ERP system applications on BSP’s
Supply Chain Management
THIRD AEGEAN
INTERNATIONAL CONFERENCE
on
DESIGN AND ANALYSIS
OF MANUFACTURING SYSTEMS
MAY 19-22, 2001
TINOS ISLAND, GREECE
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
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:
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
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:
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Some inf.'s about us:
•
•
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•
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”.
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
B/S/H/ Corporate Logistics
Customers
Customer
Order
Order for products,
Order for imported goods
Distribution order
Order,
Direct loading to Regions
E
Th. Modestou
GR
Order Confirmation
Delivery Note
Invoice
Order Confirmation,
Invoice,
Inventory
Production Plan,
Delivery schedule
D
TR
Factories
Suppliers
May 2001
ERP system applications on BSP’s
Supply Chain Management
BSP Logistics
•For final products
•For semi-finished products
•For purchased parts
Material masters, BOMs,
work centers with availability capacity, work plans
GR Central
Production plan
Factory MPS:
finished product
Factory MRP:
Semi-finished
Factory MRP:
Purchased parts
• Weekly reqs planning
for products
• Weekly reqs planning
for products
• Spare parts
customer reqs
• Spare parts
customer reqs
• Net requirements
determination
• Monitoring MPS
result
• Monitoring MRP
result
• Consumption
controlled mater.
• Capacity leveling
• Production
Orders
• Requirement
planning
• Monitoring MRP
result
• Production
Orders
• Requirement
planning
• Transfer of reqs to
factory
• Purchase Orders
• Delivery
Schedules
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
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
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
The Virtual Cooperation
Purchasing
Manufacturing
Sales/distrib.
Supplier
P
M
S
Customer
Contracts
Contracts
Internet
P
M
S
Intranet
Electronic catalog
Check customer's credit and
availability of goods
Electronic invoice
Electronic catalog
Check customer's credit and
availability of goods
Electronic invoice
Improve ... • Business Infrastructure in multiple vendor
environment
• high transaction volumes
• real-time decisions across the supply chain
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Why ERP?
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•
•
•
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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 ebusiness
• comply with corporate policy and strategy (SAP)
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Which ERP (SAP) modules
Introduced:
SD
FI
Sales &
Distribution
Financial
Accounting
MM
CO
Materials
Mgmt.
Controlling
PP
Production
Planning
QM
AM
R/3
Fixed Assets
Mgmt.
Client / Server
ABAP/4
Quality
Management PM
Plant Maintenance
PS
Project
System
•
•
•
•
•
•
•
Sales & Distribution
Materials Management
Production Planning
Financial & Accounting
Controlling
Workflow
Quality Management
(incoming materiel only)
• Fixed Asset Management
WF
Workflow
HR
IS
Human
Resources
Industry
Solutions
Under Introduction:
• Human Resources
Open:
• Warehouse Management
• Plant Maintenance
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Application Preconditions
1. 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
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Why do Greek enterprises not
adopt ERP systems
70%
64%
k
55%
60%
55%
45%
50%
36%
40%
30%
20%
9%
10%
0%
Lack of
information
Investment
Insufficient
HRs for
administration
Small size
of the
enterprise
Lack in the
organization
of processes
Insufficient
technological
infrastructure
SOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Introduction time
influence factors
90%
82%
Average Introduction
time of ERP systems
12 - 18
82%
80%
months
0%
64%
70%
55%
BSP
more than
18 months
0%
60%
48%
50%
40%
52%
30%
20%
6 - 12
months
48%
10%
0%
coordination
with the
management
Appropriate
HRs
Link to
other
systems
Less than
6 months
52%
BPR
SOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Critical Introduction Issues
1. Technological:
• Data transfer from the old system
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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
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Critical Introduction Issues
2. Financial:
Introduction cost mainly resulting from :
• hardware
• software
• consulting services
• intensive user training
• installation
• maintenance
• data transfer and
• customizing
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Critical Introduction Issues
Yes (BSP)
No
11%
26%
No
89%
74%
Yes (BSP)
System Maintenance
Suppliers include maintenance
in installation cost
User Training
Suppliers include user training
in installation cost
SOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Critical Introduction Issues
3. 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
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Critical Introduction Issues
4. 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
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
Critical Introduction Issues
5. 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.
Th. Modestou
May 2001
ERP system applications on BSP’s
Supply Chain Management
The bottom line
• organization
• communication
• Information
• scheduling
• forecasting
• unification
• soundness
• transparency
• control
• online inf.s
• direct access on data
• integration
Th. Modestou
• excellent reporting
• fun
• motivation
• personal improvement
• order
• discipline
• know how
• upgraded services
• coordination
• quality
• speed
May 2001
ERP system applications on BSP’s
Supply Chain Management
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
Th. Modestou
May 2001