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Two-Tier ERP Strategies - Conquering Complexity in Real-Time
Two-Tier ERP Strategies - Conquering Complexity in Real-Time
Two-Tier ERP Strategies - Conquering Complexity in Real-Time
Two-Tier ERP Strategies - Conquering Complexity in Real-Time
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Two-Tier ERP Strategies - Conquering Complexity in Real-Time

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This is an excerpt of the Cincom whitepaper “Conquering Complexity in Real-Time Using Two-Tier ERP Strategies” for the complete version of the whitepaper, visit …

This is an excerpt of the Cincom whitepaper “Conquering Complexity in Real-Time Using Two-Tier ERP Strategies” for the complete version of the whitepaper, visit http://erp.cincom.com/content/twotierwhitepaper/?Ref_ID=twotierwhitepaperSM

Two-Tier ERP Strategies: Conquering Complexity in Real Time is an in-depth analysis and review of two-tier ERP and the strategies and best practices of complex manufacturers. The following topic are covered:
- Using two-tier ERP strategies to make manufacturing strategic,
- Placing high priority on conquering complexity that can kill a company is left unchecked
And
- The success factors for Two-Tier ERP strategies.

For information on Two-Tier ERP and Cincom CONTROL, visit http://erp.cincom.com

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  • 1. Conquering Complexityin Real Time UsingTwo-Tier ERP StrategiesBest Practices of Complex ManufacturersWHITE PAPERCincom In-depth Analysis and Review S I M P L I F I C AT I O N T H R O U G H I N N O VAT I O N ®
  • 2. 1 Conquering Complexity in Real Time Using Two -Tier ERP StrategiesConquering Complexity Table of Contentsin Real Time Using Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Two-Tier ERP Strategies Using Two-Tier ERP Strategies to Make Manufacturing Strategic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Best Practices of Complex Manufacturers Conquer Complexity that Can Kill a Company if Left Unchecked . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Aggressively Intelligent in Using Two-Tier ERP for Competitive Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Increasing Financial Performance by Capitalizing on the Intelligence and Knowledge of Teams Instead of RelyingWHITE PAPER on Cost Reduction Alone . . . . . . . . . . . . . . . . . . . . . . . . . . 4Cincom In-depth Analysis and Review A Passion for Measuring Results and Continually Improving Is Engrained in Their Cultures . . . . . . . . . . . . . . . . . . . . . . 5By Louis Columbus Has Defined Critical Success Factors for Two-Tier ERP Strategies and Lives by Them . . . . . . . . . . . . . . . . . . . . . . 6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
  • 3. Conquering Complexity in Real Time Using Two -Tier ERP Strategies 2 the status quo and confront complexity for what it isa major Bottom Line roadblock in your company to achieving its objectives and Becoming more demand-driven, staying focused on goals. And, using two-tier ERP systems to scale globally can emerging markets and attaining higher levels of per- save your company potentially thousands of hours and mil- formance all start by using two-tier ERP strategies as lions of dollars in lost opportunities. foundations of strategic growth.Opportunities. They’re everywhere. Spot- Here are the best practices that complexting and acting on them takes enterprise manufacturers are using to get the mostsystems that can cut through complexity value from their two-tier ERP strategies:and allow a business to quickly achieveits goals. 1. Using two-tier ERP strategies to make manufacturing strategic – HP, IBM, Schindler, Toshiba and many others are doing this with exceptionally strong results. In speak-From opening a new manufacturing, distribution or sales ing with several CIOs about this strategy, a few have men-center in an emerging, high-growth region of the world tioned the Harvard Business Review article, “Making theto outpacing competitors by sheer efficiency and focus, Most of Foreign Factories,” by Dr. Kasra Fedrows. Dr.the race is on. Never before has time been so precious a Fedrows has done decades of research on what makesresource, so costly to replace and so absolutely essential distributed manufacturing centers globally successful. Hisfor capitalizing on opportunities. The old model of inflexi- definition of the role of foreign factories is graphicallyble, uncustomizable, slow-to-react ERP systems is quickly shown in the following figure. Source: (Fedrows, 1997). Hegoing away. ERP systems the heart of many complex manu- has found several critical success factors that are includedfacturers must be agile; focused on customers; and capa- in the framework, which is also included in this white paper.ble of being quickly integrated to, reconfigured and mostimportantly aligned to strategy not just there to deliver From nearly two decades of research, Dr. Fedrows hasdata-processing dial tones in the form of routine reports found six dominant strategic roles of global factories.that reflect the past. From the outpost to the lead roles of global factories, the most critical dimension is access to skills and knowledge.This white paper is for companies that are out to conquer Dual-tier ERP systems are what create lead factories thosecomplexity and become more competitive now. that are delivering innovations in process and productBy concentrating on steps you can take today to transform strategy. And what’s making lead factories possible is theyour complex business and make it more competitive, real-time data delivered by dual-tier ERP strategies.responsive and opportunistic your company will more ef-fectively use the ERP systems it has. It’s time to challenge The Roles of Global Factories: a Strategic Matrix Reprinted with permission from "Making the Most of Foreign Factories" by Kasra Ferdows, “Harvard Business Review” March/April 1997. © 1997 by the Harvard Business Publishing Corporation; all rights reserved.
  • 4. 3 Conquering Complexity in Real Time Using Two -Tier ERP Strategies 2. Conquer complexity that can kill a company if left The top three impediments to getting more value from uncheck – Complex manufacturers that are attaining existing ERP systems include the following: best practices with their two-tier ERP strategies are focused on how to simplify every phase of their value 1. Existing ERP systems are too complex to integrate chain. From the upgrading of legacy systems to the seamlessly with other existing applications (23.3%). real-time integration of information workflows across 2. Financial ERP and operational capabilities are weak departments, divisions and global subsidiaries, these or nonexistent (20.1%). complex manufacturers are attaining a very high level 3. It’s too complicated and expensive to upgrade (18.4) of competitive efficiency. Examples of companies in this area include Cisco with its real-time updates on It’s important to look behind these statistics to see what’s build-to-order production workflows, Dell and its highly driving them. integrated supply chain, Goodrich, Greenheck Fan, Har- In many instances, it’s the needs of different departments, ris Corporation, Michelin and others. divisions and country subsidiaries that are outpacing the From the excellent study, “In Pursuit of Operational centralized ERP systems, and that is a main factor that’s Excellence: Accelerating Business Change through driving the growth of dual-tier ERP systems. Next-Generation ERP,” by IDC Manufacturing Insights, the traditional ERP limitations of complex manufacturers are shown below. Respondents ranked the first, second and third weaknesses or limitations of their ERP systems. 3. Be aggressively intelligent in using two-tier ERP for Rank 1, Rank 2 and Rank 3 in the figure below indicate competitive advantage – Two-tier ERP systems will these rankings. continue to gain in importance as a means to address new market requirements, replace aging legacy systems that are losing their effectiveness and support new busi- ness models. Here are how complex manufacturers are making two-tier strategies pay by streamlining operations while gaining customer insights at the same time. • By relying on a two-tier ERP strategy, Schindler was able to displace the long-standing rival in India by cultivating a local supply chain. The competitor, who was U.S.-based, was completing sub-assembly work in the Midwest and shipping components to India for final assembly at customer sites. By using a two-tier ERP strategy and sharing a common system of record through Master Data Management (MDM) with its European headquarters, this elevator company was successful in displacing 34% of the low-end elevators throughout southern India. • HP’s reliance on a two-tier ERP strategy in its printer production operations led to innovations in process management and new product develop- ment. What was remarkable about visiting the HP manufacturing plant in Malaysia was how quickly the entire facility could translate little advances in produc- tion processes into cost and time savings. The HP Malaysia plant is well-known for this ability to innovate and educate other manufacturing centers of these advances. Its ability to innovate would not have been possible without HP having chosen a two-tier ERP strategy for its Malaysian operations. Dr. Fedrows has also visited this plant and written about it in the article, “Making the Most of Foreign Factories.”

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