Enterprise information systems project implementation:A case study of ERP in Rolls-Royce

Enterprise information systems Enterprise information systems project implementation:project implementation:A case study of ERP in Rolls-RoyceA case study of ERP in Rolls-Royce

ABHISHEK SHARMA-06502909ABHISHEK SHARMA-06502909

B SRAVANTH KUMAR 06502929B SRAVANTH KUMAR 06502929

POOJA GUPTA-09609011POOJA GUPTA-09609011

ABHINAV SHARMA-09609018ABHINAV SHARMA-09609018

17/8/2010 1Rolls Royce Case Study

OBJECTIVEOBJECTIVE

• To identify core issues to confront in successful implementation of enterprise information system.

• To understand the application of ERP software package known as SAP R/3, which was the ERP software package selected by Rolls-Royce plc


INTRODUCTIONINTRODUCTION

• Information systems such as manufacturing resource planning (MRPII) and enterprise resource planning (ERP) have gained in providing support for achieving an integrated supply chain.

• Firms have been implementing ERP systems since the 1990s to have a uniform information system in their respective organizations.


CONTD..

• ERP system as a packaged software has the advantages of reduced cost, rapid implementation, and high system quality.

• Such IT-driven initiatives require change of the organization's socio-economic system

• Thus organizational resistance to change is identified as a critical success factor for ERP implementation.


ENTERPRISE RESOURCE ENTERPRISE RESOURCE PLANNINGPLANNING

The development of a range of software applications aimed at integrating the flow of information throughout a company, and these commercial software packages were known as Enterprise Systems.

ERP aims to integrate individual functional systems such as manufacturing, finance, procurement and distribution.17/8/2010 5Rolls Royce Case Study

ENTERPRISE RESOURCE ENTERPRISE RESOURCE PLANNINGPLANNING

ERP uses Internet technologies to integrate the flow of information from internal business functions as well as information from customers and suppliers.

The key principle behind the system involves entering the data from a series of modular applications only once and the data automatically update the all related information within the system.

.


BENEFITS OF ERPBENEFITS OF ERP

Business process automation.

Timely access to management information.

Improvement in the use of E communication and E-commerce.

Reduction in working capital


IMPLEMENTATION OF ERPIMPLEMENTATION OF ERP

ERP implementations involve organizational transformation processes with implications to the organization management model, culture Structure and management style.

The key factor of an ERP implementation is the way in which the software is configured.


Rolls-Royce—case studyRolls-Royce—case study


Company backgroundCompany background

Rolls Royce has its major presence in aero propulsion and industrial gas turbines.

It manufactures The most modern family of engines the Trent series, which is used to power the Airbus A330, A340-500/600.

Power Generation Market includes both electrical and nuclear power, which also includes marine applications, such as providing power plants for nuclear and naval vessels.


The situations before ERPERP

Rolls-Royce used over 1500 systems before the ERP project was started, many of which were developed internally by Rolls-Royce over the last two decades.

These legacy systems were expensive to operate and difficult to maintain and develop. They did not provide accurate, consistent and accessible data that was required for good and timely decision-making and performance assessment.


Cont..

Work within Rolls-Royce was functionally orientated and various departments worked in isolation.

MERLIN – mechanized evaluation of resources, logistics and inventory.

corporate cost accounting (CCA) was used to financially monitor transactions, which covered pipeline inventory and inter-site transport.


IT at Rolls-RoyceIT at Rolls-Royce

•In 1996 Rolls-Royce formed a partnership with electronic data services (EDS).

•In 1998 changes were made to flatten the structural hierarchy. The customer focused business units (CFBU) were made responsible for making sales deals within the various market segments.

•Whilst the operational business units (OBU) formed the manufacturing support for producing the product, the Executive Group controls the whole business and makes decisions on the overall direction of the company.


Strategy &

Direction


Phase 1 : Strategy and DirectionStrategy and Direction

To study to set the scope of the project and provide an outline plan and costing


Strategy &

Direction Planning

Analysis &

Convergence


Phase 2 Planning Analysis & Planning Analysis & ConvergenceConvergence

Preliminary design review, developing a design and implementation strategy, defining the scope of the project, and developing the business process model.

High level design review,analyse the enterprise model and develop Vanilla prototype.

Critical design review, detailed design and customization of the prototype.

Implementation realisation,integration testing.

Technical/operation review, user acceptance testing.


Strategy &

Direction Planning

Analysis &

Convergence

Early Deployment


Phase:3

large to implement thus was divided into two waves.


Strategy &

Direction Planning

Analysis &

Convergence

Early Deployment

Wave 1 – Focus on Operations

Wave 1 – Pilot


Wave 1 :Focus on Operations and PilotFocus on Operations and Pilot

Introduction of IPM for new production projects and shop floor data management (SFDM) .

SAP pilot

Providing new capabilities for gas turbine operations.


Strategy &

Direction Planning

Analysis &

Convergence

Early Deployment

Wave 1 – Focus on Operations

Wave 1 – Pilot

Wave 2 – Focus on Assembly & Spares17/8/2010 22Rolls Royce Case Study

Wave 2 : Focus on Assembly & SparesFocus on Assembly & Spares

Implementing engine assembly, spares, logistics and

human resource elements within the project.


Changes to the existing system

Suite 1Suite 1• Plan the supply chain: planning activity with a 2–5 year horizon.

• Review of all potential future sales, including engines and spares,

• Identifying the probable minimum and maximum level.

• The supply chain capacity was compared to the range of possible sales scenarios.

• Sales and operating review board (SORB),strategically planning engine sale and factory capacity on a 2–5 year rolling forecast

The SORB makes decisions affecting changes to achieve capacity in terms of manpower, machines, technology, and ultimately for factories to meet the potential sales forecast.


Suite 2Suite 2

Plan and schedule the factory:

converting the agreed schedule from suite 1 into a production plan and enabling all the manufacturing units plan capacity to produce the required components.

Schedule the shop: converting the production plan into a detailed shop plan.

Suite 3Suite 3Operate the factory:

Covers the control of workflow through the shop from the initial generation of launch paperwork, right through to delivery of finished products.


The ERP pilot aims at:The ERP pilot aims at:

•Business principles

•Processes

•Procedures

•Role definitions and behaviors

•Software, hardware and data transfers


The Go LiveThe Go Live

oThe most difficult part of the cut over process was in transferring the data from legacy systems.

oThe shear volume of data that has to be transferred is far greater than any normal transaction load that will be carried out by the system thereafter.

oThe initial data to be transferred includes some transaction data and master data.


Before the system can go-live the team needed to check that it works properly in their operational environment.

Problems experienced on Going Live :

•User authorization problems.

•Work was temporarily halted as route cards were unavailable.

•Values between the systems were incorrect.

• Transaction problems occurred from the first MRP run.


Project risksProject risks

The non-delivery or non-availability of reliable IT hardware and infrastructure both before and during implementation.

The possible failure of providing inadequate and ongoing support after implementation, from both Rolls-Royce and EDS.

Management and supervision may treat the project as merely an IT implementation, rather than change in process methods.


Cont…

Inadequately educating the workforce to operate the new system properly.

Possible failure to give ERP adequate priority due to the number of existing and ongoing business improvements

The project may impact on company interim and end of year accounts.


ConclusionConclusion

•The future of this project will eventually lead to the need for a Data Warehouse.•The full benefits of the project will not be fully experienced or achieved until the system becomes executive and has a period of stability, for at least a whole year.•An immediate benefit that will be achieved by the system will be the ability to promise and then deliver to the customer on time.•Sustainability management of EIS is a very important research dimension that needs to be explored.


THANK YOU! &THANK YOU! &


Enterprise information systems project implementation:A case study of ERP in Rolls-Royce

Documents

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