PRESENTED BY:AGREETA

ANKITA GUPTAMUKESH KUMARNEHA KHURANARAJSHREE SONI

1

2

Aster Tekstil

Having adopted a total service concept since the year 1993, and been exporting its authentic designs to England, America, Denmark, Spain, France, and Italy, Aster Tekstil conducts all of its work processes via CANIAS ERP software. 

Aster Tekstil is capable of producing up to 500,000 items/month

3

CANIAS ERP IMPLEMENTATION DRIVERS Various software and systems were tried before ERP.

As the details they would like to inquire, and reports to receive, multiplied, and became more complicated, they analyzed the feasibility of all these via their system of the time, and saw the system's incapability to meet their requirements.

Then they decided to switch to ERP. As an answer to "Why ERP?", in the ever-hardening competitive conditions, achieving the earlier profitability rates is out of question, so in order to manage the system accurately it is needed to measure accurately, and for accurate measures a more detailed reporting is essential.

4

Today, no one may determine the price of the product he/she has produced, or sold. Client has his/her own sales price, retailer determines the sales price of the product, and tells the manufacturer to "manufacture in return to this price". While thinking about "how could I get the required product in return to this price?", you are to look for your costs, wastage rates, and previously realized data. 

Within the framework of this structure, they were to bring Aster Tekstil to a level, in which they might do reporting easily, and see the details instantly.

5

In Aster, prior to CANIAS ERP, there were softwares applicable for various processes.

They used to resolve every task via different softwares.

When a report was needed, different reports were drawn up from different divisions, leading to both inconsistence in data, and repeated data entries.

There was no integration between the applicable software solutions. 

6

Route taken in the electing of ERP software

IAS was among the international software companies they contacted.

They could not find relevant solutions for their needs in one of the softwares they reviewed, and another company told them that textiles sector was out of its field of specialty.

They received demos from a software of German origin, as well as from IAS. They paid reference visits to the companies making use of these softwares, and made reviews.

7

Having formed their assessment criteria, they compared the details. They made assessments on brand awareness, brand value, how compact is the program, as well as on such aspects as its cost, ease of use, etc. 

What is mostly dwelled on by their key users with regard to the software they would elect was the ease of use, as well as instant access to the required data. CANIAS ERP was a software with screens far more compact, and easier to use than those of the others.

8

What matters to them is the compactness of not only the software, but also that of the company. Because, they are well aware of the fact that, while comparing themselves to their competitors, their success arise from the compactness and flexibility of their company. Considering the same was also recognized by IAS, given their similar activities and successes, they opted for CANIAS ERP. 

Being well aware of the fact that an ERP software not to be approved by their key users was to disrupt the management of its process, they, therefore, counted them into the process.

9

It has got quite significant benefits, including CANIAS ERP's flexibility, and openness to development, in other words its development under their own corporation by means of software development language, TROIA. 

In order to effectively manage the software project more effectively, they counted all of the users throughout the process from the electoral phase to the decision phase. They received their opinions and assessments. Finally, they decided to carry on with CANIAS ERP. Thereafter, its application process got started. 

10

They had told all their colleagues their concern and objective properly, no extra resistance occurred respectively.

Each person's point of view towards the project implicated a different motivation.

Project motivation of the department manager, and stock data entry personnel would not be the same.

Therefore, they tried to finalize the project as quickly as possible, and under proper management.

They were well aware of the fact that, upon the beginning of such weariness, it would diffuse to all departments.

11

Upon having the project proceeded for a while, and received reports from modules, they made use of this situation as a means of motivation.

Despite having completed a part of 40 percent of the project in a period of 5 months, seeing what they acquired drove them forth.

They shared all the developments with their colleagues.

They began perceiving what we might do in the course of time. 

12

In ERP projects, the job does not end by choosing the software, or the supplier company one should also have the project managed very well. 

There were many times during the course of the project that they improved their processes. They could not have different reports compared before. But now they can; they may combine the stock status from the depot and order status from the marketing, and draw up special reports. 

13

Their ERP project dated back to September 17th, 2008.

They started by conducting system analysis together with their key users and consultants.

They appointed one of their rational and guiding colleagues from each department, expert in their fields, and competent to proceed the project, as key users.

Having ascertained the names of each users, and module(s) to be dealt therewith, a project organization scheme was thereby arranged.

14

According to the Project Scheme, they reserved first two weeks for system analysis.

Therein, they told what they had in their minds to the consultants during full-time workdays.

Their colleagues had drawn up their own department files in details. Besides, during the decision process, the files drawn up by colleagues, including not only the information gathered with regard to their departments, but also their expectations, were made use of.

They responded to the questions asked by consultants in order to design the system.

15

THE ANALYSIS PROCESS They presented numerous aspects, such as the screenshots of each

applicable program, how they entered data, output and report samples, etc. to IAS consultants during the analysis process.

They sorted out those they like by saying "we would like to have the same in CANIAS ERP", and those they said "we could not do these, and would like to do via CANIAS ERP". 

Analysis process put forth their course of action.

The project plan was schemed month by month, week by week. They intended to update them in certain periods. 

16

Having completed the analysis, they installed the software on October 8th.

They initiated basic transactions, like material descriptions.

Within such a short period of 5 months, on March 1st, 2009, they commenced real-time usage in modules, including Sales and Marketing Management, Product Trees, Routes, MRP, Purchasing Management, Invoice Control, Inventory Management, Production Management, and Work Orders.

17

First of all, by making use of CANIAS ERP, they began performing such primary processes like entering their orders in the system, creating their product trees and routes, and assessing their material needs via MRP.

Having these steps taken, thereafter they took the steps of opening purchasing orders via the system, conducting the stock entries related with purchasing orders, recording purchase invoices, commencement of our purchase invoices and export statements. 

18

They could have introduced this main chain in 5 months.

There were times they applied parallel use throughout this period.

However, in the meantime, they became aware of the fact that, unless they had 100% adopted a single system, they would by no means gain the desired productivity. For the users were able to conduct their daily works in the old system, this could lead them to consider entering data in CANIAS ERP as an additional, or a spare-time activity, and made them unable to properly test the system.

System was working, but they should have made additions at many points upon having adopted real-time use. There were times they were to conduct some of the processes manually. There were also times they encountered unforeseen problems, and those arose after adoption of real-time use. 

19

After 5th month of the project, they commenced the adaptation of modules.

In addition to the currently applicable modules, they began applying Human Resources Management, Import Management, Export Management, Quality Control, Document Management, and Standard Product Pricing modules.

By the date of January 1st, 2010, they adopted real-time use in General Accounting module. Again as from the year 2010, they commenced the use of EDI module, and introduced joint EDI projects together with their clients. 

In the further stages, they are to introduce Balanced Scorecard application over CANIAS ERP.

20

ERP STAFF

Taking their commencement to the project at the date of October 2008 in consideration, they achieved the establishment of the whole project, other than a couple of modules.

Their ERP project staff comprises of 3 people. The number of their key users is 20. They achieved most of the developments by their own personnel, without having resorted to any additional consultancy report. 

They gradually abandoned using their former softwares. Most particular of all was to abandon the individual reports, being drawn up in Excel.

21

DIFFICULTIES IN MANAGING AN ERP PROJECT IN TEXTILE SECTOR Such processes as ordering, purchasing, and stock management

reveal a similar structure in many corporations.

However, textile sector has got further more variables, and non-standardizing parameters. Even two textile companies operating in the same field may conduct their activities quite differently.

22

Eg :-MRP's logic of operations is standard. Orders are entered, product tree and route is described, MRP is operated, and material needs are assessed. According to the resulting materials needs, respective purchasing orders are established.

In their company, products are open to material additions at any stage from packaging to shipment. It is required to re-operate MRP due to each addition and modification, as well as to all the stages in the system are to be updated in accordance with such newly added materials.

23

They do manufacturing based on customer orders, and they may be demanded very short deadlines respectively.

While everything is linked with the order at hand, one has no opportunity to operate with stocks available beforehand. Despite enduring to stock costs, one has no chance to foresee such details as which product in which color to be ordered by the client. 

Client may also submit the order, but has not declared label details, or decided whether he/she would like to have an accessory be attached on the shoulders.

24

One should begin manufacturing the order without waiting for such decisions to be made.

One should supply the fabric of the ordered product, arrange its toll-manufacturers, and identify which suppliers one is to work with.

One may procure yarns, manufacture the raw fabric after having them died down, then have it dyed, and use the dyed fabric in the ordered product.

While the colour is not decided, one may have the opportunity to supply the yarns, and raw fabrics. In this process it is not the months, or days, but the hours are precious for them. One may have an average off 3-4 weeks in order to complete an order, and have it shipped. 

25

Their applicable system accordingly got to be suitable for such a pace and flexibility. Therefore, they were to conduct significant changes in certain points. Like assortment entries, creation of orders from assortment system, etc... 

They have also developed their textile-specific reports by themselves. Now they are printing their own dispatch lists, and invoices out from the system. They may have our orders and work order reports, their toll-manufacture supervision system, and manufacture reports from CANIAS ERP. In the coming days, they are to begin working on "how we may have our graphical reports printed out from Canias ERP via OLAP module, and how we may operate MIS" 

26

CONCLUSION

Unless the objectives have been ascertained clearly and in details, there would not be any chance to assess the rate of success. Therefore, before having the project initiated, the objectives and expectations from the project should be ascertained clearly and in details, and the project itself should also be reviewed frequently. 

The software most appropriate to corporate needs should be chosen. What matters is to find what is best suited. One should not only intend and apply the development and modification of the software in parallel with one’s corporate processes, but also having the processes improved in parallel with the project. 

27

28

About Hewlett‐Packard

• Founded in 1938 by Bill Hewlett and David Packard ‐ as an electronic instruments company

• The customers were engineers and scientists

• HP launched its first minicomputers in 1974

• First Personal Computer in 1981

• HP was the second largest computer manufacturer in 2001

29

HP and SAP HP had close partnership with SAP since 1989 when Sap began

developing SAP R/3

Offering consulting services for implementation of SAP’s “supply chain” & ERP software

First SAP R/3 was deployed on an HP 9000 Enterprise server in 1992

More than 50% of Sap’s customers used HP’s infrastructure to run ERP software taking consultancy from HP faster and accurate implementation.

30

CASE: FAILURE STORY OF SAP/R3 AT HP

HP announced that its revenues has gone down by 5% to $3.4bn for the 3rd quarter ended July 2004.

The reason proposed was due to the problem faced during the migration to the centralized ERP system

The total financial impact due to the failure was $160mn.

31

Conti…

Questions were raised on failure of HP implementing ERP, as it was a consultant for SAP ERP implementation.

HP’s responsibility as a consultant was to prevent the execution problems faced by the implementing on which it itself failed.

While conducting an internal survey, HP revealed that there has been execution problem and not the fault of SAP.

Technical glitches were small but contingencies planning wasn't addressed appropriately.

CASE: FAILURE STORY OF SAP/R3 AT HP

32

SAP R/3 Implementation

Objectives: 1) Shorter lead & delivery time 2) Cost Saving 3) Global Distribution System

In 1993, HP’s BCMO unit began with the implementation with several modules like- MM, PP, FI/CO.

FI & CO modules were implemented on global basis & SD module was implemented as part of pilot project.

By 1998, major migration to SAP R/3 was completed

33

The 2000’s : MySAP

• Handle complex orders

• Faster shipping and operational efficiency

• Reduce IT costs

• Increased transparency

• Improve forecasting

• Embrace new business models fast

• Reduce complex infrastructure

• Unite HP and Compaq systems

34

BENEFITS OF MySAP

• It had the option of query which would make it easier to use.

• E‐commerce capabilities for selling customized B2C products

• Faster forecasting

• Reduce huge cost incurred on IT support

• All programs will run on single browser

• Eliminate need to create custom SAP interface

35

IMPLEMENTATION OF MySAP

By 2000, HP was keen in making the web-based activities more simple to capture the direct to customer market and had over 20 SAP R/3 implementations representing FI/CO,PP, MM, SD, BW, WM & APO

Hp used different version of SAP & had multiple Sap GUI’s with around 10,000 users.

As HP was using SAP R/3, it considered using MySAP for its Internet Enabled Technology businesses to be better fit.

36

HP wanted to link its employees , customers & partners. HP faced problem in fulfilling orders when any order involved various items from more than 1 product line.

HP wanted to ship the products faster as the demand placed on HP’s supply chain data workflow increased tremendously.

The main aim was to cut cost, increase transparency & equip itself to the changing business models.

HP decided to implement the APO module, the central element of SCM.

37

ERP MIGRATION FAILURE

In Dec 2003 Gilles Bouchard, the CIO & EVP created a model to merge the business and IT group at the regional & country level.

This operation along with the ISS was completed by on May 2004 & that led to increased interdependencies between groups in the company.

This was 35th Migration and was a part of the Business Process Architecture. HP wanted to reduce the 35 ERP system implemented worldwide to four along with reduction in application from 3500 to 1500

38

HP wanted to implement a single Order Management System & successfully reduced the no. to 7 but still wanted further efficiency & flexibility with the implementation of SAP FOM platform.

SAP FOM platform HP wanted to unite the SAP of Compaq with itself. It involved migration from separate Hp 7 Compaq legacy Sap R/3 to a new Broad-Based SAP ERP system & this involved more than 70 supply chain & up gradation to SAP R/3 Version-4 6C.

39

HP took over an empty factory at Omaha to frame the contingency plan to include both the technical and business aspects so to provide buffer stock for customized order.

But as soon as the project went live in June 20004, Migration problems began surfacing.

About 20% of the orders failed to move from the legacy system to the new one due to programming errors

HP was able to fix this within a month but orders began to backlog

40

ERP MIGRATION FAILURE

The following are the causes of the migration failure:

1. Project Team Constitution

2. Data Integration Problem

3. Demand Forecasting Problems

4. Poor Planning & Improper Testing

5. Inadequate Implementation Support/Training

41

Analysts commented that the Co.’s culture did not support the much active involvement of employees also Co. ignored valuable suggestion from employees.

Co. staff had warned HP but it was not possible for it to continue with the tradition system and also suggested for a back-up system but Co. turned deaf ears over that.

Many Vice-President had joined the rival Co. and also many employees had a fear of been layed off.

ERP MIGRATION FAILURE

42

Analyzing root cause

Implementation failure can impact overall business performance.

There is no standard approach to implement ERP, many times it involves a business change in many departments.

Therefore a detailed mapping is essential otherwise it might miss out the objectives.

The success of implementation depends upon the planning, which considers the business process along with the technical aspects.

43

Analyzing root cause

• “The potential benefits to the supply chain are much bigger than the IT costs and the potential risk to the supply chain is also much bigger”.

• The success of ERP implementation depends upon the ability to align IT The success of ERP implementation depends upon the ability to align IT along with the business management objectives, Program Management Skills along with the business management objectives, Program Management Skills and a well defined processand a well defined process

• There should be a manual back-up as a contingency plan.

• There should be no cross-functional barriers and should create effective processes and teams to integrate the entire business at all levels.

44

ERP implementation should ensure ERP implementation should ensure corporate culture support.corporate culture support.

But not in case of HP.But not in case of HP.

45

HR issues at HP

Inadequate Training time to develop ones skill in the new system

Refresher training was of no use because of Backlogs

Active involvement of employees was not allowed in the Company

Valuable suggestions from the employee was ignored

Distrust of Upper Management

46

HR issues at HP

These ignorance created dissatisfaction among employees

Upper Management perceived to be overpaid and inefficient

Non Co-operation within IT Team & Business Team

These led to HIGH ATTRITION

Work culture differences between HP & Compaq leading to incompatibility between departments

47

Learning

Implementation failure can impact overall business performance.

There is no standard approach to implement ERP, many times it involves a business change in many departments. Therefore a detailed mapping is essential otherwise it might miss out the objectives.

The success of implementation depends upon the planning, which considers the business process along with technical aspects.

48

To implement ERP, the business processes must be improved & corrected but HP failed in this.

“ The potential benefits to the supply chain are much bigger than the IT costs but the potential risk to the supply chain is also much bigger.”

The success of ERP implementation depends upon the ability to align IT along with the business management objectives, Program Management Skills and a well defined process.

49

Implications on HP as SAP’s supply chain consultant are as follows:

About 20% of the orders failed to move from the legacy system to the new one due to programming errors.

HP was able to fix this within a month but orders began to backlog.

Backlog counted to US$ 160 million. Revenues down by 5%.

Analysts raised credibility of HP as a consultant for SAP.

50

• The company had to direct orders through distributers and other orders through flight to speed up order fulfillment.

• Hence added expensesadded expenses.

• Customers were unhappy and there were continuous complaints about Customers were unhappy and there were continuous complaints about delayed processing, configuration and duplicated orders. delayed processing, configuration and duplicated orders.

• Hence HP could not prove itself in this field.

51

ERP implementation failure-can HP use this failure as strategic advantage??

If HP blamed all the of the failure at SAP then HP would loose its edge over IBM.

The company’s corporate strategic policy was based on the “Adaptive Enterprise Concept” and its rival IBM concept was based on “On-Demand Computing”

The Adaptive Enterprise from HP is designed to assist organizations to harmonize the processes between the core business and IT operations

52

• Constant retooling of the corporate infrastructure to meet the demands of a dynamic enterprise has led to the evolution of real-time infrastructure.

• Developed contingency plans to devise solutions for upcoming problems.

• Hence development of contingencies plans for ERP projects is a must.Hence development of contingencies plans for ERP projects is a must.

53

PREVENTIVE MEASURES

54

The methods to prevent the reoccurrence of such a failure:The methods to prevent the reoccurrence of such a failure:

There was a need to integrate business and technology.

The company ought to encourage dialogue that would motivate employees to have a focused approach and help in early identification of problem and satisfaction of customers.

Company should remove barriers to create effective and cross-functional processes and teams that were truly integrated.

Increase dependency between and among teams i.e. front end and back end.

55

The methods to prevent the reoccurrence of such a failure:The methods to prevent the reoccurrence of such a failure:

Approach should be afresh and should not try to map with previous implementation.

Well planned, appropriate training and Better employment.

Implement with technology integration.

Improve the planning and the testing.

More effort and better forecasting needed.

Realize the inadequacy of existing business processes.

56

References

http://www.canias.com/enterprise/news/20100521-aster-textile.html

www.h71028.www7.hp.com/enterprise

www.icmrindia.org/casestudies/catalogue/ITSY045.htm

www.ecch.com/casesearch/product_details.cfm?id=54712

57

THANK YOU

58