Transportation by its nature is a really competitory and a really complex industry. ( Martin Stopford, 1997 ) Transporting companies have to run on a planetary graduated table and manage offices all around the universe and work with a diverse work force. Merchant transportation is one of the most extremely regulated industries in the universe. Hence information systems play a really of import function in the direction of the transportation company. In this essay we will analyze a instance survey of how Hanjin transportation used information systems grow as a taking transportation company. Hanjin is a planetary transit and Logistics Company. ( Hanjin transportation, 2010 ) .The company operates around 200 ships, chiefly container vass, gas oilers and majority bearers. Hanjin ships are merchandising worldwide. Hanjin conveyance lading to more than 100million dozenss a twelvemonth to 6000 finishs worldwide. ( Hanjin transportation, 2010 ) Company ‘s gross revenues web includes 200 international subdivision offices and 30 corporations. Over all the company is spread outing quickly on a planetary graduated table and is besides embarking into new transportation related concern.
Hanjin was increasing its planetary operations by opening new container terminuss, purchasing new big ships, traveling in confederation with container lines. Hanjin lacked the logistics required to be competent in the container industry. Its 10 twelvemonth old ERP systems lacked functionality and flexibleness required to run such a complex and large administration ( Oracle 2008 ) . Hanjin understood that without terminal to stop logistics solutions they can non vie in container concern. Hanjin besides faced jobs commanding procurance costs and to run into the planetary regulative demands ( Oracle 2008 ) . The information aggregation system was done manually and hence it was clip consuming and prone to mistakes. Hanjin have a work force of around 4000 which are employed all around the universe. It was increasing hard for Hanjin to pull off such a big and diverse work force.
Solution to Hanjin jobs
As a solution to the jobs Hanjin was confronting due to its planetary enlargement it decided to establish Process invention undertaking. The procedure invention intent was to set up advanced direction construction and beef uping its organizational capablenesss. ( Sustainability study, 2006 ) . ‘The undertaking applied to concern procedure and organisation construction every bit good as the corporate civilizations based on following the advanced IT substructure ‘ . ( Sustainability study, 2006, p.27 ) . Hanjin decided to re-engineer their concern procedure utilizing best pattern theoretical accounts for their ERP systems so as to derive planetary fight. This system was traveling to be a long term solution, it will non straight show on balance sheet but it will be platform for establishing new concern undertakings ( Business study 2006 ) . Hanjin besides decided to switch to client based concern by guaranting good service and increased client satisfaction.
Process Innovation Project
The procedure invention undertaking squad was assembled in October 2004 and so they spent 5 months for mapping the new systems and the procedure. The undertaking will be implemented bit by bit on a measure by step footing. The procedure invention undertaking was to be implemented during a period of 3 old ages.
The chief purpose of procedure invention was to be client centred and a profitableness oriented direction company. The information system used to re-in force the organizational capablenesss and will fix the direction to be more clients focused.
The information system development contracts were given to companies which were best in the concern ( Oracle, 2008 ) . ERP was given to ORACLE while others were given to Siebel and Hyperion. During the procedure of undertaking Oracle acquired Siebel and Hyperion which resulted in seamless integrating and client support. ( Oracle, 2008 ) .
( ERP ) Enterprise Resource planning: Enterprise system integrates the key concern processes into individual system. In this system the flow of information is seamless throughout the administration ( Laudon & A ; laudon, 2007 ) .
Hanjin ‘s Enterprise Resource Planning ( ERP )
Hanjin integrated concern procedure such as finance and accounting, capital plus planning, human resource, procurement procedure. They used these for smooth flow of information in their internal system. The company ‘s senior direction was involved in the undertakings execution. The Managing manager and CIO of Hanjin Shipping said that “ To better our planetary fight, we needed an IT solution that supported extended procedure reengineering ” ( Oracle, 2008, pg.1 ) . Hanjin decided to put about 57.7 million USD on this undertaking. They standardised the direction and information aggregations methods, restructured the flow of informations between their concern systems and prepared a dictionary so as to do it easier for the staff to follow new system. As the system was implemented on a measure by step footing, bit by bit the staff could see the benefits of the system and they were non resilient to alterations, but they were will to portion information in between different divisions. Company besides adopted other best pattern guidelines such as preparation and educating the staff, usage of package support and care.
Benefits of Information system
The above diagram is explained utilizing the generic theoretical account of 6C ‘s for explicating concern benefits.
- Lower Cost: The e-sourcing system assisted them to secure merchandises from a list of providers and they were benefited from competitory pricing which resulted in procurance costs. Cost salvaging per client was increased due to increased efficiency ( Oracle, 2008 ) .
- Improved Communication: As the information was consolidated into a individual system, therefore staff gained an incorporate position of operations ( Oracle, 2008 ) .
- Improved Management Control: New ERP systems and re-engineering procedure helped in improved concern direction. This gave the directors a complete position of the company ‘s operations and besides equipped the staff with elaborate information they required to be after, put to death and measure complex enterprises. The directors were besides able to do determinations and guarantee jobs were addressed instantly. Performance rating was easier and could be easy done on a planetary footing and medium and long term scheme planning could be done due to informations handiness. ( Oracle, 2008 )
- New Capability: HR platform helped in bettering the efficiency of the section. The new system helped the directors to see complete history of the staff and besides discard applications. This resulted in increased efficiency of HR staff which could concentrate more on pulling and retaining skilled employees and besides develop them. ( Oracle, 2008 )
- Improved Customer Service: Due to its service web it could react faster to clients demands. Detailed gross revenues and selling programs could be developed. ( Oracle, 2008 )
- Competitive Advantage: Hanjin got the acknowledgment of a dependable logistics spouse. ( Sustainability study, 2008 ) . In April 2008 Hanjin got the highest awards in logistics in Korea. ( Sustainability study, 2008 ) .
Future concern programs
The undertaking improved the overall public presentation of the company procedure. In future company aims to put more in their IT systems which aims to complement their direction systems every bit good as front office work. ( Business study 2007 ) . As the internal system execution was completed the company now is ready to develop shipping/logistics related concern which will go the company ‘s following drive forces. Banking on their internal system they are stepping closer to go a Global logistics company. They are besides be aftering to spread out its 3PL ( 3rd party logistics ) concern by widening its planetary web ( Hanjin Shipping, 2008 ) . In line with their Procedure Innovation undertaking they have besides launched another undertaking ‘Knowledge direction ‘ . ( Sustainability study, 2008 )
The undertaking taken by Hanjin to reconstruct its concern procedure by the usage of information systems was strategically really of import. Hanjin is a planetary administration with different maps, organizational degrees and many concern procedures ; therefore ERP system was the right pick of information system. This undertaking became the base to implement progress concern procedure which complement their information systems and besides increase the efficiency of the company. It helped the company to be more clients focused which is a cardinal scheme in current times. They could venture into new facets of concern such as logistics. The choice of Oracle and Siebel was besides right because they were the best in the concern. Hanjin made right determination by incorporating all systems together. The acquisition of Siebel and Hyperion by Oracle ensured that the systems have seamless integrating and uninterrupted support. The information systems which they used were in line with their concern schemes which resulted in success of the undertaking.
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- Stopford. , M, 1997. Maritime Economics 2nd erectile dysfunction. Routledge: London
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