Reebok introduces products into the market on seasonal and annual basis. Their product infusion into market is at least five to seven times in given calendar year. On an average it takes 18 months to produce a new product from scratch, however the exemption being “quick to market” products which takes more no more than 3 months to be produced. The network and rapport with the suppliers and distributors is immense to facilitate faster times to gain industry feedback, to send out new goods faster to the shelves.
Challenges which ERP implementation addressed
The common challenges which Reebok had owing to the size of its huge customer base and disbursed manufacturing facilities. Globe sales network and varied preferences. To satisfy this, Reebok wanted a systems solution which can actually lower the product development time, condense stats from all quarters of the world of both B2B and B2C information at a click of a button away. Was ERP really able to help them to address their concern is what is analyzed in the following slides.
Past Environment
The information that the company had was all scattered and it was as small islands, hence retrieving them was difficult. The transparency of information was there. Obsolete information was getting stacked and technology at factory was outdated and off shore of the administration to monitor. Command over process was lost. All this lead to high stress levels of employees. Image 1 is pictorial representation of the past environment
Image 1.
Current Environment
Huge investments into automation, lead to a change in scenario. Through internet factory activities were monitored. Computerization means single data base with high transparency and latest information at just a click away. There is no manipulation of data. This also has led to relatively lower stress levels.
Image 2.
Key attributes of current environment
Centralized information storage has enabled book keeping of entire full-fledged product information irrespective of the area they are manufactured and underlying technology. This advanced feature of digital environment has helped in command and control of the entire process and create digitally generated images of finished goods would look like. Association and tagging of products with respective categories is made easy, this paves way for future enhancement of product portfolio with much fuss and worrying about data loss or pattern miss-match. Internet, common platform ERP makes 24/7 contact with all divisions (from suppliers to vendors) of the supply chain. Industry triggers are indicated automatically.
Results of ERP implementation in product development
ERP implementation has helped the company to manage a product line of 15complete seasons seamlessly. 45000 + files are stored electronically in the information storage system. Milestone capping has risen from 2 footwear and 3 apparel to 8 and 9 respectively.
E (Electronic) – HUB Supplier: Role of ERP
The present statistics of logistics:
5,000 + purchase orders per month
40 Main Footwear Factories in 8 Countries
600 Apparel Factories in 29 Countries
450 Raw Material Suppliers
27 Freight Forwarders
Transportation modes include Ship, Truck, Rail and Air
34 Custom Brokers
This section of the paper discusses the supplier aspect of the supply chain, the role of internet technology in extending the computerization from basic ERP to PLM (Product lifecycle Management) systems.
These systems have made life simple, improved operational efficiency by automatically accept purchase orders placed and distribute them to respective departments and production facilities across the globe. It also tracks information of shipping details, track the work in process (WIP) and last but not least publish new labels and images.
Old supply chain model
Image 3.
Image 3 above demonstrates how the previous supply chain system was highly unorganized and cluttered. Such a formation would result in loss, manipulation of information, lead to fuss at every stage of the process and production. The modes of communication too were very primitive, slow, unreliable source such as Fax, Mail, Couriers, site visits, EDI, proprietary file transfers.
New Supply Chain
Image 4.
Image 4 is clear representation of highly organised with a e-hub which acts as single point of contact for all the divisions of supply chain. This agile system ensures instant data transmission without loss or theft in data. Retrieval of information is made a breeze. Communication mode is state of the art Business-to-Business data sharing /Vendor Neutral E-Hub/ Hosted Environment (ASP model), Workflow, message alerts, back office integration with reporting capabilities.
Result of revised supply chain
Revised supply chain has help achieve increased operational efficiency through electronic transmission of order information directly into the factory systems with added accuracy, lower administration cost. The same system is implemented for newer and upcoming production facilities too. Common platform for process supervision and software as standard across the entire supply chain including small suppliers has benefited in order tracking and back order retrieval prompt. Purchase order mandate is now getting logged automatically which helps finance division of the company to get file year end taxes with little or no fuss. Purchase order can be reprinted at any point in time, while pre- delivered reports can be managed with the tool to over-ride purchase order activity.
Recommendations
Looking at ERP implementation from the higher level management perspective, obtain the leadership of executives of the organization, get the involved in the process for them understand better the need/ use of this technology in the interest of organizational development. Try and balance the top-down objectives allowing leverage for improving economies of scale and job satisfaction across al verticals of the hierarchy.
Implementation process must be gradual and progressive. Sudden rush on improvement in technology and/or drastic development (big-bang implementations) should be avoided in order retain the culture within the organization, to boost employee morale. The ideal development/ implementation phase would be once in every 3 to 6 months.
Finance department of the all organizations must take into miscellaneous expenses, include the process down time, employee training costs as part of the budget as this is a substantial quantum over the expected cost of ERP (both software and hardware necessary).
Organizations working on seasonal business must ensure that the project lead in and lead out should not fall during the peak of the season as it might result in business getting affected. Adhere in strong project methodology and focus attention on issues and off plan items.If possible, defer most complex technology challenges until team has mastered the technology and gained confidence.
Selection of the vendor (service/ support provider of ERP) has to be done after detailed market study. ERP package which allow future expansion must only be selected. Organizations must keep off from software that is not the best fit for the organization.