th. modestou may 2001 erp system applications on bsps supply chain management third aegean...

Th. Modestou May 2001

ERP system applications on BSP’sSupply Chain Management

THIRD AEGEAN INTERNATIONAL CONFERENCE

on

DESIGN AND ANALYSIS OF MANUFACTURING SYSTEMS

MAY 19-22, 2001TINOS ISLAND, GREECE



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 BSPwhich means:

Who are we ?Who are we ?



BSP has become a modern competence centre for the development and production of cookers and

refrigerators for several brands, such as:

What are we producing?What are we producing?



• 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”.

Some inf.'s about us:Some inf.'s about us:



B/S/H/ Corporate LogisticsB/S/H/ Corporate Logistics

Customer Order

Order ConfirmationDelivery NoteInvoice

Customers

Order for products,Order for imported goodsDistribution order

Order Confirmation,Invoice,Inventory

Order,Direct loading to Regions

Production Plan,Delivery schedule

FactoriesSuppliers

E GR

D TR



BSP LogisticsBSP LogisticsMaterial masters, BOMs,

work centers with availability capacity, work plans

Material masters, BOMs, work centers with availability capacity, work plans

GR CentralProduction plan

• Weekly reqs planning for products • Net requirements determination

• Capacity leveling

• Transfer of reqs to factory

Factory MPS: finished product

• Weekly reqs planning for products

• Monitoring MPS result

• Production Orders

Factory MRP:Semi-finished

• Spare parts customer reqs

• Monitoring MRP result

• Requirement planning

• Production Orders

Factory MRP:Purchased parts

• Spare parts customer reqs

• Consumption controlled mater.

• Monitoring MRP result

• Requirement planning

• Purchase Orders

• Delivery Schedules

•For final products•For semi-finished products•For purchased parts

•For final products•For semi-finished products•For purchased parts



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

Competitive CriteriaCompetitive Criteria



The Virtual CooperationThe Virtual Cooperation

P M S

SupplierP M S

Customer

Purchasing Manufacturing Sales/distrib.

Contracts

InternetElectronic catalog

Check customer's credit andavailability of goods

Electronic invoice

Contracts

• Business Infrastructure in multiple vendor environment

• high transaction volumes

• real-time decisions across the supply chain

Improve ...

Electronic catalogCheck customer's credit and

availability of goodsElectronic invoice

Intranet



• 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 e-business• comply with corporate policy and strategy (SAP)

Why ERP?Why ERP?



Which ERP (SAP) modulesWhich ERP (SAP) modules

R/3R/3Client / ServerClient / Server

ABAP/4ABAP/4

FIFIFinancialFinancial

AccountingAccounting

COCOControllingControlling

AMAMFixed AssetsFixed Assets

Mgmt.Mgmt.

PSPSProjectProjectSystemSystem

WFWFWorkflowWorkflow

ISISIndustryIndustry

SolutionsSolutions

MMMMMaterialsMaterials

Mgmt.Mgmt.

HRHRHumanHuman

ResourcesResources

SDSDSales &Sales &

DistributionDistribution

PPPPProductionProductionPlanningPlanning

QMQMQualityQuality

Manage-Manage-mentment PMPM

Plant Main-Plant Main-tenancetenance

Introduced:• Sales & Distribution• Materials Management• Production Planning• Financial & Accounting• Controlling• Workflow• Quality Management (incoming materiel only)• Fixed Asset Management

Under Introduction:• Human Resources Open: • Warehouse Management • Plant Maintenance



Application PreconditionsApplication Preconditions1. 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



Why do Greek enterprises not adopt Why do Greek enterprises not adopt ERP systemsERP systems

64%

55% 55%

45%

36%

9%

0%

10%

20%

30%

40%

50%

60%

70%

Lack of information

k

InvestmentInsufficientHRs for administration

Small sizeof the enterprise

Lack in the organizationof processes

Insufficienttechnological infrastructure

SOURCE: PLANT MGT MAGAZIN, FEBR.-MARCH 2001



Introduction time influence Introduction time influence factorsfactors

coordinationwith the management


82% 82%

64%

55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

AppropriateHRs

Link to other systems

BPR

52%

48%

Less than6 months52%

6 - 12 months48%

12 - 18

months BSP0%

more than 18 months0%

Average Introduction time Average Introduction time of ERP systemsof ERP systems



Critical Introduction IssuesCritical Introduction Issues1. Technological:

• Data transfer from the old system • 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



Critical Introduction IssuesCritical Introduction Issues2. Financial:Introduction cost mainly resulting from : • hardware• software• consulting services• intensive user training• installation• maintenance • data transfer and • customizing



Critical Introduction IssuesCritical Introduction Issues

26%

74%

No

Yes (BSP)

User TrainingSuppliers include user training

in installation cost

11%

89%

Yes (BSP)

No

System MaintenanceSuppliers include maintenance

in installation cost




Critical Introduction IssuesCritical Introduction Issues3. 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



Critical Introduction IssuesCritical Introduction Issues4. 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



Critical Introduction IssuesCritical Introduction Issues5. 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.



The bottom lineThe bottom line• organization• communication• Information• scheduling• forecasting• unification• soundness• transparency• control• online inf.s• direct access on

data• integration

• excellent reporting• fun • motivation• personal

improvement • order• discipline• know how • upgraded services • coordination • quality • speed



The bottom lineThe bottom lineAfter 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 erp system applications on bsps supply chain management third aegean...

Documents

erp system applications

excellent management

total quality management

parts slide

fixed asset management

efficient project management

greece slide

production of cookers