Manufacturing and Distribution

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From Inside SAP magazine:

Automatic in real time- Autonexus

12 Feb 2009

by: Miriam Hechtman

Company name: AutoNexus Pty Limited
Website: www.autonexus.com.au
Key challenges: Resourcing the project and also running the business at the same time without impacting services provided to the customer or the budget
Project objectives: To implement an integrated system solution to support the AutoNexus vehicle logistics operation, parts logistics operation and finance requirements. The solution had to address the existing business issues and provide a platform to support growth
Solutions and services: ECC 6.0 – WM, MM, CS, SD, FICO and BI
Why SAP solutions: AutoNexus undertook an extensive selection process covering business requirements (including scripted demos), vendor and product stability and project cost. SAP scored the highest
Implementation highlights: In the first month of Go-Live for AutoNexus’s largest parts customer, they had their largest sales month. All orders were processed and AutoNexus achieved a DIFOT (Delivered In Full, On Time) result of 99.8 per cent
Key benefits: Visibility across the operations due to RF and SAP being an integrated solution
Existing environment: Mix of customer systems, mainly IBS and Reynolds solutions

SAP version: ECC 6.0
Implementation timeframe: Five months
Cost/value of implementation: Approx $1m
Modules implemented: FI/CO, SD, CS, MM, WM and BI
Database: Oracle
Operating system: AIX
Proposed upgrade timing: None at this stage

Background
With around 350 staff dispersed over 10 sites across Australia, AutoNexus provides a complex array of solutions for the automotive industry. To offer these services to its broad customer base, AutoNexus’ business system is heavily reliant on customer data and interaction. In an effort to deliver these services under one system, the search was on for an integrated systems solution to support their business operations.

After evaluating a number of systems, SAP was chosen for the way in which it could support AutoNexus’ vehicle and parts logistics operation requirements. Katina Braoudakis, supply chain system manager for AutoNexus, says: “We also looked at the numbers to determine if they were going to stack up in terms of licensing and implementation costs.” Ensuring that the system would be a long-term solution and be supported in the market in the future were also key considerations for the company. Extend Technologies was selected as the implementation partner and SAP ECC 6.0 was chosen as the most appropriate system solution for their business requirements.

Prior to implementing SAP, the company had used disparate systems, making effective operational control difficult and only offering limited functionality in its configuration. “We wanted the one system so we could operate effectively, with the sites seeing everything they had to do under the one site, and to increase the capabilities that we currently have,” says Braoudakis. The previous system also limited the scope of services that AutoNexus could offer to new or existing clients, with some of their existing customers being managed manually.

AutoNexus also relied heavily on its customers’ systems to provide services, so when they brought a customer on board they would have to utilise the customer’s host system. “This obviously made it very difficult for us because if we wanted to know what was going on with one customer we had to log on to that customer’s system,” says Braoudakis. They were also then limited by the capacity or capability of the customer’s system.
In addition to addressing these existing business issues, AutoNexus was looking for a business application that would provide a platform to support the company’s growth, “because we have seen very strong growth over the last few years and the plans are to continue with that growth,” says Braoudakis.

Key challenges

“Our biggest challenges have been resources and the operations support,” says Braoudakis. From the start of the upgrade, AutoNexus chose to build a project team comprising their own staff who knew the business well and also knew what needed to be achieved in terms of delivering the project. “We made a fairly large commitment in terms of resourcing the project. We didn’t want to bring in a bunch of consultants who put this thing together for us and then the day they left, we had no knowledge in the company.”

To staff the project team, 35 key employees were pulled out of the workforce. “That’s probably been the biggest challenge throughout the whole project – having those resources out of the business but still making sure that the business operates effectively, continues to meet its budget and continues to fulfil customer requirements,” says Braoudakis. The 35 employees also had to be skilled up in SAP from a relatively low technology base, and brought up to speed on the ins and outs of working on a project, as few of the team members had previous project experience. “That’s one thing we probably could have done a bit better – getting them a little more prepared from a project perspective and introducing more training in terms of project management.”

There was also the fear that the switch to a new system would be rejected by staff because they didn’t know how to use it and therefore wouldn’t feel as confident. “The reaction to the system was always going to be our biggest concern and particularly with interstate sites because you’re not there and you can’t help them as easily,” says Braoudakis.

Though there were no major issues during the process, says Extend Technologies general manager, business development, Dawie Gerber, working within a tight timeframe proved slightly challenging, specifically around the change management aspect. “We had to get the business ready and get the users trained and the fact that they’re a true national organisation provided some minor challenges.”

Implementation

In March 2007, AutoNexus received approval from its parent company Inchcape to go ahead with the implementation of SAP. Extend Technologies accompanied AutoNexus in June 2007 to obtain input from Inchcape’s Singapore and Hong Kong businesses before commencing the blueprint phase. The realisation phase began in November 2007, and the first customer Go-Live was in April 2008.

Braoudakis says the most important thing the company has done throughout the process is to document all procedures and work instructions. “Effectively we weren’t going to go live unless all of our work instructions and our processes were documented. You need to make sure that the users are effectively trained and you need to make sure that you have effective documentation, otherwise you won’t be able to support it,” says Braoudakis.

Due to fluctuating demand and the need to expand and deploy the casual workforce meant that the end users’ interaction with SAP had to be fairly simplified to bring new staff members up to speed quickly, says Gerber. “So the business decision they took was to ensure that all their end users who work out in the vehicle compounds or the parts warehouses actually interacted with the system only via Radio Frequency (RF) guns,” says Gerber. “One part of the project was for their parts warehouses to use the SAP Warehouse Management console complemented by a partner product.”

As there was no standard off-the-shelf package, Extend Technologies built a custom Windows-based application for the users interacting out of the vehicle compounds. Being a third party logistics provider, the majority of AutoNexus’ instructions and interactions with their customers comes via interface, says Gerber. “So there’s very little data entry from an operator point of view.” The main users of the system may be sitting in finance but the rest of the information comes into the system via interface. Consequently, Extend Technologies had to build around 36 interfaces within the scheduled delivery timeframe. “Being interfaced creates some intricate issues as well because you can’t really necessarily cover all the bases. But we managed to get through that and they’re running today a fairly stable environment of all those interfaces.”

For Go-Live, the approach taken was to roll out SAP on a customer brand by brand basis. “In hindsight that worked really well because that contained the Go-Live and reduced the number of sites that needed to be supported initially,” says Gerber. “It wasn’t a national Go-Live, so from a change management and support point of view it made it a lot easier.” AutoNexus’ largest and most recent customer, however, was Subaru, which had a national Go-Live in October 2008. “By that stage most of the issues had been sorted out and the pragmatic, conservative approach that was taken from the get-go proved to be a very prudent one in terms of the support and the system’s ability,” says Gerber. “So when it came to Subaru, which has very high data volumes, the staggered roll-out approach proved to be the right decision.”

This steady approach allowed AutoNexus to benefit from ongoing training and up- skilling throughout each implementation. After the initial roll-out was completed by Extend Technologies, by the time the third customer was ready for Go-Live, AutoNexus was able to complete many of the activities internally with less support required from Extend. “Now we’re in a position where we actually do those implementations ourselves for a lot of our smaller customers and some of the local customers,” says Braoudakis.

Results

At this stage, Braoudakis says the key benefits from having implemented SAP result largely from the increased visibility that the system provides. “Anyone can log on to the system and actually know exactly what’s happening in the business,” says Braoudakis.

All of AutoNexus’ operations are now run using RF technology, which provides real-time visibility. Staff can now see real-time status for customers on their part and vehicle processing and are also able to see when there is outstanding work and then schedule resources to meet customer requirements. Additionally, says Braoudakis, visibility facilitates “knowing where we are at any time in the month, particularly when it come to billing for services and knowing what the customer priorities are for processing vehicles and parts”.

A key advantage is “definitely the standardisation of the way they interact with customers,” says Gerber. “They’ve developed a backbone in SAP which is only one business process and then it doesn’t matter which customer they deal with. It is one standard interface out to that customer.”

Month-end processing and management reporting has also been improved, as running all these functions under one system has made it consistent, says Gerber. “Before they would have run roughly 12 different systems and had to try and export data and reconcile that in say, Microsoft Excel, and now they just have to run it out of SAP.”

As a growth organisation, the company is able to now acquire new customers and get them live on to an SAP system very quickly.

“It is a sales point for AutoNexus to say, ‘We’ve got systems and processes in place that we can hook you into quite easily and get you up and running fairly quickly,” says Gerber. Braoudakis agrees: “A seamless transition is key to a successful introduction of new customers and SAP is the enabler.”

Looking into the future, Braoudakis says, “There are still more gains that we expect. A key area for AutoNexus is also the implementation of Business Intelligence to take full advantage of the information that is available in SAP.”

[Steve Bennett]

A press release:

by Shuna Boyd
Wednesday, 11 March 2009

TransLogix, Australia & New Zealand’s leading supplier of transport and logistics solutions, has implemented an enterprise-wide 3PL warehouse system that has delivered significant and immediate benefits for the Maxwell Group of Logistics Companies.

The award-winning Advanta 3rd Party Logistics Application Suite provides advanced functionality to manage all aspects of distribution, freight management, warehouse management, order processing, inventory and supply chain management.

Based in Christchurch, Maxwell offers third party logistics (3PL) to many of New Zealand’s biggest names in fast moving consumer goods. Maxwell operates the largest purpose-built warehousing and distribution facility in the South Island, with 12,000 racked pallet spaces available for products ranging from food, beverages and spices to hardware.

The system has been operating since October 2008, Maxwell’s Managing Director, Phil Donnithorne, said:

“We chose Advanta after a four year search which considered every warehouse management product in Australia and New Zealand. Advanta was the only solution offering the warehouse management, billing, freight and reporting functionality to meet our requirements along with the full wireless capability we needed to help streamline our operation,” he said.

“We wanted a supplier from Australia or New Zealand to ensure the availability of local technical support and have been very pleased with the quality of knowledge and skills TransLogix has provided throughout the project.”

Mr Donnithorne said Advanta is accurate, efficient and affords full visibility in real-time so Maxwell clients can log into the system via a standard browser to track the status of their orders.

“As a dedicated 3PL supplier, we typically service sales-driven organisations that want to leverage our advanced logistics systems to help them grow their business. After less than two months, Advanta has improved our productivity by at least 25 per cent when it comes to picking products and shipping them out the door, allowing us to give our clients a real competitive advantage in their market in terms of efficient service and speed of delivery.”

Mr Donnithorne said Maxwell will continue to work with TransLogix over the next 12 months to build on the business intelligence, increasing visibility to further inform management decisions.

TransLogix Managing Director, Anselm Waterfield, said his company has been proud to partner with Maxwell to deliver a state-of-the-art warehouse management solution that sets new standards for efficiency and real-time visibility.

“We are committed to the success of our clients and are delighted to see that Maxwell has already achieved substantial benefits in terms of improved productivity and lower overheads. We will continue to work with their IT team to add new functionality and enhance its performance within the Maxwell environment,” he said.



About Maxwell (www.maxwell.co.nz )

Located in Christchurch and with shared facilities in Auckland, Maxwell provides third party logistics (3PL) services ranging from customs clearance, container de-vanning, order picking and assembly, product management, packaging, distribution, value-added solutions and order management. Its recently completed NZ$12m state-of-the-art 7,800 square meters warehouse complex is the only one of its kind in the South Island of New Zealand and is capable of holding 12,000 pallets.



Maxwell handles the following commodities: food, confectionery, refreshments, salt, pet food including chilled dog rolls, herbs and spices, beverages, hardware, furniture, and power tools.



About TransLogix (www.translogix.com.au )

TransLogix is Australia’s leading supplier of transport and logistics solutions with more than 330 customers supported from offices in Auckland, Sydney, Melbourne and Brisbane. The Transport Management and 3rd Party Logistics suite includes over 30 integrated modules covering accounting, transport management, warehouse, workshop, service, optimisation, scheduling, driver fatigue management, web portal, mobility, POD, GPS, mapping, tracking, Business Intelligence, document imaging and more. Recent awards include; the 2008 iAwards for best eLogistics application, the 2007 Mercury Logistics award for best technology and the winner of the innovation category at the NSW Chamber of Industry awards by one of our customers. In August 2008 TransLogix merged with Advanta to create one of Australia’s largest locally-owned software companies. TransLogix enjoys a growing profile based on award-winning technology, proven technical expertise and outstanding customer service. Its customers include many of Australia’s largest freight handling companies, including 1st Fleet Glen Cameron Group, Greenfreight, Lindsay Bros. Transport, NYK Logistics, Schenker International, Stream Solutions, Markitforce, Tyco Electronics and Maxwell Logistics.

[admin]

WIzcon is a fully integrated open SCADA architecture software suite, combining Operator interface, Supervisory control, Soft logic, Web technology and Information Systems interface. Designed to deliver secured business intelligence in Real Time over the Web using standard Web browsers.

http://www.ferret.com.au/odin/images...lab-235778.jpg

Uses the MDB (Microsoft Access database) format, enables secured access to the Axeda Supervisor application databases (Tags, Alarms, Users). A simple to use ODBC link to other databases is built in, enabling the user to select the database of choice.

[admin]

Risk Mitigation- Perspectives on managing SCM risks with BI

Inside SAP Magazine, 27 Apr 2009

by: Hari Guleria

‘’Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run that outright exposure. Life is either a daring adventure, or nothing’
Helen Keller

Exactly a hunderd years ago Henry ford started what has now become automation. To meet the stringent demands of his ‘assembly manufacturing process’ suppliers sprouted across the Dearborn, Michigan landscape and we possibly started the modern Supply Chain network.

Fords supply chain was not forgiving. If one supplier faulted there were legions of others ready to take their place. Survival of the fittest, ‘Just in Time’ deliveries and stock management of critical components.

Today with manufacturers scattered across the planet, ships and trucks running errands to global manufacturing it comes as no surprise when a $4.00 radio in ‘Radio Shack’ is a marvel of modern supply chain. Copper mined in Chile, and sent to China for processing, Plastic raw material from saudi Arabia sent to tiawan for molding, asssembly of components undertaken in Brazil, finished product shipped all across the US –and then to sell it under $5.00 is truly a marvel of supply chain.

Modern supply chains a re vulnerable to too many factors ranging from political stability, natural currency fluctations, communications breakdown, virus attacks on systems, terrorist bombings, hijackings, and even breakdown of partnerships.

A revolution in Nigeria can raise gas prices across the planet and a factory fire in Saudi Arabia can stop the delivery of an important component to manufacture Listerene, thus stopping production lines in the US. Over a 100 US companies with revenues of over $100 million will go bankrupt by 2010.

Each of these companies will have a major impact on the global supply chain.

The global risk of buyers and suppliers closing and some one loosing a critical component is extremely high.

Supply Chain risk is one of the biggest exposure for most companies as it directly effects customer demands.

China is the largest exporter to the US and that is for one simple reason – globalization. The cost of labor in china is around one to two dollars per day which is eight times lower than the US hourly rate. The skilled worker earns around one dollar an hour which is around fourty times lower than the US.

Supply Chain risks are always going to be there and low cost is not a difficult choice for multinationals. Also there are always risks to putting all your eggs into the China supply chain equation. There are companis that have a single source dependency and others that evaluate the risk and source alternative suppliers in other nations. The cost may be higher but the risk of totally loosing a supplier far outweigh the cost of alternative suppliers. There must always be the factor of redundancy in every process.

Supply Chain risks can be from unethical hiring practices in supplier countries which impact public opinion in buyer countries – like child labor or sweat shops. It could be worker benefits and support, lack of hygene or inadequate fire protection.

ERM and Risk mitigation can be expensive but not as costly as the break of the Supply Chain itself.

In time as globalization spreads and national boundaries start to blur the supply chains will only get more complex and any form of breakdown in the chain can have the potential to risk . The time to manage our supply Chains is now.
Contents

Introduction 3
Perspectives on managing SCM Risks 3
Problem Statement 3
Background information 4
Introduction 4
Management as the Lead 4
Use of BI Metrics to manage Risk 5
ERM vision and sponsorship - Planning 5
Using the microscope and the telescope 5
Conclusion 8

Introduction

With airlines delaying their shipment deliveries past the point of cancellation on one side, and large retailers busy cancelling orders on the other due to a shrinkage in demand. With producing nations having over leveraged their raw material procurements and stock piling with no where to store them. With consuming nations in the worst recession of their lifetimes ee are today in what some might term as a supply chain dilemma. This paper introduces some basic concepts for mitigating SCM risks via planning, reporting and auditing

This is the golden moment of learning, research and development and defining basic standards – such moments used to come once a century, now a little more frequenty.

Perspectives on managing SCM Risks

The only constant is change, is that after a boom there will be a bust and so on. Change leads to success, upheavals lead to optimization, and pain leads to innovation.
Supply Chain Risk mitigation has become center stage as companies suffer from one of the two maladies, overstock or under stock.

The overwhelming need for global organizational Supply chain solving and risk mitigation has placed SCM Financial Risk management at the center of the stage as never before.

1. Risk managers have been marginalized in their organizations during the growth periods
2. They had continued to build ‘Risk registers’, identify risk categories and continuously fought acceptance at the board and business unit meetings
3. Post October 2008 events, we find more risk managers taking their place at the table, and being tasked with demonstrating how to safeguard the supply chain network and the enterprise at strategic levels
4. Strategic SCM safeguarding can only be planned via identifying process level risk factors, benchmarking their acceptable variances and then measuring them periodically for audit and reporting

Problem Statement

1. Does ‘one risk solution fits all’ work in your company or not
2. Identifying what are the core of risk measurement
3. Building an actionable ‘Risk register’ with adequate controls and check points
4. Identifying risk processes
5. Mitigating Risk

Background information

Enterprise Risk Management has been the center of stage since October 2008 in most board meetings. From financial institutions, Air & Defense, manufacturing, retail to service providers and nonprofit organization all have been ensnared into the quagmire of the breakdown of key supply chain processes. Somali piracy off the horn of Africa and the risk to the Suez canal only one process comes to mind – Supply chain.

Introduction

The instability within all industries due to the current global economic crisis has put a spot light on two factors ‘Enterprise Risk Management’ and ‘Business Intelligence’. ERM for defining standards and processes for risk management and BI for auditing and reporting risk factors.

In the last decade there has been a flury of activities towards defining an enterprise level standard and methodology to better manage financial risk. Financial risk has dependencies on operational risks and in the operation side it is the supply chain that most impacts corporate risk. ERM, or Enterprise risk Management has been implemented in some form or another by most companies. SOX compliance is a component of ERM, as are government regulations, shareholder value and other such components. Some companies have integrated ERP as an imperative process of business strategy that is routinely

After 1008 a large number of financial institutions are taking Risk management to new levels, designing integrated process frameworks to identify every risk factor, holistically administrating every risk confrontation, proactive and actionable automated alerts when risk thresholds are breached – all to mitigate risk and unexpected earnings volatility.

The aim of this paper is to leverage the same ERM techniques and superimpose them on the the supply chain framework. To challenge enterprises to start viewing the current times as a golden learning period and risk itself as an opportunity for mitigation.

The key is to understand that ‘Solutions are simply the opposite of a problem’

Thus identifying a potential problem is half the solution, or the inability to identify a problem has the potential to multiply the problem manifolds as it progresses along the supply chain.

Truly a case of ‘A stitch in time saves nine’

Management as the Lead

• Good practice starts at the top.
• Management sponsorship and commitment is imperative to the success in ERM.
• Business readiness and ownership would come next. Followed by strategic alignment, documented processes, standards, organization structures and governance.
• All this is of little use unless they are documented, communicated and governed.

Use of BI Metrics to manage Risk

Good ERM practices begin with ‘best practices’ and learning from the experience, and expertise, of others. The processes have to be adapted to individual corporations, and further to the sub processes of the business units and their divisions, encompassing all the cultural and regional variances and requirements. For example France may require a special set of approvals prior to transport of a material, and Saudi Arabia may not allow the import of alcohol into their territories.

From a Risk management perspective the five components would be ERM Strategy, ERM Standards and Processes, ERM Governance and principles. This would be followed by Risk Analytics and administration – which can be further detailed into Critical Risk Dashboards, Global Risk Metrics and periodic risk reports

ERM vision and sponsorship - Planning

The toughest first step is sponsoring the ERM journey with proactive management sponsorship followed by a planned business buy in.
Planning: Phase one would begin with internal supply chain and when successfully implemented the numbers can then be shared across the whole supply chain partners, from vendors to customers, into a discussion for defining risk parameters and overseeing suggestions across the enterprises with one single aim – satisfied customers. Each partner, an enterprise in itself, can share their respective risks within their own areas of influence.

The process begins with identifying internal strategic priorities, identifying internal risk parameters, entering them into a risk register, identifying critical risk processes and then mitigating the risks via audits and reports. Once again the success is then rolled over to partners along the supply chain.

Workshops: Phase two would consist of internal/external ‘workshop exercises’ with key decision. In this process primary business unit and process owners assemble build joint risk registers, identifying the critical risk processes, and taking ‘Key decisions’ in a planned, documented and signed off manner. “it is amazing what all can be accomplished when you get key stakeholders from different disciplines into a room together, with their differences of opinions and experiences and then define the ‘Critical rosks” says Alex Paleologoes Stock Controller of SCC procurement. Business consensus always increases buy-about key risk drivers. From a corporate point of view this has to be further refined into the ‘top 10 risks’ that corporate needs to monitor.

Using the microscope with the telescope

SCM Risk management is not a walk in the local park, but a journey across the whole Supply Chain geo-political space. Company X a US chemical manufacturer with 13 plants in the US, and 7 plants across the globe involved 35 people from across different plans and operations to review operational risks from different parts and SCM risks are operational risk that need to be mitigated at the operational layers, these are then rolled up into management risk ****pits, which are rolled up into C’ level Business unit head ****pits and then finally into the ‘top 10’ risk that corporate needs to monitor on a day to day basis.

In one exercise for SCM analytics we identified collected 13 plant managers in a conference room for three days. We started the workshop with the basic question as to what are the risks that they dread the most in their jobs, what analytics did they have to mitigate those risks, and how would they like to resolve them identified. The worship identified 172 processes and sub processes that were critical for plant level procurement analytics. These represented the microscope processes and risks.

We then proceeded to identify the enterprise risks each of them presented. We then continued to sub-divide them into 7 common and critical risk factors with corporate. The risks were finally segregated into quality, financial, customer and reputation impacts. This was the telescope view of the risks that the CEO wanted to see.

When we commenced to extend the same question to the external partners, vendors in this case we saw a whole bunch of findings go outside our internal bell curve of findings. Vendor risks tecn not to hit the internal radar due to its invisibility, but have the potential to disrupt both production and customer demand. They represent a severe impact on capital allocations and overall shareholder value realization. Outside the bell curve we identified external risks like transportation risks, resource skill profile risks, buyer interaction with suppliers, etc.

In ERM resource skill management is becoming central to companies, especially as we want fewer people to do more. It is imperative to maximize resource utilization so far as there is no conflict of ‘Segregation of duties’. So when recently a customer requested that their buyer also get authority to approve payments and issue checks we clearly saw a conflict of interest as defined by SOX 404 and recommended against the decision, or get a written approval from the CFO. The request was finalized in favor of SOX guidelines. The value of an employee is directly proportional to their peace of mind. Take that away by any way and we breed inefficiencies.

The ERM recommended method is to build role maps, leading to team maps and then overlay them with resource maps and actual skill maps. This simple method identified training, team weaknesses and ensures that the right resources do work packages they are qualified to accomplish. It also identifies any team weaknesses to meet business needs and prompts training or new hire.

Part 2 continues here.

[admin]

Continuing on from part 1 here:

Risk Mitigation- Perspectives on managing SCM risks with BI

Inside SAP Magazine, 27 Apr 2009

by: Hari Guleria


Step 1: Identify ERM Strategy & Best practices

ERM is most mature in the Finance division of all enterprises, and more so in the financial sector of industry. The key here is to learn from the finance and financial teams. ERM processes must be analyzed holistically with process flow and critical points identification.
Learn from internal finance risk administrators and leverage findings from financial institutions.
Align to business need and company specific processes

Step 2: Standards

Each critical ERM process will need to be identified, named and visualized. In order to accomplish this at a global enterprise level it is imperative to standardize things like naming conventions, KPI definitions, process definitions, criticality definitions from a regional and global point of view.
For example a plant in Sweden may need a very critical raw material that only they need, this material will have a high local criticality but no global criticality.
Standards must be defined early and changed as we learn more about the baseline.

Step 3: Processes

From a supply chain point of view it is imperative to document the SCM process flows. All we need to do is take the SCM process flow and identify the critical components from an ERM point of view.
For mature organization that already have the SCM procedd flows documented this part will be simpler, but for companies that have kept this flow pending, or simply do not have it this may be a separate effort by itself.
As ERM is most mature in the Finance division thus ERM is most mature in the Finance division
For example company A and their process of lending in the property market. The traditional approach of lending to this market was asset-based and required specified assurances from all participating parties. Sometime in the late 90’s insurance companies switched from the asset-based lending to risk-based lending approach, with full support of the then US financial controllers. The risk based solvency standards were too lenient on the borrower ability to take risk and thus represented a financial exposure. However, it allowed institutions to lend large sums to borrowers who otherwise were outside their prospect window. The rest is history.
The process in this case would start from a borrower requesting a loan and encompass every single process, checks and balances, until the loan is fully paid.

SCM example: A pharmaceutical manufacturing process could start with raw materials from 5 nations, transport, customs, Quality inspections and Stocking of raw materials. This would then be followed into a master batch that is used in 10 final products. This would then be followed through to each process step until production and shipment of final product. Including any returns and reasons thereof or patient feedback. The strategic bottleneck for this SCM flow is producers in scattered countries and their volatility (including alternatives) and openwater piracies. The second critical bottleneck is the master batch on which 10 subsequent processes are dependent. If the master batch process takes 3 weeks then an error in this step could delay shipments of 10 final products.

Step 4: Organization Structure

One of the most difficult components of any strategy is Organization structure. In this single component we are faced with politics, power struggles, ownership and accountabilities. It is difficult enough to nail this down within an enterprise, accomplishing this across partners is challenging to say the least.
The core issues are ownership and local vs. corporate controls. Centralized is great for corporate but slows response time for local or partner requirements. Decentralized is great for local and regional requirements but creates perfect kingdoms but no empire.
Our recommendation is for a collaborative model. A good method is to identify components that belong to corporate and then identify local components that are unique to a partner, region or business unit. Again we recommend getting all the key players into a room and agreeing on the central and local processes and then letting each party own their processes and its rollup.

Step 5: ERM Analytics

‘If information is power, make sure your information is correct’

Data quality and Information quality is the foundation of all BI Once the above steps have been identified and accomplished then it is a matter of starting from the bottom layer. Note: The seduction to start with the upper metrics will be very strong but it is not the right path.

Paul McInnis of PKSIS systems stated “..they recommended that we commence our BI implementation strategy with metrics deployment. It all sounded great in presentations, and when it was presented, but after go live we found little business value for the generic metrics…” he continued, “.. the worst thing was if we hit a certain summarized number in our metrics, say 6.2 we had no way to validate that without a week long source system process. A 0.1 error in our metrics could mean millions of dollars difference..”. Over 4 months business stopped using the metrics altogether.

What he recommended is to always start with the granular reports and metrics first as these are numbers operational managers will check on a daily basis. Paul mentions this as auto day-to-day validations. This must then be rolled up into operational metrics that will be validated over weekly intervals. Only then must these be rolled up to SBU or corporate metrics that will be validated at much lower frequencies.

In ERM we need to make sure we do not overload the reports nor miss anything that is critical. Like with all reporting applications it is a balancing act of perfection. We need to ensure that the right risk are identified, the right risk information is extracted, that it is correctly deployed in the analytics, delivered to the right people, at the right time (even if it is in the midele of the night as an alert), and the acceptable tolerances of the risk for actionable management.

Once a risk flow is documented, ERM recommends that SCM risks be quantified by several parameters. Potential of risk, impact of risk, frequency of risk, the potential impact of risk depending on the severity, and the domino impact of a risk on subsequent events, i.e. charting what risk will impact downstream processes.

One can argue that the current economic status is due to the US, and global sub-prime mortgage irresponsibility, but on the other hand we can also see first hand how some companies have diverted the crisis and other have simply gone bankrupt. The key lesson here is Risk Management and mitigation or ERM.

The lesson being played across the planet are not those of the financial market alone but of the secondary supply chain market too. All to many ships are being dry-docked, planes mothballed, and raw material stocks piling. While on one side companies are busy divesting their assets to simply remain afloat countries and companies with sustainable ERM find themselves in an opportune point of time to acquire competition at highly marginalized costs.

Step 6: Team CRO

‘If risk is risky then controlling it becomes imperative’

Proactive organizations have always had a CRO (Chief Risk Officer) in the financial components of the organization, now they are starting to appoint a CRO for their Supply Chain risk administration. Global enterprises realized the impact of global meltdown and feel the necessity to administer risk in a collaborative manner across the supply chain.

Companies are commencing to undertake strategic ERM stock and operational exposures, build a consistent strategy for managing and monitoring critical risks. Business Intelligence is becoming especially important as reporting risk Factors is being looked at as the first step to mitigating risk.

Each layer of the organization is being appointed as an actionable Risk manager with rollups to Board members who are using dashboard type ****pits as an ‘early warning System’ to any potential crisis on hand.

For the corporate manager the ****pit is akin to the dashboard in an automobile. There are hundreds of things that are going on in the car and that can be monitored (business), but as drivers we only need a few dashboards to assist us with driving the car safely on the road. The key to success is not creating a myriad of dashboards but just those that are required to mitigate the critical risk factors. It is not about volume but about quality.

We are also witnessing a shift of the ‘compartmentalized risk management’ techniques of the last century, where finance risk managers and internal auditors only managed finance risks, legal risk managers managed insurance, procurement managed transport and stocks, PMO managed project risks, BI managers managed Information risks, treasure managed exchange risks, and so on. We are seeing a convergence of all risks under one umbrella in an organized and holistic approach

Conclusion

If anywhere you see an automation option for any manual process embrace it readily

The current global meltdown is a dent on the curb. A very deep dent indeed but still a dent. Just like a boom is predictable so is a bust, it is the degree that is unpredictable. As economists and financial giants learn to control the impacts of the busts, we see mechanisms that even out and mitigate the impact of the melt-down. The lessons and writings are on the wall today, we only have to look around and learn. What we learn in these times will be knowledge that will caution us during the next inevitable boom and thus mitigate the impact of the bust when it arrives.

Supply chain is a very integral part of all business types be they manufacturing, services or finance.

If the past is any indication we should learn today so we are better prepared for the future.

Action Items:

• Appoint a CRO
• Commence a harmonized internal Process flow risk map
• Build an internal Global Risk register
• Extend the learning curve to partners

Failure from predictable risks is no longer an option


About the Author:

Hari Guleria is a Sr BI Value Architect. He is a partner at BI DataBridge and erada Inc launching SAP BI software products like SmartCube (automated InfoCube modeling), BIA Workbench (tool for BIA administration) and RapidPro (ABAP optimization tool). The team is currently working on a Business Object & BI Optimization and a 100% BI Data Profiling, Scoring and administration tool.
Hari routinely works with customers as a business value Architect, i.e. between business owners and vendor partners, assuring SAP and SAP BI Business Value attainment in BI initiatives. His strength is in BI Strategy, Architecture, modeling and Business Value assurance, and assisting BI customers realize their business goals. Prior to this Hari worked at SAP America with their Value Realization group focusing on SAP BI strategy and value audits. Before that Hari held national BI & EP practice director roles with major SAP premier partner companies. Hari started SAP with Andersen Consulting (now Accenture) in Saudi Arabia in 1995.Prior to SAP Hari comes with over 9 years of Sr. sales, marketing and strategic planning experience with European multinationals. He has been assisting customers meet their SAP R/3 business goals since 1995 and BI goals since 1997. He has been a regular speaker at ASUG, and BITI national conferences. Hari has over 14 full life-cycle SAP projects under his belt.
Hari may be contacted at hguleria@erada.com

[admin]

Company PR from Forkliftaction.com:

We all know data is critical within a business for making precise, on-time decisions. No longer do you have to wait for reports to be run and printed in order to make calculated decisions. With Baseplan Software’s dashboard technology you can apply your own business intelligence to your data without having to sift through lengthy reports. Keep an eye on every single part of your business via one interface. You can find the information you want instantly meaning there’s no need to read through hours of reports to get the same result. Your critical information can be graphed and displayed within dynamic widgets on any screen, even your mobile phone.

The newly developed Digital Dashboard is the latest addition to Baseplan Software’s product range. Baseplan Software predominately develops business management systems for the Fleet Management Industry and have provided the industry and clients with successful software strategies and systems for over 20 years. Extensive experience in this area has resulted in a range of beneficial features and benefits including a fully featured Fleet Management System, fully integrated Servicing, Sales, Payroll, Invoicing and Payment modules, Barcode scanning availability, CRM system, and In-Van Technology (IVT) - the list goes on.

More recently, Baseplan Software have been busy analysing new technologies and creating some great new products. The impressive new Digital Dashboard allows the creation of personalised displays of your company’s key data such as sales trends, and key management data (eg: counts of hires, invoices and credits by period and branch etc). In fact, the Digital Dashboard can be used to present just about any meaningful information to your staff or clients.

A short video marketing Baseplan is attached.

[admin]

PR News:

IMI Cornelius (Asia) Chooses Epicor

World’s Leading Supplier of Beverage Dispensing and Cooling Equipment to Streamline Business Operations with Epicor Software Solution
Epicor Software Corporation (NASDAQ: EPIC), a leading provider of enterprise business software solutions for the midmarket and divisions of Global 1000 companies, announced that IMI Cornelius (Asia), the world's leading supplier of beverage dispensing and cooling equipment, has chosen Epicor iScala as its enterprise resource planning (ERP) solution provider.

IMI Cornelius, with nearly 70 years of experience in the beverage dispensing industry, manufactures their products at 12 plants in six countries. IMI Cornelius expanded its market in Asia Pacific since 1987 and established a manufacturing plant in Tianjin in 1997. IMI Cornelius (Asia) has sales offices in Hong Kong, Australia and Singapore, with approximately 400 employees. The company’s client list includes Coke Cola, Pizza Hut, McDonald’s and KFC.

Epicor offers a single, end-to-end solution that goes beyond traditional ERP, encompassing award-winning financial, inventory and manufacturing management capabilities, in addition to in-depth supply chain management, customer relationship management, business intelligence and enterprise performance management functionality.

IMI Cornelius chose Epicor from among a variety of competing ERP solutions. “Our ERP selection criteria are very strict,” said Terry Cheng, Regional IT Manager of IMI Cornelius. “In addition to excellent references and a strong brand, we chose Epicor for several reasons and are confident that Epicor is the best choice for us.”

Among the reasons mentioned by Cheng were, Epicor multi-language capabilities which can support 36 different languages and serve IMI Cornelius’ global business operations, as well as Epicor’s reputation for providing excellent after-sales service, including implementation, staff training and maintenance; all of which reduce costs of operation. Cheng believes, “with Epicor’s specialised out-of-the-box functionality, the solution will help IMI Cornelius achieve competitive advantage across all of its industry segments.

“The comprehensive functional depth and breadth of Epicor’s solution, from customer management through manufacturing to after-sales, will enable IMI Cornelius to rapidly implement and hence maximise profits,” Cheng commented.

Vincent Tang, regional director of Epicor in Hong Kong, South China and Taiwan commented, “The Epicor solution selected by IMI Cornelius is suitable for multiple industries including Hospitality, Food and Beverage, Chemical and Pharmaceutical, and is a well-established ERP solution for each. Epicor can boast one of the industry’s lowest total cost of ownership, which will help IMI Cornelius save costs on the investment, maintenance and implementation of their ERP software solution, while running the best solution to fit its business needs.”

About Epicor Software Corporation

Epicor Software is a global leader delivering business software solutions to the manufacturing, distribution, retail, hospitality and services industries. With 20,000 customers in over 150 countries, Epicor provides integrated enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM) and enterprise retail software solutions that enable companies to drive increased efficiency and improve profitability. Founded in 1984, Epicor celebrates 25 years of technology innovation delivering business solutions that provide the scalability and flexibility businesses need to build competitive advantage. Epicor provides a comprehensive range of services with a single point of accountability that promotes rapid return on investment and low total cost of ownership, whether operating business on a local, regional or global scale. The Company’s worldwide headquarters are located in Irvine, California with offices and affiliates around the world. For more information, visit www.epicor.com.

# # #

Epicor is a registered trademark of Epicor Software Corporation. Other trademarks referenced are the property of their respective owners. The product and service offerings depicted in this document are produced by Epicor Software Corporation.

[Doug Heywood]

It's not local but it is interesting:

CCE takes mobile to the next level: Analytics
2009 InfoWorld CTO 25 Awards: Kevin Flowers

By Galen Gruman | InfoWorld

2009 InfoWorld CTO 25 Awards
Kevin Flowers
Director of enabling technologies
Coca-Cola Enterprises

At first blush, equipping delivery people with mobile devices seems old hat; the industry began moving to mobile devices for tracking trucks, goods, deliveries, and staff for a good decade. Signing an electronic pad to confirm delivery, using a cell phone rather than a payphone to call in to headquarters, entering time sheets over a mobile device, and even tracking truck locations to make sure drivers aren't wasting time or gas are all old news.

But Kevin Flowers had a new idea. The director of enabling technologies for Coca-Cola Enterprises (CCE), the bottling and delivery company that brings the famous soda to store shelves, Flowers realized that equipping drivers with mobile devices provided a wealth of data for analytics beyond the trucks and deliveries. For example, analyzing delivery people's individual movements through GPS tracking revealed one delivery person moving back and forth within a store. When headquarters called this person, they discovered that he was moving hundreds of cases of Coca-Cola products using a grocery cart because the store did not have a pallet loader (which its service-level agreement required it to have).

That sort of ongoing analytics helps CCE fine-tune the efforts of its 10,500 merchandisers, the people who deliver the soda and place it on shelves, and who are the first line of insight as to changing buying patterns: Is one type running out faster than others? Do end-of-aisle promotions move more product?

[admin]

The Freestyle drink dispensers will give consumers more than 100 beverage choices -- and provide the beverage maker with valuable consumption data.

By Mary Hayes Weier, InformationWeek June 6, 2009

Refresh, refuel, and download some data
Coca-Cola doesn't think its customers have enough drink choices. So starting this summer, diners at some California, Georgia, and Utah fast-food joints will get to try a self-serve drink dispenser that pours more than 100 varieties of sodas, juices, teas, and flavored waters.
Coke plans to roll out the Freestyle drink dispenser nationwide, eventually putting tens of thousands of them in places such as McDonald's, Burger King, and Willy's Mexican Grill. And while the machine is taking the concept of customer choice to new heights, the most interesting aspect is the technology it's built on. Freestyle will become Coke's front-line robotic army for business intelligence, sending massive amounts of consumption data back to the beverage company's Atlanta headquarters.

Freestyle will let Coke more easily test new drink flavors and new beverage concepts, such as adding various vitamin combinations to flavored waters and juices. The dispensers each contain 30 cartridges of flavorings that mix up 100 different drink combinations. The cartridges are tagged with radio frequency ID chips, and each dispenser contains an RFID reader. The dispensers collect data on what customers are drinking and how much, and transmit that information each night over a private Verizon wireless network to Coke's SAP data warehouse system in Atlanta. The company will use the data to develop reports that assess how new drinks are doing in the market, identify differences in regional tastes, and help fast-food outlets decide which drinks to serve.

Test marketing via Freestyle will be a lot cheaper than the model Coke's been using: bottling and bringing to market new products that sometimes don't gain traction and get canceled after a year or two. "This is a huge jump from our current fountain dispensers," says Christopher Dennis, Coke's IT director of e-business transformation. "It's like going from the dial phone to the BlackBerry."

No Comparison

There's more to Freestyle than streamlining product development. It also will let Coke provide its fast-food outlet customers with more accurate inventories of the beverages they serve. Outlets leasing the machines from Coke will be able to view graphical drink consumption reports--such as ones that rank drinks sold during specific time periods--on an e-business portal Coke has set up.

Most fast-food restaurants collect data using point-of-sale systems that only capture beverage cup size and the number of cups sold each day. Those that collect more specific data on beverages customers order aren't always accurate, since many customers change their minds between the time they place their orders and walk over to the drink dispenser.

Besides collecting data on what customers are drinking, Freestyle also lets Coke know what flavor cartridges each dispenser holds, so the company can advise outlets on when to order more. Coke also will use the wireless network to send out new drink formulas to the beverage machines with instructions on how to mix them up. And should the soda company ever need to recall a flavor cartridge, the network also lets it instantly disable dispensers across the nation.

Coke plans to have about 60 dispensers in Atlanta, Salt Lake City, and Orange County, Calif., by the end of the summer. The dispensers will then be rolled out in other regions of the United States, and perhaps globally, Dennis says.

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Dennis describes the Freestyle machine as the company's first software-driven dispenser. It's been in development for four years, and it's the first close collaboration between Coke's R&D engineering team and IT organization. Soft drink purchases have been declining at fast-food outlets in recent years, and Coke is looking to Freestyle to increase sales by giving customers more beverage choices.
Coke is closely guarding engineering details of the machine, going so far as to manufacture the system at its own plant. Beverage machine makers usually approach Coke with new ideas. "We came up with this on our own," Dennis says.

He declined to provide details on Coke's investment in the machines, the cost to outlets to lease them, and the cost of cartridges. Some fast-food chains may deploy the Freestyle dispensers only to their largest outlets, Dennis says, and use BI gleaned from those installations to make inventory and promotional decisions at other outlets.

International Impact

While Coke is limiting the initial rollout of Freestyle to the United States, data from those machines will have a global impact. Information about how U.S. customers are responding to various beverages will be loaded into Coke's Innovation Framework, a system based on software called CA Clarity for New Product Development.

Coke research, product development, and marketing personnel worldwide use that system to share information on successful regional product rollouts and marketing programs, so they can apply them in other regions. Globally, Coke offers about 3,000 beverages, and what works in one place is often tried in another with similar demographics.

Traditional soft-drink dispensers typically offer eight to 12 drinks, dispensing them from five-gallon bags of flavored syrups. Freestyle's 30 cartridges contain highly concentrated flavorings and slide into the machine like a printer's ink cartridge. The flavors are so powerful that only a few drops go into each drink recipe, using a process that Dennis describes as "microdosing."

That means a raspberry cartridge might be used to flavor Coke, tea, or water. Microdosing comes from the medical industry; the term refers to how anesthesia and other medications are delivered in very precise amounts through an IV. "We've reapplied it to pouring a drink," Dennis says.

Freestyle's LCD panel, which offers 18 drink brands, runs on the Windows CE operating system. Customers select a brand, such as Sprite, and are then offered several variations (cherry, grape, etc.).

The dispensers communicate over the wireless network with Microsoft System Center Configuration Manager for Mobile Devices, software running at Coke's headquarters that manages the dispensers. The Verizon network has a dedicated IP range for the Freestyle network infrastructure, and each dispenser contains a Verizon wireless card.

Freestyle sends data through the Microsoft configuration manager and then to SAP's point-of-sale management software, which cleans and structures the data. Data then goes to Tibco Software middleware, which routes consumption information to the SAP Business Warehouse and operational data to the central service organization for identifying any dispenser problems.

Previously, fast-food restaurants ordered new products through Coke's call center or by fax. With the new dispensers, they'll be able to order products directly from Coke through the new portal that links into Coke's SAP CRM system. Coke will provide outlets with recommendations on how many cartridges to order based on a 10-day rolling average of consumption determined by the data that's transmitted every night, cartridge inventories provided by customers on the portal, and cartridge levels on machines based on RFID readings.

Coke's fast-food customers have struggled to keep their inventory stocks balanced "without having a lot of cash on the shelf," says Dennis. "Now they'll know when to order another cherry cartridge, depending on the average consumption at their outlet."

The Payoff

By providing customers with more variety, Freestyle has tremendous implications for Coke in terms of revenue growth, Dennis says. What's more, the machine can help Coke customize its products by region.

Freestyle will let Coke track customer preferences over months and even years. If the company determines that a certain flavor is gaining traction in a specific region--say, Peach Coke in the South--it will know that's more than a short-lived trend and could opt to bottle that flavor through retail outlets in that region with reasonable assurance that the investment will pay off.

One test outlet is already getting interesting results from the system, finding that sales of Caffeine-Free Diet Coke spike during the late afternoon. Customers apparently try to avoid sugar and caffeine late in the day, Dennis says, and the outlet could use the LCD panel on its Freestyle machines to promote low-calorie, caffeine-free beverages during that time of day, driving sales to customers who might otherwise drink water or forgo a beverage.

Water? Peach Coke? Grape Sprite? The choice will soon be yours.

[Doug Heywood]

Weathering the present storm

22 June 2009 | by David Goad*

MANUFACTURING companies have been dominating the headlines, from massive job losses and share price plummet to union talks on reducing workers pay and hours.

The message is clear, just because you're a big organisation, doesn't mean you are automatically immune from the current global economic crisis.

Unlike previous recessions, which have typically been based on a 'Boom and Bust' cycle where excessive growth has led to higher interest rates and eventually reductions in output, the current global financial crisis has been created more by a lack of confidence in the system and thus is more psychological in nature.

This means that tactics previously deployed to help weather the storm won't be applicable.

Tom Peters from Business Management Practices says we all need to do is adjust our thinking.
"Don't think of our current economic crisis as a recession. Instead think of it as a recalibration.

"Everything is different now. If you think of it as a recession you may be tempted to 'hunker down" and wait for the economy to cycle back.

"If you think of it as a recalibration, you will be motivated to focus on what you have to do differently, since everything is different now."

Some companies will survive this recalibration or economic reset and some will not. Some will even thrive. The differentiator will be the strategy each company employs.

All businesses need to have a strategy and those companies with a strategy that reflect the current global crisis will have a better chance of survival and success.

A strategy however, is not just about saving money and reducing costs, nor is it going back to what you were doing six months ago.

It needs to be unique to you and more than ever you need to plan for flexibility and agility.

"Implementing the correct strategy for your business in this current recession has never been more important" says Dean Williams, Chief Executive Officer for WH Williams engineering.

The company has recently conducted an internal audit of their processes and systems to put in place a strategy that will help them weather the global economic crisis.


Seven Rules for Success in a Recession

Rule#1: Understand your customers and develop a strategy for retention
Know their financial situation and don't be surprised by potential credit issues.

Develop a strategy and manage to it - better service, better price or both.

Consider some form of CRM Solution to manage customer interactions.

Rule#2: Provide employees with the information they need to reduce costs and manage the business
Provide employees will all the information to complete one job function on a single screen (Role Tailored Design.

Enable employees to conduct searches for required business information in order to build their own reports.

Rule#3: Manage and prioritise expenses to help with cash flow
Set guidelines and policies around expenses in consideration of free cash flow.

Forecast your free cash flow 3 to 6 months out.

Provide your business with the tools needed to show complete visibility of the expenses being incurred and provide controls to ensure expenses are prioritised.

Rule#4: Be proactive and consider new opportunities to help your customers and suppliers
Think "out of the box".

Ask yourself the question What new products and services will help my customers in these recessionary times?

How can you help your customers do more with less?

Rule#5: Use Business Intelligence effectively to improve your supply chain
Use reporting and business intelligence to minimise the amount of inventory (and locked up cash) in your channel and reduce your inventory carrying costs.

Be quick to respond to demand signals indicating potential slow downs.

Understand the profitability of your product lines (do not be caught in the Standard Costing/Overhead Allocation trap.)

Rule#6: Improve Collaboration
Communicate quickly and accurately both internally and externally to be responsive to customers, reducing the probability of excess stock and incorrect orders.

Reduce the time for demand signals to make it through your supply chain and automate the demand signals from your customers.

Reduce the costs and time associated with internal travel (utilise tools such as LiveMeeting, Unified Coms and Conf calls).

Rule#7: Build capacity through efficiency rather than real estate with a focus on:
Materials and Requirements Planning (MRP) - ensure effective phase implementation of any MRP solution to provide the correct inputs and business processes are in place.

Distribution Resource Planning (DRP) - to reach deep in to the supply side and demand size of the equation.

Inventory Planning - Provide the right information when it is required.

When WH Williams began its internal audit, the company found it needed to increase its order turnaround time to gain efficiencies but its disparate resource allocation and billing and production systems hampered both its scheduling and administration needs.

They chose to deploy Microsoft Dynamics AX 3.0 system which they upgraded to version 2009 in 2008.

"Through the deployment, we have significantly reduced downtime, and cut production lead time by 20%. This has resulted in us cutting administration costs by $200,000 and reduced despatch invoice times by three-quarters," Williams said.

"We now have the tools in place to better understand our customers changing needs with a deeper overview in real-time of what is happening within our business allowing us to respond quickly and efficiently.

"With a flexible strategy in place we are now better placed to deal with the current global economic crises," Williams said.


* David Goad is the Director of Microsoft Dynamics in APAC.