Strengthening Silverstone Projects

OCULUS
Eric Holmes | Jun Suzuki | Vitalijus Vasiliauskas | Anas Wakhani | Karne Zencker Management Consultancy 18th February 2012

Our Role
Oculus Consulting
Research and Consulting Advice

Goldrock
IT systems, Management and Outsourcing

Silverstone
Fast Growing, Multinational, Generic Pharmaceutical Firm

Agenda
1. Current Situation
Key Assumptions Lean and SAP Key Success Factors

2. Risks
Short, Medium & Long Term Why do SAP & Lean projects fail?

3. Success Stories 4. Recommendations

Current Situation

Key Assumptions
Silverstone s Goals
Maintain High Quality Minimize Production Costs

SAP and Lean Implementation

Efficient use of Time and Resources Requires Client Commitment

Goldrock s Current Problems

Delayed Projects, Lack of Trust Scope Creep with Lean Training Project

Key Assumptions
SAP implementation is halfway finished Initial Lean implementation complete

http://www.alpeconsulting.com/i/presentation_alpe_consulting_eng_2011.pdf

Risks
1 2 3 4

Risk Evaluation Matrix

LIKELIHOOD LOW HIGH Project delay Deterioration of working relationship with Silverstone Opportunity costs Internal Conflict within Goldrock

IMPACT

LOW Lawsuit from Silverstone HIGH Reputational damage Lose future clients

Lean Training Project failure Lose of Silverstone as a client Financial penalties

Why Do SAP/Lean Projects fail?

According to researchers, up to 30% of all SAP implementations and Lean projects fail to meet the buyer's expectations (Forrester/Sourceforconsulting). The Reasons: Underestimation of costs and lead-times Change management not considered Insufficient sponsorship from management Poor communication Lack of understanding among workers Lack of consultant s expertise Mismatch between projects and organizational goals

Key Success Factors & Success Stories

1 2 3 4

Key Success Factors

Besides IT and technical aspects, SAP and Lean demand business skills. Examples of successful SAP and Lean implementation

SAP Success Stories

Capgemini: Enabled rapid growth through acquisition for

West-Ward Pharmaceuticals
 Consultant selection process, expertise

Ready-to-Run SAP solutions, 4 years working relationship between consultants and company.

Accenture: Enabled Global Expansion of Metso

Support, expertise, long-term relationship (partner approach)

Tata Consultancy Services: Partnered with ABB

 Work as a team to make that happen : there were no

differences between ABB teams and TCS consultants, it was like one family.

Lean Success Stories

Lasater Institute: Bank of America - A Lean Six Sigma

Deployment Success
 Lean is part of the company culture thanks to senior

commitment, a robust internal training program, aggressive and ongoing external recruiting, and results that excite everyone in our company.
Bourton Group: Lean success at Siemens
 Transform processes and restructure the business to make

best use of engineers, Increase levels of ownership and accountability, Demonstrate significant and early return on our client s investment.

Recommendations

Recommendations
Evaluate Monetary Costs of Delays Renegotiate Contract
Hire Lean subcontractors Redefine roles and responsibilities Reschedule training projects

Conduct Goldrock s Lean training sessions together with SAP Design Schedule Buffer

Customer Relationship Management

Rebuild Relationship with Silverstone Inform Silverstone s Directors of the lack of cooperation from employees. Define Gate Keepers and Spokespeople Win-Win deal for Silverstone and Goldrock by hiring specialized Lean trainers Silverstone HR departments hire Lean Trainers Goldrock Pays and Supervises

Lean Trainers Characteristics & Skills

Global Presence Specific Knowledge in the pharmaceutical industry Successful Track Record Flexible Training Duration according to employee type Communication vertical and horizontal within Silverstone Ease resistance to change

Increase Motivation
Motivate Top Management and All Divisions
Distribute Lean training and responsibilities to upper management along with operations staff Use KPI s and competitions among worker groups Salary based incentives for workers

Global Region Team

Silverstone Personnel
Country by Country

Current Training Schedule

28 Week Duration

Proposed Training Schedule

16 Week Duration

Assuming Trainee Groups of 15 People

Result

12 Week Time Reduction 32% Cost reduction

Thank you

Lean Training
Lean Training Consultants:
Tunnell (www.tunnellconsulting.com) Kaizen Institute (www.kaizen.com) The Lean Group (www.theleangroup.co.uk) MCP (www.mcpeurope.com)

SAP Integration model for Pharmaceutical industry

Customer
Sales Order Shipment Credit Management Sales Forecast / Plan Material Availability Check

Sales & Distribution

Invoice

Transfer of Requirements Goods Issue to Sales

cGMP and USFDA

Material Requirements Compliance Production & Operation Cost Purchase Order Goods Receipt Invoice Receipt Goods issue to Process Order Process Order Receipt

Production Planning in Process Ind. Quality Management

Materials Management Quality Management

Accounting Document

Accounts Receivable

Finance & Controlling

Accounts Payable

Vendor

Asset Management
Source: Seminar SAP Life sciences, by Chandra Shekar CV (Soltius Singapore Pte Ltd)

Sources - 1
Girard K., Austria Farmer M., Business software firms sued over implementation (Nov. 1999): news.cnet.com/Business-software-firmssued-over-implementation/2100-1001_3-232404.html Why Lean and Six Sigma projects fail (Feb. 2010): www.consultantnews.com/article_display.aspx?p=adp&id=6625

Cap Gemini success story, West-Ward Pharmaceuticals: Outsourcing Platform and SAP Enable Rapid Growth through Acquisition for WestWard Pharmaceuticals : www.capgemini.com/services-andsolutions/challenges/infostructure-transformation-services/successstories/ss_westward_pharmaceuticals/ Accenture success story, Accenture Helps Metso Mining and Construction Technology Go Global : www.accenture.com/usen/pages/success-metso-global-sap-platformvideo.aspx?c=tech_smtgpjan_10000007&n=sm_0112&sf2919722=1

Sources - 2
Tata Consultancy Services success story, One Simple ABB SAP Implementation: www.tcs.com/resources/multimedia/Pages/ClientExperience-One-Simple-ABB-SAP-Implementation.aspx Van der Heiden G., De Souza K., Ambrose C., Magic Quadrant for SAP Application Service Providers, Europe (Dec. 2011): www.gartner.com/technology/reprints.do?id=118CLJQU&ct=111215&st=sb Lasater Institute, Bank of America - A Lean Six Sigma Deployment Success : www.lasaterinstitute.com/casestudy/Financial%20Services/Bank%20of% 20America(Lean%20Six%20Sigma).pdf Bourton group, Lean success at Siemens: www.bourton.co.uk/PDF/constructioninfrastructure/Siemens_Energy_Se rvices.pdf

Sources - 3
Interview to Sarah James, Marketing Executive at MCP Consulting & Training
From: S James [mailto:SJames@mcpeurope.com] Sent: 2012 m. vasario 14 d. 13:50 To: Vitalijus Vasiliauskas Subject: RE: Lean Training Hello Vitalijus, Thank you for your phone call and interest in MCP s Lean Training Programmes. Lean Awareness Workshop for Managers and Team Leaders Aim of the course - The Lean Awareness Workshop aims to raise awareness of Lean Principles and their potential impact on business performance, and how it is sustained Who should attend - Management teams, team-leaders, Objectives - To give the participants an understanding of the Lean Thinking Principles - To demonstrate, through action learning, how the application of the Lean Principles can lead to significant performance improvement - To discuss the roles and responsibilities of management teams during the lean journey - To enable teams to reflect upon the performance of their own business units and to consider possible future actions. Content - Introduction to Lean Thinking and how it relates to your organisation or business unit - Carry out a Lean simulation learn by doing - Discuss the main Principles of Lean Thinking - Putting the Principles into practice an introduction to the Lean Toolkit - How do we sustain the improvements Number of participants - A maximum of 12 is recommended.

Sources - 4
Interview to Richard Watson, Lean Specialist at The Lean Group
From: <richardwatson911@gmail.com> Date: 2012/2/14 Subject: Re: Lean Courses To: Vitalijus Vasiliauskas Dear Vitalijus The Lean Group work all over the World and so supporting you in Eastern Europe is not a problem. We tend to work in a minimum of Five Day Blocks when working overseas so that there is a reasonable balance between travel and delivery time. Our daily rate is 1345.00 excluding VAT which if you are in the EU and can provide a VAT number we do not have to charge under the reverse VAT rules, if outside of the EU no VAT is applicable. When working with a new Client overseas we normally charge a refundable deposit equal to five consultant days, refunds of deposits will be made providing that seven working days notice of cancellation/postponement is provided, less of course any non-cancellable expenses incurred, such as flights etc. In addition to our day rate we re-charge all travel and accommodation expenses at cost. Handouts/Materials cost 15 per person for the entire week and Certificates if required are 40 each. I currently have availability week commencing the 27th February, the 5th March and then from the 9th April ongoing. I hope this helps and if you need any more information please don't hesitate to contact me. Very best regards Richard