Strategic Information System PlanBY ARUN KUMAR T -028 CASE ABSTRACT CASE ABSTRACT . Keda produces and sells machinery for processing ceramics that are mainly used in construction. a mere five months after forming an ERP implementation team.CONTINUED …. . In August 2005. The project quickly paid off through lowered inventory and reduced operation and management costs. This success was all the more remarkable given the fact that an estimated 80% of ERP implementation efforts in China failed. Keda successfully deployed SAP as their ERP solution. the ceramics machinery industry was dominated by European companies. Keda had surpassed many competitors to become a world leader in building materials machinery. second only to SACMI of Italy. Innovation. . Keda began as a small manufacturer of ceramics machinery in Shunde of the Guangdong province.HISTORY Founded in 1992 by Lu Qin. At that time. with an initial capital of only 90 thousands Chinese Yuan (CNY). in fact. By early 2000's. has been Keda's emphasis. DRIVERS FOR ERP The silo (An attitude found in some organizations that occurs when several departments or groups do not want to share information or knowledge with other individuals in the same company. and in turn. Also. resulting in redundancy. heightened costs. culture) Different business units often had duplicated tasks and data. . managers could not make timely and well-informed business decisions. A silo mentality reduces efficiency and can be a contributing factor to a failing corporate based model was taking a toll on Keda’s business performance. as there was little integration between departments. our most important task is to provide the needed information for every decision maker every step of the way in the decision making process. and most importantly the customers when making decisions. or as Zhu put it.ERP THE LIFE SAVER To retain its leadership position and to continue growing its business. “In managing the enterprise. Keda needed to stay innovative with product development. and to be more informed about production.” . sales. business management and operation. It wasn’t clear how much profit or loss the sale of a product resulted in … and which part of the product or the production process contributed to that profit or loss. and costing was based on experiences. the cost of a product was unclear.ZHU STATEMENT ON ERP : “Before ERP deployment.” . too. That made it difficult for us in pricing our products. due to the mess in material management.ERP THE LIFE SAVER MR . Zhu illustrated “For example. We had someone time its usage in a week using a stopwatch. We were shocked when we learnt that it was only in production 24. Reusable materials and parts were often scrapped. precious machine time of key facilities was often wasted idling.ERP THE LIFE SAVER Also observed was suboptimal utilization of resources and facilities.6% of the time!”(Compared with over 90% utilization in a Japanese competitor) . we had a key facility for production. ERP THE LIFE SAVER Keda's rapid growth was not without consequences. did not support such multi-plant operations. Keda’s commitment to R&D in turn resulted in a greatly expanded product offering. Ltd. Keda's MRP II system at that time. The single plant mode of production could no longer cope with the highly diversified business lines and production functions. This prompted Keda’s shift from single plant to multiple plants in 2004. Competition from local and abroad prompted Keda to diversify its business and product lines. CAPMS developed by Beijing Riamb Software IT Co. . it outgrew its existing Manufacturing Resource Planning (MRP II) system's capabilities.. By expanding its operation to multiple plants. This prompted Keda’s shift from single plant to multiple plants in 2004. it outgrew its existing Manufacturing Resource Planning (MRP II) system's capabilities.IMPETUS FOR ERP Keda's rapid growth was not without consequences. Ltd.. CAPMS developed by Beijing Riamb Software IT Co. The single plant mode of production could no longer cope with the highly diversified business lines and production functions. Keda's MRP II system at that time. Competition from local and abroad prompted Keda to diversify its business and product lines. did not support such multi-plant operations. Keda’s commitment to R&D in turn resulted in a greatly expanded product offering. . By expanding its operation to multiple plants. Vendor assessment was conducted..) "The ERP project kicked off in August 2004. we focused on how much investment was needed and in what kinds of systems.” .IMPETUS FOR ERP "When working out the plan. what hindrances the company is facing.. Ltd. Computerization Plan in Keda (Source: Keda Industrial Co. what our objectives are." Zhu said. and what problems we are targeting to solve. They invited both local and foreign software vendors to visit their company for detailed assessment . why we need computerization. MNGT OFFICE AUTOMATION MANUFACTURING EXECUTION SYSTEM PRODUCT DATA MANAGEMENT COMPUTERIZATION PLAN IN KEDA .MNG MATERIAL MNGT PROD.E-portal SCM BI CRM ENTERPRISE RESOURCE PLANNING HR MNGT INVEN. PLANNING LOGISTICS vendors FINANCIAL MNGT FACILITY MNGT SALES MNGT QUALITY MNGT Customers PROJ. . .IMPETUS FOR ERP Keda performed an analysis and provided a Request for proposal to the vendors.. Keda was flodded with presentations and SOW by the nine selected vendors. Keda contacted 20 vendors and spent 2 months to zero in 9 out of 20. C)CONSULTATION – CONSULTANTS FROM DIGITAL CHINA. E)IT SUPPORT TEAM . MANAGERS FROM BOTH KEDA AND DIGITAL CHINA MNGT SYSTEMSPROJ. B)PROJ. MANAGEMENT SUPPORT. D)BEST HANDS FROM ALL DEPARTMENTS.IMPETUS FOR ERP SELECTION IS KEY : BUILDING AN IMPLEMENTATION TEAM: March 2005 ROLES: A)TOP MNGT –TO PROVIDE PROJECT DIRECTION AND TO TAKE CRITICAL DECISIONS. SAP was adopted by SACMI. SAP was chosen for various reasons. Specifically. In particular.unlike the company's existing MRP solution CAPMS. . SAP ERP was capable of supporting complex operational processes across multiple production plants. SAP emerged as the winner. For one.ERP Finally in October 2004. SAP had a proven track record of successful ERP implementations. According to Zhu. SAP's ERP solution was considered sophisticated and feature-rich. a major competitor of Keda and the industry leader. Success or failure hinged on the key users.ERP CHOOSE TO WIN ! “There were three main roles: the key users. and IT officers provided support.supporting the consultants and key users in their tasks. since they dictated the future workflow. consultants acted as coaches.” . and the IT officers. The key users were at the core. the consultants. KEDA ERP PROJECT TEAM STRUCTURE Project steering Committee over all Proj. Material Mngt. Financial mngt Process system design .direction General Manager strategic decisions Assistant P.Manager Project Manager Consultants Business strategy group IT specialists Prod. Planning. c)Realisation of system technology. . e)System implementation. d)Integrated testing for validation process for functional requirements. b)Design of Blue print for Business Operation – to find the gap between the old and new requirements.IMPLEMENTATION PROCESS FIVE STAGES: a)Assessment on status quo – to identify the current business practices and operation work flow. ERP challenge The arrangement was for the head of each module to work together at the IT department.. their computers were moved to our office and we worked together as the ERP implementation was a crucial matter related to various business units. at one point. with the marketing manager representing the marketing department. purchasing manager representing purchase department.“ . etc .. The sheer amount of data was one issue. We had to devise a data model to support all the operations and workflow. We spent a lot of time on stock taking and renumbering stock code so as to ensure data accuracy in the new system." .” Data preparation was the most difficult task.ERP challenge Data was the main issue. in order to minimize the disturbances after rollout. and the data model was another. Only they are most familiar with the operations and hence they should set the rules. Since experiences in the operations were needed in this specification. we assigned this responsibility to the key users. Besides involving them throughout the implementation process. "The first level of training was provided to selected key users by the consultants. selected key users were responsible for preparing operating manuals for all users. In fact. in parallel with system testing. staff training was also conducted. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users. At the same time. the key users committed to the changes associated." . the focus was then shifted to acclimating users to these changes. Zhu explained on the training program.ERP challenge The top management committed to the ERP project. In fact. Besides involving them throughout the implementation process. "The first level of training was provided to selected key users by the consultants. selected key users were responsible for preparing operating manuals for all users. the focus was then shifted to acclimating users to these changes. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users. At the same time. Zhu explained on the training program. the key users committed to the changes associated.ERP challenge The top management committed to the ERP project." . staff training was also conducted. in parallel with system testing. Besides involving them throughout the implementation process. Zhu explained on the training program.ERP challenge The top management committed to the ERP project. In fact. the focus was then shifted to acclimating users to these changes. staff training was also conducted. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users. "The first level of training was provided to selected key users by the consultants. At the same time. selected key users were responsible for preparing operating manuals for all users. in parallel with system testing. the key users committed to the changes associated." . "The first level of training was provided to selected key users by the consultants. in parallel with system testing. Besides involving them throughout the implementation process.ERP challenge The top management committed to the ERP project." . the key users committed to the changes associated. selected key users were responsible for preparing operating manuals for all users. At the same time. In fact. staff training was also conducted. the focus was then shifted to acclimating users to these changes. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users. Zhu explained on the training program. Zhu explained on the training program. Besides involving them throughout the implementation process. In fact. selected key users were responsible for preparing operating manuals for all users." .ERP challenge The top management committed to the ERP project. in parallel with system testing. the key users committed to the changes associated. "The first level of training was provided to selected key users by the consultants. the focus was then shifted to acclimating users to these changes. staff training was also conducted. At the same time. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users. In fact. staff training was also conducted. in parallel with system testing. Zhu explained on the training program. "The first level of training was provided to selected key users by the consultants. Besides involving them throughout the implementation process. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users. the focus was then shifted to acclimating users to these changes." .ERP challenge The top management committed to the ERP project. the key users committed to the changes associated. selected key users were responsible for preparing operating manuals for all users. At the same time. staff training was also conducted. Besides involving them throughout the implementation process. the key users committed to the changes associated. selected key users were responsible for preparing operating manuals for all users. "The first level of training was provided to selected key users by the consultants. in parallel with system testing. the focus was then shifted to acclimating users to these changes. In fact. the selected key users then in turn transfer their acquired knowledge and skills regarding system operations to other users." . Zhu explained on the training program.ERP challenge The top management committed to the ERP project. At the same time.