MWUG Conference OnDemand Implementation – BWI Case Study September 26, 2010

Background

Beijing West Industries (BWI) acquired the Brake and Suspension business of Delphi Automotive in the fall of p p2009

BWI is a joint venture of

China’s Capital Steel Corp51%

Beijing Municipal Gov’t – 25%

Temp Group24%

BWI had little experience in automotive supply

BWI engaged Plante & Moran to assist with the planning project management and transition of IT planning, project management, and transition of IT systems for the day BWI took ownership of the business

Plante & Moran at a Glance

QAD Implementation Partner

Consultants with hands on expertise in ERP, IT Philosophy & FocusStrengthened by global reach

infrastructure, automotive manufacturing process, and global project management

Experience with successful divestiture t iti transitions

Independent from hardware and software

Full service professional services firm 12th largest CPA and business advisory fi i th U it d St t

Financial

Operations

Technology

firm in the United States

Global Offices in the US, China, India, and Mexico, with alliances in 72 countries

Founded in 1924 Strategy

People

Transactions

Founded in 1924 More than 1,600 staff members

Recognized by FORTUNE magazine for 12 consecutive years as one of the nation’s “100 Best Companies to Work For”

Team IntroductionPlante & Moran

Karl ZagerO ll IT T iti L d

Doug HockenbrochtERP L dOverall IT Transition Lead ERP Lead

Monti PiccioniERP Consultant

BWI

Tim RocheleauBWI IT Director for Global Brake and Suspension

BWI acquired a business with 14 global sites

Brighton, USA (2)Luton, UK

Krosno Poland

Krakow, Poland

Dayton, USA Kettering USA Paris, France

Krosno, PolandTokyo, Japan

Shanghai, China (3)

BWI HQBeijing, China

Los Pinos, Mex (2)g ( )

Nodia, India

Manufacturingg

Tech Center

Quick Implementation Case

Problem:

f h l d d l d Part of the acquisition included a plant in NoidaIndia

The site o ld be shared therefore Delphi as The site would be shared, therefore Delphi was retaining the existing ERP solution, server room, network infrastructure, and all IT equipment, q p

Delphi was to perform contract manufacturing for BWI for a limited time

The solution needed to be implemented in 60 days

The Capex and Opex investment had to be p pminimal

Noida Site Operations

Suspension operations for a single customer

Low volume low cost product

Delphi to provide contract manufacturing

10 Employees transferring to BWI

BWI responsible for sales receiving BWI responsible for sales, receiving, shipping, procurement, engineering, transportation quality and financetransportation, quality, and finance

Customer has dedicated portal for labels and EDIEDI

Determine The Scope and Gaps

S tSystems

Staff

Normal Process – Too Slow

Assemble the team

Indentify solutions

Solicit quotes for solutions

Negotiate contractsteam solutions

neededfor solutions and implementers

contracts

11 22 33 44 55 66 77 88

Determine Establish

11 22 33 44 55 66 77 88

business requirements

budget and timeline

Select solutions

Implement solutions

Compress Time line and Activities

Start many activities up front

Li Line up resources

Early budget and funding pre-approval

Shorten selections with pre-qualification and negotiated proposal

Large team – Frequent communications

Timeline

Bus. Process FlowAssemble Team

Budget / Time Line

Easy On-Board Customizations Static DataSelectionQualify

Train/Test Go Live

ERP Solution

EvaluateNegotiate

Selection ImplementationAssess Infrastructure

PermitsRegulation

Rigorous Project Management

Budget Developed and Approved

0Assumptions 0 to 99 apply to all Phase 1 July '09 ‐ Oct '09 Transition Period Oct '09 ‐ Sep '10

Recurring Transition Costs

Recurring Costs Expended during the transition TSA Period Fixed

TSA Period  Recurring Transition Costs

TSA Period Monthly 

Recurring CostsLine # Item Fixed Costs

Transition Costs Annualized

the transition Period

TSA Period Fixed Transition Costs

Transition Costs Annualized

Recurring Costs Per Month

1000End User Support $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

2000Hosting Services $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

3000General Applications $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

4000Business Systems $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

5000Engineering Applications $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

6000Network/Telecommunications $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

7000TSA Expenses $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

8000Chi P A $ $ $ $ $ $8000China Partner Agreement $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

9000Staff / Consultants $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

Total $                 ‐ $                    ‐ $                 ‐ $                          ‐ $                        ‐ $                 ‐

Total $ Total $Total $                    ‐ Total $                        ‐

Characteristics of ERP System

Hosted solution – Already operating

bl f d d h Accessible from India, US, and China

Easy import of existing QAD data

Predefined automotive business process

Support for contract manufacturing Support for contract manufacturing

Minimally in English and Mandarin

l Minimal CapEx

Business Process

Infrastructure Assessment

New infrastructure is needed

T di i l l d li i Traditional leased lines are not an option

Plant floor connection is needed

Phone system needed

PCs needed PCs needed

Printers needed

Unique Challenges - Solutions

Challenge SolutionNo infrastructure for Hotel with wireless air router and configuration, load, and training laptopsUnreliable building infrastructure (QAD also required fast Internet to the US)

Wireless carrier service with peering points in the US

to the US)Board approval process forpurchasing solutions is taking significant time

Prepare Board in advance and obtain preapproval for budgeted amountsignificant time amount

No direct interface to Delphi systems

FTP server to transfer files using scripts

Could not get equipment in Equipment magically appeared on Could not get equipment in without permit

Equipment magically appeared on site one morning

Communication connection was delayed

Aggressive project managementdelayed

Results

The IT systems were ready on time, even though other acquisition issues required a 30 though other acquisition issues required a 30 day delay

Users were able to use the system with no Users were able to use the system with no issues

l d h h b d Implemented cost was within the site budget

Lessons Learned

Identify and start early on long lead time tasks

S i h l i Start with a gap analysis

Shorten processes such as selection when solutions are limited

Get budgets developed and preapproved

Identify potential issues and have alternative solutions

Get people from all aspects of the business involved in initial planninginvolved in initial planning

Start with a gap analysis

Plante Moran & QAD Meeting your Business Needsg y

FinancialB k t d Fi i l

Strategy Bankruptcy and Financial

Turnaround/Restructuring Debt Restructuring Due Diligence Financial Support Services Litigation Support

gy Global Sourcing Global Strategy Strategic Planning/Assessment

People Litigation Support

Operations Program and Launch Management Quality Systems Supplier Management and

Employee Benefits Assessments & Consulting

Employee Benefit Plan Audits Leadership Mentoring Organizational Development

P f M t Supplier Management and Development

Transportation Cost Reductions

Technology Enterprise Resource Planning

Performance Management Personnel Assessments Succession Planning

Transactions Acquisitions Services Enterprise Resource Planning

System Implementation Technology Assessment/Planning Technology Selection Contract Negotiations Security Assurance

Acquisitions Services Divestitures Post-Merger Integration Refinancing/Capital Raising Valuation

y Web Development

Questions