ERP - For

MANUFACTURING INDUSTRY

VELCOM ERP IT SOURCING PVT LTD

An Independent ERP Consulting & Talent Sourcing Company

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 AGENDA

VELCOM – Introduction

ERP – Introduction & Modules

ERP Relevance to Manufacturing Industry

ROI / TCO

ERP Project Phases

Success Stories

Question Hour

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 ABOUT VELCOM

An Independent ERP Consulting & Talent Sourcing Company

VELCOM do not sell or implement any particular ERP and provides neutral &
objective consulting to its customers

More than 1000 person months experience in the ERP related areas

Project Audit, Program Management, Project Management, Functional &
Technical Consulting, Talent Sourcing

Expertise in various leading International players like SAP, Oracle, PeopleSoft, JD
Edwards, Microsoft among others

An extended IT arm for its customers

Help them build their IT roadmap for their long term business objectives

Implement projects in a phased manner based on their business priorities

Board of Advisors from leading Tier I Organizations like IBM, HCL

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 ERP CONSULTING PRACTICE - SERVICES

Readiness Audit:

First step in the ERP Project Initiative and includes People Readiness (Management,
Business & IT); Process Readiness (Business Requirements & Data); System
Readiness (Software, Hardware, Bandwidth & others).

Goal Setting & Budget Planning:

Help to set the objectives & have a budget planned, to realize the complete benefits
from the ERP Investment. This includes Project Roadmap & Goals; Business
Requirement Identification; Total Cost of Ownership Planning.

Product & Vendor Selection:

Includes Product & Vendor - Evaluation & Selection; Contract Management
(including Scope, Schedule, Deliverables, TCO).

Project Orientation Workshop:

Workshop would highlight the benefits that can be achieved by the organization by
successful ERP Implementation and detail the challenges that needs to be managed
during the ERP Project Implementation.

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 ERP CONSULTING PRACTICE - SERVICES

Program Management:

Ensure that the Client & Vendor teams function together to achieve the project
objectives. This includes Project Contract Review; Set project objectives; Freeze key
ERP Business Requirements; Review Project Progress and set Action Plan to ensure
Project completion on time & budget; Project Sign-off once the project is
completed

Post-Implementation Audit:

Help to understand the ERP Implementation benefits realized. This includes Review
project Objectives (Plan & Achievement); Audit the Utilization Level of the ERP
(Functional, Technical & MIS Fitment; People Usage Level); Draft the Action Plan to
realize complete benefits of their ERP Investment.

Business Process Re-Engineering:

Aims at improving the efficiency & effectiveness of the processes that exist within &
across organizations. This includes Process — Identify; As-Is (Review, Analyze &
Update); To-Be (Design, Test & Implement).

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 What is Enterprise Resource Planning (ERP)?

ERP is an integrated computer-based system used to manage internal & external resources including
tangible assets, financial resources, materials & human resources of an organization

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 ERP MODULES - OVERVIEW
Inventory &
Financials Sales & Receivables Purchase & Payables
Warehousing
General Ledger Receivables Payables Stock Keeping Unit & BOM
Fixed Assets Invoicing Invoicing Substitution & Cross Reference
Cash Management Order Management Order Management Item Tracking & Cycle Counting
Budget & Forecast Return Order Management Return Order Management Logistics – In & Out Bound
Cost Accounting Pricing & Discounting Pricing & Discounting Multiple Locations
Inter-Company & Consolidation Tax Tax Barcode

Planning Production CRM HRMS

R&D Production Order Marketing Automation Recruitment
Supply Planning Bill of Material Telemarketing Performance Management
Capacity Planning Routing Sales Force Automation Compensation
Finite Loading Shop Floor Control Sales Management Training & Development
Demand Planner Lean Manufacturing Service Management Attendance System
Email Integration Payroll

Add-on’s Web Portal Analytics Administration

Projects Employee Business Analytics User Management
Quality Customer Business Intelligence Configuration Tool
Enterprise Asset Management Sales Person Report Builder Business Connectors
Balance Scorecard Vendor Backup / Restore
Travel Consultant
Compliance & Governance

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 ERP – TECHNOLOGY OVERVIEW

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 ERP – TECHNOLOGY OVERVIEW

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 MANUFACTURING INDUSTRY – KEY CHALLENGES

Achieving Growth & Profitability while meeting customer expectations against
competition

Continually strive for following to grow & be profitable

Reduce Production & Supply chain costs

Improve Process efficiencies & Product quality

Satisfy an avalanche of Customer demands & Regulatory requirements

Drive to optimize manufacturing processes in order to increase agility & to
ride the efficiency curve to serve the customer better

Other Key Challenges

Better Customer Service

Business Integration

On-time Delivery

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 ERP BENEFITS
Automate & Streamline Business Processes with Greater Adaptability

Align key business processes in planning, design, development, procurement, inventory,
manufacturing, sales & delivery

Match overall supply with demand and manage all resources & assets along the entire value chain

Respond quickly to Changing market conditions

Use integrated, real-time sales & operational information to accurately anticipate, plan for & respond
to orders and new demand, as well as reduce forecasting errors

Model production capabilities, quickly share engineering information & adjust product mix for
changes in demand to capitalize on new opportunities

Support compliance with regulatory requirements, including safety & environmental regulations, by
quickly validating manufacturing processes while conforming to individual markets requirements

Decision Making on Strategic Business Insight

Rich out-of-the-box analytical performance measurement tools hone the strategic planning &
monitor the overall health of the organization

360-degree visibility on accurate forecasts, effective budgets, proper resource allocation & goals

Combine operation & financial analyses to optimize day-to-day operation

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 ERP BENEFITS
Enhance Customer Satisfaction

Delivering products on time with high quality

Faster time to market, higher-quality products & accurate information provided to customers

Improve Productivity

Collaborate across business functions to consolidate information, align strategies & standardize
operational processes

Increase information worker productivity through realistic, appropriate business roles

Increase adaptability to process changes by enhancing existing skills & assets with real-time
information

Fuel efficiency & Reduce risk across the entire organization

Standardize processes & easily share best practices

Support multiple manufacturing modes & a hybrid or mixed-mode environment

Reduce time across the Order Process Cycle (Quote-Order-Delivery) there by reducing the loss risk

Gain insight into Costs & Process efficiency

Analyze & manage production schedules with reporting tools & “what-if” scenarios, including capacity
loading, shop floor activities & production costs

View real time client, contract & project details for an accurate accounting of profitability

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 ERP BENEFITS
Manage Demand Pro-actively

Trace expected to actual sales & forecast future sales while taking into account seasonal &
promotional effects

Use simulations, demand models & error analysis to determine optimal stock levels for better
profit & operations margins

Expand Sales Success

Monitor market demand & meet margin objectives through effective promotions

Increase capacity to evaluate product turnover in response to campaign & align production &
inventory accordingly

Improve Customer Service

Enhance the security & reliability of deliveries with the global available-to-promise (ATP) view,
which provides delivery alternatives in the event of unexpected disruptions

Automate sales & purchasing processes, track & locate inventory items quickly & help ensure
accurate pricing & discounts to improve customer satisfaction

Deep visibility & control over the supply chain, increase order fill rates, reduce risk of stock out or
inventory excess & enhance overall responsiveness to customers

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 ERP BENEFITS
Increase Revenue

Higher profit margins by automating & streamlining all business processes resulting in reduced
operations costs through adherence to better business practices

Improved cash flow by more efficient & accurate billing procedures, lower inventory levels & quick
turnaround

New opportunities identified through continuous, real-time monitoring of KPIs

Opening up new sales channels like e-commerce

Reduce Operating Costs

Decreased overall operating costs by converting time-consuming manual processes into
automated, streamlined, real-time business process management

Lower transportation costs through consolidated orders & combined shipments

Reduced warehouse costs from optimized utilization of resources & assets

Reduced cost of sales from use of profitable sales interaction channels

Sustained cost savings for all spend categories due to a standard approach to both strategic &
operational procurement

Reduced IT costs because administration & usability have been improved, fewer interfaces are
used & IT resources have been freed up to focus on value-adding strategic projects

Lowered TCO (total cost of ownership) by leveraging technology for facilitated exchange &
interoperability with non-ERP systems

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 ERP BENEFITS
Increase Visibility & Simplify across the Supply Chain Process

Empower users with real-time data through a user-friendly interface & Role centre that provides
access to tasks & critical Business Intelligence data such as KPIs & custom reports

Exchange data across multiple systems & gain visibility into business processes to improve decision
making & control at every level of the supply chain

Connect inventory, production, purchasing & sales processes to gain accurate, real-time view of
the entire supply chain.

Improve collaboration with trading partners with support for a wide range of predefined XML
business documents

Reduce Cost by optimizing supply chain processes

Improve productivity, adapt internal processes quickly to meet new demands & optimize
processes across sites in the supply chain

Better Collaboration with all Supply Chain Partners

Enhance collaboration among departments, customers, suppliers, business partners for a
significant improvement

Integrate partners of all sizes to release data throughout the chain that’s accurate, complete &
available up to the minute

Costs reduced, processes speed up & smooth flowing operations throughout the supply chain

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 ERP BENEFITS
Demand Driven Supply Chain Approach can help

Maintain competitive edge

Integration of supply chain processes with other business processes e.g. Sales & Operations

Respond effectively with a comprehensive, cross-functional view of the company, better
understanding of customer needs through downstream data analysis & effective collaboration
between trading partners

Control & Streamline Inventory

Use powerful inventory management tools to improve forecasting & planning, match supply with
customer demand

Create sales & purchasing forecasts based on specific items & time periods

Meet Complex Inventory requirements

Create multi-dimensional inventory records & track items throughout the supply chain for online
& accurate inventory status

Enhance Material & Product Traceability

Implement effective recall procedures & maintain complete forward & backward traceability
of any material

Track materials from purchase through production & sale with lot & location control

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 ERP BENEFITS
Integrate Design innovation into Manufacturing

Shorten time to market for product innovation by integrating design & manufacturing processes &
collaborating effectively with suppliers, partners & customers

Support a wide range of Manufacturing processes & Business models

Tailor the solution to serve make-to-stock, make-to-order, assemble-to-order, configure-to-order,
& engineer-to-order environments

Manage items from design through assembly, testing, shipping, installation & maintenance

Meet specific customer needs by configuring build-to-order items easily & effectively

Help efficiently produce & deliver products that follow custom formulas or recipes & take full
advantage of manufacturing & supply chain capabilities

Empower to streamline, monitor & control the entire production cycle

Improve Project management for customized orders

Create estimates & quotes quickly & accurately

Forecast machine & resource requirements for strategic scheduling & precise delivery times by
analyzing project cost & order processing time

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 ERP BENEFITS
Increase Productivity with a Role-Based Solution & Centralized Information

Provide empowering self-service & role-specific information that increase user productivity

Personalize portal to meet business users specific needs

Manage centrally the critical documents (e.g.) BOM, routing data, CAD designs, recipes, project
plans & item information

Streamline Integration with Web services

Improve integration within & Outside the organization by using a flexible Web services framework

Maintain high production levels & on-time delivery rates by sharing portal-based, real-time
information about specifications, order status & quality control testing among key departments &
trading partners

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 ERP – CONSTRAINTS

ERP Customization is limited or expensive

Business Process Re-engineering to fit the "industry standard" prescribed
by the ERP may lead to a loss of competitive advantage

ERP is sometimes too rigid or difficult to adapt to the specific workflow &
business processes

Many integrated links need high accuracy in other applications to work
effectively. This should be done on a phased manner for smooth transition.

Once established, ERP switching costs are very high

Resistance in sharing sensitive internal information between departments
can reduce the effectiveness of ERP

ERP once implemented is the lifeline of the business and downtime costs
are very high & impact the business critically

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 NUCLEUS RESEARCH – ERP ROI SURVEY
PARAMATER SAP ORACLE MICROSOFT AX
Customers Surveyed 21 22 16
Customers % achieved positive 43% - 65% - 75% -
ROI within the payback period 34 months 37 months 23 months
Deployment Size 2-5000 Users 20-3400 Users 35-800 Users
Reduced staff cost or 50% 48% 56%
Improved productivity
Improved operation management 30% 39% 75%
Reduced IT cost - 26% 44%
Person-months of internal team 372 81 52
required to deploy ERP
Person-hours of training per user 49 27 29
Average FTEs required for support 33.6 9 2.4
Benefits include Direct cost saving, Productivity & Indirect
ROI = (Year1, Year2, Year3)/3
benefits. Costs include Software, Hardware, Personnel,
Initial Cost
Consulting & Training.

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 NUCLEUS RESEARCH – ERP TCO SURVEY

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 ERP IMPLEMENTATION – KEY SUCCESS FACTORS

Top Management Commitment

Clear Goal Setting & Budget Planning (TCO)

Business Process Re-Engineering

Change Management

Effective Project Management

Good Project Team - Client & Vendor

High Communication Standards

Scope Creep Management

Data & Approvals on Time

Education & Training

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 ERP PROJECT – PRE IMPLEMENTATION PHASE

Organization Readiness Audit

Key Business Requirement Identification

Project Roadmap - Present & Future

Project Goals

Return On Investment Plan

Total Cost of Ownership Plan

Software & Vendor Selection

Contract Management

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 ERP PROJECT – IMPLEMENTATION PHASE

Program Management

Project Planning, Staffing & Deliverables

Communication Mechanism

Business Requirement Finalization

Training & Documentation

User Acceptance Testing

Project Sign-off

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 ERP PROJECT – POST IMPLEMENTATION PHASE

Post-Implementation Review

Action Plan for the Project Implementation done

Plan for Next Project Implementation

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 ERP – AUTOMOTIVE SUCCESS STORIES INDIA

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 QUESTIONS

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 THANK YOU!

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