Process innovation Final Exam
(2 hours)
Please answer the following question:
Question 1: criticize the example of reengineering using the first text
It has been estimated that about two-thirds of re-engineering projects either fail completely or fall significantly short of their hoped-for outcomes. Here are the most common barriers to the success of re-engineering attempts, along with their estimated percentages developed by Hammer & Associates:
Indicated resistance to change - 60%
1.
Limitations of existing systems - 40%
2.
Lack of executive consensus - 40%
3.
Lack of a senior-executive "champion" - 40%
4.
Unrealistic expectations - 30%
5.
Lack of cross-functional project teams - 28%
6.
Lack of team skills - 25%
7.
Late staff involvement - 18% Project charter too narrow - 15%. Here are the most common errors that contribute to the failure of re-engineering:
Trying to fix a process instead of changing it.
Not focusing on the business process.
Ignoring everything except the process design.
Neglecting people's values and beliefs.
Being willing to settle for minor results.
Quitting too early.
Placing constraints on the definition of the problem and the scope of the re-engineering process.
Trying to make re-engineering happen from the bottom up.
Assigning someone who does not understand re-engineering to lead the effort.
It is vital to remember that implementation is as important as design. It is in this phase that the socio- part of sociotechnical systems re-design comes into play. Neglecting the human element is a design for poor implementation.
Compiled by John E. Jones
© 1995 Reid Moomaugh & Associates | Permission is granted to reproduce this document for training and education. Comments or suggestions for additions or changes are encouraged.. Updated 05/10/06.
8.
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Twenty Sites Four Countries -- Enterprise-wide Re-engineering Across All Operations with SAP® R3® for Millennium Chemicals
Millennium Chemicals Inc. (MCH) is a major international company with leading market positions in a broad range of commodity, industrial, performance and specialty chemicals, consisting of:
Industry
Energy, Utilities and Chemicals Country
US Alliance partner
SAP Solution
SAP
Millennium Inorganic Chemicals Inc. (MIC) -- the 2nd largest producer of titanium dioxide in the world. MIC operates in three regions, The Americas, Europe and Asia/Pacific with eight plants and one mine
Millennium Specialty Chemicals Inc. (MSC) -- the world’s largest producer of turpene-based fragrance and flavor ingredients derived from turpentine
Millennium Petro chemicals Inc. (MPI) -- 2nd largest U.S. manufacturer of acetic acid and vinyl acetate monomer
Equistar Chemicals LP -- the largest producer of ethylene and polethylene in North America
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Business Requirements
MCH’s key business objectives were to:
reduce costs
support global consistency across regions optimize business processes
increase Economic Value Added (EVATM) facilitate organizational growth
System Requirements
MCH had inherited disparate IT systems from several company acquisitions. In order to integrate company operations across borders, Millennium Chemicals Inc. decided to implement the ERP business software SAP.
Capgemini was selected to conduct a Business Improvement Project (BIP) for MCH to establish the scope of a global, enterprise-wide SAP implementation, affecting 10 manufacturing and administrative sites in 4 countries. Ten SAP modules would be implemented: FI, CO, PS, AM, SD, MM, PP, PM, QM, and HR.
The Capgemini Solution
Entering into one of the largest consulting engagements in the organization’s history, Capgemini took responsibility for complete project delivery and project management at 20 sites worldwide.
MIC is the largest of the divisions, with manufacturing facilities in the United States, the United Kingdom, France, Australia and Brazil. This project involved re-engineering all operations worldwide except Brazil.
The first region to “go-live” was Asia/Pacific, followed by a phased rollout to the United States and Europe in the following six months. The MIC project was a 14-month re-engineering across all operations with focus on Procurement, Quality Management and Integrated Demand Management. The BIP
comprised a truly international team: 61 consultants from Capgemini and 75 professionals from Millennium.
Business re-engineering introduced new designs that were incorporated into the SAP implementation, consisting of ten modules and impacting business processes for over 3,200 employees. The project scope also included “Change Management,” i.e., Organizational Design, Communication, Mobilization,
Education and Training. The project was built around Capgemini’s “Just Start” approach . The complete
“run” was outsourced during the development, indicating that Millennium wasn’t under any pressure to make early decisions about the infrastructure or build their own knowledge around an infrastructure that was moving to a complete “people management” structure with centralized HR.
MIC’s very successful “go-live” in the Asia/Pacific region was the first of the three MICs to implement SAP. (MPI and MSC were the first and second subsidiaries respectively to implement SAP. MIC was the third).
MCH worked with Capgemini to implement a global Human Resources system (including payroll) using SAP’s HR module. “The idea is to have one global database which will cover all regions, and will incorporate Inorganics (MIC), Specialty (MSC), and Petrochemicals (MPI) and will facilitate movement of people between the companies so that we can leverage our strengths,” explained the HR module team leader for MCH. This project was part of the MIC project.
MPI was the first of the projects to “go-live” and was accomplished in six months using AcceleratedSAP methodology. Six SAP modules were implemented in two USA locations.
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MSC completed two re-engineering initiatives in the areas of Demand Management and Plant
Maintenance, and went “live” with seven SAP modules in five plants in three countries. The Capgemini delivery team comprised 12 consultants.
Four Conference Room Pilots (CRP) or mobilization events, conducted in 2-3 month intervals, provided valuable feedback into the phases of the BIP rollout. The CRPs were well attended by over 200
participants from seven sites, four countries and three continents. The audience broadly comprised executives, sponsors, team leads, guests and project team members. Key objectives of the CRP were to:
validate that the processes and systems support company goals and objectives provide all players with a shared understanding
show that the project was on target
facilitate a common approach from different points of view build buy-in to the project
During this project when Millennium acquired major companies in France, Capgemini was able to demonstrate flexibility by being able to adapt the overall picture to accommodate new players.
Complete Team Mobilization
The international magnitude was evidenced by 22 nationalities participating on this project. MCH brought a complete team in from Australia, France and the U.K. to the USA. Cross-cultural exchanges were maximized with foreign language classes that were arranged for team members. “Go-live” was one of the most successful ever seen and stands tribute to the tremendous partnership during 14 months among all team members. During the European rollout, Capgemini also leveraged skills of its resources in France and the U.K.
The Benefits
Successes at MCH did not come without challenges. Clearly, this proves that by leveraging the unique talents across the Capgemini organization, we were able to excel in delivering high added-value services to clients. This implementation marked the first major milestone in the “shared risk/ shared reward”
contract. Module implementation and re-engineering objectives enable MCH to:
decrease time-to-market for products and reduce service interruptions to the manufacturing process obtain globalization through operational consistency across regions
optimize business processes facilitate organizational growth
improve profitability with increased Economic Value Added concepts, determining the allocation of financial and management resources. Cash flow and return on investment are primary measurement tools, contributing to shareholder value.
By taking a business approach built on internal collaboration to offer maximum results to the client, Capgemini expanded its relationship with Millennium.
“I have always been positive about the way Capgemini has performed - they brought people to the project who could really get the job done. We have started to see the benefits of the financial integration and our first close went very well.”
MPI’s Project Manager
“I don’t think we would have come together as well as we have as a team without Capgemini both guiding us and setting an example. They certainly have inspired confidence in us. And one of the things I find myself worrying about now is how we are going to manage when Capgemini leaves.”
MIC’s Integration Manager
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