ERP Implementation Coca-Cola Hellenic
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The document discusses Enterprise Resource Planning (ERP) systems, detailing their evolution from Material Requirements Planning (MRP) to ERP, highlighting benefits and challenges. It specifically focuses on Coca-Cola Hellenic's implementation of SAP as their ERP vendor, aiming to standardize processes across their operations while improving customer service and efficiency. Key factors for successful ERP implementation include clear understanding of goals, top management support, and thorough training, as reflected in the phases and strategies outlined for the project.
ERP Implementation Coca-Cola Hellenic
- 1. Group Project Operations & Information Management Instructor: Prof. Papadopoulos Zoi Karakosta Stathis Simeonidis
- 2. 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
- 3. MRP MRP becomes the fundamental concept used in production management History of ERP MRP is the initial effort Software application that generates planning and scheduling materials for complex manufactured goods SAP company is born Five German engineers begin the company SAP for producing and marketing standard software for integrated business solutions MRP evolves into MRP II Distribution Management Activities HRM Human Resource Management is developed MRP becomes ERP The 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
- 4. Scope of ERP systems Manu- facturing Accounting Finance Sales & Marketing Human Resources Vendors Vendors Vendors Customers Customers Customers Production Systems Accounting Systems Finance Systems CRM Systems HRM Systems Business Processes Business Processes Business Processes Business Processes Business Processes TraditionalSystems Manu- facturing Accounting FinanceSales & Marketing Human Resources Business Processes Business Processes Enterprise–wide Business Processes Enterprise System Vendors Vendors Vendors Customers Customers Customers EnterpriseSystems
- 5. 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
- 6. 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
- 7. 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
- 8. 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)
- 9. 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
- 10. 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 ERP Market ShareFunctionality
- 11. 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 billion EBITDA 42,000 employees 90 brands 28 countries 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
- 12. 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
- 13. 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
- 14. Enterprise Process Map Key Account Wholesaler plan Field sales plan Equipment Monitoring Customer Profitability Promotion Evaluation Survey Monitoring Field Sales Monitoring Equipment demand planning Equipment Placement Equipment Maintenance Equipment Refurbishment/ Disposal Business Planning Demand Planning Supply Network Planning Financial Planning Capital Budget Treasury Cash Mgmnt Financial Accounting Period End Closing Operational Reporting / KBI Group Reporting / KBI Product & Customer Segmentation Financial Management Controlling Channel / Category Plan and Promotion Plan Settlement Billing Distribution Mgmnt In Store Execution Territory/ Visit Plg. Accounts PayableRFA Process Receiving Mgmnt Procurement Mgmnt Vendor Mgmnt Market-to-Cash Forecast-to-Deploy Procure-to-Pay Asset Management Weekly Dem. & Supply Mgmnt Production Execution. Product Quality Fleet Mainten. Haulage Warehouse management Integr. Order Mgmnt Strategic Route Planning Vendor Monitoring Human Resource Planning Recruit- ment Org.Mgmt & Admin Compen- sation People Performance & Development Recruit-To-Retain Pricing Treasury Cash Mgmnt Financial Accounting Period End Closing Financial Management Controlling Corporate & Management Reporting Sales, Marketing & Distribution Manufacturing & Haulage Procurement Asset Management Human Resource Management FinanceManagement CorporateReporting (BusinessIntelligence)
- 15. Change Management Document processes Define Gaps Assess / Implement Build knowledge Transfer knowledge (train) Use knowledge
- 17. 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-off Only 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.)
- 18. Assessment Evaluate Solution Define Key Users / Critical personnel Gap Analysis / Change Requests Assess / Approve changes Users with operational knowledge join consultants Access to specialized training Champions as reference for user queries Define distance from toll-gates Create requests for implementing alterations in template solution Toll-Gate The level of readiness to major organizational change concerning People, Process and Technology. The project committee approves/rejects change requests based on priority and importance Evaluate existing solution provided in software lab-tests (UNIT TESTS)
- 19. 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 schedule the provided solution and anticipate change needed in the organization The final solution must be tested by both project team but also champions & key users Provide feedback in order to decide if will be included in the next roll out phase
- 20. 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 major changes 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 the scope. After go-live, focus is given in critical operations such as order taking, production and distribution until the system is declared stable by the committee.
- 21. Expectations of Change Go Live The go-live event is 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. Project Implementation Timeline Once people become comfortable using the system and all the bugs are worked out, then the environment stabilizes. With a stable environment, the benefits of SAP can be obtained, such as efficiency, effectiveness and transformation. Preparation Phase Much work to prepare for new systems and business processes.
- 22. 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%.
- 23. Group Project Operations & Information Management Instructor: Prof. Papadopoulos Zoi Karakosta Stathis Simeonidis Thank You!