Keda - World Leader in Building Materials Machinery

1. Keda, while a world leader in building materials machinery, had some challenges internally and were a prime candidate for process improvement and utilization of a tool such as SAP. They were successful largely in part to their fluid and innovative culture, however with growth came the necessity to integrate and overhaul their processes and systems to increase efficiency and predictability of their production lines.

Challenge People Organizational Technical

Silo-based model leads to duplication of work; lack of information flow. Decision makers did not have needed information to act strategically. Workers carrying out process had no knowledge of other groups doing similar work. Business units operating independently. No high level understanding of state of business, profitability of products, or even necessity of manufacturing processes Lacking a single source of truth for insight into performance. Lack of access to status information from other groups leads to redundancy.

Inventory Management ineffective. Diverse product line proved challenging to track. People responsible for P&L have no way to gauge actual profitability of product due to data spread. No insight into cost of production. Accounting lacks a way to track cost/revenue in a usable way. No data flow from revenue figures back to processes/product lines/costs. Centralizing data reflecting the cost of goods vs. the revenue generated allows for insight into actual profitability (or lack thereof)

Struggles to meet demand Production facility utilization at 24.6%, sales cannot give reliable delivery estimates No resource/utilization data for managers to recognize process bottlenecks/causes for delays/etc. No automated tracking. Underutilized facilities were only recognized after manual monitoring.

2. “Those companies that stressed the enterprise, not the system, gained the greatest benefits.”

An ERP system is not a magic bullet for process efficiency, and Keda recognized this. They implemented carefully, with acknowledgement of the associated risks, and kept the business at the forefront of their minds when making decisions. The Davenport study outlines the fact that processes must be reworked when implementing an ES, and Keda was a perfect example of that.

Zhu and Zhang came up with a plan to define the status quo prior to jumping into a system. The process entailed:

1. Identifying existing problems

2. Collecting business requirements

3. Establishing shared objectives

4. Prioritizing objectives to align with strategic goals

Key Factors for Success:

• They did not shy away from going with an ES already in use by a competitor, a risk in some industries of leveling the playing field.

• They chose to go for a big bang implementation as opposed to rolling out in parallel or piecemeal, but they did warn the board and executives