Haas Team Final

Slide 2: RITAESQUIVEL TINARUSSELL JONATHANWISNIEWSKI STEPHENZIERHUT BUS 310, MIS BERNARD MERKLE MAY 6, 2008 TEAM CASE STUDY

Slide 4: 1. Haas Automation 2. Information Technology Architecture 3. SAP Implementation 4. Issues Surrounding ERP Implementation 5. Recommendations

Slide 6: 1983 COLLET INDEXER

Slide 7: 1983—1987 Rotary tables Rotary indexers Machine tool accessories

Slide 8: 1987

Slide 9: Today Full line of CNCs, rotary indexers and tables, and collet indexers

Slide 10: OXNARD, CA

Slide 11: MODERN OPERATION

Slide 12: Distribution HEADQUARTERS HAAS EUROPE HAAS ASIA FACTORY OUTLETS

Slide 13: Customers

Slide 14: CNC Machines Built 2007 Largest CNC builder in the world

Slide 15: Revenue 2007 Will exceed goal of $1 billion by 2010

Slide 17: 2007 Results

Slide 18: Exporting Percentage

Slide 19: US VS International Sales

Slide 20: Competitive Forces Model NEW MARKET ENTRANTS SUBSTITUTE PRODUCTS THE FIRM COMPETITORS IT SUPPLIERS CUSTOMERS

Slide 21: NEW MARKET ENTRANTS SUBSTITUTE PRODUCTS COMPETITORS MAG Industrial Mori Seiki Cincinnati Milicron IT SUPPLIERS CUSTOMERS

Slide 22: NEW MARKET ENTRANTS SUBSTITUTE PRODUCTS •China, the next big thing COMPETITORS MAG Industrial Mori Seiki Cincinnati Milicron IT SUPPLIERS CUSTOMERS

Slide 23: NEW MARKET ENTRANTS SUBSTITUTE PRODUCTS •No direct substitutes •Outsourcing COMPETITORS MAG Industrial Mori Seiki Cincinnati Milicron IT SUPPLIERS CUSTOMERS

Slide 24: NEW MARKET ENTRANTS SUBSTITUTE PRODUCTS COMPETITORS MAG Industrial Mori Seiki Cincinnati Milicron IT SUPPLIERS CUSTOMERS •Aerospace •Industrial equipment •Automotive industries

Slide 25: NEW MARKET ENTRANTS SUBSTITUTE PRODUCTS COMPETITORS MAG Industrial Mori Seiki Cincinnati Milicron IT SUPPLIERS CUSTOMERS •SAP (ERP) •Axon Italis (SAP integrator) •Dell •HP

Slide 26: Competitive Strategies American-made Quality Low-cost leader Service

Slide 27: Value Chain Model SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE PRIMARY ACTIVITIES

Slide 28: SUPPORT ACTIVITIES Continuous focus on negotiated price discounts (from vendors), closed loop supply chain management HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE PRIMARY ACTIVITIES

Slide 29: SUPPORT ACTIVITIES PROCUREMENT Improve Quality of Life TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE PRIMARY ACTIVITIES

Slide 30: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT Global SAP implementation initiative (ERP) FIRM INFRASTRUCTURE PRIMARY ACTIVITIES

Slide 31: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT High performance Quality Management team staffed with people who have practical experience PRIMARY ACTIVITIES

Slide 32: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE Supply Chain Management (JIT inventory) via ERP PRIMARY ACTIVITIES

Slide 33: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE Extreme focus on efficiency PRIMARY ACTIVITIES

Slide 34: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE Worldwide network of Haas Factory Outlets and distributors PRIMARY ACTIVITIES

Slide 35: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE 100+ trade shows a year (domestic and international) PRIMARY ACTIVITIES

Slide 36: SUPPORT ACTIVITIES PROCUREMENT HUMAN RESOURCES DEVELOPMENT TECHNOLOGY DEVELOPMENT FIRM INFRASTRUCTURE Haas distributors (HFO) PRIMARY ACTIVITIES

Slide 37: Current use of information systems with strategic business impact

Slide 38: Opportunities to increase strategic advantage through information systems

Slide 40: 1986-1996 2005-Present 1996-2005

Slide 41: No production schedule No scheduling system 1986-1996 2005-Present 1996-2005

Slide 42: • Manual Tools Organization Applications documentation • Program implemented 1986-1996 2005-Present 1996-2005

Slide 43: • Outgrown Tools Organization Applications Lotus 123 • Implemented MAX 1986-1996 2005-Present 1996-2005

Slide 44: • MRP Tools Organization Applications implemented • Four-Shift software 1986-1996 2005-Present 1996-2005

Slide 45: $150-$200m sales Dataworks Recruit IS expert 1986-1996 2005-Present 1996-2005

Slide 46: • SQL Tools Organization Applications database • Call Manager • Avante ERP system 1986-1996 2005-Present 1996-2005

Slide 47: • SeaWay  Tools Organization Applications Matricon • VRA configurator • HAE = Globis • HAA = Excel 1986-1996 2005-Present 1996-2005

Slide 48: • Avante Tools Organization Applications • SQL database • Call Manager • Danzas 1986-1996 2005-Present 1996-2005

Slide 49: Many changes over 20 years Planning for completive advantage and future success 1986-1996 2005-Present 1996-2005

Slide 50: • New ERP INFORMATION ORGANIZATION APPLICATIONS TECHNICAL INFRASTRUCTURE system • New CIO • Data transfer • Training • Consultants 1986-1996 2005-Present 1996-2005

Slide 51: ORGANIZATION 1986-1996 APPLICATIONS ERP • SAP system 1996-2005 INFORMATION TECHNICAL INFRASTRUCTURE 2005-Present

Slide 52: • SAN INFORMATION ORGANIZATION APPLICATIONS TECHNICAL INFRASTRUCTURE upgraded • 10 TB of information • Future = 24 TB 1986-1996 2005-Present 1996-2005

Slide 53: • $750,000 INFORMATION ORGANIZATION APPLICATIONS TECHNICAL INFRASTRUCTURE hardware • 45 servers • SAN system • Data protection • UPS • (2) 32-port fiber switches 1986-1996 2005-Present 1996-2005

Slide 55: World’s leading provider of business software Third largest software supplier Systems Applications and Products in Data Processing

Slide 56: • 47,000+ customers Organization • 120 countries • NetWeaver • Create efficiencies • 25 industries • Employees in 50+ countries

Slide 57: Graphical user interface (GUI)

Slide 58: The Need for SAP 2005 Isolated databases Limited communication Various systems Over-customized ERP system

Slide 59: The Need for SAP 2005 Mounting problems Increasing needs Continued expansion

Slide 60: The Need for SAP 2005 “ to create a limitless opportunity for growth at Haas, a state-of-the-art ” ERP system was needed

Slide 61: The Need for SAP 2007 Planning • Greatly improved Visibility • Real-time • High quality Integration • Central repository • Connection

Slide 62: SAP Architecture 2007 July 1st 2007

Slide 63: ORGANIZATION • Core team • Consultants APPLICATIONS 2007 TOOLS SAP Architecture TECHNICAL INFRASTRUCTURE

Slide 64: SAP Architecture 2007 • Enterprise TECHNICAL INFRASTRUCTURE APPLICATIONS TOOLS ORGANIZATION Core Component (ECC) • Advanced Product Optimization (APO) • Transaction codes

Slide 65: SAP Architecture 2007 • Software TECHNICAL INFRASTRUCTURE APPLICATIONS TOOLS ORGANIZATION packages • Software upgrades • Customized fit

Slide 66: SAP Architecture 2007 • Star topology TECHNICAL INFRASTRUCTURE APPLICATIONS TOOLS ORGANIZATION • SAP-R/3 • (2) Dual fail- over servers • Database server • Numerous servers • Storage array network (HP) • RAID 10 • RAID 0 • (2) UPSs

Slide 68: Issues 1. Data migration 2. Training

Slide 69: Data Migration Transfer between systems Existing system

Slide 70: Data Migration Transfer between systems Garbage in Garbage out

Slide 71: Data migration Management • Miscalculated time/effort • Resources • Ownership Technology Organization Procedure(s) Solution(s)

Slide 72: Data migration Management Technology • Data mapping • Data loading • SQL loader Organization Procedure(s) Solution(s)

Slide 73: Data migration Management Technology Organization • Heavy reliance on consultants • Significant group effort Procedure(s) Solution(s)

Slide 74: Data migration Management Technology Organization Procedure(s) • Improper practices • Data cleansing Solution(s)

Slide 75: Data migration Management Technology Organization Procedure(s) Solution(s) • No surprises • Better planning • More time

Slide 76: Training to the new system Complex tool to be learned

Slide 77: Training to the new system Vital aspect of implementation

Slide 78: Training Management • Scheduling • Minimize costs • Core team members Technology Organization Procedure(s) Solution(s)

Slide 79: Training Management Technology • Complexity of SAP • GUI availability • Module creation Organization Procedure(s) Solution(s)

Slide 80: Training Management Technology Organization • Haas culture—extreme efficiency • Resistance to change • Size of company Procedure(s) Solution(s)

Slide 81: Training Management Technology Organization Procedure(s) • Expertise of consultants and super users • System development • Task-based vs. system-based documentation Solution(s)

Slide 82: Training Management Technology Organization Procedure(s) Solution(s) • More employees on hand • Staff better skilled consultants • Provide quality in-house training

Slide 84: Average Implementation Meta Group Analysis

Slide 85: Haas Implementation Haas Automation, Inc estimates

Slide 86: Recommendations Past 1. Began data migration earlier 2. More experienced contractor 3. Legitimate training department

Slide 87: Recommendations Present The journey is not over at go live

Slide 88: Recommendations Present 1. Ensure “clean” data in 2. Training expansion 3. Document creation 4. Module certification