Erp for manufacturing industry


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ERP Benefits for Manufacturing Industry

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Erp for manufacturing industry

  1. 1. ERP - For MANUFACTURING INDUSTRY VELCOM ERP IT SOURCING PVT LTD An Independent ERP Consulting & Talent Sourcing Company 1 MAY’2010 VELCOM Exceed Expectation
  2. 2. AGENDA VELCOM – Introduction ERP – Introduction & Modules ERP Relevance to Manufacturing Industry ROI / TCO ERP Project Phases Success Stories Question Hour 2 VELCOM Exceed Expectation
  3. 3. 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 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 3 VELCOM Exceed Expectation
  4. 4. 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. 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. 4 VELCOM Exceed Expectation
  5. 5. 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 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). 5 VELCOM Exceed Expectation
  6. 6. What is Enterprise Resource Planning (ERP)? ERP is an integrated computer-based system used to manage internal & external resources including tangible assets, financial resources, materials & human resources of an organization 6 VELCOM Exceed Expectation
  7. 7. 7 VELCOM Exceed Expectation
  8. 8. ERP MODULES - OVERVIEW Inventory & Financials Sales & Receivables Purchase & Payables Warehousing General Ledger Receivables Payables Stock Keeping Unit & BOM Fixed Assets Invoicing Invoicing Substitution & Cross Reference Cash Management Order Management Order Management Item Tracking & Cycle Counting Budget & Forecast Return Order Management Return Order Management Logistics – In & Out Bound Cost Accounting Pricing & Discounting Pricing & Discounting Multiple Locations Inter-Company & Consolidation Tax Tax Barcode Planning Production CRM HRMS R&D Production Order Marketing Automation Recruitment Supply Planning Bill of Material Telemarketing Performance Management Capacity Planning Routing Sales Force Automation Compensation Finite Loading Shop Floor Control Sales Management Training & Development Demand Planner Lean Manufacturing Service Management Attendance System Email Integration Payroll Add-on’s Web Portal Analytics Administration Projects Employee Business Analytics User Management Quality Customer Business Intelligence Configuration Tool Enterprise Asset Management Sales Person Report Builder Business Connectors Balance Scorecard Vendor Backup / Restore Travel Consultant Compliance & Governance 8 Industry Solution VELCOM Exceed Expectation
  9. 9. ERP – TECHNOLOGY OVERVIEW 9 VELCOM Exceed Expectation
  10. 10. ERP – TECHNOLOGY OVERVIEW 10 VELCOM Exceed Expectation
  11. 11. 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 Other Key Challenges Better Customer Service Business Integration On-time Delivery 11 VELCOM Exceed Expectation
  12. 12. 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 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 12 VELCOM Exceed Expectation
  13. 13. ERP BENEFITS Enhance 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 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 13 VELCOM Exceed Expectation
  14. 14. ERP BENEFITS Manage 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 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 14 VELCOM Exceed Expectation
  15. 15. ERP BENEFITS Increase 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 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 15 VELCOM Exceed Expectation
  16. 16. ERP BENEFITS Increase 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 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 16 VELCOM Exceed Expectation
  17. 17. ERP BENEFITS Demand 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 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 17 VELCOM Exceed Expectation
  18. 18. ERP BENEFITS Integrate 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 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 18 VELCOM Exceed Expectation
  19. 19. ERP BENEFITS Increase 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 & trading partners 19 VELCOM Exceed Expectation
  20. 20. 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. 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 20 VELCOM Exceed Expectation
  21. 21. NUCLEUS RESEARCH – ERP ROI SURVEY PARAMATER SAP ORACLE MICROSOFT AX Customers Surveyed 21 22 16 Customers % achieved positive 43% - 65% - 75% - ROI within the payback period 34 months 37 months 23 months Deployment Size 2-5000 Users 20-3400 Users 35-800 Users Reduced staff cost or 50% 48% 56% Improved productivity Improved operation management 30% 39% 75% Reduced IT cost - 26% 44% Person-months of internal team 372 81 52 required to deploy ERP Person-hours of training per user 49 27 29 Average FTEs required for support 33.6 9 2.4 Benefits include Direct cost saving, Productivity & Indirect ROI = (Year1, Year2, Year3)/3 benefits. Costs include Software, Hardware, Personnel, Initial Cost Consulting & Training. 21 VELCOM Exceed Expectation
  22. 22. NUCLEUS RESEARCH – ERP TCO SURVEY 22 VELCOM Exceed Expectation
  23. 23. ERP IMPLEMENTATION – KEY SUCCESS FACTORS Top Management Commitment Clear Goal Setting & Budget Planning (TCO) Business Process Re-Engineering Change Management Effective Project Management Good Project Team - Client & Vendor High Communication Standards Scope Creep Management Data & Approvals on Time Education & Training 23 VELCOM Exceed Expectation
  24. 24. ERP PROJECT – PRE IMPLEMENTATION PHASE Organization Readiness Audit Key Business Requirement Identification Project Roadmap - Present & Future Project Goals Return On Investment Plan Total Cost of Ownership Plan Software & Vendor Selection Contract Management 24 VELCOM Exceed Expectation
  25. 25. ERP PROJECT – IMPLEMENTATION PHASE Program Management Project Planning, Staffing & Deliverables Communication Mechanism Business Requirement Finalization Training & Documentation User Acceptance Testing Project Sign-off 25 VELCOM Exceed Expectation
  26. 26. ERP PROJECT – POST IMPLEMENTATION PHASE Post-Implementation Review Action Plan for the Project Implementation done Plan for Next Project Implementation 26 VELCOM Exceed Expectation
  28. 28. QUESTIONS 28 VELCOM Exceed Expectation
  29. 29. THANK YOU! 29 VELCOM Exceed Expectation
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