• Asia Pacific University of Technology and Innovation

• PROJECT MA 123

Project Management Question Paper Page 1 of 2 Level 3 Asia Pacific University of Technology & Innovation 202301 A LARGE DRUG WHOLESALER FAILED LARGE IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING (ERP) In the early 90s, FoxMeyer, a healthcare service company, was the fifth largest drug wholesaler in the United States, with $5 billion in annual sales and around 500,000 items shipped daily. Because of fierce competition, FoxMeyer needed a solution that would make complex supply chain decisions while facing cost pressure. FoxMeyer decided that an ERP would offer the best solution to get realtime information, automate, and integrate inventory systems into a unique system. The company expected to eliminate unnecessary or redundant activities, set up appropriate inventory levels, and implement more responsive customer services. This IT system, a multi-million-dollar project, was the first of its kind launched in the pharmaceutical industry. The implementation cost for Systems Applications and Products in Data Processing (SAP) was budgeted at $1 million, and the ERP system was projected to save FoxMeyer about $4 million per year. The Planned Value (PV) includes:  $500,000 client/se