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Coca-Cola Hellenic, one of the largest Coca-Cola bottlers worldwide, has started a three year long project to substitute all legacy systems with a SAP implementation called Wave 2, in order to maximize efficiencies in use of resources and apply common best practices and polices accross the group.
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Group ProjectOperations & Information ManagementInstructor: Prof. Papadopoulos Zoi KarakostaStathis Simeonidis
ENTERPRISERESOURCEPLANNING
SYSTEMS
ENTERPRISE RESOURCE PLANNING SYSTEMS
What is ERP ?
Corporate / Enterprise-wide information systems
Highly complex
Aggregate information from entire company or outside it
Automate processes from all functions
Modular Information Systems
Available in the Market
Incorporate Best Practices from other companies
Customization needed to fit to own company
Comply with international standards
ENTERPRISE RESOURCE PLANNING SYSTEMS
MRPMRP becomes the fundamental concept used in production management
History of ERP
MRP is the initial effortSoftware application that generates planning and scheduling materials for complex manufactured goods
SAP company is bornFive German engineers begin the company SAP for producing and marketing standard software for integrated business solutions
MRP evolves into MRP IIDistribution Management Activities
HRMHuman Resource Management is developed
MRP becomes ERPThe term ERP is coined when MRP II is needed to cover areas like Engineering, Finance, and Project ManagementEuro
Introduction of Euro, many companies take this opportunity to use ERP (because of disrupted legacy systems) 9/11 triggers a drop in demand for new ERP
systems.
ERP becomes internet enabled
Early 60s
1970s
1972
1980
1988
1990
2000
2001
2002
2004
Services Oriented Architecture (SOA) allows different systems to communicate one another
ENTERPRISE RESOURCE PLANNING SYSTEMS
Scope of ERP systems
Manu-facturing Accounting Finance Sales &
MarketingHuman
Resources
Vendors
Vendors
Vendors
Customers
Customers
Customers
ProductionSystems
AccountingSystems
FinanceSystems
CRMSystems
HRMSystems
BusinessProcesses
BusinessProcesses
BusinessProcesses
BusinessProcesses
BusinessProcesses
Trad
itio
nal S
yste
ms
Manu-facturing Accounting
FinanceSales & Marketing
Human Resources
Business ProcessesBusiness Processes
Enterprise–wide Business Processes
Enterprise System
Vendors
Vendors
Vendors
Customers
Customers
Customers
En
terp
rise S
yste
ms
ENTERPRISE RESOURCE PLANNING SYSTEMS
Why ERP ?
Changing economic & business environment
Economic outlook drives for efficiencies
Maintain competitive advantage
Eliminate duplicate efforts and Leverage Best Practices
Increased need for unified on-time information and user interface
Business alignment towards strategy & Control towards standards (IFRS, SOX, etc.)
Quick decision support
Sharing & integration of management information with partners
ENTERPRISE RESOURCE PLANNING SYSTEMS
Advantages & Disadvantages
1. Potential failure in utilizing the system properly could make
the company less efficient in the long run
2. High costs - Only large corporations can access these benefits
offered by this technology
3. Continuous training of employees
4. ERP has a number of limitations (the success is fully
dependent on how employees utilize it)
5. Hard to customize.
6. Making the necessary changes may make the company less
effective in the market
7. ERP vendors may charge additional license fees
8. ERP technical support has been questioned
1. Accounting applications (integration of costs, profit and
revenue information of sales in a granular way)
2. Easy alterations in manufacturing
3. The company keeps better track of their products which are
produced with a higher level of quality
4. High Employed Security
5. ERP in logistics strengthens the cooperation between
suppliers, companies and clients
6. Efficient cash management
7. Quality control support (Internal auditory procedures and
providers)
8. Improved Financial Information
ENTERPRISE RESOURCE PLANNING SYSTEMS
Challenges of ERP
Needs a clear understanding of the organization and how it does things
Clear documentation of Business Processes & Legacy Systems
Scope defined in detail
Implementation brings a lot of change & resistance
ERP packages may need customization to fit but also
Organization has to adapt to it (organization changes)
Expenses of implementing are high – so is the risk
Implementation is resource-intensive
ENTERPRISE RESOURCE PLANNING SYSTEMS
Critical Success Factors
Clear understanding of strategic goals, expectations and deliverables
Top management support, engagement and participation
Engagement in excellent project management (define the objectives, develop work plan)
Business driven implementation directed by business requirement (not by IT dept.)
Top-notch implementation team (detailed project plan and full availability of all necessary resources)
Absolute data precision (invalid data can have a negative domino effect)
Thorough training and extensive education
(giving 10-15% of the total ERP implementation budget for training provides 80% chance of success.)
Specific performance measures. (Evaluation criteria must be included from the early beginning)
ENTERPRISE RESOURCE PLANNING SYSTEMS
Implementation Process
Review
Get Trained
Plan the Project
Define Gaps
Test solutions
Document Processes
Roll-out
Improve Continuously
Review the pre-implementation processes (how the company does things now)
Get extensive training on the selected software package
Establish project team, plan, milestones, risks and contingency plans
Set up a process for gap analysis & assessment
Consult extensively the end-users
ENTERPRISE RESOURCE PLANNING SYSTEMS
After-implementation support level
Reputation – Nb Of installations in industry and area – Successful track record of its partners
Compatibility with the existing infrastructure
Modularity – Customization Possibilities - % of processes covered – Best Practices of Industry
Technology
Vendor
Support
Costs
Vendor selection
SAP 35%
Oracle 28%
MS14%
Others 23%
ERP Market ShareFunctionality
ENTERPRISE RESOURCE PLANNING SYSTEMS
Company Profile
Coca-Cola Hellenic is one of the largest bottlers and vendors of The Coca-Cola Company’s products in the world, and the largest based in Europe, spanning over 28 countries and serving 560 million people.
€1 billionEBITDA
42,000employees
90brands
28countries
Coca-Cola Hellenic was formed in 2000 as a result of the merger of the Athens-based Hellenic Bottling Company and the London-based Coca-Cola Beverages
ENTERPRISE RESOURCE PLANNING SYSTEMS
Implementation in CCH
Coca-Cola Hellenic has selected SAP as its ERP Vendor
Will replace a legacy system BASIS, designed by TCCC for all its vendors worldwide
Since 2004, it used the Accounting & Finance Module only of SAP, called Wave 1
The total implementation, that will replace all legacy systems is called Wave 2
Started in Czech & Slovakia operations, will phase in all countries until 2014
Major release in established countries Italy & Greece on 01/01/10
ENTERPRISE RESOURCE PLANNING SYSTEMS
Goals of implementation
SAP Wave 2 is a complete end-to-end business tool that will allow CCH to standardize all systems & processes applying the same technology in all divisions.
Significant investment in SAP Wave 2, introducing new and more effective methods to optimize productivity and performance throughout the organization.
SAP Wave 2 Platform allows CCHellenic to provide excellent customer service by improving our customer-centric procedures such as inventory management and invoicing accuracy.
With the installation of SAP Wave 2, business developers have access to various critical customer information such as:
Transaction History Promotion Activities Product Availability
…through their handheld devices that enable more competitive customer service.
Projected benefits$53 - $109
million
ENTERPRISE RESOURCE PLANNING SYSTEMS
Enterprise Process Map
Key AccountWholesaler plan
Field salesplan
Equipment Monitoring
CustomerProfitability
Promotion Evaluation
SurveyMonitoring
Field SalesMonitoring
Equipment demand planning
Equipment Placement
Equipment Maintenance
Equipment Refurbishment/
Disposal
BusinessPlanning
DemandPlanning
Supply NetworkPlanning
FinancialPlanning
CapitalBudget
TreasuryCash Mgmnt
FinancialAccounting
Period End Closing
OperationalReporting / KBI
GroupReporting / KBI
Product & CustomerSegmentation Financial
Management
Controlling
Channel / CategoryPlan and
Promotion Plan
SettlementBilling
DistributionMgmnt
In Store Execution
Territory/ Visit Plg.
AccountsPayableRFA
Process
ReceivingMgmnt
ProcurementMgmnt
VendorMgmnt
Market-to-Cash
Forecast-to-Deploy
Procure-to-Pay
Asset Management
Weekly Dem. & Supply Mgmnt
Production Execution.
ProductQuality
Fleet Mainten.
Haulage
Warehouse management
Integr. OrderMgmnt
Strategic RoutePlanning
VendorMonitoring
HumanResourcePlanning
Recruit-ment
Org.Mgmt& Admin
Compen-sation
PeoplePerformance
& DevelopmentRecruit-To-Retain
Pricing
TreasuryCash Mgmnt
FinancialAccounting
Period End Closing
FinancialManagemen
t
Controlling
Corporate &
Management
Reporting
Sales, Marketing & Distribution
Manufacturing & Haulage
Procurement
Asset Management
Human Resource Management
Fin
an
ce M
anagem
ent
Corp
ora
te R
eport
ing
(Busi
ness
In
telli
gence
)
ENTERPRISE RESOURCE PLANNING SYSTEMS
Change Management
Today
Desti
nati
on
Change Plan
Document processes
Define Gaps
Assess / Implement
Build knowledge
Transfer knowledge(train)
Use knowledge
ENTERPRISE RESOURCE PLANNING SYSTEMS
Implementation Process
Prepare Set up Project Team
Define Project Plan
Define and finalize Scope
Establish Milestones
Assess Evaluate SolutionDefine Key
Users / Critical personnel
Gap Analysis / Change Requests
Assess / Approve changes
Implement
Allocate external & internal resources
Monitor Implementation
Test solution provided
Provide Feedback
Roll – out Halt change process
Define cut-off period and
Phase in
Define Contingency Plan
(in case of failure)
Minimize functionality
until stabilization
ENTERPRISE RESOURCE PLANNING SYSTEMS
Preparation
Set up Project Team
Define Project Plan
Define and finalize Scope
Establish Milestones
Special / separate project team per country:Project management office +Extracted Operational Users
Freeze general scope before kick-offOnly critical details implemented later
Highly detailed plan (who, when, what)Extends after the go-live
Important dates where certain events take place(kick offs, trainings, set-ups, unit tests etc.)
ENTERPRISE RESOURCE PLANNING SYSTEMS
Assessment
Evaluate Solution
Define Key Users / Critical
personnel
Gap Analysis / Change Requests
Assess / Approve changes
Users with operational knowledge join consultantsAccess to specialized trainingChampions as reference for user queries
Define distance from toll-gatesCreate requests for implementingalterations in template solution
Toll-Gate
The level of readiness to major organizational change concerning People, Processand Technology.
The project committee approves/rejects changerequests based on priority and importance
Evaluate existing solution provided in software lab-tests(UNIT TESTS)
ENTERPRISE RESOURCE PLANNING SYSTEMS
Implementation
Allocate external & internal resources
Monitor Implementation
Test solution provided
Provide Feedback
Allocate all external & internal resources (people, computers, rooms, consultants etc.) to be available according to the change plan
Continuously monitor and test according to the schedulethe provided solution and anticipate change neededin the organization
The final solution must be tested by both project team but also champions & key users
Provide feedback in order to decide if willbe included in the next roll out phase
ENTERPRISE RESOURCE PLANNING SYSTEMS
Roll - Out
Halt change process
Define cut-off period and
Phase in
Define Contingency Plan
(in case of failure)
Minimize functionality
until stabilization
The project plan must have some kind of contingency plan(pen and paper, overtime budget, backup systems)for every critical process.
A short time before the go-live, only important and majorchanges occur in the system and priority and focus is given only to critical operations.
A given time before the go-live, change requests are not longer accepted and any gap identified is left out of thescope.
After go-live, focus is given in critical operations suchas order taking, production and distribution until thesystem is declared stable by the committee.
ENTERPRISE RESOURCE PLANNING SYSTEMS
Expectations of Change
Go LiveD
IP
The go-live eventis both an end
and a beginning.
Recovery
Immediately after going live,
performance,productivity and morale usually
declines as people adapt to the new
system and processes.
Benefits
Project Implementation Timeline
Once peoplebecome
comfortable usingthe system and all
the bugs areworked out, thenthe environment
stabilizes.
With a stable environment,
the benefits of SAP can be
obtained, such asefficiency,
effectivenessand
transformation.
Preparation Phase
Much work to prepare
for new systems andbusiness processes.
ENTERPRISE RESOURCE PLANNING SYSTEMS
Conclusion
In the Czech Republic, Slovakia, Italy and Bulgaria, hand-held electronic devices allow the delivery drivers to produce customer invoices at the time of delivery, reducing invoice inquiries and improving cash flow.
In Poland, Bulgaria and Romania, automated dispatching of products results in faster delivery
and optimized route planning, to help meet specific customer requirements.
In Austria and Italy, a SAP-driven vendor management inventory system allows exchanging electronic inventory information with large customers and plan the replenishment of their warehouses.
In Bulgaria, a specialized customer order entry process and keyboard have helped Customer Service
specialists reduce the time required to take a product order by 25%-30%.
Group ProjectOperations & Information ManagementInstructor: Prof. Papadopoulos Zoi KarakostaStathis Simeonidis
ENTERPRISERESOURCEPLANNING
SYSTEMS
Thank You!
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