Unit 6 - Case Study NIBCO’s “Big Bang”: An SAP Implementation Professor: Richard Yellen Student: Vo Ngo Lan Phuong Course: Ham 23 ID: 217496 Professor: Richard Yellen Student: Vo Ngo Lan Phuong Course: Ham 23 ID: 217496 Hanoi, 11/2012 CASE STUDY Table of Contents I. Overview 3 II. NIBCO’s implementation of ERP solution 3 III. Pros and Cons of “BIG-BANG” approach for ERP 4 IV. ERP project implementation: lessons and recommendations 6 List of Reference 9 Case Study - NIBCO’s SAP Application Implementation I. Overview The case shows the implementation of SAP ERP solution in NIBCO, a manufacturer of pipe and fittings, a mid-size manufacturer with about 3,000 employees and revenue over 460 million USD. The company …show more content…
All the business units, most of employees will be affected by the new systems at the same time. In fact, the other approach can be doing a pilot implementation at a factory or distribution centers, or only implement for only a few popular units. But this way can cost more time, efforts and cannot test the capability of the whole system. Also, with the investment in consultancy and purchasing the leading solutions from top ERP vendors, the NIBCO aim to get the new system run for all the business unit, and the real time running can also test the performance of the new system, also save cost and time for implementation. Running all at the same time can also help the testing of integration and cooperation among factories and distribution centers. The big-bang or cut over approach requires the good skilled personnel, and also training for the new systems, working processes and running, maintenance the new system. The productivity was reported a reduction in the first month after the new system running, but improves gradually in the later months. The accounting reports can be done in two or three day, rather than two to three weeks when using the old systems. Also, with the new system, sharing and collaboration helps reduce inventory, as much as 25%, and also increase the fulfillment ratio from 80% to 95%, service quality has improved to
o Scope – The scope will be changed since one big step will be eliminated with the new system. Now that the new system will not migrate the three business systems together this will change the part of the project that will streamline the business operations in the school.
The authors of “Why ERP?: A Primer On SAP Implementation” discussed the reasons of the successful installation in one facility and the failure in other. Regardless of the nature of the business SAP R/3 has been successful in many organizations such as Ohio plant. The system works very well in organizations that have multiple locations of operations, in” firms for which the change costs are small and in plants which require low flexibility and high centralization (Jacobs & Whybark, 2000, p.126). In contrast, there are many reasons that SAP R/3 might not be successful. SAP R/3 is not appropriate in firms with low turnover and low profitability. Additionally, in some companies manufacturing customized products, SAP R/3 are not appropriate. For instance, the Ohio and North Carolina products are not the same; Ohio’s is in mass production while the other manufactures customized products.
Changing technology may affect the demand for a firm’s products and services but on the other hand due to technology businesses can have systems that provides faster services like the retail businesses have systems that does stock control, cash and customer service.
The increased number of IT investment is applied in organization. It is clear that information technology has become the competitive fact in world business. Collaboration is the new trend in business world. No one can deny the importance of information technology application. Besides the profits outcome, the impacts of information technology deployment also create commitment, trust and value. Advanced information system can improve each steps of business process. It enables people to share information, performance task simultaneously and making decision efficiently. IT companies designed different products to satisfy each step of business operation in terms of manufacturing and human resources. Seminole should apply this new IT infrastructure to business operation. Firstly, company can use the transaction processing systems (IPS) to keep track of all business activities and transaction of the organization such as payroll and employee record keeping. IPS also shows all information from internal and external operation. Secondly, Business intelligence systems are designed for decision-making support. Management information system (MIS) is a system that helps managers to keep track of company performance status, which purposed for decision-making and evaluation. Decision-support system (DSS) is purposed for future business decision-making. Thirdly, Enterprise application systems are designed for integrating business process from different functions, such as supply chain
The current process takes too many hours to complete the required tasks, so the new updated system must be fast and efficient. All of Riordan Enterprise's locations will move to the new accounting and inventory system; therefore, it must also comply with the existing technology. "Companies are recognizing that not only is the aftermarket profitable, but it also can drive significant competitive advantage as a customer-service differentiator" (Kevin O'Brian 2005)
NIBCO has 100 years history and $ 400 million revenues. The main product is flow control like valves, fitting, and hangers so on. Compare to other same types of manufacturers, NIBCO wants to provide low price and differentiation of flow control products. In these days, the product quality is not only a requirement among the commodity markets. The value-added services also are good ways to attract more customers. However, when NIBCO wants to give value-added services to customers, the old system cannot suit their needs. The managers of NIBCO decided to use SAP R/3 implementation project, which helps them to deal with issues. From 1998 to 2001, SAP R/3 implementation has run smoothly in NIBCO. As a supply chain business processes, the
NIBCO is a pipe and valve manufacturing company headquartered in Indiana with ten plants and three distribution centers. NIBCO wanted their business processes to be strategically improved in order for their manufacturing facilities and distribution centers to meet their customer’s requirements (Brown, DeHayes, Hoffer, Martin, & Perkins, 2012). There were multiple systems being utilized within NIBCO and none of the systems had the ability to communicate with each other which created duplicative and wasteful resource efforts. NIBCO’s decision to implement an ERP system was to improve their information systems. Beutler (as cited in Brown et al., 2012) stated that the consulting group reported to NIBCO “to look at integration as a major
The company owns an ERP package specifically designed for the plastics manufacturing process. Evaluation of this software product is essential to ensure the ability to handle the operations in Georgia, Michigan, and China to meet Riordan’s needs for scalability. A new ERP package research will be accessible should the current product prove incapable of meeting Riordan’s needs.
This is important because the same system is used in all working plants, monthly assessments and calculations will be done by employees to regulate and determine many factors. These factors include their reactions to the new system and the productivity and efficiency of the system. It is job of managers to provide the collective data to the consultants, who are responsible to evaluate and make changes that are required and necessary. Changes recorded will be reported back to the managers from them. Changes will be announced to their employees and a detailed feedback report about re-evaluation will be emailed after a week to the staff. The new customer information system will be successful as employees from every level are working together on a same
The Riordan Industries corporate office has been performing a research project to consolidate their financial processes and production software packages. Not one of the three offices or corporate use the same system, which makes data collection, verification, and reporting difficult at best. They need to have a uniform business system throughout all the facilities, as well as procedures implemented in order to attain this goal of seamless data collection they are hoping to achieve. The customer will need to upgrade all their hardware in addition to their current software packages.
1. Cisco suffered from inertia when an attempt was made to engage business management in selecting software for their individual areas, and/or agreeing to participate in the ERP implementation project. List and explain reasons why management would hesitate to become engaged in the IT process/project.
The system allows to company to modernize its strategies and processing more efficiently than its competitors
Nestle is a multinational company based on Switzerland, was establish long ago in 1866 by Henri nestle which supplies different kinds of food products. Over the period nestle has grown as one of the big company. Nestle USA is a part of nestle company, having seven business divisions: beverage, confection and snacks, food service, foreign trade, nutrition, prepared food and sales. Some of Its popular products in USA were: Alpo, Nescafe, Tasters choice. Its annual revenue was 8.1 billion and 16000 employees were working. In 1992 enterprise resource planning (ERP) system provider SAP introduced the R3 system of client server architecture and Nestle USA has decided to implement R3 ERP system in
Will you have an Enterprise-Wide System? Discuss the options and why you will or will not use each. (Hint: TPS, ERP, CRM, SCM)
ERP is short for enterprise resource planning which is designed to improve both external customer relationship s and internal collaborations by automating tasks and activities that streamline work process, shorten business process cycles, and increase user productivity. ERP software integrated all facets of an operation, including product planning, development, manufacturing processes, sales and marketing. In this short essay, three ERP application softwares from Oracle, Epicor and Netsuite were compared separately in the form of diagram: