Successes and Failures of ERP Systems

By: Annie Collier, Lauren Jepson, Lynzee Harrell, and Kristen Warren

Poly-CastPlastics (Suzhou) Co., Ltd.

The overall goal was to drive accurate and timely financial reports internally out of

EnterpriseIQ for better awareness and management of the Suzhou, China plant. This was

approached in five steps:

1. Separate out the Poly-Cast data into two locations: The headquarters in Oregon and

locally at the China location by setting up a separate enterprise plant (EPlant) in

EnterpriseIQ.

2. Drive 100 percent of Poly-Cast Suzhou's financials from EnterpriseIQ within three

months.

3. Create system-driven reports that management can use to track progress and identify

risks.

4. Eliminate the outsourced financial support of the China CPA within six months.

5. Stay 100 percent compliant to rigorous PRC GAP and tax laws with the new internal

financial reports.

Poly-CastPlastics (Suzhou) Co., Ltd.Poly-Cast has achieved:

Awareness: Poly-Cast was able to set up a real-time view of its business, with daily financial results, rather than waiting until the month end or later to see how the company fared.

Proactive Approach: Poly-Cast now takes advantage of more system-driven data to project month end results and manages risks to make sure that financial goals are met.

Better Business Intelligence: Poly-Cast now knows critical decision making details about its business, including product break-even points, where costs are on the production floor and how to better manage to get the desired results.

University of MassachusettsWhen the University of Massachusetts-Amherst’s new online registration system, Spire, crashed the day

before classes commenced, all 24,000 students found themselves unable to register for classes, access

timetables or perform any online activities at all. Pandemonium broke out amongst disoriented first-years

and classes were disrupted for the first three days of term.

But the chaos didn’t stop there. At Stanford University students started the new school year with a dead

web portal and no clue where their classes were meant to be, and at Indiana University, 3,000 students

were denied financial aid by the faulty new ERP system, rushing financial aid administrators off their feet

to scramble together food and short-term loans.

You may be wondering the cause of such widespread disaster. Could it have been a sorority Ouija session

or a practical joke gone-wrong? The truth lies in the rushed installation of software that included a

PeopleSoft Web portal implementation.

University of MassachusettsUniversity administrators may be drawn to the organizational features of ERP systems but often fail to

remember that they have been designed to centralize corporate business processes. According to CIO.com,

recent studies have shown that not only do ERP implementations take far longer to install at Universities,

but they usually cost up to five times more than the original quote which is rather a problem when you’re

running a college and not a profit spinning corporation.

The moral of the story: if you don’t have the talent, experience or financial capability to manage a sturdy enterprise system, it’s better to leave it alone, in particular if you are a non-profit organization.

Failure ●Set out to upgrade it’s IT System in 1996

●Chose SAP $112 R/3 software

●instead on suggested 48 month implementation period, Hershey demanded to be implemented in 30 months (before Y2k)

●Went live July 1999 ○ Hershey's largest sales period- before Halloween and Christmas orders

●to meet demands, Hershey had to cut corners on the critical system testing phases.

●Failure was rooted in shortcuts in systems testing, data migration, and training

●Incapable of processing $100 million worth of candy, even though it had it in stock

Testing phases ●“Should never be compromised”

●3 rounds of testing○ 1st- Pilot Phase- Key users test the most frequently used business scenarios, one

functional department at a time.

○ 2nd - Departmental Pilot Phase - A team of users test the ERP system under realistic conditions

■ Full piloting

○ 3rd - Integrated Pilot Phase - “day-in-the-life” the users test the system to make sure all of the various modules work together as intended

90’s : Nike uses SAP ERP system

Year 2000 : Nike hires i2 Technologies

Year 2001: Stock fell almost 20% ; $100 million dollars in lost sales

-Nike blames i2 Technologies because instead of matching their supply with demand, the new system ended up ordering low-selling shoes in place of high selling ones

-Result: collapse in supply chain

Timeline of Events

Consequences of i2 TechnologiesInaccurate demand forecasting

Inventory problems

Overdue deliveries

Causes of System FailureSoftware was too slow

Did not integrate well

Inadequate training

Software did not fit Nike’s business model

OutcomePartners with Llamasoft for sustainable supply chain innovation

In 2002-2003, there was an 8% increase in revenue of $10.7 billion, due to:

less inventory

leaner supply chain

Miniature Precision Components, Inc. (MPC)

Jay and Shirley Brost

Founded in March of 1972

Leading tier-one supplier for major automotive manufactures

Make a wide variety of thermoplastic components and assemblies

Before ERP implementationDid not have the visibility to examine its production

process with an eye for outliers and poor performance

Their lack of integration limited the company’s potential

IntegrationMPC purchased EnterpriseIQ with Realtime Production

Monitoring by IQMS

After purchasing,

MPC has implemented the IQMS system across 5 physical plants and 8 production groups

MPC has seen significant returns on investment

reduced maintenance costs

better allocation of resources

visibility to make decisions quickly

References cont.http://www.iqms.com/manufacturing-award/mpc/

http://www.iqms.com/company/mpc/index.html

ReferencesIQMS.com. 1998-2015. How Poly-Cast Utilized the IQMS Financial Management Modules to Maintain Rigorous PRC Tax Standards. Retrieved on 11/2/2015.

http://www.iqms.com/company/poly-cast/index.html

Sharedserviceslink.com Ltd. 2015. Freshers’ failures. Retrieved on 11/2/2015.

http://www.sharedserviceslink.com/blog/the-top-three-truly-shocking-erp-implementation-disasters

http://www.pemeco.com/a-case-study-on-hersheys-erp-implementation-failure-the-importance-of-testing-and-scheduling/

http://www.cio.com/article/2429865/enterprise-resource-planning/10-famous-erp-disasters--dustups-and-disappointments.html

http://blog.360cloudsolutions.com/Top-Six-ERP-Implementation-Failures

http://www.cio.com/article/2439601/supply-chain-management/nike-rebounds--how--and-why--nike-recovered-from-its-supply-chain-disaster.html?page=2