dr.

Tom Bramorski
University of Wisconsin
USA
Introduction
Medium size U.S. business
1,200 employees
Multiple, geographically scattered manufacturing
sites located in the Milwaukee metro area
Single finished product with a large variety of custom
options
Multiple distribution centers worldwide
Introduction
Bill of Materials with approximately 25 levels
250 global suppliers
Mature product, well established brand name
Demand consistently exceeds supply
Production capacity shortage
SAP R/3 ERP system
ERP Benefits
Cross-functional process orientation with high
visibility
Enables exchange of information throughout the
supply chain in real time
Reduces operations costs
Reduces cycle times
Facilitates bottleneck identification and management
ERP Benefits
Improved inventory management and inventory cost
reduction
Improved customer service levels, material shortages
and reduced late deliveries
Standardized and normalized data and data formats
ERP Benefits
Enhanced communication across functional
boundaries
Emphasis on process orientation
Enhanced integration across the supply chain and
business units
Expanded information access with appropriate user
rights
ERP Benefits
Enhanced empowerment of employees through
increased information sharing
Improved system-wide accountability and visibility
Facilitates the implementation of do it right the first
time philosophy
Improved accuracy of forecasting and master
scheduling
Specifically, ERP Benefits:
Organization and it’s supplier chain
Manufacturing and sales functions
Inventory management
Product distribution and logistics
IT function by consolidating and standardizing
diverse legacy database platforms
ERP Disadvantages
Large dollar investments for setup, implementation
and maintenance even for small ERP projects
Painful and lengthy implementation and debugging
High level of expertise needed for implementation
and debugging
ERP Disadvantages
Multiple difficulties are hidden leading do “doubling
the time and tripling the cost” estimates for the
project
Difficulties amplify organizational resistance to
change
Strategic benefits are hard to quantify
Targets are rarely achieved
Plans are too ambitious (time and $$$)
ERP Disadvantages
Expectations are unrealistic
Lack of understanding of strategic benefits of ERP
implementation (follow the crowd mentality)
Superficial implementation with a lack of necessary
infrastructure support
Is it really worth it?
ERP Implementation Case
Specific Strategic Goals:
Speed-up new product development
Improve customer focus (emphasis on large accounts)
Eliminate 5 independent computer systems to improve
operating system efficiency
Eliminate functional silos by enhancing communication
ERP Implementation Case
Phase I: The establishment of a “Customer First” team
in order to:
Identify customer expectations (for external and
internal customers)
Understand the current processes
Identify improvement opportunities
Determine future process vision, targets, and goals, and
Develop a Vision
ERP Implementation Case
Phase I implementation difficulties:
Lack of common vision (functional silo mentality)
based on 220 interviews
Current processes and infrastructure could not
efficiently support the requirements of increased
customer demands
SAP Modules Selected for
Implementation
Materials Management
Sales and Distribution
Production Planning
Warehouse Management
Human Resources
Business to Business
SAP Modules Selected for
Implementation
Advanced Planning Optimizer (Forecasting Tool)
Financial Accounting/Controlling
Costing, and
Customer Relations Management
Implementation Schedule
18 months allowed for complete system
implementation
System simulations performed in May, 2002 using
mock transactions
Go-live in July, 2002 (slow business period)
IBM consultants retained to facilitate the
implementation process
Implementation Issues
Since 7/2002 implementation there was:
Confusion and a general lack of knowledge about the
new system throughout the organization
The production and inventory control department, as
well as the SAP help desk, and IS department were
pummeled with a lot of questions that they did not
have the capacity to answer
Implementation Issues
Since 7/2002 implementation there was:
A lack of tools for generating necessary reports/ the
new system wasn’t customized to the business
Lack of quantitative measures to assess implementation
progresses and the fulfillment of strategic benefits
Implementation Issues
Since 7/2002 implementation there was:
A lack of knowledge regarding the forecasting module
decreased forecasting accuracy
No back-up plans
Unacceptable consultant turnover produced instability
Implementation Issues
Since 7/2002 implementation there was:
Data had been inaccurate, incomplete, overlooked or
was not entered into the system causing many errors
(garbage-in, garbage-out)
Confidence in the system amongst internal and external
customers was undermined
Implementation Issues
Since 7/2002 implementation there was:
Insufficient time and money necessary to successfully
implement the project
Management pushed for a quick transition to a new
system to save money on current system software
licenses
Finger-pointing and blame shifting for poor system
performance
4 Major Implementation Issues
Always develop back up strategies and computer
infrastructure systems
Review and understand your current processes
and need before defining the need for a system
(Choose or design a system around your business
needs)
Support and drive from executive staff to change
corporate culture is a must, and
Training, Training, Training
Conclusions
Develop a system exploitation strategy:
Identify projects that utilize the base infrastructure and
deliver the biggest benefits
Find people who understand the business and its
processes, and the technology
Conclusions
Develop benefit-focused implementation plans
supporter by specific business cases
Establish recognizable benefit delivery processes