning for any business. It will improve operational costs for a business by having distinct information of the inventory on hand. It will also help manage inventory so a business does not have too much or too little of a product. It will save business money by having less overall waste on products. It will manage the expiration dates especially for groceries. Knowing when items will expire and then managing them so you do not have to throw products as often. For successful businesses you will hear the management department say time is money all the time. PIMS will help a business locate where they are losing money and where the business is making money. PIMS keeps important records that pertain to the business up to date.

6 5 Efficiency Supply Chain Management software offers direct and measurable benefits by being able to reduce inventory holds and increase inventory turns. SCM software, like ERP and PIM systems, offers value to firms in a plethora of ways but the most crucial benefits are attributed to reduced inventory and improved inventory management. Improvements in inventory turns and other intermediate process measures are considered to be direct (first order) effects of SCM software implementation, whereas improvements in the overall financial performance are indirect (second order) effects as stated in an investigation of the effect of the SCM software (Blankley, 2008). Enterprise Resource Planning and Product Information Management are two kinds of SCM software. ERP provides a foundation for data focusing on the store and the warehouse environment. It is an analysis on the company and their process to interpret the data and manage inventory. By interpreting the data it can forecast inventory demands therefore reduce inventory to the essentials. ERP systems are wide scale for a company reaching all business activities including product planning, manufacturing, marketing, sales, inventory, shipping and payment (Osterhout, 2013 December 18). Product Information Management Software is focused on centrally managing information about the product, storing rich product information. PIMS is central set of product data can be used to deliver accurate and up-to-date information to multiple distribution channels. As the systems get more complex, ERP systems can be hard to provide information to on the product to different areas of the business. For example on the Web the product information might consist of

7 6 product details, uses, color, etc. whereas for logistics the size and weight of product would be more useful information. PIMS seeks to enable true item management outside the dependent application environments. PIM enables retailers to maintain and syndicate product information to their sales channels in a much more agile fashion so that the process is better tailored to the requirements of the channel as seen on an article by Microsoft. The article describes PIMS as a stepping stone and how the studies show that the ecommerce will show a huge reliance on PIMS in the next 3 years (Cairney, 2015). Small Business Applications Product Information Management Software refers to computer-based systems that are tasked with the tracking of various functions in any organization. Some of the core functions that such systems help in tracking include the tracking of sales and deliveries, orders and the inventory levels in any production organization. Such systems can also be used in various production companies to produce production related documents such as bill of materials and work orders. Inventory management programs are used by companies to avoid product outages or overstock. On the other hand, ERP is short for enterprise resource planning that refers to a business management system that entails various integrated applications used by organizations in collecting, storing, managing and interpreting data from the many activities conducted by the organization (Vangie, 2015). Such activities include the different stages of product planning, the manufacturing process, sales and marketing, inventory management and shipping and payments.

8 7 From the definition, it is clear that PIMS is just a component of a larger system also known as the ERP systems. However, for small businesses, the PIMS provides a reliable system that can be used in tracking the company s production process and help in determining the levels of inventory in the company if it cannot be able to fund the larger ERP systems. Through the various ranges of business application, the Product Information Management System offers some critical advantage given its relative cheaper cost, its efficiency or ease of use and the insights it provides in various trending issues in the industry. In terms of small business applications, Product Information Management software can be used in a range of ways in a small business providing certain forms of advantages over the ERP systems. The most important part of the role of the PIMS is to ensure that the inventory levels are on a desirable level. Essentially, this entails the tracking of inventory at all stages of production and the number of inventory that is remaining in the stores. The software helps small business in maintaining a good balance between excess and too little inventory in the systems and provides timely updates in the case that the levels of inventory is at undesirable levels. In this case, the inventory management can be programmed in such a way that managers will be alerted to reorder a product that is finished in the shelves or used up in the stores. The inventory also helps small businesses to track their inventories as the inventory is transported between various locations. This would include the transportation from the manufacturer to the warehouse and finally to production locations. The professional inventory systems can also be used in product identification. Some producers have an active policy to provide preferred retailers with more and better product information earlier, while reducing the

9 8 number of product attributes and resolution of product photos to less preferred distribution channels (Hoogeboom, 2009). With the use of the barcode reader, the information of the product is inputted in the professional inventory system before it is identified. In this way, the small business can identify if the product they have are those that had been ordered in the first place. Furthermore, the software can also be used in identifying aspects of the product such as price in cases such as retail chain centers or supermarkets. In service oriented small businesses or organization, the Product Information Management system can also be used in a variety of ways. For instance, the product can be used in tracking the cost of materials that are crucial for the existence of the business or those that are useful in the day to day operations of the business. A small business offering massage services can use the PIM software can be used in tracking the prices of items such as ointments used in massage or the price of cleaning supplies. Since the PIMS is relatively used in one component of the organization, inventory management, it is easier to program the system or the software to be used in the ways described above. This is opposed to trying to tailor an ERP system to conform to the needs of a company in terms of inventory management. The main advantage that the PIMS systems have over the ERP systems involves the cost of the systems. Since the PIMS system is just a component of the ERP system it is relatively cheaper to develop as compared to the full ERP system. The costs of having an ERP system hinder most small businesses from having them. Owing to the relative low cost of having and maintain a PIMS systems most of the small business would rather have them instead of the ERP system.

10 9 The PIMS system is also developed and tailored directly to be used in the management of inventory. On the other hand, the ERP system is general software that is used for various situations in the company. For it to be effectively used in the management of inventory, it has to be heavily tailored to deal with such demands. This increases the costs of the software. It is, therefore, cheaper for small businesses to use the PIMS systems. Another critical advantage is the ease with which the system can be used as opposed to using an ERP system. Since the PIMS system is a component of the ERP system, it contains less material or information as compared to the ERP. This is because the PIMS is just tailored to deal with the inventory management issues. The tailoring of the system makes it easy to use and understand as the data provided only deals with the issue of inventory. In contrast, the ERP system is used in a range of places in the organization ranging from human resource issues, financial management issues, project management and other areas in the organization. This makes it difficult to use or understand. There are several strategic reasons for implementing PIM in the organization (Yankee Group, 2005). It is clear that the PIMS system is crucial software that aids small businesses in various ways. For instance, the software can be used in the tracking of inventory and the identification of products and inventory. The PIMS system has certain advantages over the ERP systems that make it popular with small businesses. Such advantages include the low prices of developing the software as compared to the development of the ERP system. Furthermore, using and understanding the PIMS system is easy as compared to using and understanding the ERP system.

11 10 HUSKY-TECH STORE APPLICATION St Cloud State University, member of the Minnesota State Colleges and Universities, runs extensive information/ technology department which has an operational branch for attending specifically to her student s informational and technological needs. This includes software problems such as troubleshooting, device configuration, student account set ups and other general technological needs (Kotcho, 2015). The store itself has been designed in a way that mimics an apple store. Although there are a variety of apple products on shelf; the schools technology store and help center, houses items beyond the 700 billion dollar company s offerings, ranging from your everyday headphones to your Xbox 360 Kinect. Like any business entity, the Husky tech has a catalog of suppliers which constitute members of its supply chain. With any supply chain, comes the overwhelming need for efficient and effective management. Operating an effective product information system is necessary for any business that has an extensive product portfolio such as the Huskytech. Product information system provides product information required by all business functions and technology systems across and within an organizational framework. This partly explains why organizations have product information spread across numerous information systems (Adam software, 2012). The system often referred to as product information management systems (PIMS), if properly deployed can provide several important operational and financial benefits (Adam software, 2012). Strategically there are several benefits of implementing a PIM system in an organization. One of which is assortment expansion of what it can purchase and deliver to its customers through a dependent and centralized system of inventory management. The benefits of implementing a product information system as a long-tail strategy through assortment expansion of what it can purchase and later sell, are not only that more

12 11 products can be sold to the same customers in this case the faculty and students of St Cloud State University, but also that the products in the long run can be sold against a higher margin (Pocheco, 2014). With the online management of procurement and inventory management through the PIMS software, the HuskyTech is able to reduce inventory cost by not physically storing too many items that may become obsolete. The incentive here is that customer expectation is easily met as shelf size and inventory costs are not major concerns. Demand for specific products by its market niche (SCSU students and faculty) makes it easier to manage the number of assortments it can provide (Apaia, 2014). Large enterprise resource planning application software is used by big corporations to manage their supply chains and product information systems. SAP, Oracle, envision are some of the larger software s used by various companies. But a small business such as the husky-tech store uses a smaller, more cost effective software packet called Professional Inventory Management software (PIMSx). PIMSx has been tailored specifically to fit and meet the needs of the store. Before we expand on the stores own application of the software, let s take a look at why the store needs this and how it all makes sense. First of all, remember the HuskyTech store only sells to St Cloud State university students, faculty, staff and departments. Meaning in addition to the individualized sales to students and staffs, all the different departments fill in orders that are processed through the store and delivered directly to them. Speaking to Mark Kotcho, the store manager we asked him about how the inventory system works, and this is what He said The PIMSx we use, helps us monitor each point of sale transaction. If one merchandise gets sold, it is reflected in the software It all enables us to figure out how many we need to order (Kotcho, 2015). So basically, they keep a light amount of

13 12 inventory, PIMS helps them to keep a low amount of inventory by monitoring the demand for certain products and how fast certain products are selling. Another interesting thing Mark mentioned was that they have no specific list of suppliers. They can trade directly with certain wholesalers and retailers; it all depends on their forecast of consumers interest (Kotcho, 2015). For example, through the PIMS system they are able to process transaction via amazon. Sometimes, certain products like computers can be bought through the store even though they are not on display physically. Take for example, a colleague who is not much of an apple fan, wanted to buy a Hewlett Packard laptop, and went to the store to get one. Although there were some non-apple computers on display, the one he wanted was not on shelf, after inquiring and looking through a list of other offerings. He put in an order with the store, which in turn made an order with HP directly. The product arrived in about a week. The point here is PIMS enables the store to engage in value adding activities such as meeting customer needs and specifications by reducing the time to market.

14 13 CONCLUSION In this current era, customer requirements and customer tastes are increasingly hard to satisfy, any business, small or large needs to properly integrate sustainable and effective information system software that would enable the organization to maximize their core business competencies in efforts to reach its goals and at the same time reduce cost. Product information Management system is a very important aspect of any businesses information system capabilities. It is important for an enterprise to recognize what its needs are, which includes the needs of both its internal and external customers, the cost and benefit associated, and proper selection and procurement of a cost effective system. From our discussion on the benefits of PIMS, the relevance of such a package cannot be overstated. There are several vendors to choose from, depending on the company size and needs. For example we discussed a very cheap and easily adaptable product information system called PIMSx (professional Inventory Management System software), and how it is being applied by St. Cloud State University s HuskyTech store. Product information systems can be tailored to satisfy the needs of small businesses with market niche; this can increase a business's profitability, reduce costs and create higher customer retention and loyalty if used appropriately to meet customer requirements and satisfaction.

15 14 REFERENCES Apaia, M. (2014, May 20). Perspectives The Informatica Blog. Retrieved April 9, 2015, from Blankley, Alan I., Moutaz Khouja, and Casper E. Wiggins. (2008) AN INVESTIGATION INTO THE EFFECT OF FULL-SCALE SUPPLY CHAIN MANAGEMENT SOFTWARE ADOPTIONS ON INVENTORY BALANCES AND TURNS. Retrieved Mar 4, 2015 from Boone, L, E. and Kurtz,D, L. (2015, April 6). Profit Impact of Marketing Strategies. Retrieved April 10, 2015 from Cairney, S., & Citino, D. (2015). Product Information Management (PIM) As a Stepping Stone. Retrieved March 13, 2015, from Hiiemaa, K, (2014, December 22). How to Increase Sales and Cut Costs by using PIM Software. Retrieved April 10, 2015, from How Product Information Management Systems Reduce Costs - ADAM Software. (2012, October 2). Retrieved April 9, 2015, from cecosts/ Ko nst, J. S., la Fontaine, J. P., & Hoogeboom, M. G. R. (2009, August). Product data management, a strategic perspective. Geldermalsen: Maj Engineering Publishing Kotcho, M. (2015, February 3). Product Information Management Software for HuskyTech [Personal interview].

16 15 Osterhout, C. (2013, December 18). WSOL. Retrieved April 6, 2015, from Pacheco, A., Santos, R., Oliviera, M., & Paulino, E. (2014). Benefits of PIM. In New Advances in Statistical Modeling And Applications (p. 285 p.77). Springer. Technology HelpDesk: St. Cloud State University. (n.d.). Retrieved April 9, 2015, from The Yankee Group. (2005, January). The cost of waiting: Building the ROI case to implement product information management now. Vangie, Beal. (2014, March 28). Webopedia:ERP-enterprise resource planning. Retrieved April 8, 2015, from