Notes

Outline

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The Client A world leader in Computer Manufacturing. Pioneer in developing a new type of computer. Head office in USA. Manufacturing plants in many countries.

Need of the project A new-comer entered in the market with a revolutionary idea of configuring and ordering a PC online. This idea was welcomed by customers. Many small players entered in the market to give non-branded PCs. These factors were considered as potential threat to the market position of the company.

Problem Defination To reduce response time to two working days from 7-8 working days. To reduce inventory by 30%. To Reduce cost of manufacturing by 10%

Methodology adopted To introduce some Supply Chain Management Solution to achieve the ambitious results.

Major Findings The industry has a wide range of finished goods. The finished goods are configurable. The components are continuously upgraded. Keeping track of the versions is very important but difficult. The components are rapidly getting obsolete.

Major Findings (cont.) Small components are expensive. Keeping them under security and keeping track of inventory is a must. Customer driven market. The customer is not ready to wait. Market is concentrated around USA and Europe. However market in Asia is increasing very fast.

Constraints As per USA laws, components manufactured in some designated countries (e.g. Cuba) can not be imported in the country. Therefore tractability of each component going into the product is important. Assemblies processed in restricted zones of some countries (e.g. Shenzhen SAR of China) have to follow some restrictions.

Solutions Recommended The first alternative was to implement SAP R/3 as SCM solution. Build necessary additional functionalities using ABAP language of SAP R/3. Another alternative recommended was to implement SAP R/3 as the central database and integrate it with other SCM solutions suitable to the industry. Decided to go by the second alternative.

Implementation Details SAP R/3 was implemented as a central database and other solutions were also implemented with SAP R/3. SAP R/3 was implemented with a central server in USA and three other servers in each region. The central SAP database in USA was designed to get updated with the regional databases every night USA time.

Implementation Details (cont) Other solutions would be updating SAP R/3 central database every night USA time. There would be only one final assembly plant every region. Other plants would produce sub-assemblies. Requirements of one type of computers would be aggregated globally and assembled in one final assembly plant.

Implementation Details (cont) All the plants would work on ‘one company-one way of working’ principle. Minor variations due to local requirements will be accepted. The web-based order booking would be introduced in second phase.

Benefits Realised After first phase of implementation: Response time was reduced from 7 to 8 days to 4 days. Inventory was reduced by 20%. Cost of manufacturing was reduced by 7%

Future scope Web based order configuration and booking. More reports can be added to give more transparency of the business to the management.

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