Enterprise information systems project implementation:
A case study of ERP in Rolls-Royce
Submitted by:-
Amrita Tiwari (09609005)
Bhavna Kapoor (09609050)
Chetan Parashar (09609127 )
INTRODUCTION
Enterprise Resource
Planning (ERP) is an
integrated computer-based
system used to manage
internal and external
resources, including
tangible assets, financial
resources, materials, and
human resources.
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Rolls-Royce
ERP allows the corporate management of a business, and aims to integrate
individual functional systems such as manufacturing, finance,
procurement and distribution.
ERP uses Internet technologies to integrate the flow of information from
internal business functions as well as information from customers and
suppliers.
The system uses a relational database management system, within
client/server network architecture, to capture valuable management data.
The key principle behind the system involves entering the data from a
series of modular applications only once.
ERP systems offer companies the following three major benefits:
Business process automation.
Timely access to management information.
Improvement in the supply chain via the
use of E-communication and E-commerce.
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IMPLEMENTATION OF ERP
ERP when successfully implemented, links all areas of a company
including order management, manufacturing, human resources,
financial systems, and distribution with external suppliers and
customers into a tightly integrated system with shared data and
visibility.
Potential benefits include drastic declines in inventory, breakthrough
reductions in working capital, abundant information about customer
wants and needs, along with th ability to view and manage the
extended enterprise of suppliers, alliances and customers as an
integrated whole.
ERP implementations involve, in truth, broad organisational
transformation processes, with significant implications to the
organisation’s management model, organisation structure, management
style and culture, and particularly, to people.
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Most ERP software vendors supply their customers with an
implementation programme as part of an overall solution package.
For example SAP provides some of its customers with accelerated SAP
(ASAP). ASAP suggests the adoption of a ‘big bang’ implementation.
This programme opts for a quick implementation that is specifically
designed for small and medium sized companies.‘Big bang’
implementations offer lower costs and generally use only a few of the
software’s interfaces, however the risks are greatly increased, as less
time is spent on development and assessing business needs.
The key factor of an ERP implementation
is the way in which the software is configured.
The most important issue to identify
before an implementation is the
‘core’ of the business,
which can be identified by the use of the business model
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Rolls-Royce
Rolls-Royce—case study
COMPANY BACKGROUND
This case study conducted at Rolls- Royce investigating the
implementation of ERP (SAP) is discussed.
Rolls-Royce, a world-leading provider of power systems and
services for use on land, at sea and in the air, has established a
strong position in global markets - civil aerospace, defense
aerospace, marine and energy.
Rolls-Royce today has a broad customer base comprising more
than 600 airlines, 4,000 corporate and utility aircraft and
helicopter operators, 160 armed forces, more than 2,000 marine
customers, including 70 navies, and energy customers in nearly
120 countries, with an installed base of 54,000 gas turbines.
Annual underlying revenues were £10.1 billion in 2009, of which
about half came from services revenues. The firm and announced
order book stood at £58.3 billion at 31 December 2009, providing
visibility of future levels of activity.
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THE SITUATIONS BEFORE ERP
Rolls-Royce used 1500 legacy systems before ERP project was
started.
These legacy systems were difficult decision making and
performance assessment.
Rolls-Royce implemented another system MERLIN, which
stands for mechanized evaluation of resources, logistics and
inventory.
MERLIN often had difficulty communicating with another
manufacturing system named IBIS, IBIS was an older
manufacturing system that was used at the Bristol and Antsy
facilities.
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IT AT ROLLS-ROYCE
In 1996 Rolls-Royce formed a partnership with electronic data
services (EDS). The Rolls-Royce IT department was
outsourced to EDS, which meant that EDS were responsible
for the development of the company’s IT systems.
Rolls-Royce implemented ERP PROJECT consists of a
management team of specialists from the external outsourcing
company EDS.
In conjunction with this team each OBU has its own ERP
planning team, which is responsible for implementing working
changes and training.
The project implementation problems can be grouped into
three areas……...........
1. Cultural Problem
2. Business Problem
3. Technical Problem
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Cultural problems
New function might not get the full appreciation the legacy systems
once had.
Implementation of new system require training which cost is very
expensive.
Business problem
ERP are rigid and difficult to adapt to the specific workflow and
business process ,—this is cited as one of the main problem for
implementation .
Cost of switching old system to new system is very high .
Technical problem
Accuracy of data
Duplication of data was a major concern
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Implementation of ERP in
Rolls Royce
Modification made to Legacy System
Suite 1
Plan the supply chain:
The supply chain capacity was compared to the range of possible sales
scenarios
Master schedule key programmes:
The sales and operating review board (SORB), makes decisions affecting
changes to achieve capacity.
Suite 2
Plan and schedule the factory:
This converts the agreed schedule from suite 1 into a production plan.
Schedule the shop:
This converts the production plan into a detailed shop plan.
Suite 3
Operate the Factory:
It control of workflow through the shop from the initial generation of launch
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paperwork, right through to delivery of finished products.
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Suite Implementation
Suite 1
Plan the supply Master Schedule Key
chain Programmes
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The ERP pilot
The purpose of the pilot was to Initial problem Experienced:
demonstrate: User authorisation problems
business principles Transaction problems occurred
processes from the first MRP run
procedures Route cards were unavailable
role definitions and behaviours Values between the systems
software, hardware and data were incorrect, so comparisons
transfers were made on the values from
Creation of New Roles: the legacy system with those on
MRP controllers the new system
Capacity owners
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The ‘Go live’
The Process goes as follows
The data must be kept in a ‘stable’ state for a period of roughly 10 weeks.
The initial data to be transferred includes some transaction data and master
data
If any changes occur to the data on the old systems after the transfer, they are
logged and then passed through to the new system
Running the MRP system to initialise the whole system.
The whole ‘Go Live’ process took roughly 2 weeks to complete, and during
this time the new system was ‘off the air’.
Project Risk
The non-delivery or non-availability of reliable IT hardware and infrastructure
both before and during implementation
Possible failure to give ERP adequate priority due to the number of existing
and ongoing business improvements.
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Possible failure to cut over to the new system through an inability to load data.
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Conclusion
Increased orders from the market place, and also from the fact that ERP has
become a standard solution world-wide within the Aerospace and Defence
industry.
Rolls-Royce produce a range of quality world class turbine engines, and have
recognised that they must change in order to compete effectively with their
competitors.
Accurate information systems and direct communication with suppliers are
vital when offering customers a committed promise to deliver.
The partnership with EDS has produced a sound architectural framework for
the project, thus allowing Rolls-Royce to concentrate its efforts on
manufacturing turbine engines.
Managing effective relationships and leading teams in both technical and non-
computer based environments.
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THANK YOU
