erp implementation coca-cola hellenic

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Group Project Operations & Information Management Instructor: Prof. Papadopoulos Zoi Karakosta Stathis Simeonidis ENTERPRISE RESOURCE PLANNING SYSTEMS

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Coca-Cola Hellenic, one of the largest Coca-Cola bottlers worldwide, has started a three year long project to substitute all legacy systems with a SAP implementation called Wave 2, in order to maximize efficiencies in use of resources and apply common best practices and polices accross the group.

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Page 1: ERP Implementation Coca-Cola Hellenic

Group ProjectOperations & Information ManagementInstructor: Prof. Papadopoulos Zoi KarakostaStathis Simeonidis

ENTERPRISERESOURCEPLANNING

SYSTEMS

Page 2: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

What is ERP ?

Corporate / Enterprise-wide information systems

Highly complex

Aggregate information from entire company or outside it

Automate processes from all functions

Modular Information Systems

Available in the Market

Incorporate Best Practices from other companies

Customization needed to fit to own company

Comply with international standards

Page 3: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

MRPMRP becomes the fundamental concept used in production management

History of ERP

MRP is the initial effortSoftware application that generates planning and scheduling materials for complex manufactured goods

SAP company is bornFive German engineers begin the company SAP for producing and marketing standard software for integrated business solutions

MRP evolves into MRP IIDistribution Management Activities

HRMHuman Resource Management is developed

MRP becomes ERPThe term ERP is coined when MRP II is needed to cover areas like Engineering, Finance, and Project ManagementEuro

Introduction of Euro, many companies take this opportunity to use ERP (because of disrupted legacy systems) 9/11 triggers a drop in demand for new ERP

systems.

ERP becomes internet enabled

Early 60s

1970s

1972

1980

1988

1990

2000

2001

2002

2004

Services Oriented Architecture (SOA) allows different systems to communicate one another

Page 4: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Scope of ERP systems

Manu-facturing Accounting Finance Sales &

MarketingHuman

Resources

Vendors

Vendors

Vendors

Customers

Customers

Customers

ProductionSystems

AccountingSystems

FinanceSystems

CRMSystems

HRMSystems

BusinessProcesses

BusinessProcesses

BusinessProcesses

BusinessProcesses

BusinessProcesses

Trad

itio

nal S

yste

ms

Manu-facturing Accounting

FinanceSales & Marketing

Human Resources

Business ProcessesBusiness Processes

Enterprise–wide Business Processes

Enterprise System

Vendors

Vendors

Vendors

Customers

Customers

Customers

En

terp

rise S

yste

ms

Page 5: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Why ERP ?

Changing economic & business environment

Economic outlook drives for efficiencies

Maintain competitive advantage

Eliminate duplicate efforts and Leverage Best Practices

Increased need for unified on-time information and user interface

Business alignment towards strategy & Control towards standards (IFRS, SOX, etc.)

Quick decision support

Sharing & integration of management information with partners

Page 6: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Advantages & Disadvantages

1. Potential failure in utilizing the system properly could make

the company less efficient in the long run

2. High costs - Only large corporations can access these benefits

offered by this technology

3. Continuous training of employees

4. ERP has a number of limitations (the success is fully

dependent on how employees utilize it)

5. Hard to customize.

6. Making the necessary changes may make the company less

effective in the market

7. ERP vendors may charge additional license fees

8. ERP technical support has been questioned

1. Accounting applications (integration of costs, profit and

revenue information of sales in a granular way)

2. Easy alterations in manufacturing

3. The company keeps better track of their products which are

produced with a higher level of quality

4. High Employed Security

5. ERP in logistics strengthens the cooperation between

suppliers, companies and clients

6. Efficient cash management

7. Quality control support (Internal auditory procedures and

providers)

8. Improved Financial Information

Page 7: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Challenges of ERP

Needs a clear understanding of the organization and how it does things

Clear documentation of Business Processes & Legacy Systems

Scope defined in detail

Implementation brings a lot of change & resistance

ERP packages may need customization to fit but also

Organization has to adapt to it (organization changes)

Expenses of implementing are high – so is the risk

Implementation is resource-intensive

Page 8: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Critical Success Factors

Clear understanding of strategic goals, expectations and deliverables

Top management support, engagement and participation

Engagement in excellent project management (define the objectives, develop work plan)

Business driven implementation directed by business requirement (not by IT dept.)

Top-notch implementation team (detailed project plan and full availability of all necessary resources)

Absolute data precision (invalid data can have a negative domino effect)

Thorough training and extensive education

(giving 10-15% of the total ERP implementation budget for training provides 80% chance of success.)

Specific performance measures. (Evaluation criteria must be included from the early beginning)

Page 9: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Implementation Process

Review

Get Trained

Plan the Project

Define Gaps

Test solutions

Document Processes

Roll-out

Improve Continuously

Review the pre-implementation processes (how the company does things now)

Get extensive training on the selected software package

Establish project team, plan, milestones, risks and contingency plans

Set up a process for gap analysis & assessment

Consult extensively the end-users

Page 10: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

After-implementation support level

Reputation – Nb Of installations in industry and area – Successful track record of its partners

Compatibility with the existing infrastructure

Modularity – Customization Possibilities - % of processes covered – Best Practices of Industry

Technology

Vendor

Support

Costs

Vendor selection

SAP 35%

Oracle 28%

MS14%

Others 23%

ERP Market ShareFunctionality

Page 11: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Company Profile

Coca-Cola Hellenic is one of the largest bottlers and vendors of The Coca-Cola Company’s products in the world, and the largest based in Europe, spanning over 28 countries and serving 560 million people.

€1 billionEBITDA

42,000employees

90brands

28countries

Coca-Cola Hellenic was formed in 2000 as a result of the merger of the Athens-based Hellenic Bottling Company and the London-based Coca-Cola Beverages

Page 12: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Implementation in CCH

Coca-Cola Hellenic has selected SAP as its ERP Vendor

Will replace a legacy system BASIS, designed by TCCC for all its vendors worldwide

Since 2004, it used the Accounting & Finance Module only of SAP, called Wave 1

The total implementation, that will replace all legacy systems is called Wave 2

Started in Czech & Slovakia operations, will phase in all countries until 2014

Major release in established countries Italy & Greece on 01/01/10

Page 13: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Goals of implementation

SAP Wave 2 is a complete end-to-end business tool that will allow CCH to standardize all systems & processes applying the same technology in all divisions.

Significant investment in SAP Wave 2, introducing new and more effective methods to optimize productivity and performance throughout the organization.

SAP Wave 2 Platform allows CCHellenic to provide excellent customer service by improving our customer-centric procedures such as inventory management and invoicing accuracy.

With the installation of SAP Wave 2, business developers have access to various critical customer information such as:

Transaction History Promotion Activities Product Availability

…through their handheld devices that enable more competitive customer service.

Projected benefits$53 - $109

million

Page 14: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Enterprise Process Map

Key AccountWholesaler plan

Field salesplan

Equipment Monitoring

CustomerProfitability

Promotion Evaluation

SurveyMonitoring

Field SalesMonitoring

Equipment demand planning

Equipment Placement

Equipment Maintenance

Equipment Refurbishment/

Disposal

BusinessPlanning

DemandPlanning

Supply NetworkPlanning

FinancialPlanning

CapitalBudget

TreasuryCash Mgmnt

FinancialAccounting

Period End Closing

OperationalReporting / KBI

GroupReporting / KBI

Product & CustomerSegmentation Financial

Management

Controlling

Channel / CategoryPlan and

Promotion Plan

SettlementBilling

DistributionMgmnt

In Store Execution

Territory/ Visit Plg.

AccountsPayableRFA

Process

ReceivingMgmnt

ProcurementMgmnt

VendorMgmnt

Market-to-Cash

Forecast-to-Deploy

Procure-to-Pay

Asset Management

Weekly Dem. & Supply Mgmnt

Production Execution.

ProductQuality

Fleet Mainten.

Haulage

Warehouse management

Integr. OrderMgmnt

Strategic RoutePlanning

VendorMonitoring

HumanResourcePlanning

Recruit-ment

Org.Mgmt& Admin

Compen-sation

PeoplePerformance

& DevelopmentRecruit-To-Retain

Pricing

TreasuryCash Mgmnt

FinancialAccounting

Period End Closing

FinancialManagemen

t

Controlling

Corporate &

Management

Reporting

Sales, Marketing & Distribution

Manufacturing & Haulage

Procurement

Asset Management

Human Resource Management

Fin

an

ce M

anagem

ent

Corp

ora

te R

eport

ing

(Busi

ness

In

telli

gence

)

Page 15: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Change Management

Today

Desti

nati

on

Change Plan

Document processes

Define Gaps

Assess / Implement

Build knowledge

Transfer knowledge(train)

Use knowledge

Page 16: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Implementation Process

Prepare Set up Project Team

Define Project Plan

Define and finalize Scope

Establish Milestones

Assess Evaluate SolutionDefine Key

Users / Critical personnel

Gap Analysis / Change Requests

Assess / Approve changes

Implement

Allocate external & internal resources

Monitor Implementation

Test solution provided

Provide Feedback

Roll – out Halt change process

Define cut-off period and

Phase in

Define Contingency Plan

(in case of failure)

Minimize functionality

until stabilization

Page 17: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Preparation

Set up Project Team

Define Project Plan

Define and finalize Scope

Establish Milestones

Special / separate project team per country:Project management office +Extracted Operational Users

Freeze general scope before kick-offOnly critical details implemented later

Highly detailed plan (who, when, what)Extends after the go-live

Important dates where certain events take place(kick offs, trainings, set-ups, unit tests etc.)

Page 18: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Assessment

Evaluate Solution

Define Key Users / Critical

personnel

Gap Analysis / Change Requests

Assess / Approve changes

Users with operational knowledge join consultantsAccess to specialized trainingChampions as reference for user queries

Define distance from toll-gatesCreate requests for implementingalterations in template solution

Toll-Gate

The level of readiness to major organizational change concerning People, Processand Technology.

The project committee approves/rejects changerequests based on priority and importance

Evaluate existing solution provided in software lab-tests(UNIT TESTS)

Page 19: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Implementation

Allocate external & internal resources

Monitor Implementation

Test solution provided

Provide Feedback

Allocate all external & internal resources (people, computers, rooms, consultants etc.) to be available according to the change plan

Continuously monitor and test according to the schedulethe provided solution and anticipate change neededin the organization

The final solution must be tested by both project team but also champions & key users

Provide feedback in order to decide if willbe included in the next roll out phase

Page 20: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Roll - Out

Halt change process

Define cut-off period and

Phase in

Define Contingency Plan

(in case of failure)

Minimize functionality

until stabilization

The project plan must have some kind of contingency plan(pen and paper, overtime budget, backup systems)for every critical process.

A short time before the go-live, only important and majorchanges occur in the system and priority and focus is given only to critical operations.

A given time before the go-live, change requests are not longer accepted and any gap identified is left out of thescope.

After go-live, focus is given in critical operations suchas order taking, production and distribution until thesystem is declared stable by the committee.

Page 21: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Expectations of Change

Go LiveD

IP

The go-live eventis both an end

and a beginning.

Recovery

Immediately after going live,

performance,productivity and morale usually

declines as people adapt to the new

system and processes.

Benefits

Project Implementation Timeline

Once peoplebecome

comfortable usingthe system and all

the bugs areworked out, thenthe environment

stabilizes.

With a stable environment,

the benefits of SAP can be

obtained, such asefficiency,

effectivenessand

transformation.

Preparation Phase

Much work to prepare

for new systems andbusiness processes.

Page 22: ERP Implementation Coca-Cola Hellenic

ENTERPRISE RESOURCE PLANNING SYSTEMS

Conclusion

In the Czech Republic, Slovakia, Italy and Bulgaria, hand-held electronic devices allow the delivery drivers to produce customer invoices at the time of delivery, reducing invoice inquiries and improving cash flow.

In Poland, Bulgaria and Romania, automated dispatching of products results in faster delivery

and optimized route planning, to help meet specific customer requirements.

In Austria and Italy, a SAP-driven vendor management inventory system allows exchanging electronic inventory information with large customers and plan the replenishment of their warehouses.

In Bulgaria, a specialized customer order entry process and keyboard have helped Customer Service

specialists reduce the time required to take a product order by 25%-30%.

Page 23: ERP Implementation Coca-Cola Hellenic

Group ProjectOperations & Information ManagementInstructor: Prof. Papadopoulos Zoi KarakostaStathis Simeonidis

ENTERPRISERESOURCEPLANNING

SYSTEMS

Thank You!