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ERP - For
MANUFACTURING INDUSTRY
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VELCOM ERP IT SOURCING PVT LTDAn Independent ERP Consulting & Talent Sourcing Company
MAY20101
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AGENDA VELCOM Introduction
ERP Introduction & Modules
ERP Relevance to Manufacturing Industry
ROI TCO
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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
Ex ertise in various leadin International la ers like SAP Oracle Peo leSoft JD
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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
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equ remen en ca on; o a os o wners p ann ng.
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:
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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
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 &
WarehousingStock Keeping Unit & BOM
Substitution & Cross Reference
Item Tracking & Cycle Counting
Logistics In & Out Bound
Multiple Locations
Barcode
Planning
R&D
Production
Production Order
CRM
Marketing Automation
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CompensationTraining & Development
Attendance System
Payroll
Capacity PlanningFinite Loading
Demand Planner
RoutingShop Floor Control
Lean Manufacturing
Sales Force AutomationSales Management
Service Management
Email Integration
Add-onsProjects
Quality
Enterprise Asset Management
Balance Scorecard
Travel
Compliance & Governance
Industry Solution
Web PortalEmployee
Customer
Sales Person
Vendor
Consultant
AnalyticsBusiness Analytics
Business Intelligence
Report Builder
AdministrationUser 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
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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
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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
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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
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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 reducedoperations 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 o eratin costs b convertin time-consumin manual rocesses into
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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
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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 asignificant improvement
Integrate partners of all sizes to release data throughout the chain thats 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
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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
Hel efficientl roduce & deliver roducts that follow custom formulas or reci es & take full
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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 byanalyzing 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 s ecifications, order status & ualit control testin amon ke de artments &
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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
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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 UsersReduced 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.
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NUCLEUS RESEARCH ERP TCO SURVEY
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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
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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
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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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