SAI460 Week 5 Case Study-Nestle USA PDF

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Weekly Case Study for Week 5 (100%)...

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Week 5 Case Study

Assignment Week 5: Case Study- Nestle USA Stephen Aubert August 10th, 2019 SAI460: Organizational Process Analysis, taught by Professor: Michael Goyden

Week 5 Case Study

Table of Contents Nestle USA Installs SAP/ERP.....................................................................................................................2 Depth of Discussion.....................................................................................................................................5 References................................................................................................................................................... 7

Nestle USA Installs SAP/ERP

Week 5 Case Study

In most cases ERP system offers the company the chance to re-engineer business processes, coordinate the systems of geographically dispersed locations, consolidate data, and empower users by giving them access to all the company’s data in real time. In past weeks we discussed in ERP implementation lead to failures due to poor scheduling of project managers and budget is low to cover large costs or costs that were not expected if later in the project if more resources or costs are added outside the original plan before the project started. In this week we cover a company Nestle SA a Swiss food conglomerate. “In 1997, Nestle USA decided that it would standardize all of the major software systems in all of its divisions…By March 1998, the team had its plan. It decided it would standardize on five SAP modules-purchasing, financials, sales and distribution, accounts payable, and accounts receivable…the project to install SAP modules also became a Y2K program”(Paul,489). So the ERP implementation for any general company is to make their processes more efficient and Nestle USA has decided to standardize all of the major software systems in all of its divisions and the text further goes about going against SAP module and went to Manugistic model because, it was already designed to be somewhat compatible with the SAP modules. The project started in 1997 with hopes of systems implementation being completed by Y2K as efficient and running as possible. The Nestle USA considered the implementation of SAP modules to standardize their operations based on their prices which ranged differently in each division for the same product. During the planning phase, all of the divisions agreed matters on the standards of the products and divisions. One of the many challenges was Nestle USA faced along the implementation was the conflict with the scheduling issues and reaching their goal of making it for Y2K and having the software implementation and running ready by December 31,1999. The resistance of the implementation came from workers that did not understand the SAP modules deployed, stakeholders failed to

Week 5 Case Study

look over the different divisions would have to go through not only culture changes but also major changes to the business processes set in place for a long time. Then employees were not informed of the changes to the different processes were helpful in achieving their responsibilities, in all there was a lack of effective communication and the translated into the people of not wanting to learn the processes or make the changes. This is due to the major issues of Nestle USA has decided to put in the rear heat of the Y2K project and gave the priority in dealing with the success of the implementation and making sure the processes were set in stone or correctly with the SAP structuring model. The changes in the model of the project team added to the pain and the lack of preparation of more deadlines/milestones setback. So the team tried to pull it together and they were able to develop a brand new set plans added as new deadlines in correcting the previous mistakes or conflicts. Then came 2002 and the Nestle US SAP implementation is completed and the things covered from the implementation is to make sure to understand the importance of business processes and to understand to successfully deploy the software solution to improve those processes. Then the Nestle USA needs to change the businesses processes and the need to be achieved with the planning and effective communication at all levels of the organization. So starting from the beginning of the project, it would been best to include team of the main executives from the divisions to meet and develop a plan for the deployment to covey all the required information to employees to feel part of the project and avoid the natural resistance when it comes with the changes in their roles. It would also been best not to set small time constraint’s like meeting within the implementation of SAP project software to be finished by Y2K and extended the time for more testing and safe measures were taken. In the text it mentioned of costs “The company spent approximately $200 million on the transition…The new planning processes, for example, make it possible to project Nestle USA-

Week 5 Case Study

wide demand more accurately and to save significant inventory and redistribution costs. The VP for Nestle USA’s supply chain, Dick Ramage, estimates that supply chain improvements have accounted for a major portion of the $325 million that Nestle has saved as a result of the SAP installation”(Paul,490). As the text stated the project saved 325 Million dollars in long-term goal of inventory/redistribution costs after the SAP implementation though, they spend 200 million dollars for the project on the short term. So overall that covered the last question of the three main questions of the kind of personal or political resistance which was encountered in the organization? How was it overcome? What techniques were employed? What worked? What didn’t work? If you were hired as an advisor prior to the start of the project, what specifics steps would you recommend to make the implementation as smooth as possible? Overall from my understanding Nestle USA Case study taught me of the ERP implementations from previous week and this week of the success and failures of it. Also the recommendations of the right individuals for consultants or vendors, setting agile type of project planning rather than the traditional specific planning because, like in this case study there were changes that were necessary and needed to be changed during the implementation process, another recommendation is proper training of employees of the system and ERP implementation to obtain universal buy-in for the project by top level executives. Also the text stated how ERP has problems as well that they are not permanent solutions and used to updating and improving the organization and is the planning process that involves time and costs which are the two main factors involved in it.

Depth of Discussion

Week 5 Case Study

I wrote this Week 5 case study based on the reading of the Business Process Change Chapter 17 reading of Nestle USA installs SAP pages from 488-490. We covered the questions of the kind of personal or political resistance which was encountered in the organization? How was it overcome? What techniques were employed? What worked? What didn’t work? If you were hired as an advisor prior to the start of the project, what specifics steps would you recommend to make the implementation as smooth as possible?

Week 5 Case Study

References Paul, Harmon,. Process Trends. Business Process Change: A Guide for Business Managers and BPM and Six Sigma Professionals, 2nd Edition. Retrieved on August 11th from: https://devry.vitalsource.com/#/books/9780123741523/cfi/13!/4/[email protected]:34.7...