Case study Sinosteel
Its mall units work on R&D, Trade&Loglstlcs and Equipment Supply Resource.
The major challenges that Consistent has are to manage its 76 subsidiaries, among which 53 are in China and 23 abroad. It grew thanks to the absorption of many tiny companies, as well as some medium and bigger ones. As a result, it has many deferent employees and information systems to deal with. For example, a customer can owe money to one subsidiary and be paid by a second one, making the customer relationship quite messy, and creating Information conflicts.
Furthermore, the coding Is different between subsidiaries, which can potentially lead to delivering a wrong order In the rang place, to the wrong customer.
Finally, managerial regulations are fluctuating from a subsidiary to the other, and there is a pretty high information risk due to a lack of tracking and control of the information. An ERP system could be the key to unlock this heavy door of difficulties, as it can globally monitor and highly standardize the information to an enterprise scope. Not only can It grant an efficient management of all core business functions, but It also achieves Information sharing and thus Improves efficiency.
In a scattered company like this one, needing a broad mineral system to enable communication between subsidiaries, an ERP system proves helpful because it consists in building a tool on a whole company scale. 2.
Why did Consistent pursue the development of an ERP system? What were the objectives? What challenges (risks) does ERP address for Consistent? [The CEO Is difficult to understand on some of the objectives, but later In the video an IT manager is more clear and reflects the Coo’s position almost exactly. You will need to listen carefully].
Snootiness’s aim was to enhance its centralization. Moreover, because of this umber of subsidiaries, this kind of business requires accuracy and solid systems it can rely on. They saw immediate benefits to the implementation of such a system. It provided an answer to its main Issues: centralization, standardization, cover against information hazard, consolidating management, and optimizing resources management (physical and human resources).
The real objective of this ERP system was to succeed in a sustained development as well as keeping a high efficiency.
It was also pursued to deliver adaptive industry processes and a superior ownership experience. To conclude, ERP helped managing more information and allowed a common share of all the customers’ information that did not exist in the past. 3 want Doctors were Important In ten console AT oracle? When selecting the ERP system, Consistent had one thought in mind: managing the Supply Chain. They had to look for a system providing a free flow of information internally.
Oracle enabled such a thing, and had many other interesting advantages.
First, it could help in the creation of global HRS policies and standards, through the efficient connection of employees’ personal and financial information. Then, it was a laity system of advanced technology, that had a relatively flexible platform. It means that Consistent could easily adapt it to its own personal needs that could best suit its requirements. Moreover, Oracle was easy to learn to administer and maintain. As a result, no long training time would be needed once the first people who implemented the system had done the Job.
It created a centralized and unified platform the covered the whole enterprise. This benefit was the most valuable for Consistent who dramatically needed such a platform. 4. How did business processes change in order to implement this ERP system? The initial situation was that Consistent built up through the acquisition of many companies, leading to unrelated information systems from one acquired company to another and inefficient communication between its units. To solve this problem, Consistent made the choice to use Oracle’s ERP system.
But to implement it, Consistent needed to get ready first. This went through adapting the way it was operating to make sure everyone’s behavior is matching the tool right. For example, with the standardization of management processes, the managers would need to be trained for the switch to the new system. Moreover, we can imagine that one of the major changes was in the data access and storage. Before putting Oracle’s ERP system in place, Snootiness’s subsidiaries probably made their own databases and files. These databases would need to be refined to fit in the new system.
For departments such as the Human Resource Management, this implementation was a considerable change, due to the general standardization across all subsidiaries needing to be taken into account. The regulations being standardized too, everyone had to be informed of the new processes implied by the implementation of the ERP system. . What do you think some of the implementation issues and risks might have been with this system? As mentioned before, the main issues and risks of implementing such a system is getting the people used to the change.
It needs a consequent prior work of information and communication, and then of training to adapt the workforce to the change. Then, there might have been some difficulties linked to any operational change done in a company, that can have different natures.
The first one is the question of motivation: do people really want this change? Being standardized ND having to comply to new rules is never easy for an employee used to his or her old system he or she has been using for several years.
It requires time of training, during which the worker is not actively contributing to the revenues of the firm. On a more physical and technical approach, installing the Oracle system must have engendered difficulties for people to work during the transition time. The old system was probably not looked at in details, and some measures may have been needed to ensure people can continue working during this time. A further point may seem Insignificantly, out all ten support services were proudly locate to ten new system and not to helping the employees.
The relationship with customers might have been pretty complicated too: on the very first days the system is operating, there are always some bugs or some people unable to use it properly, leading to errors or mistakes that deteriorate the service provided to the client.
On a financial aspect, the investment made in the new system would represent a tremendous cost, which is money not invested elsewhere. This means that the other departments would robbery need to deal with shorter amounts of cash during a certain period, therefore postponing other investments (replacing old transports for example).
Finally, strictly on the nature of this change (implementing a new information system in a company), one of the huge risk would be to lose always precious data, which could have dreadful consequences if it were to concern a customer. In the case of missing data, it can be harder for the employees to achieve their work. Consequently, the tasks are harder and the employees waste time recovering the data they need, Hereford drastically raising the inefficiency of the firm for some time.
6. How did this investment in ERP systems help Consistent achieve operational excellence?
What do you think were the benefits of installing this system given the substantial costs involved? Such a considerable investment surely did not prove useless: the information and data needed to be standardized in order to make the managers able to operate properly. With the same types of information, they can probably work together more easily now. In addition, global HRS policies and efficient connections between employees’ financial and personal information have been dad. The Supply Chain Management is easier, the relationship with customers is simplified and unified, and management processes are optimized.
All these contribute to building operational excellence within Consistent.
Moreover, some benefits can probably be inferred from this new ERP system. Communication within the entire organization must have reached its highest point. Consistent had to improve the information travel not only from one department to the other, but also from one country to another. We can easily imagine, for instance, that in spite of the very averse needs from the Logistics department to the R one, they still require to process the same information and the same data.
This first step through standardization must also have helped building a corporate culture, that was so far dispersed between the small acquired companies. And now that the customers are all clustered in one chunk, Consistent can grow more simply to a global scale.
Through this combination of efficiency, optimization, standardization and centralization, Consistent is probably cataloging its profitability and taking the right path to avoid an otherwise undoubted obsolescence.