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Transcript of Keda/SAP
Questions Computerization @ Keda 5-year
plan Investment Specific
Systems Objectives Reason
faced Implementing the Team 3 key roles: key users, IT officers, and consultants Which was the most significant role? Why? Team selection How were teams selected?
Do you agree with this method?
Why or why not?
If not, how could team member selection be adjusted? Challenges What was a major challenge faced by senior management? Was this a good solution? Would this solution have worked if this were an American company? Implementing SAP Challenges What was Keda's most difficult task during implementation? Southwick's Recurring Theme KEDA SAP PROCESSES
STRATEGY ALIGNMENT "organization structure
to accommodate the ERP system" "as-is processes had to be
studied, and to-be processes
designed" "We were more inclined to adopt the
model the system was originally
designed for, and make changes to the
workflow and its management" Going live
• Overall the country-specific culture is used to attain project success. In China organizational culture is imposed, which means authority provides the direction System deployment • Five months after the team was formed • Timing is carefully selected during the low season in August, September and October Deployment method • Big-bang (implementation happens in a single instance.) • Top management reassurance and approval for ERP-related delays in deliveries within the first year • Team faced resistance as loss of both status and discretion occur • Employees not sticking to the new system are terminated Improvements as a result of implementing ERP
• Data accuracy improved up to 98 %
• Information becomes more transparent
• Convenient price analysis
Keda’s success after implementation
• Improved market responsiveness
• Decreased inventory holding costs
• Better product delivery
• Faster monthly financial reconciliation
• Improvement in productivity capacity
• Improved decision quality ERP - In a nutshell Choosing an ERP Vendor • Proprietary v 3rd party provider.
• Decided on 3rd party: faster, cheaper, higher quality. Their competitive advantage was product innovation not proprietary processes.
• Choose global v local vendor; experience v suitable cultural context.
• Invited 20 vendors, visited their clients (helped learn from their mistakes), allowed middle and top managers to have a say.
• SAP’s ERP solution was selected due to sophistication and feature-rich. Another factor – selected by SACMI, Keda’s competitor and global leader. •2000 - 1st failed computerization attempt - no goals, direction; "winging."
•MRP II vendor withdraws support
•Dilemma for new IT head: direct resources to immediate needs vs long term computerization plan
•Long term 5-year plan simultaneosly address short term needs
•Step one: Status quo analysis – problems were identified, requirements collected, and shared objectives were established.
•Uniformity - Established standardized procedures to improve management control and info quality
•Planned implementation projects for ERP, PDM, OA, MES, CRM, and SCM. Completed in phases. ERP was priority. Discussion Questions 1. Why did the original attempt at computerization fail?
2. What were the driving forces behind the decision to purchase from a 3rd party instead of in-house? ERP Implementation Process/ Leader Best Practice Stage
Identify need for system
System testing and user training
System rollout Description Drivers for ERP system were identified so that Keda could define clear goals that were in line with its overall business strategies A suitable provider of an off-the-shelf solution was selected on the basis of the needs identified above. This selection process involved receiving responses to the request for proposal (RFP), short-listing vendors for presentation and visiting vendors’ existing client Existing business processes and operations needed to be modified to fit the chosen system. Responsibility for this stage was placed on key users. The ERP modules were configured and customized for Keda’s business processes and data needs. This process involved converting and loading data and making changes to process flows The system was tested to see whether it was ready for deployment. Users of the system familiarized themselves with system operations The system went online Here are some of the main challenges faced by Keda in each stage of the ERP project
•Time ( MPR II was ineffective, replacement was needed fast to support growing production demand; “big bang “ deployment approach
•Data characteristics ( poor quality of existing data; but necessary efforts were made to ensure data accuracy in the new system)
•Users’ resistance (resistance at various points of implementation process); firm and assertive management was able to cope with opposition; terminations)
•Production delay ( production delays were expected, but to circumvent this problem the rollout schedule was carefully chosen to occur in a low season)
What are the critical factors in the successful implementation of ERP identified in the case of Keda? Keda
Founded in 1992 by Lu Qin in ShunDe, China
Manufacture ceramic machinery
Recognized as a china top 500 manufacturer and top 10 building materials machinery
Became a listed company on shanghai stock exchange in 2002
$209 million revenue in 2009 (almost double from 2006)
Broad product offering and comprehensive plant design
Orders typically high customization low volume and high margins
Several key business functions all acting autonomously
Freewheeling corporate culture allowed for “pursuit of perfection” and endless innovation
Many innovative products and business innovations Drivers for ERP
Silo-based model taking a toll on kedas business performance
Disconnected business units equals duplicate tasks ,redundancy and heightened costs
Little information flow and lack of integration prevented timely strategic decisions
To remain a leader keda needed to continue innovating, but needed to provide information to all departments along the way
Also the Chinese government’s call computerization in corporations
Inventory management difficult because of the diverse product line
Low usage and production made it difficult to meet demand
The expended product offering caused keda to build more factories, causing Keda to outgrow it MRP II system.
Keda needed to rethink its IT. Discussion questions How would ERP help solve the silo problems for Keda?
How did Keda’s rapid growth cause it IT problems? Future for ERP For Keda
•Successful implementation but yet the full potential of centralized data and processes is to be discovered
• Integration of customer relationship management, business intelligence and supply chain management, optimize decision making.
•How such system will allow for flexibility—an ability to adapt enterprise technology to disruptive business events as they occur.
•Cloud ERP Challenges for ERP What other considerations
should/could Keda have taken?
-Staffing? Cultural considerations Cultural dimension Characteristic Power distance High Uncertanty avoidance Low Masculinity High Individualism Low