erp for manufacturing industry
DESCRIPTION
ERP Benefits for Manufacturing IndustryTRANSCRIPT
ERP - For
MANUFACTURING INDUSTRY
VELCOMExceed Expectation
VELCOM ERP IT SOURCING PVT LTDAn Independent ERP Consulting & Talent Sourcing Company
MAY’20101
AGENDA
� VELCOM – Introduction
� ERP – Introduction & Modules
� ERP Relevance to Manufacturing Industry
� ROI / TCO
VELCOMExceed Expectation
� ROI / TCO
� ERP Project Phases
� Success Stories
� Question Hour
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ABOUT VELCOM
� An Independent ERP Consulting & Talent Sourcing Company
� VELCOM do not sell or implement any particular ERP and provides neutral &
objective consulting to its customers
� More than 1000 person months experience in the ERP related areas
� Project Audit, Program Management, Project Management, Functional &
Technical Consulting, Talent Sourcing
� Expertise in various leading International players like SAP, Oracle, PeopleSoft, JD
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� Expertise in various leading International players like SAP, Oracle, PeopleSoft, JD
Edwards, Microsoft among others
� An extended IT arm for its customers
� Help them build their IT roadmap for their long term business objectives
� Implement projects in a phased manner based on their business priorities
� Board of Advisors from leading Tier I Organizations like IBM, HCL
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ERP CONSULTING PRACTICE - SERVICES
� Readiness Audit:
� First step in the ERP Project Initiative and includes People Readiness (Management,
Business & IT); Process Readiness (Business Requirements & Data); System
Readiness (Software, Hardware, Bandwidth & others).
� Goal Setting & Budget Planning:
� Help to set the objectives & have a budget planned, to realize the complete benefits
from the ERP Investment. This includes Project Roadmap & Goals; Business
Requirement Identification; Total Cost of Ownership Planning.
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Requirement Identification; Total Cost of Ownership Planning.
� Product & Vendor Selection:
� Includes Product & Vendor - Evaluation & Selection; Contract Management
(including Scope, Schedule, Deliverables, TCO).
� Project Orientation Workshop:
� Workshop would highlight the benefits that can be achieved by the organization by
successful ERP Implementation and detail the challenges that needs to be managed
during the ERP Project Implementation.
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ERP CONSULTING PRACTICE - SERVICES
� Program Management:
� Ensure that the Client & Vendor teams function together to achieve the project
objectives. This includes Project Contract Review; Set project objectives; Freeze key
ERP Business Requirements; Review Project Progress and set Action Plan to ensure
Project completion on time & budget; Project Sign-off once the project is
completed
� Post-Implementation Audit:
� Help to understand the ERP Implementation benefits realized. This includes Review
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� Help to understand the ERP Implementation benefits realized. This includes Review
project Objectives (Plan & Achievement); Audit the Utilization Level of the ERP
(Functional, Technical & MIS Fitment; People Usage Level); Draft the Action Plan to
realize complete benefits of their ERP Investment.
� Business Process Re-Engineering:
� Aims at improving the efficiency & effectiveness of the processes that exist within &
across organizations. This includes Process — Identify; As-Is (Review, Analyze &
Update); To-Be (Design, Test & Implement).
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What is Enterprise Resource Planning (ERP)?
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ERP is an integrated computer-based system used to manage internal & external resources including
tangible assets, financial resources, materials & human resources of an organization
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ERP MODULES - OVERVIEWFinancials
General Ledger
Fixed Assets
Cash Management
Budget & Forecast
Cost Accounting
Inter-Company & Consolidation
HRMS
Recruitment
Performance Management
Sales & Receivables
Receivables
Invoicing
Order Management
Return Order Management
Pricing & Discounting
Tax
Purchase & Payables
Payables
Invoicing
Order Management
Return Order Management
Pricing & Discounting
Tax
Inventory &
Warehousing
Stock Keeping Unit & BOM
Substitution & Cross Reference
Item Tracking & Cycle Counting
Logistics – In & Out Bound
Multiple Locations
Barcode
Planning
R&D
Supply Planning
Production
Production Order
Bill of Material
CRM
Marketing Automation
Telemarketing
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Performance Management
Compensation
Training & Development
Attendance System
Payroll
Supply Planning
Capacity Planning
Finite Loading
Demand Planner
Bill of Material
Routing
Shop Floor Control
Lean Manufacturing
Telemarketing
Sales Force Automation
Sales Management
Service Management
Email Integration
Add-on’s
Projects
Quality
Enterprise Asset Management
Balance Scorecard
Travel
Compliance & Governance
Industry Solution
Web Portal
Employee
Customer
Sales Person
Vendor
Consultant
Analytics
Business Analytics
Business Intelligence
Report Builder
Administration
User Management
Configuration Tool
Business Connectors
Backup / Restore
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ERP – TECHNOLOGY OVERVIEW
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ERP – TECHNOLOGY OVERVIEW
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MANUFACTURING INDUSTRY – KEY CHALLENGES� Achieving Growth & Profitability while meeting customer expectations against
competition
� Continually strive for following to grow & be profitable
� Reduce Production & Supply chain costs
� Improve Process efficiencies & Product quality
� Satisfy an avalanche of Customer demands & Regulatory requirements
� Drive to optimize manufacturing processes in order to increase agility & to
ride the efficiency curve to serve the customer better
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� Other Key Challenges
� Better Customer Service
� Business Integration
� On-time Delivery
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ERP BENEFITS
Automate & Streamline Business Processes with Greater Adaptability
� Align key business processes in planning, design, development, procurement, inventory,
manufacturing, sales & delivery
� Match overall supply with demand and manage all resources & assets along the entire value chain
Respond quickly to Changing market conditions
� Use integrated, real-time sales & operational information to accurately anticipate, plan for & respond
to orders and new demand, as well as reduce forecasting errors
� Model production capabilities, quickly share engineering information & adjust product mix for
changes in demand to capitalize on new opportunities
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changes in demand to capitalize on new opportunities
� Support compliance with regulatory requirements, including safety & environmental regulations, by
quickly validating manufacturing processes while conforming to individual markets requirements
Decision Making on Strategic Business Insight
� Rich out-of-the-box analytical performance measurement tools hone the strategic planning &
monitor the overall health of the organization
� 360-degree visibility on accurate forecasts, effective budgets, proper resource allocation & goals
� Combine operation & financial analyses to optimize day-to-day operation
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ERP BENEFITSEnhance Customer Satisfaction
� Delivering products on time with high quality
� Faster time to market, higher-quality products & accurate information provided to customers
Improve Productivity
� Collaborate across business functions to consolidate information, align strategies & standardize
operational processes
� Increase information worker productivity through realistic, appropriate business roles
� Increase adaptability to process changes by enhancing existing skills & assets with real-time
information
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Fuel efficiency & Reduce risk across the entire organization
� Standardize processes & easily share best practices
� Support multiple manufacturing modes & a hybrid or mixed-mode environment
� Reduce time across the Order Process Cycle (Quote-Order-Delivery) there by reducing the loss risk
Gain insight into Costs & Process efficiency
� Analyze & manage production schedules with reporting tools & “what-if” scenarios, including capacity
loading, shop floor activities & production costs
� View real time client, contract & project details for an accurate accounting of profitability
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ERP BENEFITSManage Demand Pro-actively
� Trace expected to actual sales & forecast future sales while taking into account seasonal &
promotional effects
� Use simulations, demand models & error analysis to determine optimal stock levels for better
profit & operations margins
Expand Sales Success
� Monitor market demand & meet margin objectives through effective promotions
� Increase capacity to evaluate product turnover in response to campaign & align production &
inventory accordingly
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Improve Customer Service
� Enhance the security & reliability of deliveries with the global available-to-promise (ATP) view,
which provides delivery alternatives in the event of unexpected disruptions
� Automate sales & purchasing processes, track & locate inventory items quickly & help ensure
accurate pricing & discounts to improve customer satisfaction
� Deep visibility & control over the supply chain, increase order fill rates, reduce risk of stock out or
inventory excess & enhance overall responsiveness to customers
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ERP BENEFITSIncrease Revenue
� Higher profit margins by automating & streamlining all business processes resulting in reduced
operations costs through adherence to better business practices
� Improved cash flow by more efficient & accurate billing procedures, lower inventory levels & quick
turnaround
� New opportunities identified through continuous, real-time monitoring of KPIs
� Opening up new sales channels like e-commerce
Reduce Operating Costs
� Decreased overall operating costs by converting time-consuming manual processes into
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� Decreased overall operating costs by converting time-consuming manual processes into
automated, streamlined, real-time business process management
� Lower transportation costs through consolidated orders & combined shipments
� Reduced warehouse costs from optimized utilization of resources & assets
� Reduced cost of sales from use of profitable sales interaction channels
� Sustained cost savings for all spend categories due to a standard approach to both strategic &
operational procurement
� Reduced IT costs because administration & usability have been improved, fewer interfaces are
used & IT resources have been freed up to focus on value-adding strategic projects
� Lowered TCO (total cost of ownership) by leveraging technology for facilitated exchange &
interoperability with non-ERP systems
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ERP BENEFITSIncrease Visibility & Simplify across the Supply Chain Process
� Empower users with real-time data through a user-friendly interface & Role centre that provides
access to tasks & critical Business Intelligence data such as KPIs & custom reports
� Exchange data across multiple systems & gain visibility into business processes to improve decision
making & control at every level of the supply chain
� Connect inventory, production, purchasing & sales processes to gain accurate, real-time view of
the entire supply chain.
� Improve collaboration with trading partners with support for a wide range of predefined XML
business documents
Reduce Cost by optimizing supply chain processes
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Reduce Cost by optimizing supply chain processes
� Improve productivity, adapt internal processes quickly to meet new demands & optimize
processes across sites in the supply chain
Better Collaboration with all Supply Chain Partners
� Enhance collaboration among departments, customers, suppliers, business partners for a
significant improvement
� Integrate partners of all sizes to release data throughout the chain that’s accurate, complete &
available up to the minute
� Costs reduced, processes speed up & smooth flowing operations throughout the supply chain
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ERP BENEFITSDemand Driven Supply Chain Approach can help
� Maintain competitive edge
� Integration of supply chain processes with other business processes e.g. Sales & Operations
� Respond effectively with a comprehensive, cross-functional view of the company, better
understanding of customer needs through downstream data analysis & effective collaboration
between trading partners
Control & Streamline Inventory
� Use powerful inventory management tools to improve forecasting & planning, match supply with
customer demand
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� Create sales & purchasing forecasts based on specific items & time periods
Meet Complex Inventory requirements
� Create multi-dimensional inventory records & track items throughout the supply chain for online
& accurate inventory status
� Enhance Material & Product Traceability
� Implement effective recall procedures & maintain complete forward & backward traceability
of any material
� Track materials from purchase through production & sale with lot & location control
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ERP BENEFITSIntegrate Design innovation into Manufacturing
� Shorten time to market for product innovation by integrating design & manufacturing processes &
collaborating effectively with suppliers, partners & customers
Support a wide range of Manufacturing processes & Business models
� Tailor the solution to serve make-to-stock, make-to-order, assemble-to-order, configure-to-order,
& engineer-to-order environments
� Manage items from design through assembly, testing, shipping, installation & maintenance
� Meet specific customer needs by configuring build-to-order items easily & effectively
� Help efficiently produce & deliver products that follow custom formulas or recipes & take full
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� Help efficiently produce & deliver products that follow custom formulas or recipes & take full
advantage of manufacturing & supply chain capabilities
� Empower to streamline, monitor & control the entire production cycle
Improve Project management for customized orders
� Create estimates & quotes quickly & accurately
� Forecast machine & resource requirements for strategic scheduling & precise delivery times by
analyzing project cost & order processing time
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ERP BENEFITSIncrease Productivity with a Role-Based Solution & Centralized Information
� Provide empowering self-service & role-specific information that increase user productivity
� Personalize portal to meet business users specific needs
� Manage centrally the critical documents (e.g.) BOM, routing data, CAD designs, recipes, project
plans & item information
Streamline Integration with Web services
� Improve integration within & Outside the organization by using a flexible Web services framework
� Maintain high production levels & on-time delivery rates by sharing portal-based, real-time
information about specifications, order status & quality control testing among key departments &
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information about specifications, order status & quality control testing among key departments &
trading partners
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ERP – CONSTRAINTS
� ERP Customization is limited or expensive
� Business Process Re-engineering to fit the "industry standard" prescribed
by the ERP may lead to a loss of competitive advantage
� ERP is sometimes too rigid or difficult to adapt to the specific workflow &
business processes
� Many integrated links need high accuracy in other applications to work
effectively. This should be done on a phased manner for smooth transition.
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effectively. This should be done on a phased manner for smooth transition.
� Once established, ERP switching costs are very high
� Resistance in sharing sensitive internal information between departments
can reduce the effectiveness of ERP
� ERP once implemented is the lifeline of the business and downtime costs
are very high & impact the business critically
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NUCLEUS RESEARCH – ERP ROI SURVEY
PARAMATER SAP ORACLE MICROSOFT AX
Customers Surveyed 21 22 16
Customers % achieved positive
ROI within the payback period
43% -
34 months
65% -
37 months
75% -
23 months
Deployment Size 2-5000 Users 20-3400 Users 35-800 Users
Reduced staff cost or
Improved productivity
50% 48% 56%
Improved operation management 30% 39% 75%
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Reduced IT cost - 26% 44%
Person-months of internal team
required to deploy ERP
372 81 52
Person-hours of training per user 49 27 29
Average FTEs required for support 33.6 9 2.4
ROI = (Year1, Year2, Year3)/3
Initial Cost
Benefits include Direct cost saving, Productivity & Indirect
benefits. Costs include Software, Hardware, Personnel,
Consulting & Training.
NUCLEUS RESEARCH – ERP TCO SURVEY
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ERP IMPLEMENTATION – KEY SUCCESS FACTORS
� Top Management Commitment
� Clear Goal Setting & Budget Planning (TCO)
� Business Process Re-Engineering
� Change Management
� Effective Project Management
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� Good Project Team - Client & Vendor
� High Communication Standards
� Scope Creep Management
� Data & Approvals on Time
� Education & Training
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ERP PROJECT – PRE IMPLEMENTATION PHASE
� Organization Readiness Audit
� Key Business Requirement Identification
� Project Roadmap - Present & Future
� Project Goals
� Return On Investment Plan
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� Total Cost of Ownership Plan
� Software & Vendor Selection
� Contract Management
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ERP PROJECT – IMPLEMENTATION PHASE
� Program Management
� Project Planning, Staffing & Deliverables
� Communication Mechanism
� Business Requirement Finalization
� Training & Documentation
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� User Acceptance Testing
� Project Sign-off
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ERP PROJECT – POST IMPLEMENTATION PHASE
� Post-Implementation Review
� Action Plan for the Project Implementation done
� Plan for Next Project Implementation
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ERP – AUTOMOTIVE SUCCESS STORIES INDIA
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QUESTIONS
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THANK YOU!
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THANK YOU!
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