Business Value Enhanced by Business Value Enhanced by ERP ERP

Group No. 2Group No. 2

Name Roll No Name Roll No

Deepa Karappan 13Deepa Karappan 13

Kunal Doshi 15Kunal Doshi 15

Dipti Gawas 19Dipti Gawas 19

Siddesh Kurdikar 33Siddesh Kurdikar 33

Sandeep Pandita 39Sandeep Pandita 39

IntroductionIntroduction ERP systems provide an integrated suite of ERP systems provide an integrated suite of

information technology applications that support information technology applications that support the operations of an enterprise .the operations of an enterprise .

It encompasses the business processes that drive It encompasses the business processes that drive system requirements and capabilitiessystem requirements and capabilities . .

Benefits:Benefits:

Operational Efficiency Lower cost in long run Standard Process Allows management of processes across

organizational boundaries

Success Case - MyWipro Success Case - MyWipro Citi Technology Services the technology and Citi Technology Services the technology and

infrastructure outsourcing arm of Citi provides infrastructure outsourcing arm of Citi provides information technology services and informationinformation technology services and information

to Citi entities worldwide. to Citi entities worldwide.

Wipro Technologies, the global IT services Wipro Technologies, the global IT services business of Wipro has acquired Citigroup's business of Wipro has acquired Citigroup's subsidiary, Citi Technology  Services .subsidiary, Citi Technology  Services .

Wipro uses a ERP which is implemented by a SAP Wipro uses a ERP which is implemented by a SAP system known as MyWipro.system known as MyWipro.

MyWiproMyWipro

• Attendance captured Attendance captured manually by Managersmanually by Managers

• Mandatory 9.5 hours Mandatory 9.5 hours login was manually login was manually sentsent

• Paper work abolishedPaper work abolished

• Salary slip, Form 16 Salary slip, Form 16

• Mail trails avoidedMail trails avoided

Swipe details getting directly Swipe details getting directly reflectedreflected

The difference between the out The difference between the out and in swipe is captured for and in swipe is captured for Client Billing. Client Billing.

MyWipro including the entire MyWipro including the entire cycle of Goal settings, Manager cycle of Goal settings, Manager comments and Feedback comments and Feedback

now available on the portalnow available on the portal

Business Cards, Training and Business Cards, Training and assessments, e-learning. On assessments, e-learning. On MyWiproMyWipro

Project tracking, Career moves, Project tracking, Career moves, updating of Resumes, Claims like updating of Resumes, Claims like Food claims, Mobile Food claims, Mobile reimbursements, IT declaration, reimbursements, IT declaration, HRA declaration, LTA declaration, HRA declaration, LTA declaration, Variable pay declaration, Variable pay declaration, Educational reimbursements etc Educational reimbursements etc

Business Value EnhancementBusiness Value Enhancement

Integration is Key to ERP Integration is Key to ERP A totally integrated system A totally integrated system The ability to streamline different processes and The ability to streamline different processes and

workflows workflows The ability to easily share data across various The ability to easily share data across various

departments in an organization departments in an organization Improved efficiency and productivity levels Improved efficiency and productivity levels Better tracking and forecasting Better tracking and forecasting Lower costs Lower costs Improved customer service Improved customer service

IntroductionIntroduction

Global business providing integrated power Global business providing integrated power systems for use on land, at sea and in the air. systems for use on land, at sea and in the air.

Business overview Business overview Civil AerospaceCivil Aerospace

The world's number two engine manufacturer overall The world's number two engine manufacturer overall Trent family of engines - number one for modern, Trent family of engines - number one for modern,

wide body aircraft wide body aircraft Market leader for business jet enginesMarket leader for business jet engines

Defence AerospaceDefence Aerospace Number one military aero engine manufacturer in Number one military aero engine manufacturer in

Europe* Europe* Number two military aero engine manufacturer in the Number two military aero engine manufacturer in the

worldworld* * Marine Marine

range of products and services includes established range of products and services includes established names such as Kamewa, Ulstein, Aquamaster and names such as Kamewa, Ulstein, Aquamaster and Brown Brothers Brown Brothers

Energy Energy Rolls-Royce has supplied more than 15,000 units to Rolls-Royce has supplied more than 15,000 units to

customers in nearly 120 countries. customers in nearly 120 countries.

The situations before ERPThe situations before ERP Used over 1500 systems before the ERP project Used over 1500 systems before the ERP project

was started was started MER- LIN --IBIS -often causing inventory and MER- LIN --IBIS -often causing inventory and

stock take problems.stock take problems. A range of individual systems for controlling and A range of individual systems for controlling and

monitor- ing commercial, financial and monitor- ing commercial, financial and procurementprocurement func- tions, these systems had problems func- tions, these systems had problems interfacing with each other.interfacing with each other.

The legacy systems did not allow Rolls- Royce to The legacy systems did not allow Rolls- Royce to establish direct, on-line communication with establish direct, on-line communication with customers, partners and suppliers. customers, partners and suppliers.

Did not support significant growth of the Did not support significant growth of the business and were not sufficiently agile to keep business and were not sufficiently agile to keep pace with the changing business environment.pace with the changing business environment.

IT at Rolls-RoyceIT at Rolls-Royce In 1996 Rolls-Royce formed a partnership In 1996 Rolls-Royce formed a partnership

with electronic data services (EDS). with electronic data services (EDS). Move was made in order to allow Rolls-Move was made in order to allow Rolls-

Royce to concentrate its efforts on its Royce to concentrate its efforts on its main area of expertise—the making and main area of expertise—the making and selling of aero engines .selling of aero engines .

EDS were chosen because of their EDS were chosen because of their substantial experience within the substantial experience within the aerospace industry. aerospace industry.

Cost of ProjectCost of Project 1000 additional PCs 1000 additional PCs

The total cost for the network infrastructure The total cost for the network infrastructure was about two million pounds. was about two million pounds.

The company required over 6000The company required over 6000

SAP licences for users across all the business SAP licences for users across all the business

The server was provided by Sun Microsystems The server was provided by Sun Microsystems and in excess of 2 Terabytes of disk space. and in excess of 2 Terabytes of disk space.

Challenges FacedChallenges Faced Cultural problems Cultural problems Business problems:Business problems: SAP R/3 requires a fairly rigid business struc- SAP R/3 requires a fairly rigid business struc-

ture for it in order to work successfully ture for it in order to work successfully They achieved this by using an internal business They achieved this by using an internal business

process re- engineering (BPR) programme. process re- engineering (BPR) programme. Drawing and mapping the current Drawing and mapping the current

processes. processes. Identifying any problems or issues raised Identifying any problems or issues raised

from the from the mapped process. mapped process. Involved applying some of these issues to a Involved applying some of these issues to a demonstration of SAP, demonstration of SAP, Re-mapping or modification of the processes Re-mapping or modification of the processes

in line in line with SAP. with SAP.

The implementation project (cont..)The implementation project (cont..)

Technical problemsTechnical problems Accuracy of data. Accuracy of data. Retrieval of old Retrieval of old

data data 1998 1999 2000 200

1

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Phase1

1 SAP‘Go Live’

Phase2

2

3

Phase3

4 5

6

Key

Phase 1 1 Strategy & Direction

Phase 2 2 Planning Analysis & Convergence

3 Early Deployment

Phase 3 4 Wave 1 – Focus on Operations

5 Wave 1 – Pilot

6 Wave 2 – Focus on Assembly & Spares

Benefits of ImplementationBenefits of Implementation

lower IT cost.lower IT cost. The system will be the ability to promise and The system will be the ability to promise and

then deliver to the customer on time. then deliver to the customer on time. The system will also improve the relationship in The system will also improve the relationship in

the supply chain, as transactions will be made the supply chain, as transactions will be made easier via the use of Electronic Communications .easier via the use of Electronic Communications .

OverviewOverview

One of the leading chocolate manufacturer across One of the leading chocolate manufacturer across

world.world.

Need of an efficient and reliable logistics system Need of an efficient and reliable logistics system to cater to these large no of seasonal to cater to these large no of seasonal requirements .requirements .

Reliable product availability is critical.Reliable product availability is critical.

Existing SystemExisting System

A network of 19 manufacturing plants, eight A network of 19 manufacturing plants, eight contract manufacturers and more than 20 co-contract manufacturers and more than 20 co-packers.packers.

The company was running on legacy systems, The company was running on legacy systems, and with the impending Y2K problems, it chose to and with the impending Y2K problems, it chose to replace those systems and shift to client/server replace those systems and shift to client/server environment.environment.

To tackle Y2K problem Hershey decided to To tackle Y2K problem Hershey decided to replace existing legacy systems.replace existing legacy systems.

IT PartnersIT Partners A $112 million worth of combination of softwares A $112 million worth of combination of softwares

for CRM, ERP and forecasting.for CRM, ERP and forecasting.

Replace existing mainframe based legacy Replace existing mainframe based legacy systems by SAP R3 – Accenture.systems by SAP R3 – Accenture.

Production forecasting, scheduling and Production forecasting, scheduling and transportation management – Manugistics Group transportation management – Manugistics Group Inc.Inc.

Managing customer relations and tracking Managing customer relations and tracking effectiveness of marketing activities– Siebel CRM.effectiveness of marketing activities– Siebel CRM.

Implementation Plan for Enterprise Implementation Plan for Enterprise 2121

Expected BenefitsExpected Benefits

Fine-tune deliveries to suppliers.Fine-tune deliveries to suppliers.

Upgrade and standardize companies business processesUpgrade and standardize companies business processes..

Efficient customer driven processes capable of Efficient customer driven processes capable of

managing changing customer needs.managing changing customer needs.

Reduce order cycle times and boost inventory accuracyReduce order cycle times and boost inventory accuracy..

Reduce inventory costs.Reduce inventory costs.

Better execution of business strategy of emphasizing Better execution of business strategy of emphasizing

core mass market candy businesscore mass market candy business..

Actual ScenarioActual Scenario

Unable to deliver $100 million worth of Kisses chocos and Unable to deliver $100 million worth of Kisses chocos and

Jolly Ranchers for Halloween in 1999.Jolly Ranchers for Halloween in 1999.

Stock price down 35%Stock price down 35%

Earnings drop 18% Earnings drop 18%

Order fulfillment time doubled to 12 days! Order fulfillment time doubled to 12 days!

Lost prominent shelf space for the season!!! Lost prominent shelf space for the season!!!

Several consignments were shipped behind schedule, and Several consignments were shipped behind schedule, and

even among those, several deliveries were incomplete.even among those, several deliveries were incomplete.

““Enterprise software isn’t just Enterprise software isn’t just software. It requires changing the way software. It requires changing the way

you do business.”you do business.”

What went wrongWhat went wrong

What went wrong?What went wrong? Squeezed deadlines:Squeezed deadlines:

Project originally scheduled for 4 yearsProject originally scheduled for 4 years Company forced the implementation to 30 monthsCompany forced the implementation to 30 months

Wrong timing:Wrong timing: The company went live at their busiest timeThe company went live at their busiest time Released the solution just before the HalloweenReleased the solution just before the Halloween

Big-Bang Approach:Big-Bang Approach: To quicken the implementation process, Hershey opted for Big To quicken the implementation process, Hershey opted for Big

Bang implementation.Bang implementation. Simultaneously implemented a customer-relations package and a Simultaneously implemented a customer-relations package and a

logistics package even without testing some of the moduleslogistics package even without testing some of the modules Increased the overall complexity and employee learning curveIncreased the overall complexity and employee learning curve

Un-entered data:Un-entered data: ““Surge Storage” capacity not recorded as storage points in the Surge Storage” capacity not recorded as storage points in the

ERPERP Orders from many retailers and distributors could not be fulfilled, Orders from many retailers and distributors could not be fulfilled,

even though Hershey had the finished product stocked in its even though Hershey had the finished product stocked in its warehouses.warehouses.

SuccessfSuccessful ERPul ERP

Learning'sLearning's

SUPPLY CHAIN ERP FAILURE STORY

Mahindra & Mahindra Ltd

28

Material ManagementMaterial Management

Requirements Determination

Order Follow-upInventory Management

1.1.

Vendor Selection3.3.

Order Processing4.4.5.5.

Goods Receipt and7.7.

Invoice Verification

Purchase OrderPurchase Order

8.8.

9.9.SourceDetermination

2.2.PaymentVendor invoice

?

QM in Procurement6.6.

MRPSRM

MRP or Materials requirement planning software is basically a calculator that is expected to :

• Ensure raw materials and/or products are available for production and/or shipping to meet the demands of the customer.

• Maintain the low levels of inventory.

• Plan manufacturing activities, delivery schedules and purchasing activities.

MRP FOR MATERIAL MANAGEMENT

MRP as an ERP system is an integration of foll. modules:

1. Inventory module2. Different products module with bill

of materials3. Planning module for manufacturing

and thus procurement4. Order module for placing SO, PO.

MRP FOR MATERIAL MANAGEMENT

Planning lead times for MRP

MRP FOR MATERIAL MANAGEMENT

After weekly MRP run schedule lines are generated considering all the factors

MRP FOR MATERIAL MANAGEMENT

Total inventory (eod) = stock in hand + receipts - requirements

If receipts and requirements are matching then inventory can be controlled.

FAILURE ANALYSIS FOR MRP IN MFG. ORG

Stock in the system (SAP) and physical quantity never matches.

Forecasting fluctuates making it difficult to work for monthly production systems.

Production orders always fluctuates making it difficult to predict requirement.

False sales order created which inflates the total requirement.

False Stock transfer orders for inter-plant movement created in system.

Production declaration not done on time which deflates the requirement.

BOM errors due to frequent changes in design.

All the above reasons made it difficult to run the entire material management team and production team on MRP.

Success story Air FranceSuccess story Air France “ “Making the sky the best place on Making the sky the best place on

EarthEarth ““ Air France was formed on 7 October 1933Air France was formed on 7 October 1933

Air FranceAir France is a is a French airline based at Charles de Gaulle airport in

Roissy-en-FranceParis, France, and is one of the world's largest airlines .

Air France serves 20 destinations in France and operates Air France serves 20 destinations in France and operates worldwide scheduled passenger and cargo services to 150 worldwide scheduled passenger and cargo services to 150 destinations in 83 countries global fleet of 551 airplanes destinations in 83 countries global fleet of 551 airplanes that carried more than 64 million customers last year and that carried more than 64 million customers last year and supported the collaborationsupported the collaboration of more than 100,000 of more than 100,000 employees.employees.

Upgrade to MySAPUpgrade to MySAP Air France has been an SAP ERP customer since 1998.Air France has been an SAP ERP customer since 1998.

The SAP solution touches the entire organization with The SAP solution touches the entire organization with thousands of users performing a broad set of business thousands of users performing a broad set of business processes: from accounts receivable to budget controls, and processes: from accounts receivable to budget controls, and from general purchases to maintenance, repair and, overhaul from general purchases to maintenance, repair and, overhaul (MRO) for heavy maintenance management of its Airplanes.(MRO) for heavy maintenance management of its Airplanes.

In May 2005 Air France kicked off a project to upgrade the In May 2005 Air France kicked off a project to upgrade the SAP R/3 4.0B system to MySAP ERP, which provides ERP SAP R/3 4.0B system to MySAP ERP, which provides ERP Central Component (ECC) 5.0, the main component within Central Component (ECC) 5.0, the main component within MySAP ERP solutions.MySAP ERP solutions.

Vendors : SAP and IBMVendors : SAP and IBM

Upgrade process was a success “ It was 10% less than Upgrade process was a success “ It was 10% less than budgeted, and we worked very well with SAP and IBM,’’ budgeted, and we worked very well with SAP and IBM,’’ Antoine Bihler, head of SAP Competence Center at Air FranceAntoine Bihler, head of SAP Competence Center at Air France

Difference SAP and MYSAPDifference SAP and MYSAPSAPSAP MYSAPMYSAP

client-server systemsclient-server systems Web-based environmentWeb-based environment

Batch dataBatch data Helps access real-time Helps access real-time information especially as information especially as current processes are current processes are disjointed disjointed

Collaborations is difficult Collaborations is difficult as there exists different as there exists different instances of financial, instances of financial, planning, and purchasing planning, and purchasing applicationsapplications

Facilitate internal and Facilitate internal and external collaborationexternal collaboration

Benefits of ERP UpgradeBenefits of ERP Upgrade Greater usability and satisfaction for more than 2,200 Greater usability and satisfaction for more than 2,200

corporate users at Air France with regard to Web features corporate users at Air France with regard to Web features like bookmarking frequently used intranet pages and like bookmarking frequently used intranet pages and system menus.system menus.

Enhanced reporting and reduced time to generate business Enhanced reporting and reduced time to generate business warehouse reports.warehouse reports.

Easier account information access by Air France business Easier account information access by Air France business analysts, buyers, and other users compared with the analysts, buyers, and other users compared with the difficult data extraction tools used previously.difficult data extraction tools used previously.

Reduced programming and maintenance costs with the Reduced programming and maintenance costs with the elimination of nearly 100 customized programs.elimination of nearly 100 customized programs.

A repository of over 1,600 test cases and process best A repository of over 1,600 test cases and process best practices for future reuse and system improvementpractices for future reuse and system improvement

Why UpgradeWhy Upgrade Air France are capable of transforming their operations to pursueAir France are capable of transforming their operations to pursue even greater operational excellence and service improvement.even greater operational excellence and service improvement. becoming a prerequisite for companies to mitigate risks, reduce complexity, becoming a prerequisite for companies to mitigate risks, reduce complexity,

control maintenance costs, and standardize corporate governance activities.control maintenance costs, and standardize corporate governance activities.

Functional improvement for a larger number of usersFunctional improvement for a larger number of users Ease of integration and business process mappingEase of integration and business process mapping Enhanced connectivity and collaboration among internal and external Enhanced connectivity and collaboration among internal and external

usersusers Reduced time to introduce products and services to the marketplaceReduced time to introduce products and services to the marketplace Long-term support and maintenance from software vendorsLong-term support and maintenance from software vendors Positive cost impact via consolidation of systems and software Positive cost impact via consolidation of systems and software

instances, reduced total cost of ownership (TCO), and improved return-on-instances, reduced total cost of ownership (TCO), and improved return-on-investment (ROI)investment (ROI)

Benefits of ERP UpgradeBenefits of ERP Upgrade

Speed of Service DeliverySpeed of Service Delivery : :Air France’s decision to Air France’s decision to

upgrade is based on providing relevant, role-based and timely information to its employees, upgrade is based on providing relevant, role-based and timely information to its employees, suppliers, and customers, all of which will benefit from a stable and scalable Web-based platform suppliers, and customers, all of which will benefit from a stable and scalable Web-based platform that delivers intuitive user interface, sophisticated reporting and analytics capabilities, as well as that delivers intuitive user interface, sophisticated reporting and analytics capabilities, as well as design elements that accelerate task and project completion.design elements that accelerate task and project completion.

Retire Legacy MaintenanceRetire Legacy Maintenance : : At Air France, the At Air France, the continuation of the SAP R/3 4.0B system would have meant rising maintenance costs continuation of the SAP R/3 4.0B system would have meant rising maintenance costs especially due to customized product features, while the migration to MySAP ERP especially due to customized product features, while the migration to MySAP ERP translates into a controllable expense structure with a predictable Outcome .That translates into a controllable expense structure with a predictable Outcome .That would mean the elimination of 98 customized programs, mostly written in the SAP would mean the elimination of 98 customized programs, mostly written in the SAP development language ABAP, allowing Air France to redeploy these IT resources to development language ABAP, allowing Air France to redeploy these IT resources to other more strategic projects.other more strategic projects.

Ease of Integration: TheEase of Integration: The new system will increase new system will increase the synergistic benefits from its merger with KLM asthe synergistic benefits from its merger with KLM as

many of the underlying systems being used in different operations in many of the underlying systems being used in different operations in France, Holland and elsewhere will be replaced, combined, and France, Holland and elsewhere will be replaced, combined, and standardizedstandardized

ERP ,a Continuous improvementERP ,a Continuous improvement

To accommodate growing To accommodate growing operationsoperations..

the status quo is no longer an option because of the the status quo is no longer an option because of the rapid changes in their marketplaces and customersrapid changes in their marketplaces and customers

System upgrades could become one of the most effective System upgrades could become one of the most effective strategies to survive and thrive in the marketplace teeming strategies to survive and thrive in the marketplace teeming with competition.with competition.

The need to have comprehensive analytics and reporting The need to have comprehensive analytics and reporting capabilities, attain faster decision making and improved capabilities, attain faster decision making and improved control, enable transparency throughout business control, enable transparency throughout business processes as well as empower employees through quicker processes as well as empower employees through quicker information access.information access.

Conclusion/ Learning'sConclusion/ Learning's While companies adapt to change, those that While companies adapt to change, those that

succeed tend to be the ones that havesucceed tend to be the ones that have the best understanding and the business the best understanding and the business

intelligence needed to decipher changingintelligence needed to decipher changing customer requirements and quickly respond to customer requirements and quickly respond to

them effectively. In that sense companies need to them effectively. In that sense companies need to implement a suitable system to embrace and implement a suitable system to embrace and accommodate change before it overwhelms accommodate change before it overwhelms them. them.

Thus when ERP is judiciously implemented it Thus when ERP is judiciously implemented it

undoubtedly brings in value enhancement to the undoubtedly brings in value enhancement to the overall Business overall Business

Thank YouThank You

BibliographyBibliography

www.google.com, www.ask.com, www.ask.com www.icmrindia.org Company sites : Air France, Hershey, Company sites : Air France, Hershey,

Rolls RoyceRolls Royce EBSCOEBSCO Interview of ERP personnel for in Interview of ERP personnel for in

house cases.- My MyWipro and M&Mhouse cases.- My MyWipro and M&M