ERP Systems Applications on BSP's Supply Chain Management

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THIRD AEGEAN INTERNATIONAL CONFERENCE on DESIGN AND ANALYSIS OF MANUFACTURING SYSTEMS MAY 19-22, 2001 TINOS ISLAND, GREECE

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Who are we ? a traditional Greek household appliance manufacturer founded in 1865 and named PITSOS which was acquired in 1977 by B/S/H/ (Bosch und Siemens Hausgeraete GmbH) and has been renamed BSP which means:

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What are we producing?BSP has become a modern competence centre for the development and production of cookers and refrigerators for several brands, such as:

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Some inf.'s about us:Our 62K m2 production facility is located in Piraeus we produce more than 500.000 appliances per year we employ more than 1000 people we are holding more than 40% of the Greek market we export 60% of our production to nearly 20 countries in Europe and overseas we were able to constantly increase our annual turnover and PBT we deploy modern Quality Management systems such as: ISO9001, ISO14001, and Total Quality Management and are committed to achieve outstanding performance thanks to the “diligence of the individual and excellent management”.

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B/S/H/ Corporate LogisticsCustomer OrderOrder Confirmation Delivery Note InvoiceCustomersOrder for products, Order for imported goods Distribution orderOrder Confirmation, Invoice, InventoryOrder, Direct loading to Regions Production Plan, Delivery schedule Factories Suppliers E GRD TR

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BSP LogisticsMaterial masters, BOMs, work centers with availability capacity, work plansGR Central Production plan Weekly reqs planning for products Net requirements determination Capacity leveling Transfer of reqs to factory Factory MPS: finished product Weekly reqs planning for products Monitoring MPS result Production OrdersFactory MRP: Semi-finished Spare parts customer reqs Monitoring MRP result Requirement planning Production OrdersFactory MRP: Purchased parts Spare parts customer reqs Consumption controlled mater. Monitoring MRP result Requirement planning Purchase Orders Delivery SchedulesFor final products For semi-finished products For purchased parts

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Competitive Criteria Production quality alone is no longer a decisive competitive advantage. Success is also based on the ability to meet customer requirements for: time volume responsiveness service level Customer requirements in the future will only be met by collaborate relationships among trading partners on joint planning and execution

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The Virtual Cooperation

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Why ERP?boost organizational effectiveness and efficiency improve level of decision making (quality!) flexibility (internal and external) integration of all organizational processes cost reduction along the entire Supply Chain operational data integrity and consistency increase business value added decrease the operation’s “time to market” enhance business control and awareness deploy basic infrastructure for extended enterprise and e-business comply with corporate policy and strategy (SAP)

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Which ERP (SAP) modulesIntroduced: Sales & Distribution Materials Management Production Planning Financial & Accounting Controlling Workflow Quality Management (incoming materiel only) Fixed Asset Management Under Introduction: Human Resources Open: Warehouse Management Plant Maintenance

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Application Preconditions1. Full, unrestricted commitment of the management 2. Financial funds availability 3. Business Processes Reengineering 4. Effective and efficient project management 5. Cooperation with the system provider (supplier) 6. Selection of efficient external consultants 7. Enterprise data reliability 8. Appropriate IS/IT infrastructure (internal) 9. Effective user training 10. Willingness to change culture

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Why do Greek enterprises not adopt ERP systemsSOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001

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Introduction time influence factorscoordination with the managementSOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001Appropriate HRsLink to other systemsBPR Less than 6 months 52% 6 - 12 months 48%12 - 18 months BSP 0%more than 18 months 0%Average Introduction time of ERP systems

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Critical Introduction Issues1. Technological: Data transfer from the old system Adaptation to operational requirements (customizing) Adaptation to Greek legal requirements (customizing) System’s response time (load) Integration with other subsystems (interfaces) Hardware Upgrade Job scheduling to avoid lock entries and gain performance Hellenisation User Access Authorizations

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Critical Introduction Issues2. Financial: Introduction cost mainly resulting from : hardware software consulting services intensive user training installation maintenance data transfer and customizing

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Critical Introduction IssuesNo Yes (BSP) User Training Suppliers include user training in installation costNo Yes (BSP)No System Maintenance Suppliers include maintenance in installation costSOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001

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Critical Introduction Issues3. Organizational: Cultural shock The organization was not prepared to deal with the high degree of interdepartmental process integration Adaptation and redefinition of several operational processes (Business Process Reengineering) Adaptation and redefinition of organizational schemes

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Critical Introduction Issues4. Operational: Error frequency in data entering/processing during the introduction period was extremely high Continuous comparison between physical and system stocks was necessary New material numbering was a source for confusion. Definition & parameterization of master data cannot be taught, but only experienced. No matter how good the level of training, it can not prepare someone for the productive start of the system

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Critical Introduction Issues5. Human Resources: It became extremely difficult and costly to find and hire personnel with (ERP/SAP) related professional experience and expertise. Great percentage of the existing personnel didn’t have any IT system familiarization/competency. Special care had to be taken for these people, to ensure their quick adaptation and utilization in the context of the new system The competency profile of the personnel had to be drastically upgraded.

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The bottom line organization communication Information scheduling forecasting unification soundness transparency control online inf.s direct access on data integration excellent reporting fun motivation personal improvement order discipline know how upgraded services coordination quality speed

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The bottom line After almost 2 1/2 years of operation with our ERP system, we do not doubt about the correctness of our decision. The successful introduction and ERP-based operation of the company became possible because of : the management’s commitment to change culture excellent project management, which was a corporate joint effort the continuously improving user support by our IT department specialists (business analysts ) and last but not least, because of the extraordinary personal efforts and dedication of the key users

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Last Updated: 8th March 2018

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