1130-1200 Dinesh Mohan Operational Excellance at RAK CERAMICS


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See how RAK CERAMICS, World’s Largest Ceramics Manufacturer, achieves excellence with SAP.

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1130-1200 Dinesh Mohan Operational Excellance at RAK CERAMICS

  1. 1. FOUNDER: HH Sheikh Saud Bin Saqr Al Qasimi, the Ruler of Ras Al Khaimah CHAIRMAN: HH Sheikh Mohammad Bin Saud Bin Saqr Al Qasimi, the Crown Prince of Ras Al Khaimah OPERATIONAL EXCELLENCE AT RAK CERAMICS Dinesh Mohan, CIO dm@rakceram.com
  2. 2.  Annual turnover of $1 billion, exports to over 160 countries  Annual output: Tiles-117 mil sq.m., Bathware-4.5 mil pcs, Tableware-20 mil pcs  Manufacturing plants in UAE, Bangladesh, China, Sudan, Iran & India  Over 8,000 models of ceramic tiles and sanitary ware  8,000 employees in UAE, 15,000 employees worldwide RAK CERAMICS World’s Largest Ceramics Manufacturer 2
  3. 3. - Diversified portfolio - Complex interdependencies; poor visibility at the top - Critical knowledge only with few executives - Restructure around core competencies - Make SBUs more accountable for their respective performance - Transform from ‘person-driven’ to ‘process-driven’ RAK CERAMICS PSC 2010: Restructuring Around Core Competencies •India •B’desh •China •Sudan •Iran UAE RAK CERAMICS AL-HAMRA REAL EASTATE RAK PORCELAIN KLUDI-RAK AL-HAMRA CONSTRUCTION 3
  4. 4. THE RIGHT MARKETS AND CUSTOMERS To drive the right mix of customers and products in each geography, to achieve profitable growth WORLD CLASS OPERATING SYSTEMS AND PROCEDURES To create common world class operating systems and procedures, facilitating sustainable, profitable growth PERFORMANCE BASED CULTURE To create a performance based culture managed by a measurement structure that will enable continuous improvement THE BEST PEOPLE To create a development programme that provides opportunity for our employees and attracts the people that we need for the future Become the most competitive company in our business Increase EBITA margin by 2% THE CERAMICS BUSINESS 2011: Envisioning The Future Integrate Products, Processes and People with SAP as integrating mechanism 4
  5. 5. Innovation Priorities Are we Continuously Improving? “ “ Are we geared up to be in sync with the Business Roadmap? “ “ “ “ Financial Impact Realization time and effort Technology innovation (hardware/ software) High Medium Low HighMediumLow Today Future Scalability Business IT Alignment Execution Excellence Optimization  We need to focus our funds & resources for Business Growth THE CIO AGENDA Setting The Priorities Is our Business getting Benefit? 5
  6. 6. BUSINESS- IT ALIGNMENT SCALABILITY OPTIMIZATION PROLIFERATION EXECUTION EXCELLENCE  Business Vision Drives IT Vision  Joint Business- IT Planning  User driven IT  SAP Best practices Implementation  Tier-2 Data Centre  Decommissioned legacy systems  Reduction in number of applications Business process improvements Implement best practice s (ITIL) Established CoE concept Right sizing IT organization Global Template creation Rollout to other locations Rollout to other Subsidiaries Data Analytics Financial Consolidation Cloud Infrastructure Global Support Center Right sizing DRP Archiving optimization 2011 2012 THE IT ROADMAP Aligning With The Transformation 2013 2014 2014-2015 6
  7. 7. Financial Excellence Finance Financial Compliance/IFRS Financial Performance and Risk Management On-line Banking Finance Shared Services Superior Customer Value Sales Effectiveness Customer Contact Center Customer Service and Support Consumer Products: Trade Promotions Mgt. Product and Service Leadership Product Lifecycle Mgt. Responsive Supply Networks Supply Chain Planning Warehouse Mgt. Transportation Mgt. Demand Planning Distribution Supply Chain Planning Professional Business Networks Operational Excellence Manufacturing Procurement Preventive Maintenance Lean Enterprise Quality Management End to End Processes Enterprise Healthcheck – Manufacturing Enterprise Healthcheck - Services Public Sector Healthcheck Order to Cash Fashion: Order to Cash Retail: Merchandising Private Equity: Operational Assessment Best People and Talent HCM Talent Management HR Shared Services Strategic IT Business Intelligence Enterprise Information Management High Performance Analytics Enterprise Mobility Total Cost of Ownership Best Run IT Value Management Enterprise Architecture Implementation Services High Performing Assets EH&S Compliance Enterprise Asset Mgt. Optimized Asset Mgt and Operations Benchmarking Survey Best Practices Survey Industry Specific Benchmarking Survey PLANNING FOR SAP Driving Change Through Best Practices 7
  8. 8.  SALES can rapidly put new designs into SOP  PLANNING production flexibly  QUALITY is maintained through value chain  MANAGEMENT can identify and resolve constraints to maintain optimal production  OPERATIONS efficiently utilizes labor, material and assets  MAINTENANCE effectively allocates capital and ensures asset availability  SUSTAINABLE resources and operational risks are managed Distribution Center Planning & Execution Sales & Service Raw Materials Component Supplier Contract Manufacturer Planning & Control Quality Management Operations Sales Sustaina bility Maint PLANNING FOR SAP Benefits And Value Creation 8
  9. 9. Project name: RAK-on-SAP (Read as “Rock-on-SAP”) Scope: SAP ERP 6. EHP5, SAP CRM 7.0 EHP1, SAP Netweaver 7.3 (JAVA), SOLMAN 7.1 Process coverage: Comprehensive coverage of processes across Sales, Manufacturing, Procurement, Logistics, Maintenance, Marketing, Finance and HR Implementation type: BIG BANG – All Modules Rollout scope: UAE operations - 13 manufacturing units, 15 warehouses, 6 retail showrooms and all administrative offices Implementation partner(s): SAP Estimated project effort: 14600 person days Duration: 8 months THE SAP PROJECT Scope and Scale 9
  10. 10. Business speaks to the Implementation Team with “One Voice” Project success means profitable business The Challenge Our Strategic Goal No surprises - issues and risk are addressed at the right level at the right timeOur Immediate Objective THE GOVERNANCE AGENDA Effective Execution 10
  11. 11. RAK Ceramics Board Chairman, Executive Director, CEO Executive Sponsor Executive Director Project Owner CIO Project Manager CFO  Top Level Ownership  Business Drive  Scope Management  Accountability Change Managers CXO’s  Integration into strategic program  KPI Owners  Benefits Accountability Quality Assurance KPMG  End to End Quality Compliance  Outside In View  Enterprise Standards Project Team SAP MENA  Product Owners  Delivery Assurance  Best Practice  First Level Issue and Risk Mitigation Core Team Leads - 14 Senior Business Managers Master Data and Core Team Associates - 72 Business Managers and Executives Steering Committee Executive Director CEO All CXO’s PROJECT ORGANIZATION The Best Practice 11
  12. 12. THE BACKBONE Building The Data Center  Private Cloud  Complete redundancy  Scalable architecture  Highly Available  Disaster recovery  BS7799 based security Phase 1 Applications • SAP ERP for Manufacturing Hardware • HP integrity rx2800 i2 Servers • HP Integrity BL860C i2 Server Blades • HP Integrity BL890C i2 Server Blades • HP ProLaint BL460c Server Blades • HP EVA P6300 Storage • HP Switches for Core and Edge 12 Software • HP-UX 11iv3 • Microsoft Windows • HP Data Protector for rapid backup and recovery Phase 2 • HP Matrix Cloud
  13. 13. …an integrated approach  Global landscape control using SAP Solution Manager  Rule-based landscape change management policy  High visibility and transparency  Instant Collaboration between distributed IT (Dev./Ops.), business and Implementation Teams DEV IND CHD BND PQA INQ CHQ BNQ PRD INP CHP BNP RAK Ceramics UAE RAK INDIA RAK CHINA RAK BANGLADESH GTD GTQ Transport route Solution Manager connection Global Development Server Global Template Solution Manager ……. RAK PORCELAIN ………….. ………….. 2012 2014 2015 ……. ……. ……. ……. TACKLING THE GLOBAL COMPLEXITY SAP Solution Manager 13
  14. 14. DELIVERING VALUE SAP - Finance  Group and Local Policies  Faster closing, shorter planning cycles, respond faster to market conditions  Effective credit control  On-line banking  Accurate foreign currency valuation  IFRS reporting 14
  15. 15. DELIVERING VALUE SAP - Controlling  Actual costing of each product manufactured  Profitability analysis – LOB, Product, Sales Order, Customer, Salesman, Region-wise  Huge impact on planning and decision making 15
  16. 16. DELIVERING VALUE SAP - Sales And Distribution  Increase profit - Move from ‘Revenue-based targets’ to ‘Product-mix based profit targets’ for each salesman 16
  17. 17. DELIVERING VALUE SAP - Production Planning  Flexible production planning and scheduling over multiple production lines  Online production monitoring and control  MTO - production strictly against sales order  Match supply to demand 17
  18. 18. DELIVERING VALUE SAP – Materials Management  Regulate Inventory levels thru MRP and ageing analysis  Empower lower/middle managers thru workflows for requisitioning and purchase  Faster inventory reconciliation  Real time visibility on production & dispatch schedule  Spend analysis for smarter sourcing 18
  19. 19. DELIVERING VALUE SAP – Quality Management  Customer complaints  Vendor analysis  Visibility into ‘B’ grade inventory throughout the supply-chain 19
  20. 20. DELIVERING VALUE SAP – Plant Maintenance  Move from ‘Corrective- maintenance’ to ‘Preventive- maintenance’  Repair vs Buy decisions 20
  21. 21. DELIVERING VALUE SAP – Human Capital Management  Largest GCC payroll on SAP  Online leave and benefits calculation  Annual leave/tickets  ESS/MSS 21
  22. 22. Big bang approach for Go-Live CIO reporting to the Board of Directors Distinct SAP PMO in addition to the Project Org Innovative contract – reciprocal penalties Quality Assurance from KPMG to avoid costly errors/rework Systemic balancing of various interest groups ASAP methodology Adoption of Standard SAP processes and reports Second-in-command from each department as the Core Team Ex-stock availability of sandbox machine as essential condition for Hardware Contract SOLMAN and RWD for simultaneous documentation and control 11 Steering Committee reviews in 8 months Off-shore ABAP delivery Realization and Unit Testing delivery planned for Ramadan Upfront identification of Strategic, Op and Tech risks – mitigation plans CxO-level Change Managers Master Data Cell established under CFO ‘Train-the-trainer’, 100% coverage before Go-Live Computer awareness for shop floor User manuals prepared by Core Team Identified post Go-Live Support vendor early, ensured knowledge transfer SAP Support Vendor identified for Quick Stabilization At Go-Live, Core Team converted into L1 Support Team SAP COE STRATEGY OPERATIONS MANAGING CHANGE STABILIZATION IMPLEMENTATION Speed And Quality As Key Deliverables  Project Go-Live in 8 m.  On budget, on time  No deviation in scope STRATEGY 22
  23. 23.  Cloud-based Infrastructure  Minimized downtime (e.g. during upgrades)  Right sized backup / recovery  Performance Optimization  Automated Job Scheduling  Standardized Template-based Testing  Implemented best practice ITSM processes (ITIL)  Established Super User Concept  Global Support Center  From Service SLA’s to Output Based Management EXECUTION EXCELLENCE The IT Paradigm Shift 23
  24. 24. MEASURING THE OUTCOMES The Short-term Win  RAK Ceramics delivers more than 200,000 sq.m. every day from the RAK facility  On Day-4 we were shipping this quantity  And we have been on steady state ever since 24
  25. 25. MEASURING THE OUTCOMES Auditing The Business Benefits Metric Pre-SAP 9 m after Go-Live Future Target Time to close monthly accounts 12 days 5days 4 days Time to prepare Quarterly accounts for publishing to Abu Dhabi Stock Exchange 60 days 45 days 30 days Credit/Debit Notes per month 100-150 50 25 Cost Report Coverage Select Few Complete Complete Costing of new products 3 days 12 hours Real-time Publishing of Monthly Cost Report 6 days 2.5 days Real-time Reduction in Net Debt 4% 10% Reduction in Av. Overdue Receivables 6% 10% Reduction in F&A Manpower Cost 7% 20% ……………..and many more across departments 25
  26. 26. MEASURING THE OUTCOMES The IT Benefits Metric  One Production Landscape - Cloud based scalable Infrastructure  Zero Downtime (planned and unplanned)  40 Incidents per month lowest in industry  3 Changes per quarter lowest in industry  IT Spend at 1% of Revenues industry average spend for manufacturing 26
  27. 27. THE FINAL TEST Realizing The Value Metric Pre-SAP Present NET PROFIT (m. AED) 224 272.3 (Up 21.55%) EARNING PER SHARE 0.38 0.78 SHARE PRICE (AED) 1.34 3.89* Realizing the Leadership Vision through effective IT * As on May 1, 2014 27
  28. 28. “Even executives and staff who would not be directly involved with using the finished implementation were included in training and briefings, to ensure an enterprise-wide view was taken……………the realization that there are certain elements outside of the traditional technical skill sets or hardware requirements, that are essential to successful deployments.” MARK SUTTON Senior Group Editor, ACN LARGE IMPLEMENTATIONS CATEGORY CITED FOR INNOVATION Exceeding Expectations 28
  29. 29. THANK YOU.