Erp for manufacturing industry

ERP - For

MANUFACTURING INDUSTRY

VELCOMExceed Expectation

VELCOM ERP IT SOURCING PVT LTDAn Independent ERP Consulting & Talent Sourcing Company

MAY’20101

AGENDA

� VELCOM – Introduction

� ERP – Introduction & Modules

� ERP Relevance to Manufacturing Industry

� ROI / TCO


� ROI / TCO

� ERP Project Phases

� Success Stories

� Question Hour

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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


� 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

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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.


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.

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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


� 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).

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What is Enterprise Resource Planning (ERP)?


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ERP is an integrated computer-based system used to manage internal & external resources including

tangible assets, financial resources, materials & human resources of an organization


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ERP MODULES - OVERVIEWFinancials

General Ledger

Fixed Assets

Cash Management

Budget & Forecast

Cost Accounting

Inter-Company & Consolidation

HRMS

Recruitment

Performance Management

Sales & Receivables

Receivables

Invoicing

Order Management

Return Order Management

Pricing & Discounting

Tax

Purchase & Payables

Payables

Invoicing

Order Management

Return Order Management

Pricing & Discounting

Tax

Inventory &

Warehousing

Stock Keeping Unit & BOM

Substitution & Cross Reference

Item Tracking & Cycle Counting

Logistics – In & Out Bound

Multiple Locations

Barcode

Planning

R&D

Supply Planning

Production

Production Order

Bill of Material

CRM

Marketing Automation

Telemarketing


Performance Management

Compensation

Training & Development

Attendance System

Payroll

Supply Planning

Capacity Planning

Finite Loading

Demand Planner

Bill of Material

Routing

Shop Floor Control

Lean Manufacturing

Telemarketing

Sales Force Automation

Sales Management

Service Management

Email Integration

Add-on’s

Projects

Quality

Enterprise Asset Management

Balance Scorecard

Travel

Compliance & Governance

Industry Solution

Web Portal

Employee

Customer

Sales Person

Vendor

Consultant

Analytics

Business Analytics

Business Intelligence

Report Builder

Administration

User Management

Configuration Tool

Business Connectors

Backup / Restore

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ERP – TECHNOLOGY OVERVIEW


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ERP – TECHNOLOGY OVERVIEW


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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

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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


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

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ERP BENEFITSEnhance 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

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ERP BENEFITSManage 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

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ERP BENEFITSIncrease 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


� 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

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ERP BENEFITSIncrease 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


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

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ERP BENEFITSDemand 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

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ERP BENEFITSIntegrate 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


� 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

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ERP BENEFITSIncrease 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 &


information about specifications, order status & quality control testing among key departments &

trading partners

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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.


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

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NUCLEUS RESEARCH – ERP ROI SURVEY

PARAMATER SAP ORACLE MICROSOFT AX

Customers Surveyed 21 22 16

Customers % achieved positive

ROI within the payback period

43% -

34 months

65% -

37 months

75% -

23 months

Deployment Size 2-5000 Users 20-3400 Users 35-800 Users

Reduced staff cost or

Improved productivity

50% 48% 56%

Improved operation management 30% 39% 75%


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Reduced IT cost - 26% 44%

Person-months of internal team

required to deploy ERP

372 81 52

Person-hours of training per user 49 27 29

Average FTEs required for support 33.6 9 2.4

ROI = (Year1, Year2, Year3)/3

Initial Cost

Benefits include Direct cost saving, Productivity & Indirect

benefits. Costs include Software, Hardware, Personnel,

Consulting & Training.

NUCLEUS RESEARCH – ERP TCO SURVEY


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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

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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

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ERP PROJECT – IMPLEMENTATION PHASE

� Program Management

� Project Planning, Staffing & Deliverables

� Communication Mechanism

� Business Requirement Finalization

� Training & Documentation


� User Acceptance Testing

� Project Sign-off

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ERP PROJECT – POST IMPLEMENTATION PHASE

� Post-Implementation Review

� Action Plan for the Project Implementation done

� Plan for Next Project Implementation


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ERP – AUTOMOTIVE SUCCESS STORIES INDIA


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QUESTIONS


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THANK YOU!


THANK YOU!

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Erp for manufacturing industry

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