Solution To Hanjin Problems Information Technology Essay

Solution To Hanjin Problems Information Technology Essay shipping by its nature is a truly(prenominal) agonistic and a very complex industry. Martin Stopford, 1997 Shipping companies have to operate on a ball-shaped scale and manage offices all around the world and work with a diverse work force. Merchant shipping is one of the most super regulated industries in the world. Hence information schemas play a very important role in the steering of the shipping society. In this hear we will analyse a case study of how Hanjin shipping employ information forms grow as a leading shipping company. Hanjin is a global transportation and Logistics troupe. (Hanjin shipping, 2010).The company operates around 200 ships, mainly container vessels, fuck up tankers and bulk carriers. Hanjin ships are trading worldwide. Hanjin transport cargo to more than 100million loads a year to 6000 destinations worldwide. (Hanjin shipping, 2010) Companys sales meshwork includes 200 international sev eralize offices and 30 corporations. Over all the company is exaggerateing rapidly on a global scale and is too venturing into parvenu shipping related trading. bank stemma problemsHanjin was increasing its global operations by opening new container terminals, acquire new large ships, going in alliance with container lines. Hanjin lacked the logistics needed to be competent in the container industry. Its 10 year old ERP systems lacked functionality and flexibility required to operate such a complex and big organisation (Oracle 2008). Hanjin understand that without end to end logistics resolvents they cannot compete in container business. Hanjin to a fault faced problems exacting procurement costs and to meet the global regulatory requirements (Oracle 2008). The selective information parade system was done manually and hence it was time consuming and prone to errors. Hanjin have a work force of around 4000 which are use all around the world. It was increasing difficult for Hanjin to manage such a large and diverse work force.Solution to Hanjin problemsAs a solution to the problems Hanjin was facing due to its global expansion it refractory to launch act upon innovation go out. The physical process innovation purpose was to establish carry ond management structure and strengthening its organisational capabilities. (Sustainability traverse, 2006). The protrude applied to business process and government structure as well as the corporate cultures based on adopting the advanced IT infrastructure. (Sustainability report, 2006, p.27). Hanjin decided to re-engineer their business process using best dedicate models for their ERP systems so as to gain global competitiveness. This system was going to be a long term solution, it will not directly manoeuvre on balance sheet notwithstanding it will be plan for launching new business projects (Business report 2006). Hanjin also decided to permutation to guest based business by ensuring good servic e and change magnitude customer satisfaction.Process Innovation ProjectThe process innovation project team was assembled in October 2004 and then they spent 5 months for mapping the new systems and the process. The project will be implemented gradually on a measuring by step basis. The process innovation project was to be implemented during a period of 3 years. origination (Hanjin Sustainability report, 2008, pg.27)The main work out of process innovation was to be customer centred and a profitability oriented management company. The information system employ to re-in force the organisational capabilities and will prepare the management to be more customers focused.The information system development contracts were habituated to companies which were best in the business (Oracle, 2008). ERP was condition to ORACLE while others were given to Siebel and Hyperion. During the process of project Oracle acquired Siebel and Hyperion which resulted in circular-knit integration and custo mer support. (Oracle, 2008).Information Systems(ERP) Enterprise Resource planning Enterprise system integrates the primeval business processes into single system. In this system the flow of information is seamless throughout the organisation (Laudon laudon, 2007).Hanjins Enterprise Resource Planning (ERP)Internal systemInternal systemSource Author generatedHanjin integrated business process such as finance and accounting, capital asset planning, human resource, procurement process. They used these for smooth flow of information in their internal system. The companys elderly management was involved in the projects implementation. The Managing director and CIO of Hanjin Shipping said that To repair our global competitiveness, we needed an IT solution that supported extensive process reengineering (Oracle, 2008, pg.1). Hanjin decided to invest about 57.7 million USD on this project. They standardised the management and info collections methods, restructured the flow of data betwee n their business systems and prepared a lexicon so as to make it easier for the staff to follow new system. As the system was implemented on a step by step basis, gradually the staff could see the benefits of the system and they were not resilient to changes, but they were will to share information in between different divisions. Company also adopted other best practice guidelines such as training and educating the staff, use of software support and maintenance.Benefits of Information systemSource (Hanjin Sustainability report, 2008, pg.27)The above diagram is explained using the generic model of 6Cs for explaining business benefits. commence Cost The e-sourcing system assisted them to procure products from a list of suppliers and they were benefited from competitive pricing which resulted in procurement costs. Cost saving per customer was increase due to increased skill (Oracle, 2008).Improved Communication As the data was consolidated into a single system, hence staff gained an integrated take of operations (Oracle, 2008).Improved Management Control New ERP systems and re-engineering process helped in improved business management. This gave the managers a jazz view of the companys operations and also equipped the staff with detailed information they required to plan, execute and evaluate complex initiatives. The managers were also able to make decisions and ensure problems were addressed immediately. surgical procedure evaluation was easier and could be easily done on a global basis and medium and long term system planning could be done due to data availability. (Oracle, 2008)New Capability HR computer programme helped in improving the dexterity of the department. The new system helped the managers to view complete history of the staff and also discard applications. This resulted in increased efficiency of HR staff which could focus more on attracting and retaining skilled employees and also train them. (Oracle, 2008)Improved Customer Service Due to its service network it could respond faster to customers demands. Detailed sales and marketing plans could be developed. (Oracle, 2008) belligerent Advantage Hanjin got the recognition of a reliable logistics partner. (Sustainability report, 2008). In April 2008 Hanjin got the highest awards in logistics in Korea. (Sustainability report, 2008).Future business plansThe project improved the overall performance of the company process. In future company aims to invest more in their IT systems which aims to complement their management systems as well as front office work. (Business report 2007). As the internal system implementation was completed the company today is ready to develop shipping/logistics related business which will father the companys next driving forces. Banking on their internal system they are stepping nestled to become a Global logistics company. They are also planning to expand its 3PL (3rd party logistics) business by extending its global network (Hanjin Shipping , 2008). In line with their Process Innovation project they have also launched another project Knowledge management. (Sustainability report, 2008)ConclusionThe project taken by Hanjin to rebuild its business process by the use of information systems was strategically very important. Hanjin is a global organisation with different functions, organisational levels and many business processes hence ERP system was the correct choice of information system. This project became the base to implement advance business process which complement their information systems and also increase the efficiency of the company. It helped the company to be more customers focused which is a key strategy in current times. They could venture into new aspects of business such as logistics. The selection of Oracle and Siebel was also correct because they were the best in the business. Hanjin make correct decision by integrating all systems together. The acquisition of Siebel and Hyperion by Oracle ensured that the systems have seamless integration and continuous support. The information systems which they used were in line with their business strategies which resulted in success of the project.