United under SAP : The process of eliminating information islands for ThyssenKrupp in China (Zhongshan) 9783836628686, 9783836678681

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Marcel Gundlach

United under SAP

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The process of eliminating information islands for ThyssenKrupp in China (Zhongshan)

United under SAP : The process of eliminating information islands for ThyssenKrupp in China (Zhongshan), Diplomica Verlag, 2009. ProQuest Ebook Central,

Diplomica Verlag

Marcel Gundlach United under SAP The process of eliminating information islands for ThyssenKrupp in China (Zhongshan) ISBN: 978-3-8366-2868-6 Herstellung: Diplomica® Verlag GmbH, Hamburg, 2009

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Dieses Werk ist urheberrechtlich geschützt. Die dadurch begründeten Rechte, insbesondere die der Übersetzung, des Nachdrucks, des Vortrags, der Entnahme von Abbildungen und Tabellen, der Funksendung, der Mikroverfilmung oder der Vervielfältigung auf anderen Wegen und der Speicherung in Datenverarbeitungsanlagen, bleiben, auch bei nur auszugsweiser Verwertung, vorbehalten. Eine Vervielfältigung dieses Werkes oder von Teilen dieses Werkes ist auch im Einzelfall nur in den Grenzen der gesetzlichen Bestimmungen des Urheberrechtsgesetzes der Bundesrepublik Deutschland in der jeweils geltenden Fassung zulässig. Sie ist grundsätzlich vergütungspflichtig. Zuwiderhandlungen unterliegen den Strafbestimmungen des Urheberrechtes. Die Wiedergabe von Gebrauchsnamen, Handelsnamen, Warenbezeichnungen usw. in diesem Werk berechtigt auch ohne besondere Kennzeichnung nicht zu der Annahme, dass solche Namen im Sinne der Warenzeichen- und Markenschutz-Gesetzgebung als frei zu betrachten wären und daher von jedermann benutzt werden dürften. Die Informationen in diesem Werk wurden mit Sorgfalt erarbeitet. Dennoch können Fehler nicht vollständig ausgeschlossen werden und der Verlag, die Autoren oder Übersetzer übernehmen keine juristische Verantwortung oder irgendeine Haftung für evtl. verbliebene fehlerhafte Angaben und deren Folgen. © Diplomica Verlag GmbH http://www.diplomica-verlag.de, Hamburg 2009

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Table of content Table of content............................................................................................... III Table of figures................................................................................................. V Table index....................................................................................................... VI Table of abbreviations ................................................................................... VII 1 Introduction .................................................................................................. 1 1.1 Motivation ................................................................................................ 1 1.2 Objective .................................................................................................. 1 1.3 Structure................................................................................................... 2 2 Disambiguation ............................................................................................ 4 2.1 SAP System ............................................................................................. 4 2.1.1 SAP ERP w/ ECC 6.0 ...................................................................... 5 2.1.2 Accelerated SAP (ASAP) ................................................................ 6 2.2 Information ............................................................................................... 7 2.2.1 Information flow ............................................................................... 9 2.2.2 Information island ............................................................................ 9 3 Company introduction ............................................................................... 11 3.1 ThyssenKrupp Group ............................................................................. 11 3.2 ThyssenKrupp Elevator.......................................................................... 12 3.2.1 Business Unit Structure ................................................................. 12 3.2.2 ThyssenKrupp in Zhongshan......................................................... 13

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4 Influence of Chinese Culture on the business company ........................ 15 4.1 Language and mindset .......................................................................... 15 4.2 Corporate culture and Chinese work attitude ......................................... 16 4.2.1 Systematic approach ..................................................................... 18 4.2.2 Interpersonal relationships (Guanxi).............................................. 19 5 The process of implementation ................................................................ 20 5.1 Prearrangement ..................................................................................... 20 5.1.1 System Requirements ................................................................... 20 5.1.2 (Project) Management organization and requirements .................. 21 5.2 Actual analysis (as is) ............................................................................ 23 5.2.1 Business processes at present...................................................... 24 5.2.2 Currently used applications and procedures ................................. 25 5.2.3 Current problems........................................................................... 26 5.3 Target / Analysis (to be) ......................................................................... 28 5.3.1 Project plan ................................................................................... 29 5.3.2 Scheme of improvement................................................................ 30 5.4 Realization of the project ....................................................................... 32 5.4.1 Project Preparation ........................................................................ 32 III

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5.4.2 Blueprinting ................................................................................... 35 5.4.3 Realization..................................................................................... 37 5.4.4 Final Preparation ........................................................................... 39 5.4.5 Go Live and Support ..................................................................... 41 6 Reaches & Results ..................................................................................... 43 6.1 Project appraisal .................................................................................... 43 6.1 Reaches in relation to the process of eliminating information islands .... 44 6.1.1 Disclosing information islands ....................................................... 44 6.1.2 Discovered existing information islands ........................................ 46 6.1.3 Method of treatment ...................................................................... 47 6.2 Comparison: “as is” – “to be” ................................................................. 49 6.3 Assets & Drawbacks .............................................................................. 52 7 Conclusion.................................................................................................. 54 Reference list ................................................................................................... IX

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Appendix ......................................................................................................... XII

IV

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Table of figures Figure 2.1-1: SAP ECC Modular System ........................................................... 5 Figure 2.1-2: Example Sub-System PP .............................................................. 6 Figure 2.1-3: ASAP Roadmap ............................................................................ 7 Figure 2.2-1: Information filter ............................................................................ 8 Figure 3.1-1: Graphic representation of the group structure ............................. 11 Figure 3.1-2: Plants worldwide (including Corporate) ....................................... 12 Figure 3.2-1: Business Unit Structure (Segment Elevator) ............................... 12 Figure 3.2-2: TKE ESC Production Growth ...................................................... 13 Figure 3.2-3: Zhongshan Company structure ................................................... 14 Figure 3.2-4: TKE ES/PBB plant Zhongshan.................................................... 14 Figure 5.1-1: Network configuration ................................................................. 21 Figure 5.1-2: SAP project organization chart .................................................... 22 Figure 5.2-1: High level “as is” process ............................................................ 24 Figure 5.2-2: Simplified process for IQC .......................................................... 25 Figure 5.3-1: Strategy and targets .................................................................... 28 Figure 5.3-2: Project time schedule .................................................................. 29 Figure 5.3-3: TKE Business Process – SAP Module Mapping ......................... 31

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Figure 5.4-1: Stages as CPA (Critical Path Analysis) with resource planning .. 34

V

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Table index Table 2.2-1: Overview of potential motives ...................................................... 10 Table 4.2-1: Differences between Chinese and German .................................. 17 Table 5.4-1: BPR: Key activities and planned results ....................................... 36 Table 5.4-2: RLZ: Key activities and planned results ....................................... 38 Table 5.4-3: FLP: Key activities and planned results ........................................ 39 Table 5.4-4: GLS: Key activities and planned results ....................................... 41 Table 6.2-1: Comparison: “as is” – “to be” 1/3 .................................................. 49 Table 6.2-2: Comparison: “as is” – “to be” 2/3 .................................................. 50

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Table 6.2-3: Comparison: “as is” – “to be” 3/3 .................................................. 51

VI

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Table of abbreviations ABAP

Advanced Business Application Programming

ASAP

Accelerated SAP

BPML

Business Process Master List

BPR

Business Process Reengineering

BOM

Bill of Material

CO

Controlling

CPA

Critical Path Analysis

ECC

ERP Core Components

ERP

Enterprise Resource Planning

FI

Finance

HP

Hewlett-Packard

IMG

Implementation Guide

IQC

Inspection Quality Check

IS

Information System

IT

Information Technology

KU

Key User

LG

Logistic

MD

Manufacturing Department

ME

Manufacturing Engineering

MM

Materials Management

VII

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MRPII

Manufacturing Resource Planning

MS

Marketing and Sales

PBB

Passenger Boarding Bridge

PE

Project Engineering

PEM

Project Execution Management

PO

Purchase Order

PP

Production Planning

PS

Project System

PU

Purchase

QAS

Quality Assurance Staff

Q&Adb

Question & Answer Database

QM

Quality Management

SAP

Systems, Applications and Product in Data Proseccing

SD

Sales & Distribution

SOA

Service-oriented Architecture

SOW

Scope of Work

TKE ESC

ThyssenKrupp Escalator Co. (China) Ltd

TKE PBB

ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd.

VIII

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1 Introduction Nowadays, companies all over the world face incredible pressure in global markets. To survive and to stay competitive, procurement of every description needs to be developed as a major leverage to save cost in the recent years. To achieve competitive differentiation with advantage, companies have to empower information workers. Business processes are the key to unlock the potential of these strategies. 1.1

Motivation

A supportive IT structure may play a decisive role for business processes and can make a great deal of difference. The implementation of an ERP system provides an opportunity of a „„configurable information system (IS) package that integrates information and information-based processes within and across-functional areas in an organization‟‟1. In information system areas, implementation is defined as „„the process that begins with the managerial decision to install a computer-based organizational information system and is complete when the system is operating as an integral part of the organization‟s information

system‟‟

2

. After

implementation, significant benefits such as improved customer service, better production scheduling, and reduced manufacturing costs can accrue from successful implementation of ERP systems as well as staying competitive against competitors in matters of flexibility and adaptively. But especially, more transparence through a common used system enables the opportunity of increasing inner-company‟s processing and working flows with fast and convincing criteria of decisions.

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1.2

Objective

In the scope of this book the methods and concepts of SAP implementation for ThyssenKrupp Escalator in Zhongshan (in the South of China) have to be investigated and presented. This investigation has to include both the project approach and before-after situation in order to increase the practical relevancy. 1 2

Kumar, K., Hillegersberg, J.V.: “ERP experiences and Evolution”, pp. 23–26, 2000 Burns, O.M., Turnipseed, D.: “Critical success factors in manufacturing resource planning implementation.”, pp. 5-19, 1991 1

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However, ERP systems are expensive and time-consuming, and once ERP systems are implemented, management should evaluate whether it is successful and delivers promised benefit. The successful implementation is extremely coupled on the predetermined goal(s). Furthermore, Chinese culture is quite different from Western countries; so is organizational culture imbedded within national culture and it is a core attribute to discern between the Chinese view of satisfaction and the Western view. The SAP implementation project in Zhongshan cut both ways: for ThyssenKrupp Co. (China) Ltd. and ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd., which means both companies – N.B. based in the same location – will be united from the IT point of view. Finding existing information islands and to see the effect of improvement by implementing SAP needs a research of the whole project‟s analysis. Target is to find out potential of improvement of the company‟s business processes according to eliminate existing information islands. The specific aspects of business in China have to be shown and the main barriers pointed out, as well as possibilities emerging. With these facts as basis, a result of implementation success has to be worked out, which provides enhancement to the existing methods of capability improvement by considering the local requirements. 1.3

Structure

In order to attain meaningful results, this ledger‟ approach is primary based on an attending survey on issues of the implementation project of SAP directly in situ at ThyssenKrupp Escalator in Zhongshan, in respect of practices in China. In the beginning of this work, definitions are given on the main terms required, so

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e.g. “SAP system” and “Information island”. “Information island” may be confused, since that term may not be defined in other works. Further, explanations are given to show the considered aspects. After that, from ThyssenKrupp Group down to the company‟s plant ThyssenKrupp Escalator in China (Zhongshan) is introduced with thoughtful details such as the organizational structure and facts and figures.

2

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In the following, Chinese culture on the business company is focused. The fundamental circumstances to consider are explained. This chapter has been involved due to the site survey according to the matter of relative importance about information treatment. The Chinese culture aspect contains special characteristics and can be of strategic and operative influence. The basic indicators are introduced and illustrated. As next, the main activities are focused: the process of implementation with its goals, including actions and responsibilities. This is concluded by the requirements in aims, a strong focus on the actual analysis with current used processes and software as well as the scheme of improvement. The differences between the “as is” and “to be” are shown by that and the specific approach analyzed, in order to understand the importance for a structured approach like the relevant one for this textbook: ASAP. The actual analysis based primarily on a representatively chosen core process. The accelerated SAP roadmap during the realization phase is presented with its key activities and deliverables as it is the method of choice for the project approach. In chapter 6 the survey results are presented, reaches are described. Researches of internal information islands are discussed, the general issues presented and evaluated upon applicability in China. The SAP implementation plays the essential role, so its utility is emphasized as well. Reaches and results in form of a once more comparison between the “as is” and “to be” is a useful extension and derivation to show the major drivers for success. Assets and drawbacks is the discussion for possible improvements but also for barriers after going live. After the description of results, a summary and an outlook for the future conclude this

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work.

3

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2 Disambiguation Before dipping into the matter, a description of the survey‟ two main topics will be now examined in this chapter. One core point is the implementation of the Enterprise Resource Planning (ERP) software from SAP. The second is the field about information (rather information islands). The study deals with these terms and therefore a brief introduction about “SAP System” as well as an explanation of the term “information” is given. 2.1

SAP System

SAP AG is an international enterprise founded in Germany in the year 1972. The developer of proprietary software for business solutions used to focus chiefly on middle and large sized enterprises but now starts to actively target small sized enterprises. It aims to support and improve everyday business processes in different industry sectors. Amongst others, SAP ERP is one of the main products and for this investigation the one of importance. SAP stands for “Systems, Applications and Products in data processing” 3. SAP R/3 was first released in 1992 and is still core of SAP products. The “SAP R/3” version gives references about its system structure. This means that “R” stands for “Real-time” and “3” is related to the 3-tier (Client- Server) architecture: database, application server and client.4 A great leap forward was made by upgrading the product using SOA technology (Service-Oriented Architecture) which offers a more and quicker flexibility.5 Enterprise Service-Oriented Architecture

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Independent of the operating system, enterprise SOA provides a reusable runtime environment and enables to link stand-alone processes to quickly compose new end-to-end processes and selectively combine and/or redesign existing processes. Beside the advantages of adaptability and flexibility, the possibility to automate many process steps that used to require human intervention. It also empowers

3

Muir, N., Kimbell, I.: “Discover SAP”, pp. 31-43, 2008 Hansen / Neumann: “Wirtschaftsinformatik 1“, Stuttgart, pp. 544, 2005 5 SAP R3 Architecture: “interview questions and answers”, 2008 4

4

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information workers to gain a plus in cost efficiency.6 In this context, the application server provides the technical basis between enterprise SOA and the business process platform, on which it is built on.7 2.1.1 SAP ERP w/ ECC 6.0 ECC 6.0 is the latest up-to date version and the successor of SAP R/3 Enterprise. The token “ECC” stands for ERP Central Components, hence, in SAP ERP ECC are the central ERP functions included. Software library SAP‟s successful concept is running in a modular system. SAP offers all financial, logistic, supply chain and human resource modules which are very tightly intertwined and integrated:

SD

FI

Sales & Distribution

Financial Accounting

MM

CO

Materials Mgmt.

Controlling

PP

Production Planning

AM

ECC

QM Quality Mgmt. PM

Client / Server ABAP/4

Plant Maintenance

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Fixed Assets Mgmt.

PS Project System

WF Workflow

HR

IS

Human Resources

Industry Solutions

Figure 2.1-1: SAP ECC Modular System Source: ThyssenKrupp ES/PBB, PowerPoint presentation SAP_Kick-Off.ptt, 2008

6

SAP Enterprise Serviceoriented Architecture from a Business Perspective: “Differentiate, Accelerate, and Simplify Your Business”, pp. 9-13, 2008 7 SAP Deutschland AG & Co. K: “IT-PRACTICES UND IT-SCENARIOS MIT SAP NetWeaver®“, 2008 5

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Each of these modules is so complex and deep, they are further divided to sub modules8 shown in the example of a PP module:

PP SFC

PP PC

PP CRP

Production activity control

Capacity planning

PP PI

Process industry

Costing

PP MRP

Requirements planning

PP

PP MPS

PP BD

Program planning

PP IS

Production info system

Basic data

Figure 2.1-2: Example Sub-System PP Source: ThyssenKrupp ES/PBB, PowerPoint presentation SAP_Kick-Off.ptt, 2008

It shows that such modular system provides a high degree of cross-functional integration (amongst: operations, manufacturing, marketing, sales, logistics, purchasing, finance, human resources, etc).9 2.1.2 Accelerated SAP (ASAP) Purpose of Accelerated SAP (ASAP) is a comprehensive solution for implementing SAP ERP Software quickly and efficiently. A large drawback of SAP is that it takes too long to implement. Long-term implementation means higher costs.

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SAP developed ASAP methodology and shall cut the implementation time and reduce costs.10 ASAP includes and combines several accelerators and tools, such as templates, forms, check lists, “Q&A” and examples11. The ASAP Roadmap constitutes a key part of the implementation assistant. Each level of the Roadmap structure stores 8

SAP R/3 and Enterprise, http://www.sapmmexpert.com/sap_r3.htm, 11.08.2008 Ghosh, A., asp alliance, 2008 10 Dr. Andijani: “Industrial Information Systems (061)”, 2008 11 SAP AG: “AcceleratedSAP”, p. 5, 2008 9

6

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documents. These contain recommendations for implementing SAP software as well as links to helpful accelerators (tools).12 The roadmap below visualizes the ASAP methodology:

Figure 2.1-3: ASAP Roadmap Source: http://www.uky.edu/IT/AdminApps/IRISTechPortal/asap/roadmap-horizontal.gif, 20.08.08

It divides the implementation process into the five phases: (1) Project Preparation, (2) Business Blueprint, (3) Realization, (4) Final Preparation and (5) Go Live & Support. This will be further explained in chapter 5 “The process of implementation”. 2.2

Information

It is important to clarify the term information. According to the Duden and encyclopedias, the term “information” has its origin from the Latin word: “informatio”, “in” and “forma” respectively meaning “to give something shape”, “to deal”, “to outline”.13 The definition further outline the term and fits even better: “By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw

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facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.”14 But actually, to define the term “information” depends on several point of views, that is why there are plenty definitions in different ways. Due to integration function 12

SAP AG: “AcceleratedSAP”, p. 5, 2008 Duden: “Information“, http://www.duden.de, 28.07.2008 14 According to Laudon (1997) as cited in Rolf Alexander Teubner (2008): “Grundbegriffe der Wirtschaftsinformatik”, p. 5, 2008 13

7

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and focusing on information systems, the term “information” is highly signifant in the field of in business computing. The graphic account below is based on material from the study course “information industry” and helps to point out the differences between the keywords data, messages and information:

Signals

Syntax

Data Semantics

Message Pragmatics

Information

Figure 2.2-1: Information filter Source: Lecture script in subject 'information industry' IW, Prof. Pietsch, SS2008

Sent signals or characters (as in a communication system or computer) may contain thousands of bits of information and - if the syntax is matching -

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representing facts or data. A message is received and understood as one, if the semantic is given which again is necessary to elicit whether it is information. With knowledge acquired through study or experience or instruction the message might become to information for the receiver if the pragmatics can be extract.15

15

Merriam-Webster: Online Dictionary, 30.07.2008 8

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2.2.1 Information flow The importance of information is obvious: variety compounded technical words contains the term information (for example information system, information flow, information management, information service, information islands, etc.).16 The characteristic of information flow consists of communication as information exchange between sender and receiver (interchange between people, person(s) and computer, between systems) to gain useful information. But to enable modeling, analyzing and to help improving processes safely, security management with access control must be regulated as well. In this way, information flow (e.g. along a process within departments) can have different level of security – quasi a question of transparency. Important to manage is, who (is allowed to) get which (parts) of information and also where, how and when. This flow should be proceeding fluently. According to that, if information won‟t be delivered complete or too late or even incorrect, an existing lack of information flo appears – an information island.17 2.2.2 Information island Those “islands” exist among everyday business processes of a company‟s range of operations. They aggravating the feasibility to delimit and solve problems. To keep an information flow up, transparence in (IT) structure to link the information islands is inevitable. Therefore, the source has to be found and the background reason has to be understood. The reason why such islands exist can be very manifold and even depends from which view the things are considered. But this can either consist on a single person or on several persons, on the approach or

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other circumstances. Indices for information islands are if between sender and receiver information run crawling and haltingly, although mostly the wanted and necessary information exists. The following high level structure is an exemplary, categorized overview of potential motives, why those information islands could come out: 16

According to Maier, Lehner (1995), p. 213 as cited in Rolf Alexander Teubner (2008): “Grundbegriffe der Wirtschaftsinformatik“, p. 2, 2008 17 Hansen / Neumann: “Wirtschaftsinformatik 1“, Stuttgart, pp. 310-313, 2005 9

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Interpersonal view

Company-internal view

IT structure view

Culture, language and mentality

Type of enterprise

Access and Availability (security and rights)

Skills, experience, knowledge

Corporate strategy

Kind of main system (or even no common system)

Personality and working method

Company management

Wide use of non-affiliated software / applications

Region/Location

Region/Location

Imprecise (“manually”) process approach

Table 2.2-1: Overview of potential motives

Due to the fact that all aspects are associated with each other or may depend and infect others, it is a plexus that makes it easier to discover than to deal with

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information islands or rather to eliminate them.

10

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3 Company introduction 3.1

ThyssenKrupp Group

The official registration of ThyssenKrupp AG is dated on March 17, 1999. ThyssenKrupp is a German corporation with more than half of all employees and two thirds of the customers are located outside Germany. ThyssenKrupp companies‟ operations lie in numerous international markets in the five segments: Steel, Stainless, Technologies, Elevator and Services. The share of foreign sales in the Elevator segment is more than 90%. At the moment, more than 191.000 people are employed worldwide. Around 600 foreign subsidiaries and associated shareholdings have about 106.000 employees, which mean that more than one in two ThyssenKrupp employees work outside Germany.18 ThyssenKrupp‟s operation in the five segments: ThyssenKrupp group structure Steel

Stainless

Technologies

Elevator

Services

Sales: 13.2 Mrd € Employee: 40.000

Sales: 8.7 Mrd € Employee: 12.000

Sales: 11.5 Mrd € Employee: 55.000

Sales: 4.7 Mrd € Employee: 40.000

Sales: 16.7 Mrd € Employee: 43.000

Steelmaking

ThyssenKrupp Nirosta

Plant Technology

Central/Eastern/ Northern Europe

Industry

ThyssenKrupp Mexinox

Marine Systems

South. Europe/ Africa/MiddleEast

Auto

Acciai SpecialiTerni

Mechanical Components

Americas

Processing

Shanghai Krupp Stainless

Automotive Solutions

Asia/Pacific

Stainless International

Transrapid

Escalators/ Passenger B. B.

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ThyssenKrupp VDM

Materials Services International Materials Services North America Industrial Services Special Products

Accessibility

Figure 3.1-1: Graphic representation of the group structure Source: Own, in accordance with www.ThyssenKrupp.de, 12.08.08

18

TK Magazine: “Global Views“, | 1 | 2007 | January, 2008 All figures relate to the 2006/2007 fiscal year, Annual Report, as of September 30, 2007 11

United under SAP : The process of eliminating information islands for ThyssenKrupp in China (Zhongshan), Diplomica Verlag, 2009. ProQuest Ebook Central,

Plants

Sales

Employee

Worldwide

51,7 Mrd. € (100 %)

191.350 (100 %)

Germany

18,5 Mrd. € (36 %)

84.999 (44 %)

Figure 3.1-2: Plants worldwide (including Corporate) Source: Own, in accordance with www.ThyssenKrupp.de, 12.08.08

3.2

ThyssenKrupp Elevator

ThyssenKrupp Elevator is one of the worlds largest elevator company and is represented at over 800 locations in more than 60 countries. Products include passenger and freight elevators, escalators and moving-walks, stair and platform lifts, passenger boarding bridges (PBBs) as well as service for all products.19 3.2.1 Business Unit Structure

ThyssenKrupp Elevator AG Strategic Advisory Committee Central/ East./North. Europe

Southern Europe/ Middle East

Americas

Asia/Pacific

Escalators/ PBB

Accessibility

Figure 3.2-1: Business Unit Structure (Segment Elevator) Source: Own, in accordance with TK ES/PBB Presentation: TK Organization, 21.08.08

The Asia-Pacific region is becoming more and more important for ThyssenKrupp.

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In terms of local presence, China and India are the most important bases in the region. In these two countries alone, ThyssenKrupp currently has more than 10.700 employees (6.100 are currently employed in China with 98 % of them are Chinese nationals) representing 80% of workforce in Asia-Pacific.20 The strong growth of the Chinese economy and its immense potential offer attractive market conditions for ThyssenKrupp‟s products and services. One prime 19 20

ThyssenKrupp AG: http://www.thyssenkrupp-aufzuege.de, 1.9.2008 ThyssenKrupp AG: http://www.thyssenkrupp.de, 12.08.2008 12

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example is the planning and realization of the world‟s first commercial Transrapid line, running between the city of Shanghai and Pudong Airport. In November 2006, ThyssenKrupp Elevator opened a new plant for escalators (ES), moving walks and passenger boarding bridges (PBBs) in Zhongshan in the Chinese province of Guangdong. 3.2.2 ThyssenKrupp in Zhongshan The Zhongshan plant consists of ThyssenKrupp Escalator Co. (China) Ltd. (TKE ESC) and ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd. (TKE PBB). TKE ESC (Zhongshan subsidiary factory) is specialized in production of lift, escalator and moving-walkway which has been implemented ISO 9001 Quality Management System

in

designing

and

development,

production,

sales,

installation,

improvement and after-sales services. Contributed from the rapid progress and development of the escalator and moving-walkway, where results in the foundation of TKE ESC specialized in manufacturing escalator and moving-walkway. Meanwhile, TKE PBB, was set up for production of airport system products, such as aerobridge. As standards, there are four different models of escalator and two models of boarding bridge being produced in Zhongshan. About 850 are currently employed. The new facility compound is about 195.000 square meters and the workshop floor is 40.000 square meters. In 2008, capacity is about 2.400 escalator units and 50 boarding bridge units. Esc Production Growth 2435

2500 1726

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2000 1284

1500 Output

918

1000 500 0

530 83 182 190 2001 2002 2003 2004 2005 2006 2007 2008 Year

Figure 3.2-2: TKE ESC Production Growth Source: TK: PowerPoint Presentation Productoverview_esc_d.ppt

13

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Target is to further expand the operation to reach a capacity of 4.000 escalator units and 200 boarding bridge units per year. The Zhongshan company structure:

BU Board

SD

Esc MS

SD

PBB MS Sales

PM

PU Purchase

MD

CO

HR

IT

PEM ME

PE

LG

MD

Manufacturing

Figure 3.2-3: Zhongshan Company structure

Since its establishment, the new plant has started or worked on projects, for instance, escalator products had been successfully built in Shanghai Metro 2nd Line Project, moving-walkway products had been built in Capital International Airport 2nd Stage Project and airport systems products (aerobridge) had

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successfully won the bid of the Expansion Project of Guangzhou Airport.

Figure 3.2-4: TKE ES/PBB plant Zhongshan Source: TK: PowerPoint Presentation Productoverview_esc_d.ppt, 09.09.08

14

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4 Influence of Chinese Culture on the business company “Men‟s nature are alike, it is their habits that carry them far apart.” Confucius

21

This chapter will be an extract to understand the affect on businesses by cultural differences. Also the preparation of this present book was touching that kind of barriers so that it has to be explained a bit what “doing business abroad” (or equated with to produce a scientific work like a bachelor thesis) means. The necessity of consideration and knowledge of a foreign country its culture and way of living may have a deep influence. The complex structure of society and fast growing change in the last centuries makes it nearly impossible to understand the whole Chinese culture, whereby this paragraph does not claim to be exhaustive. In general, but in this case primarily referring to the location at ThyssenKrupp Escalator in China (Zhongshan), whether corporate culture, Chinese‟ work attitude or just the language: the culture difference is mentioned as the main reason for arising difficulties in collaborations between Chinese and foreigners.22 4.1

Language and mindset

The official language is High Chinese, also called Mandarin or Putonghua. On the strength of complexity and distinction, Chinese - for western foreigners - is normally hard to learn. Beside, great many dialects are spoken in certain regions. The dialects are so dissimilar, that only the people in those regions are able to understand. One popular dialect is Cantonese in the south province of Guangdong (where Zhongshan is) and in Hong Kong. That is why sometimes the written-

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language (Chinese characters “hanzi”) is the only way of communication. Chinese people‟s mindset and way of acting is influenced by the language as well. 23 Studying and using Chinese enhances young Chinese‟s their capability and

21

Chinese philosopher & reformer (551 BC - 479 BC) BusinessForum China. Special Issue: “German Business Expansion in China: 2008 – 2010", 2008 23 Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 22

15

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perseverance of (optical) differentiation ability and also to link coherences. On the other hand, faculty of abstraction and analytical skills are in part less skilled.24 First barriers are caused if direct communication is impossible because of no local language ability. In addition, ThyssenKrupp Escalator Co. (China) Ltd. in Zhongshan has only few non-Chinese employed (normally less than two percent). Firstly, Chinese are usually less used to apply English, at least depending strongly on regional, economical and age-related realities. Although it is not difficult to get a whole text translated nowadays, e.g. through online dictionaries, it is suitable to only a limited extent. Fundamentally, Chinese language is built up very different compare to, for instance, European languages. Secondly, even existing language skills are no guaranty for communication without any problems. Without professional support by an experienced and/or involved person, the meaning is easy to miss-(understand). Another element that becomes important is the problem solving and the personal communication channel. Chinese prefer an indirect form of information exchange and argumentation.25 A problem will be circuited first and a direct touch avoided. Comparing for Germans it is more common to directly emphasize the gist and collect details or ideas afterwards. This characteristic entails communication difficulties and misunderstandings. 4.2

Corporate culture and Chinese work attitude

China is indeed a specialty for “Western” foreigners but also because in comparison to their own point of view - compared to the own culture and work attitude. The motive is rather based on being unaware of the country-specific

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(corporate) culture. To reach success in business requires to acknowledge and to bridge that gap. Flexibility and tolerance is inevitable.26

24

Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 26 BusinessForum China. Special Issue: “German Business Expansion in China: 2008 – 2010”, 2008 25

16

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The following table is a prefacing, summarized overview of some differences in a concise manner: No 1

Issue Life style

Chinese - Group orientated - Aspire to harmony

German - Group / individual orientated

2

Boss position

3

Own opinion

- Model role - Strongly involved in departments daily work - Acquiescent - Affirmative

- Respect - Mainly decision / controlling “management” - Adherent - Confident

4

Problem solving

- Indirectly - Circuiting

- Directly - Face-to-face

5

Show oneself

- “Face”-Concept - Rarely disagreeing - positivism

- Directly, personal - Flaunting - Moody creature

Table 4.2-1: Differences between Chinese and German

1 - Lifestyle Derived from their lifestyle, Chinese people are quite group orientated. This based on the aspiration for harmony. Similar to the way of solving problems, mistakes and uncover other‟s weakness should be avoided. Instead, to be on friendly terms with each other (be in “harmony”, even if being at variance) should be retained unchanged. 27 2 - Boss position According to the corporate culture is must be known that Chinese role allocation is highly established by priority.28 Interestingly from this follows that often a manager Copyright © 2009. Diplomica Verlag. All rights reserved.

in a leading position is faced with a lot kind of daily duties and tasks, sort of allround or universal manager with role model function. High respect is what they receive and grant them a good status in case of positive reputation.

27 28

Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 17

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3 - Own opinion No doubt, Chinese have an own opinion. But here are two behavior pattern worth to explain: on the one hand, they are easier willing to give a positive response in form of an affirmation to the opposite‟s opinion due to the fact to cause no fight – or: to do not hurt the opposite‟s “face”. On the other hand, another culture related aspect is that Chinese have a self-conception for lower demands within their inherent community and, hence, represent the common opinion of the group.29 4 - Problem solving As already described, the communication, if problems have to be solved, is preferred indirectly from Chinese side. Again the “face concept” takes its meaning. A gruff reply is objectionable. 5 - Show oneself This is an important culture mannerism that carries the aspect of a “face”-concept and has consequently influence on personal work attitude and in that way on business processes. Avoiding conflicts to not “lose or hurt face” – the own as well as other‟s, especially in front of third or in public. 30 But to criticize is alright if it is in private, according for businesses even welcome.31 Chinese businessmen are exerted to circumvent disaffirmation but to search for similarities. That results from the importance of reputation and keeps the harmony. 4.2.1 Systematic approach Their systematic approaches are different compare to most Western ways what can be seen, for example, in the different needs when reports are created or

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requested. However, study and knowledge is of great importance for Chinese. The traditional Chinese way of learning is in the first instance imitation, learning by heart, learning from example. By contrast, analyzing may be of less importance.32 Time schedule planning is also less important – preferably thinking in the short run and focus on the present. Also frequently charismatic for Chinese work attitude is 29

Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 31 BusinessForum China. Special Issue: “German Business Expansion in China: 2008 – 2010”, 2008 32 Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 30

18

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that Chinese employees partly tend to work less independent and assume not too much responsibilities. 33 But recent reports and researches show, here is an upward trend, especially caused by the increase of international cooperation along with and within Chinese companies but also due to the improved and adapted educational changing for students; 34 what, after all, makes it to a differential of generation and job position. 4.2.2 Interpersonal relationships (Guanxi35) Personal relationships in the business world have a big impact on many operations. In China it has even a bigger impact, roots by the intensity and meaning of relations. This famous characteristic in China is called “guanxi”. The meaning of relations is high and even more than that: it is useful and often necessary. In cases like relationships between friends, between teacher and student or between colleagues it can be also open to foreigners. But guanxi is neither something to categorize nor just a group association. It is a network of connections where a relationship between two people is “valued”. This sense of community requires nourishing relationships with interactive maintenances. Right from the start a common group background (for example the own family, alumni, (ex-) colleagues, people from the same village, etc.) may have an advantage. In general, guanxi is a mutual matter of to give and to take for a long-term relationship – where relationships are developed and maintained based on trust. In other words, guanxi enables chances, sometimes even just in the first place. Also as foreigner it should be adapted and combined with the own values to deal with a job in China. In general, the role and position of a foreigner can vary. In some cases foreigners are still rare for Chinese, as it were “new” or “different”. For example, that openness might be reserved at the beginning. But usually there is Copyright © 2009. Diplomica Verlag. All rights reserved.

no barrier for foreigner to get into it, as long as they are eager interested and want to become integrated, so Chinese are open for it.

33

Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 Kampf, C. (2007): “Deutsche Expatiaten in China”. GaTec Verlag, 2007 35 Guanxi (关系) translated from Chinese into English can mean: “relation(ship)”, “connection”, “influence” 34

19

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5 The process of implementation The investigation for this study has begun in the middle of the implementation project since an SAP implementation is usually a long-term project. Such a largescale project has a prospective impact of daily work processes. Certainly this entails labor and changes, but principally also chances of improvements. After a brief description of the requirements the target-performance of the implementation project is explained before the realization steps in each single of the five major phases are presented. In case of this project the decision was made that Hewlett-Packard (HP) will accomplish the project implementation as consultant partner, to ensure a successful implementation. At SAP, the advantage is the combination of expertise and commitment that brings HP with. 5.1

Prearrangement

This can be seen as pre-phase of the project. The enterprise-wide implementation of an (SAP) ERP system has its start basically before the real project kick-off begins. After the decision has been made to use a new or another software system, the requirements and specifications must been ascertained and prioritized. Prioritizing of requirements is really important to focus on the things that matters most. That contains the project organization structure with roles and responsibilities, project objectives, project scope with allocation of resources in consideration of the project budget, project master plan including work-break-down schedule and critical path analysis as well as any other required information.

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As next, two view of requirements are described: the project management requirements as well as technical system requirements. 5.1.1 System Requirements SAP is the most important information technology (IT) development within the Company. An existing IT network is already installed so that for SAP

20

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implementation it just has to be (re)adjusted. All existing software applications must interact with SAP for those which won‟t be replaced. For implementing and running the SAP ERP ECC 6.0 software both HP and TKE have stipulated a leasing contract containing first of all the technical conditions:

3rd Party Data Center

Remote User

Application Zhongshan User

Server

UNIX server, Oracle Database w/ Redundancy and Recovery

Database

Function Tester Backup Development

Server rd

3 Party and inhouse Developer Figure 5.1-1: Network configuration Source: Own, in accordance with TK ES/PBB Kick Off PowerPoint Presentation 2008

Thus, HP provides two servers, one server installation contains the Development system (DEV; ABAP) and Quality Assurance Staff (QAS) systems, and the other is the Production (PRD) server. Main memory is 16 GB while the hard drive capacity has 600 GB. There are around 180 end user pc‟s.

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5.1.2 (Project) Management organization and requirements Before the project enrolled, preparations and information about the way of implementing SAP and the (prioritized) goals were discussed. The Kick-off Meeting at start helped and informed the involved people to know about the project purpose, goals (including milestones) with time table, roles and responsibilities.

21

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The following chart shows the organization chart for the SAP implementation project including TKE ESC/PBB and HP consultant partner with the area allocations:

Figure 5.1-2: SAP project organization chart Source: Own, in accordance with TK ES/PBB Kick Off PowerPoint Presentation 2008

For each SAP module an HP consultant in close collaboration with one or more assigned

department

coordinators

takes

part

during

the

SAP

project.

The Executive Sponsor directly communicates the company‟s long-term goals and visions and participates in the feedback meetings for project reviews and has the ultimate decision-making power in the fulfillment of the engagement contract as well as the final budget authority. Two project managers are responsible for the

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project: one is from ThyssenKrupp and one is from HP. The Project Manager is the primary liaison with the Steering Committee, Executive Sponsor, Business Process Owner and Key Users, as well as the HP consulting team. The primary responsibilities are to monitor the project progress and provide support for global efforts and implementation programs on a weekly basis and to communicate progress and status to the Steering Committee and sponsors on a regular basis. Further responsibilities lie in to develop strategies and procedures for efficient implementation of the system and to develop and to manage the project scope, 22

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the budget, and schedules in accordance with approved plans are significant for the overall degree of performance of the project. Process owner are according to department‟s processes the corresponding persons in charge. That person is responsible for approving the SAP system solution for assigned business areas. The End Users from TKE ESC/PBB as well as the TKE Key Users (TKE KUs) are part of the SAP Team. TKE End Users assist the TKE KUs. On the contrary, TKE KUs are representatives working full-time with the HP project team. Since ERP systems are enterprise-wide ISs that integrate information and information-based processes within and across all functional areas in an organization, it is imperative to get support from all functional segments of the organization. Every person and department is responsible / accountable for the overall system and key users from different departments are ensured to commit to the project implementation without being called back to their prior functional job position frequently. 5.2

Actual analysis (as is)

For this investigation, all elaborates data based on primary data acquisition. That means, information was brought together through observations, reporting methods and questionnaires/interviews. A major procedure to get into the actual company their department activities based on a developed questionnaire. Its structure contains questions categorized by: 1. Department's organization 2. Department's connections and relations 3. Information islands/potential of improvements and Copyright © 2009. Diplomica Verlag. All rights reserved.

4. SAP utility

23

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5.2.1 Business processes at present Also based on the interviews and on existing process descriptions from the departments, a compressed business process flow for ThyssenKrupp Escalator Co. (China) Ltd. looks like this: 1. Receive Orders

TK Field 3a. Verify spec. with Field

2. Contract Information

MS

3b. Technical support

PEM

ME

5. Confirm newmaterial

PE

PU

7. Negotiation

Supplier

8. Confirm price

9. Place order

Buyer

4. Issue start up notice

14. Shipping notice

11. Issue BOM in Excel

Shipping

16. Delivery to customer

6. Release material for quotation

Planner

15. Arrange shipping

12. Release MPS in Excel

MD

LG WH

10. Delivery

13. Issue project cost

Pre-ass.

Figure 5.2-1: High level “as is” process Source: Own, in accordance with TK: Process chain TKProcessexp.doc, 13.08.08

The above shown figure describes the connections and the order of the ThyssenKrupp‟s working flow. As it is too deep going if each single process of both TKE ESC and TKE PBB would be investigated, this representative “as is” situation on the basis of a standard process cycle is pictured. This process flow describes an exemplary process chain, starting and concluding order receiving and contract information over compiling the product(s) Bill of Material (BOM) list and accordingly quotation, purchasing and from supplement to goods receiving Copyright © 2009. Diplomica Verlag. All rights reserved.

(actually with quality inspection) before it finally can be delivered to the customer. The regularly process contains the above mentioned departments and stages of Marketing and Sales (MS), Project Execution Management (PEM), Project Engineering (PE), Manufacturing Engineering (ME), Purchase (PU), Logistic (LG), Quality Management (QM) and Manufacturing Department (MD) as they are in consideration of the ThyssenKrupp Escalator‟s core departments.

24

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One concrete example is demonstrated within one important business processes between the Quality Management department in connection with Logistic department, supplier and the workshop (production). Also Purchase department is involved due to the Purchase Order handling. But this figure shows the process in a simplified demonstration for “Incoming Quality Check”:

LG (Dep and Warehouse)

QM

Workshop

Material order

Incoming material

No

IQC

NG Parts? Yes

Reworking

Yes

No Parts will be returned to supplier

Reworking

Place in LG Warehouse / storage

Stock refilled

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Figure 5.2-2: Simplified process for IQC

5.2.2 Currently used applications and procedures Afore SAP will be a used common main system, one other software system has been installed and used: Fourthshift. According to the determining factors, actually that system will be complete exchanged. According to the chosen business process in 5.2.1, the affiliated departments using this software are here mainly FI/CO, LG and PU, and PE (material list) only.

25

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The Fourthshift introduction about the potential modules is very brief. The reason is that this system is only lightly used, although Fourthshift provides the modules for planning, executing and results with reporting and status tracking. At the moment, Fourthshift is primarily used for purchase orders (POs), Warehouse stock, billing and especially maintaining material part lists (for Billing of Materials, abbr. BOM). But in the sense of the company the software is not in a satisfactory manner. According to this, activities have gotten outsourced to more and more manually procedures. Fourthshift has become to an “outsider” because it is unsuitable. However, in general – and this applies for all relevant departments - a lot manually procedures are done by using primarily only MS Office applications (MS Excel, MS Word, MS Outlook and MS PowerPoint). Fourthshift‟s potential is not used to 100% at all and also does neither cover all main processes nor creates a connection between the departments. 5.2.3 Current problems The main focus for this study is to find existing imperfections and deficiencies. Those have a direct impact of the general business environmental and – most of the time as a consequence of this – the operational work. They are interlinked with each other and they are or cause unwanted information islands. According to interviewed department representatives, the processes are in general working, but desired is a smoother processing with more standardization and less confusions, less manpower and less time-consuming caused by several reasons. One main reason is that there is neither a common main system nor file sharing system except one sharing hard drive on the network and an unutilized ERP system.

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The research for the current situation has occurred and affirmed that there are too many “manual” activities as department interactions. This has the affect that information is either missing or inaccurate or wrong. This kind of manual activities is currently the only way for the Quality Management department – by using MS Office only. According to this, inconstant inspection descriptions are the consequences. Even the problem case has arisen, that in communication with PU (purchase order ID) and LG (delivery note) the departments due to different ID

26

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notations for the same ID number were confused. Additionally, the usage of Excel lists and fill outs by hand caused the trouble of unclear inspection comments in two ways: the unclear hand writing might be a problem and also the content. Varying remarks makes it almost impossible to analyze supplier‟s delivery goods in regard to recurrently defects. In spite of the existing Fourthshift system, actual issues for ThyssenKrupp‟s plant in Zhongshan have been arisen, that material master data can be improved in fixing these problems: 

Single ID refer to multiple stock items



One stock item has multiple IDs



Identical description for similar items



No stock item classification



No ID defined for bundle purchased items



Total confusion between design parts, self-made parts and purchased parts

There is also potential of improvement with a very high importance for the project BOM production, not only for complicated product customization. Right now it is created and maintained in Excel by multiple users, which might cause failures, like that the BOM is often: 

Missing items



Having excessive items



Listing wrong stock items

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Actually, the BOM accuracy fails totally but is a key factor for the whole business. The Project Engineering (PE) department is maintaining the BOM list in Excel but contains the “special” components only. The Bill of Material is usually parted into the common and the special material components. After receiving an order and when the contract data have been fixed, the BOM must be created in order to provide the Logistic department this for managing the procurement. If now the created BOM is missing parts or has excessive items, parts will be ordered or 27

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purchased by PU department which won‟t be used later, or still parts are missing and endanger the project time schedule. From the Supply chain management view, unlikely situations and procedures should be reduced such as rush orders are placed in order to avoid stopping the production or stock materials are overflowing in the warehouse, while key parts are still missing for production. According to the already visualized process flow in 5.2.1, the current problems are to be found again. Yet, there is not a complete BOM for boarding bridges; the technical data is still being transferred from Spain. There is even no systematic naming scheme and standardized description, a large number of stock materials share the same description, which causes a lot of confusion, and led to more redundant materials being added to the system. The entire material list has not yet stabilized, constant changes are made to the make-or-buy, unit of measure and configurations. Another issue, there is no systematic classification between engineering BOM and production BOM; the translation is done manually with experience. 5.3

Target / Analysis (to be)

Roughly described, there are three targets in consideration of the company‟s strategy:

process

improvements,

information

system

improvements

and

organizational improvements. Strategy

Process

SAP

System

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Organization

Figure 5.3-1: Strategy and targets Source: Own, in accordance with http://www.talentedgesolutions.com/services, 19.09.08

The graphic above predicates that the opportunity has arisen to reach these aimed improvement fields through SAP implementation at once. In order to gain that, all 28

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relevant business processes should be reviewed to fit for SAP ERP system. Hereby, the focus lies on the “to be” situation. After the marriage between business and IT, complexity ought to be more transparent. 5.3.1 Project plan This project has its start in January, 2008, and would go live in October, 2008. The project would involve ThyssenKrupp Escalator Co. (China) Ltd. (TKE ESC) and ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd. (TKE PBB). The modules PP， MM，SD，FI，CO，PS will be implemented with the ASAP Roadmap methodology. TKE ESC/PBB Project overall schedule: Phase

Dec

Jan

Feb

Mar

April

May

June

July

Aug

Sept.

Oct

Nov

Dec

Project Preparation Blueprinting Realization Final Preparation System Integration Testing User Acceptance Testing Go Live

Go Live and Support Training Issue Solving Cutover

Figure 5.3-2: Project time schedule Source: Own, in accordance with TK: Escel Project overall schedule.xls, 2008

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Based on the project schedule, the project would go live in the first week of October, 2008. Although the “Project Preparation” phase belongs to the five phases, the core project start begins after finishing the “Project Preparations” and starting with the “Blueprinting” phase. Project lead time until “Go Live and Support” phase is very short, ten month in total excluding. Starting in January, the “Blueprinting” phase should be finished in the middle of April. Afterwards, within roughly three month scheduled, “Realization” phase should be finished in the

29

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middle of July. As next, the “Final Preparation” would follow, with its planned ending in the end of September. The last milestone “Go Live and Support” would be at the beginning of October. 5.3.2 Scheme of improvement Project mission is to establish an excellent SAP team so that they can provide timely, reliable, and effective solution for business. The project objective is to synchronize both ThyssenKrupp Escalator Co. (China) Ltd. (TKE ESC) and ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd. (TKE PBB) their business solution and processes. Finally both TKE ESC and TKE PBB businesses can run in one platform, which would match ThyssenKrupp global business strategy: 1. The SAP version would be ECC 6.0 2. Two companies would use one platform and one standard process 3. Test, verify and confirm business process, business integration process and customization development 4. Central manage and control two companies roles and authorization

Only those functions that are critical to the company value chain will be realized. But in the end, benefits for every one of the company as well as improving efficiency and accuracy of the Engineering, Manufacturing and Logistic departments are expected. As critical success factors and therefore as aimed SAP benefit is, beside to complete the implementation of SAP ECC 6.0 for TKE ESC/PBB within budget and on schedule, that both companies can successfully complete MRP runs and for this establish a common information platform. In addition, to enhance existing business processes and realize the new processes in Copyright © 2009. Diplomica Verlag. All rights reserved.

the SAP system should be reached.

30

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A created (high level) mapping of TKE‟s business units‟ processes shows the implementation in accordance with the SAP key modules (Sales Delivery, Material

Management, Product Planning, Financial Reporting, and Cost Controlling): Figure 5.3-3: TKE Business Process – SAP Module Mapping Source: Own, in accordance with TK ES/PBB Kick Off PowerPoint Presentation 2008

As already mentioned, improving business processes and work flows to increase the operation efficiency wants to be reached – to get sound internal control, so to speak. Finally, a data collection platform to facilitate accurate and timely reporting in areas such as accounting, manufacturing and sales should existing. The expected utilities of SAP implementation have concretely been appointed. For the adapted “to be” processes it means that in future MRPII should been established to enhance company‟s value chain, to reduce stock level, and to provide accurate

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stock information for production. Another change for the better lies in managing as well as sharing the order and the project information to enhance production flexibility. With SAP in future, the delivery lead time should be reduced and providing accurate order and project statistic reports will be possible. The BOM management has been announced as a main criterion. Creating multi-level product BOM management and configuration tool to assist project engineering, to increase project material accuracy and to provide a sound base for costing / pricing is projected for the future. 31

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5.4

Realization of the project

With hindsight, only standard “SAP best practice” processes are to be implemented. Major customization requires project manager‟s consensus, as well as approval from steering committee. The project organization formation is built by the official project committee and the nominated project team with functional Key User (KU). As this project is a time- and cost-critical ERP project, this project implementation based on ASAP methodology, a standardized procedure model. The entire project duration is divided into five main phases: 1. Project preparation phase – project formally initiated and planning 2. Business blueprint phase – project team gathers requirements and conducts conceptual design of the solution 3. The Realization phase – system solution is built and integration tested, end users trained 4. The Final preparation phase – final check before cut over to new system solution 5. The Go live & support phase – solution confirmation, on-going support in place and project closing

These five milestones correspond to the ASAP roadmap. The roadmap portrays the project structure and provides a detailed description of work packages, activities and tasks for each phase of the implementation project. To ensure a successful project go-live, every phase is designed with its own milestone tasks.

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5.4.1 Project Preparation In this phase of the ASAP roadmap the plan and the foundations for a successful implementation is set. The crucial strategic decision is made by establishing the project organization and the relevant committees and by assigning the resources. Project goals, scope of implementation and objectives have to be defined, like the project schedule, budget plan, and implementation sequence.

32

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Multiple key activities come up in the project preparation. Actually, before gathering requirements (flow charts) for the blueprinting phase is possible, TK PM has to develop and maintain the master implementation plan and sub-tasks. To do so, the first work was done in co-operation with the HP PM by setting up the project team members from TKE ESC/PBB and consequently their roles and responsibilities, especially for the business process owner, application consultants and key users.36 Before the initial project core team training as last activity during the project preparation phase can begin, the following tasks had been completed: 

Project Charter



Organization Chart



Preliminary Project Work Plan



Project Standards and Procedures



Project Scope



Technical Architecture Design



Hardware Sizing Recommendation



Initial Core Team Training



Critical path analysis



Project Decision-making Model

The critical success factors have also been defined in the preparation phase of the

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project. Due to its importance of success it will be described in more detail (on the next page).

36

SAP AG: “AcceleratedSAP”, pp. 7-19, 2008 33

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Stages and CPA (Critical Path Analysis) Material Master Preparation Project Initiation

Sign off PID

Material Master Signoff BOM Preparation

BOM Modular Selector

SD BPR MM BPR Consultant

PP BPR

TK Member

Implement. Stage

Review / Closure

Business Process Sign-off

FI/CO BPR

20 15 10 5 Defining stage | Planning stage | Implementing stage | Completion stage strategic training | BPR, material preparation, MM – PP – BOM configuration | user training, user acceptation test

Figure 5.4-1: Stages as CPA (Critical Path Analysis) with resource planning Source: Own, in accordance with ZSAP TKE ES/PBB Project Kick-Off.ppt, 2008

In the visualization is the resource planning described and where extra attention is necessary. Defining stage at the beginning contains: 

Committee and Project Team Training and Business Case Analysis



Formalize project objectives and critical success factors



Integration training



Steering Committee Sign-off Project Initiation Document & Official Kickoff

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Thenceforwards, the Planning stage occupies the project team‟s attention a lot. It contains the following points: 

Based on best-practice implementation solution



Department manager and KU training



Project team, department manager and KU business process review



Sign-off and finalizing business process documentation 34

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

Preparing material master for all four escalator models



Design an escalator configuration tool



Sign-Off on material master and BOM configuration tool design

Important phase with most manpower in a tight time period is the Implementing stage, where the keys for success are: 

Design and implementation



Parallel SAP System pilot run



Modifications, final acceptance and user sign-off and



Full System change-over

The last stage of the CPA is the completion stage with the conduction of a PostCompletion-Audit for committee review. These factors carry the key interfaces to run a smooth project. Team work and reasonable care and skill are a must to avoid blockades and to pursue the scheme. 5.4.2 Blueprinting During Blueprinting phase, “as is” processes and requirements as well as “to be” processes must be complete developed and documented. The Blueprinting phase result is a visualization of the defined organizational structure and the future business processes‟ state. The quintessence of this phase is the business process reengineering (BPR), which can be defined as „„the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed‟‟. 37 Implementing an ERP system involves reengineering the existing Copyright © 2009. Diplomica Verlag. All rights reserved.

business processes to the best business process standard.38 For combining them with the SAP functionality in order to prepare the business blueprint, a translation of previous documented “as is” processes to “to be” processes would be necessary. But in this case with this project, it is as a great opportunity for ThyssenKrupp in Zhongshan to generate such a strict documentation of the 37

Zhe Zhang, et al.: “A framework of ERP systems implementation success in China: An empirical study”, pp. 56-80, 2005 38 Zhe Zhang, et al.: “A framework of ERP systems implementation success in China: An empirical study”, pp. 56-80, 2005 35

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department their processes for the first time. Such a work had not been really done before. Standard planned overview of key activities and aimed results: No.

Outcome

Key activity

1

Create development system

SAP System Installation

2

Define organizational structure and enterprise structure

SAP Organization Structure Design Knowledge Transfer Plan

3

Conduct business process workshops for all modules

Business Process Procedure Master List

4

Conduct detailed requirements workshops for all modules

Baseline Scope

5

Interview subject matter experts

User Readiness Assessment

6

Complete questionnaires required for the blueprint

Business Blueprint

7

Identify gaps

Gap Analysis

8

Identify reports, interfaces, conversions, and enhancements (R.I.C.E. items)

Initial Reporting, Interface, Conversion, Enhancement (R.I.C.E.) Requirements

Create Customer Input Templates

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Table 5.4-1: BPR: Key activities and planned results

39

Further activities on PM side are done in general, for example, conducting status meeting for project team and conducting steering committee meetings and addressing organizational issues relating to organizational change management.

39

SAP Training: “Phase 2: Blueprint”,2008 36

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Different tools are used in this phase: 

Accelerated SAP Implementation Assistant



Business Process Master List (BPML)



Question & Answer Database (Q&Adb)



R/3 Structure Modeler



Business Navigator and external modeling tools40

BPML is created as a report from “Q&Adb”. It has been used to identify, plan and monitor the configuration and test processes within the scope of an implementation. An R/3 reference model has also been useful for comparing the standard functionality with the own organizational requirements and creating the documentation for the conceptual design. In the end, business processes has been refined and optimized. No revision for the overall project schedule was necessary in this phase. 5.4.3 Realization The purpose of the third phase “Realization” is to configure the SAP system from the business blueprinting. There is a major scope as first step, the baseline configuration, and a remaining scope as final configuration. Other key areas of this

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phase are conducting integration tests and drawing up end user documentation.

40

SAP Training: “Phase 2: Blueprint”, 2008 37

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Standard planned overview of key activities and aimed results: No.

Outcome

Key activity

1

Configuration

Baseline configuration, Final configuration

2

Determine User Roles and Authorizations

User Roles and Authorizations

3

Create and test conversion programs and interfaces,

Integration Tests

Set up test client 4

Perform unit testing

Unit Tests

5

Create reports, forms, training materials

Development of R.I.C.E. Items (Reports, Interfaces, Conversion programs, Enhancements)

Define training and documentation plan for end-users

Table 5.4-2: RLZ: Key activities and planned results

41

The main tool used for setting the parameters to configure or customize SAP during the realization phase is called “Implementation Guide” (IMG). IMG reflects the chronological order in which the customizing activities are carried out.42 At the end of this phase, PM has checked the status of deliverables for completeness and accuracy. This internal quality check has been carried out in addition to an external, independent third party Quality Audit. Preparation for enduser training needs to be gone through and approved at and of this phase as well. Copyright © 2009. Diplomica Verlag. All rights reserved.

During realization phase, system construction, configuration, development and unit test/system integration

test should be

finished.

Unfortunately,

the

configuration files are not entirely complied on schedule at this phase. The input is huge and due to the dual language engrossment in SAP system (English and Chinese) – while the configuration documentation for the most part is in English

41 42

SAP Training: “Phase 3: Realization”, “01.09.2008” SAP Training: “Phase 3: Realization”, “01.09.2008” 38

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elaborated or reworked into English. In addition, the configuration descriptions must been revised for all modules several times in order to have a very clear understanding of the company’s processes. Baseline configuration but not final configuration have been finished and tend to the fact that final sign-off of the configuration could not be made within the specified period. To do not endanger the project time schedule, the decision-makers have decided to go on according to schedule and finish the configuration as soon as possible during next phase. 5.4.4 Final Preparation The purpose of this final phase before going live is to complete the final preparations of the SAP system, including testing, end user training, system management and cutover activities. Therefore, all open issues must be resolved in this phase. Standard planned overview of key activities and aimed results: No.

Outcome

Key activity

1

Deliver end-user training

End-user Training

2

Establish production system administration and train appropriate personnel

Final System Testing

Conduct system administration tests, volume and stress tests, printing and fax tests Test back-up and restore procedures, failure scenarios

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3

4

Conduct SAP‟s Going Live Check,

Review and Approval of Cutover Plan

Prepare cutover plan and conversion checklist

Production Support Plan

Perform Cutover

Cutover to Production System

Table 5.4-3: FLP: Key activities and planned results

43

43

SAP Training: “Phase 4: Final Preparation”, 2008 39

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Final Preparation involves consolidating all activities from previous phases. In this .

phase the SAP ERP system is handed over to individual departments for productive operation. This includes preparation of end-user documentation and training the end-users. The technical environment is installed and tested. End-user training is a critical activity for success of the project. After finishing the overdue IMG configuration and since SAP clients have been installed already, departments selected key user but especially the business process owner were urged from this time on to use SAP additively. This is a staidly procedure for testing and training as well. The users have to work with inputting data double (input now also into the SAP system). Only few of the processes are not going well, such as subcontracting, fixed asset, and the full variant configuration. Yet, productive operation system and testing it is of great important. In total, the test plan contains the following three activities for the project team: 

Unit test, which is for configuration test to ensure system functionality



System integration test, which is performed by SAP team internally crossing the whole business process



User acceptance test, which is performed by process owners with real master data and whole major process flow.44

So during final preparation phase, user acceptance test must be preceded and cut over list must be finished. Crucial is the ongoing migration of all the master material data into SAP system. According to the scope of work (SOW) arrangement and due to the resource limitation some key areas have to given up, what includes the master material maintenance is not complete to be finished as it Copyright © 2009. Diplomica Verlag. All rights reserved.

is too much detail for this project time schedule. Therefore this has to be done continuously also during the “Going Live and Support” phase.

44

SAP Training: “Phase 4: Final Preparation”, 2008 40

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5.4.5 Go Live and Support Unfortunately, this phase is starting after this investigation is finished due to the fact that it is outside of the processing time. Sure is, the planned date of this phase, to go live, will be unchanged the beginning of October, 2008. This final phase is concerned with supporting and optimizing the operative SAP system after moving from the pre-production environment to the live system. Standard planned overview of key activities and aimed results: No.

Outcome

Key activity

1

Activate Help Desk support

Production Support

2

Monitor system transactions and performance

Measurement and review of system performance

3

Validate business process results

Resolve issues, closure of outstanding issues

4

Provide ongoing training and documentation maintenance support

Post-Go Live training

Table 5.4-4: GLS: Key activities and planned results

45

The most important elements include setting up production support, monitoring system transactions, and optimizing overall system performance.46 In other words, after the system has gone live, the implementation has been completed, but the

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project is not finished yet. The SAP team from the consultant partner Hewlett Packard is going to accompany the project one more month, in order to optimize SAP ERP System continuously and analyze the system‟s technical infrastructure. Furthermore, supportive activities are also going to be exercised to ensure the system functions as smooth as possible, like tracking the continuous input of

45 46

SAP Training: “Phase 5: Go Live and Support”, 2008 SAP Training: “Phase 5: Go Live and Support”, 2008 41

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master material data, validating business processes and their configuration or the

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follow-up training for users.

42

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6 Reaches & Results To improve the production for ThyssenKrupp Escalator Co. (China) Ltd. and ThyssenKrupp Airport System Co. (Zhongshan) Ltd. it is necessary to connect several relevant persons, processes and information – from the first incoming order over material procurement to end product delivery to the customer. This vision of improvement is aimed by eliminating the major source if irritation: the existing information islands. Appointed in the preparatory work already, problems have been ascertained and targets have been concerned – first and foremost during the “Blueprinting” through the business process reengineering, but certainly also before the project has begun as it is with the main motive of this undertaking. This chapter will discuss the reaches in conformity with the project managers‟ statements and in accordance with the already finished implementation steps. 6.1

Project appraisal

Inexpediently, the SAP project has reached the “Go Live and Support” stage when the study period ended. In the end, milestones from “Project Preparation” to “Final Preparation” are considered as closed. The result of the project is (so far) denoted as “satisfied”. Summarized, the most important announced project objectives to match ThyssenKrupp‟s global strategy are successfully done, which means implementing SAP version ECC 6.0 could be reached in full for going live as scheduled and both companies ThyssenKrupp Escalator Co. (China) Ltd. (TKE ESC) and ThyssenKrupp Airport Systems Co. (Zhongshan) Ltd. (TKE PBB) can use one platform and one standard process. But does it have enhanced the

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misdemeanor activities to get the status “satisfied” as well? The answer and result depends a lot on the ongoing SAP support after implementation. After all, the employee are the key for success, the new SAP system has enabled the opportunity instead. Another objective like establishing a complete manufacturing resource planning solution (MRP II) is included. And reengineering the processes has been done, but whether or how much improved must be proven in practice. While the previous business processes have been totally reworked and they had been made fit for SAP ERP software, at least the functions are now complete 43

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provided, integrated and a standardized business process. Each single department controls in these processes their specific contribution. Whereas in the past the departments worked without a good file sharing system with each other, information islands had been facilely created. The proactive contribution and ownership of the problem identification and resolution is critical to the success and quality of a solution for the process and information flow.4748 6.1

Reaches in relation to the process of eliminating information islands

By fulfilling the implementation requirements the risks are decreased for both companies that work flows will slow down due to lack of information. The supporting operating systems are so realized by SAP that work flows are building connected units and manually, separately work is not as a “main procedure” necessary anymore. Those imperfections would be considered as deficits when the work flow is not able to run through smoothly. In exactly this field do these information islands exist, due to the situation for the local plant of ThyssenKrupp by missing to have a common ERP system in practice; the departments were running without real IS interfaces. The SAP project carries the advantage of eliminating them by building those interfaces between the departments, and in addition with a now complete (reengineered) process flows covered through SAP. In fact, the foundation of the plant in Zhongshan was already good: A new building with the technical equipments existed already, a network was installed. Here can be seen, the source has not only arisen from information technology spot as there had already been a basis for communication in different possible ways (phone, EMail, fax, network with internet / intranet). Thus, the reason is for sure not alone technical based.

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6.1.1 Disclosing information islands Such an intension of disclosure requires knowledge about the own processes. First circumstantial evidence appears if, for instance, new employees have difficulties to reach that knowledge in regard to having problems to get requested

47 48

Wu, J.: “IFIP: International Federation for Information Processing”, pp. 739-745, 2007 Aladwani, Adel M.: “Change management strategies for successful ERP implementation”, pp. 266-275, 2001 44

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information

about

process

tasks

and

dependencies

on

their

own.

49

Generally, they will be discovered at latest when they “had already been created” (in the fewest cases this happens on purpose). They normally come up more like a feedback affect. Thus, how does it look like to discover information islands? How they are defined in relation to this survey and in terms of the definition in chapter two means, they are isolated processes, islands, causing unsynchronized work flows. It follows that the interactions between computer and person or just between them with each other is of importance. Information can be of quality or quantity usable value type. For instance, in every software system the information quantity and also the quality depend on the person who is in charge of feeding the software with data. Searched information is answered by a software system with previously entered data. For the corresponding workers at ThyssenKrupp were data input into that Fourthshift system not mainly for information sharing and transparency. Interchanges between systems are only able to run correct if the factor human configured it right and the data are possible to call up. The source to an information islands roots basically to the human being. It is similar in a case of information request between person and machine. In addition, the person‟s skill, educational experience / knowledge do matter, too. The person‟s culture and the corporate culture as background take a part as well.50 First, the question is why it is impossible to obtain wanted information. It makes sense according to task allocations or improvement for more safety. But inside of ThyssenKrupp Escalator in Zhongshan was the problem along the process visible, when an asked person or department could not deliver a precise project related answer towards the enquirer – at least not right away, sometimes even not at all or wrong – preconditioned the enquiry is correct and logical. This adds also the further value type (besides quality and quantity): the period of time information enquiry needs to Copyright © 2009. Diplomica Verlag. All rights reserved.

receive the enquirer. All those reasons can be considered as visible or tactile. More difficult is the reason such as the person‟s characteristic. On account of experience during the processing at ThyssenKrupp Escalator in Zhongshan one significant matter for information islands has emerged as the (corporate) culture. Even if the company is 49 50

Dillard, J.F., Yuthas, K.: “Critical Perspectives on Accounting”, pp. 202–223, 2006 Motwani, J., et al.: “Critical factors for successful ERP implementation Exploratory findings from four case studies Computers in Industry”, 56 p. 529–544, 2005 45

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subordinated, international acting, it is a typical Chinese led company. Hence, the regional aspects in connection to the culture aspects must receive attention, too, in order to eliminate information islands. For example, information across departments is less freely or smoothly shared if unmeant competition is active. In a case like to deal with those islands for ThyssenKrupp Escalator Co. (China) Ltd. it has happened, also because of another background: it is primary managed with concentration on their line of business. Output figures are the key and the basis of valuation. But for staying competitive, and for a growing market like China of additional importance, an enterprise-wide system with potential of future process improvements had become necessary for TKE ESC and TKE PBB. 6.1.2 Discovered existing information islands Deriving from the whole investigation of the SAP implementation project, the information islands are shown in several stations. Generally spoken, there is almost no standardization and no integration. The process exemplary exemplifies, the communication between the departments is a constant “to and from” of information – most of the time in form of approvals. But as there is no common platform of communication for a complete processing chain from A to Z, it signifies lacks in project execution status, stock material availability, special project requirements and others. Information can not be shared within company. Occasionally, due to rush orders are placed in order to avoid stopping the production, large numbers of ad-hoc approaches or procedures are done. From that follows that ISO procedures are almost irrelevant to the daily operation but more significant, to retrieve necessary data is aggravated. Other gains of information from the investigation research could be won, for instance, due to lack

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of communication, material ID does not correspond to the state of stock materials being purchased, and there are large numbers of items uses same material ID which causes logistic nightmare. According to the one concrete example demonstrated in 5.2.1 about the different description use for the same (IQC) ID between the Quality Management department in connection with Logistic department, Purchasing department, supplier and the workshop (production) must be said, that this information island is 46

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not completely solved. Although through SAP unique ID numbers for PO generates, and also a PO must be registered into SAP in order to follow the process, there still no change developed to improve the Excel solution for QM and slows the entire performance down as before. However, in terms of Scope of Work (SOW) beside few others but for this one with importance, Quality Management (QM) is not in the scope of this project. Before this decision will be valued, the possible methods of treatments are characterized. 6.1.3 Method of treatment The opportunity arises to use possibilities for the method of treatment such as from risk management. Like handling potential risks, also discovered information islands may be handled in four different ways: 

Avoidance



Adaptation



Acceptance



Elimination

When information islands are known and the reason has been discovered, they need to get valued according to the weighting of ascendancy. The reason why they exist and how it has come to that situation is necessary to be able to eliminate them. But it might be also rational to keep it untouched. It is a matter of time and cost, or a matter of strategy from the management level, whether it is right to enhance forces to try to avoid, adapt, accept or eliminate them. To ensure an efficient business, those problems after appearing must be managed. Here is of Copyright © 2009. Diplomica Verlag. All rights reserved.

great importance to validate the potential effect. In order to beware information islands, the probability of occurrence is a key factor. A better decision can be made in combination with the validated effect. Thus, planning in kind of risk management is helpful, in target of avoidance yet necessary. Do not knowing about existing information islands does not mean there are no information islands, it just might be not considered as such. Instead of eliminating could be the option to improve/adapt the imperfection because, for example, the elimination is 47

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impossible (no available resources such as time, budget or manpower or it is unknown how to improve, or possibly to avoid new/more conflicts elsewhere). Last option left could be to accept the existing of information islands. Statement of reasons can be the desired competition between departments or inside of a department in order push motivations. Well known are those purposed competitions between subsidiaries. In such cases are information restrictions on interpersonal base understandable. However, comparable competitions must have comparable results. From that it follows, between the competitors are islands acceptable, but between their systems it is rather a disadvantage. It does not have to be a complete enterprise-wide implementation to treat with problems of information sharing. Devolved on the study, the method of treatment for ThyssenKrupp‟s companies in Zhongshan is clear, according to the topic and the project‟s objective the information islands should be as good as possible eliminated. Seen from the project execution, also chances to reduce time and gaps are given by train employees‟ skills on one side (train their skills) and by motivate them in reaching mutual goals. SAP as method of treatment The larger the company the more an adherence standardized, suitable net of systems is vitally for bridging the gaps – at least, it is easier to communicate with each other. In the run-up of the project of SAP ERP ECC implementation for TKE ESC/PBB was no previous situation with such an extent before. From higher entity came the decision to implement SAP ERP software which enables the chance to enhance actual processes and plug the gaps of communication. TKE ESC/PBB had to have SAP to meet the ThyssenKrupp Elevator strategy. The restructuring was the chance to improve the process-procedure. Since the previous ERP

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system Fourthshift is unable to provide a BOM tool as it is for TKE ESC/PBB their products necessary, but with Chinas market opportunity for growing sales quantity, the decision to implement SAP ERP was found very fast. The goal is to rais the sales figures but to keep the good image being a strong brand in the industry sector, reengineering of the plant‟s processes were inevitable.

48

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6.2

Comparison: “as is” – “to be”

In this chapter are the main characteristics before and after SAP implementation confronted. By this, a result is given which has the content of what is new for ThyssenKrupp its business and what was a (hopefully improved) change. Differences before and after SAP implementation:

Department‟s compound structure (sharing system)

Computer network (workstations): 

Computer network (workstations):

1 shared network drive



1 shared network drive



SAP ERP System

ERP End user Licenses

10

120

Main communication and information sharing method

Mainly:

Mainly:



Hard copy



SAP



E-Mail



Hard copy



E-Mail

Main ERP System

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New: from “to be”

Old: from “as is”

Issue

Partly: 

Telephone / Fax



Face to face



Telephone & Fax



Fourthshift



Face to face

Partly:

SAP ERP 6.0

Fourthshift

Table 6.2-1: Comparison: “as is” – “to be” 1/3

49

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Issue Key processprocedure improvement

Old: from “as is” (1) In some cases: 

PO proceeded without registered in ERP system



Before any goods movement are made, Project in SAP is started



Process cycle executed even PO Number in some cases subsequently created if order received orally etc.



And PO in system registered (PO Number exists)



Goods movement controlled

(1) PO No. (2) LG Planning

New: from “to be” (1) To be regular:



Aftereffect: goods removal and/or goods receiving without PO number

(2) Material order list: 

LG Planning: according to incorrect list (wrong or missing components) buying not used parts / still parts missing

(2) Material order list complete, LG planning less incorrect: 

Cost savings due to not buying wrong parts



Time saving due to complete order

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Table 6.2-2: Comparison: “as is” – “to be” 2/3

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Issue ERP System modules use

Old: from “as is” By limited usage: 

Purchasing (POs)



SD



Finance (Billing)



MM



FI / CO



PP



PS



Variant configurator (complete), (after “Go Live and Support” phase) Material data complete

 Warehouse management (stock)

Material data / BOM config.

Warehouse management

New: from “to be” Full usage:



Excel list (compressed), Incomplete Material data

“Pull” (actuality by taking components)

“Push” (actuality by placing components)

Table 6.2-3: Comparison: “as is” – “to be” 3/3

In addition: 

Finally, a common system platform connects all departments. That is the first big chance through the completion of SAP implementation, with an immense increase of applied end user.



Although ISO90001 exist, it is used in a limited way only as it has been accustomed to work without company-wide supportive ERP software and

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with Excel and other manual ways instead. It is uncomfortable of having a shared hard drive only, which has been built up for sharing data. The handling is controlled by readable, writeable, read-and-writeable folders, files are meanwhile maintained by the departments themselves, which means department “aliens” have to have knowledge about the used structure and work flows of the others department, there is no default structure.

51

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

The BOM management had been announced as a main criterion. Creating a multi-level product BOM management and configuration tool to assist project engineering, to increase project material accuracy and to provide a base for costing / pricing is now present at all. The previous imperfectly used Excel solution has become exchanged.

6.3

Assets & Drawbacks

The project is naturally planned to be a gainfully undertaking, however, with enhanced processes and through the inexperience with a complex SAP system like SAP ERP are possibilities of both sides: assets and drawbacks. Although the indications for the vantages gain the upper hand over disadvantages, it is also crucial what effects might accrue on the risky side. Further improvements has been mentioned in the table of the “as is” and “to be” comparison, and will be completed in this chapter. Expected utilities of SAP implementation have concretely been appointed. For instance, MRPII is established to enhance company‟s value chain, to reduce stock level, and to provide accurate stock information for production. Another change for the better lies in managing as well as sharing the order and the project information to enhance production flexibility. With SAP, the delivery lead time should be reduced and providing accurate order and project statistic reports will be possible A data collection platform to facilitate accurate and timely reporting in areas such as accounting, manufacturing and sales has successful been established by the SAP team. The advantage is obvious, faster up-to-date gain of information, or in one word: transparency. While many hard copies must be managed within and

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between departments, so is now an information system providing persistent and consistent data and creates better organizational structure. With a lot of chances through the new system are in contrast also responsibilities grown. Alternatively, the processes and/or eliminating existing information could have been improve without by chance of the SAP project as well, e.g. with Fourthshift and intensive training sessions. But the SAP project has the advantage to be from this time onwards prepared for the future in order to use more potential out of it (see BOM creation). TKE ESC/PBB has 120 user licenses acquired recently, whereat all are 52

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able to access the system at the same time. This is a huge leap forward in compare to the situation before – ten Fourthshift licenses enabled here limited usage. Anyway, ThyssenKrupp concern‟s demand is reached first of all due to better possibility in comparing/checking the plants with others TK plants. Negative facet is the necessary to learn to use SAP. And in regard to ThyssenKrupp their primary eye on the production may exist a hazard that budget and resources will be spend “directly” for the production and the SAP ERP system would be neglected. Hereby, budget for ongoing training inevitable. According to the extreme tight schedule of the complete practical implementation, training and testing could have been too short. Also the ASAP roadmap stages are cut what raises risks of incompleteness. A danger is the defect of acceptance by SAP problems and by return back to the “island solutions”. As long as SAP ERP will be thorough used in compare to Fourthshift ERP then in future this project will have

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basically eliminated the previous information islands.

53

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7 Conclusion On the strength of production increasing, Zhongshan‟s plants for ThyssenKrupp had to improve the own processes due to more and more complex work and data which must be managed. As there is the specialty of two companies in one facility, and furthermore, for the ThyssenKrupp concern beneficial anyway, finally both the ESC (Escalator) as well as the PBB (Passenger Boarding Bridges) manufactories would be united, and consequently, be comparable. This enables both companies to align their strategies in one platform. However, regularly problems with information quality and delivery reliability occurred. Together, these factors can lead to a big shrinkage of the expected output figures and even make a project fail. Consequently, the company attempt to decrease the occurrence of these issues. Business processes development and improvement emerge to be appropriate approaches on it. Both Companies (TKE ESC and TKE PBB) began to focus on their core processes what led to the decision to implement the core modules of SAP ERP first: SAP ERP ECC 6.0. Although I am not able to witness the “go live” situation and even three months are a short time frame in relation to a company‟s whole SAP implementation, the opportunity for great insights is deep. That is why the “real” result is based on a project achievement goal comparison. However, this study‟ end-work performance can be seen as a confirmation for the existing innerinformation deficits, from the IT side at least. The missing common main platform structure form was an extra difficulty in catching up on the “as is” business processes – since the investigation plunged into the middle of the project – and a lot existing data were in Chinese only. So the meaning about the information islands is interesting of bifocal perspective: for the company of course but also because of the influence for the study approach. The information islands along the

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processes and between the departments are touched by the Chinese related characteristics, and hence, had an influence on the investigation itself (first of all caused by language issues but involved Chinese were principally willed to try to help). The study result is without doubt affected by this. None the less, the SAP teams of Hewlett Packard and ThyssenKrupp worked well together, which is an important success factor. Consciously an extreme tightly time schedule and less manpower provided a possible complete SAP ERP implementation within ten month only. Accordingly, the ASAP mythology was a good and right decision. In its 54

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roadmap phases, the Blueprinting was the one of most importance to learn “as is” business process, and reengineer “to be” process based on SAP capability, what leaded to the improving of business processes and successfully reached the defined project goal to synchronize these two companies business. So far – for the enclosed phases one to four and with fulfillment to reach the “go live” date on schedule – the project state is valued as satisfied. Future prospects With a view to the continuing operations during the “Go Live and Support” phase a final result it remains to be seen. The reengineered processes are up-to-date but won‟t stay unchanged forever. That means, in future processes must be reengineered again. This process of implementing SAP ERP ECC contains the core modules. That has united the departments for the main business process in their scope of industry sector. Especially, in order to enhance beside quantity also quality aspects, it is highly recommended to go a next step by implement QM module as well. For one more months after the going live, Hewlett Packard Consulting Partner accompany for support, before the project is going to be finalized. Afterwards, the HP hosting team would support remotely. Depending on the concentrate and eager gain for more SAP knowledge, the future of Zhongshan‟s ThyssenKrupp companies for escalators and passenger boarding bridges lies in the willingness to keep on going with the SAP ERP system. Therefore and first of all, the trainings and continue usage is a must – otherwise the process-procedures will change to become worse, and outstanding tools like MS Word and MS Excel will become to the more popular way out again, what would made the project to a failure

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afterwards. But once the company get used to work with SAP its utilities, potential prospective enhancements give a competitive edge and underline the success of the project undertaking.

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Reference list 49

Aladwani, Adel M.: “Change management strategies for successful ERP implementation”, Business Process Management Journal, Vol. 7 No. 3, MCB University Press, pp. 266-275, 2001

10

Dr. Andijani: “Industrial Information Systems (061)”. ASAP: Accelerated SAP Phase 1 and 2 (Handout), „http://ocw.kfupm.edu.sa/user/SE46401/ASAP Phase 1 and 2 Handout (061).pdf‟, 16.08.2008

2

Burns, O.M., Turnipseed, D.: “Critical success factors in manufacturing resource planning implementation.” International Journal of Operations and Production Management, 11, pp. 5–19, 1991

22, 26, 31

BusinessForum China. Special Issue: “German Business Expansion in China: 2008 – 2010”, Elaborated by: German Chamber of Commerce in China, “Results of a Survey Conducted among German Operations in China Focussing on Market Potential, Barriers to Doing Business and Future business Outlook”, 10.11.2008

50

Dillard, J.F., Yuthas, K.: “Critical Perspectives on Accounting”, pp. 202–223, 2006

13

Duden: Bibliographisches Institut & F. A. Brockhaus AG, Mannheim, “Information“,http://www.duden.de/suche/index.php?begriff=informati on&bereich=mixed&pneu=, 28.07.2008

9

Ghosh, A., asp alliance, Published: 27 Feb 2007. http://aspalliance.com/1128_SAP_R3_System_Architecture, 14.08.2008

4, 16

Hansen / Neumann: “Wirtschaftsinformatik 1“, Grundlagen und Anwendungen. 9. Auflage, Lucius & Lucius, Stuttgart, p. 310-313, 2005

23-25, 27-30

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32-34

Kampf, C.: “Deutsche Expatiaten in China”, GaTec Verlag, 2007

1

Kumar, K., Hillegersberg, J.V.: “ERP experiences and Evolution”, Communications of the ACM 43, pp. 23–26, 2000

14

Laudon: According to Laudon (1997) as cited in Rolf Alexander Teubner (2008): “Grundbegriffe der Wirtschaftsinformatik”, Daten und Information, http://www.wi.uni-muenster.de/WI/studieren/ewi/ws0405/Information_Kommunikation.pdf, p. 5, 30.07.2008

IX

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16

Maier, Lehner: According to Maier, Lehner (1995), p. 213 as cited in Rolf Alexander Teubner (2008): “Grundbegriffe der Wirtschaftsinformatik“, Daten und Information, http://www.wi.unimuenster.de/WI/ studieren/ewi/ws04-5/Information_Kommunikation.pdf, p. 2, 30.07.2008

15

Merriam-Webster: Online Dictionary, 2008, http://www.merriamwebster.com/dictionary/information, 30.07.2008

51

Motwani, J., et al.: Critical factors for successful ERP implementation Exploratory findings from four case studies Computers in Industry 56 p. 529–544, 2005

3

Muir, N., Kimbell, I.: “Discover SAP”. Discover what SAP is by exploring its products, solutions, strategies, and more. Galileo Press, SAP PRESS, Boston (MA), USA, Bonn, Germany, p. 31-43, 2008

11, 12, 36

SAP AG: “AcceleratedSAP” Release 4.6B, 2000, http://help.sap.com/printdocu/core/print46b/en/data/en/pdf/SVASAP, pdf, p. 5-19, 15.08.2008

7

SAP Deutschland AG & Co. K: “IT-PRACTICES UND IT-SCENARIOS MIT SAP NetWeaver®“. Die besten Lösungswege für Ihre betriebswirtschaftlichen Anforderungen. 2005, http://www.sap.com/germany/media/50077020.pdf, 13.08.2008

6

SAP Enterprise Serviceoriented Architecture from a Business Perspective: “Differentiate, Accelerate, and Simplify Your Business”, http://www.sap.com/germany/plattform/enterprisesoa/pdf/ESOA_from %20_ _Business_Perspective.pdf, SAP 2006, pp. 9-13, 13.08.2008

8

SAP R/3 and Enterprise, www.sapmmexpert.com/sap_r3.htm, 11.08.2008

5

SAP R3 Architecture: “interview questions and answers”, SAPbrainonline, http://www.sapbrainsonline.com/faqs/technical/sap_abap_architectur e_faq.html, 21.07.2008

39-41

SAP Training: “Phase 2: Blueprint”, http://training.saptechies.com/phase2-business-blueprint/, 01.09.2008

42, 43

SAP Training: “Phase 3: Realization”, http://training.saptechies.com/phase-3-realization/, 01.09.2008

44, 45

SAP Training: “Phase 4: Final Preparation”, http://training.saptechies.com/phase-4-final-preparation/, 01.09.2008

46, 47

SAP Training: “Phase 5: Go Live and Support”, http://training.saptechies.com/phase-5-go-live-and-support/, 01.09.2008

20

ThyssenKrupp AG: http://www.thyssenkrupp.de, 12.08.2008

X

United under SAP : The process of eliminating information islands for ThyssenKrupp in China (Zhongshan), Diplomica Verlag, 2009. ProQuest Ebook Central,

ThyssenKrupp AG: http://www.thyssenkrupp-aufzuege.de, 01.09.2008

18

TK Magazine: “Global Views“. | 1 | 2007 | January, http://www.thyssenkrupp.com/documents/Publikationen/Magazin/Thy ssenKrupp_Magazin_e_1_07.pdf, 16.08.2008

48

Wu, J.: “IFIP: International Federation for Information Processing”, Volume 254, Research and Practical Issues of Enterprise Information Systems II Volume 1, eds. L. Xu, Tjoa A., Chaudhry S. (Boston: Springer), pp. 739-745, 2007

37, 38

Zhe Zhang, et al.: “A framework of ERP systems implementation success in China: An empirical study”, School of Management, Shanghai Jiao Tong University, Shanghai 200052, P.R. China, Int. J. Production Economics 98, pp. 56-80, 2005

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19

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Appendix A1: Interview questionnaire “Department situation”: TKE ES/PBB Zhongshan Quality Assurance / Ledger SAP Implementation Project

Interview Department's activities Name & Department: Contact person (Manager,KU)

Question No.

Question

Introduction/Purpose of the question list below: - For my study - Understanding the SAP implementation: requirements, how to do, what to do, etc. - Comparing previous and to be situation according to the SAP implementation project and check how it (could) improve(s) the processes and eliminate those "information islands"

A 1

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2

2.1

Answer (Activity)

Information islands are fields or lacks in the information flow. Main questions: why do they exist, how to eliminate them (make it more transparency, easier to get the right information at the right time at the right place in the right way).

Department's organisation How many people are in total working for the department? What are the used systems, tools, applications? (Mention all you are working with, e.g. Fourthshift, Excel, and Access/SQL DB …). What is each application or system used for? (To do what?)

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"Information island(s)"

Contact person (Manager,KU)

Question No.

Question

2.2

What is your "main" system your department is working with?

2.2.1

How many end users are working on the current "main" system?

2.3

How/where is the information out coming from that program saved? (e.g. network path XYZ, in the system…)

2.4

How/where will the results and information be delivered to others?

3

Does documentation about Functional Roles & Responsibilities exist?

4

How much and how important is using English language in your department?

B

Department's connections and relations Which other departments are important? Outline a simple drawing or view (information sharing with which departments mainly) Which information from whom and to whom are most important? (departments, persons or so)

1

1.1

2

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2.1

Answer (Activity)

What is (are) your "main process(es)"? Exists a chart of the main process(es)? Where can I find it?

XIII

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"Information island(s)"

Contact person (Manager,KU)

Question No.

Question

2.2

What is the major way of information sharing within the department and to other departments in that main process? What is the most common way of documentation and information sharing? (E.g. Database, a file sharing system, E-Mails, talking, telephone, etc.) If possible to tell: how much time does is taking to finish a complete (main) process usually?

2.3

2.4

How easily it is possible to follow the "to be" process? (or often 'different' way? Pls describe how satisfied you are with the current)

3

What kind of reporting are used and created there (outgoing information for others)?

3.1

How/Which tool/software are you using for this? How regular are these reports necessary to provide?

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3.2

4

How much of the information are for internal use (within the company), how much for external use (outgoing to client or so)? (What kind of information is intern/extern)?

5

How important is 'time schedule' planning? And how much can it infect the own and how much other department (their processes)? (Is there an aftereffect/chain reaction?)

Answer (Activity)

XIV

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"Information island(s)"

Contact person (Manager,KU)

Question No.

Question

5.1

Which information are difficult or need a long time to handle them (to work with these information)? (for example because too many details or very complex or sensitive information) And why it is like this? Are there some special needed information often missing (or difficult to get)? Which ones? Why it is like this?

5.2

5.3

Do you have to handle (often?) with wrong information? How serious are wrong information? How comes?

6

Are there information which are secret (for the own department only)? If yes, which kind of?

C

information islands/potential of improvements

1

Which other small, typically difficulties/problems often appear as well beside the main process in your department? (For example: working knowledge of the employees, English skills, hardware problems, working environment, etc.) Any solutions or suggestions for this kind of difficulties/problems?

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1.1

2

Is there a risk management implemented in your process(es)? If yes, how does it work?

2.1

Are there special, high risks, which could appear? Status request: Do you use a way to track your procedures (setting a status for your tasks/projects/processes)?

3

Answer (Activity)

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"Information island(s)"

Contact person (Manager,KU)

Question No.

Question

3.1

If yes, is it easy to find/get the status (for internal as well as for external people)? If yes, is the status always up to date? How and who is controlling this?

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3.2

3.3

If no, why not and would you say it would be better to do so?

4

What else of information islands exists? E.g. are there 'lacks' in the information flow? Which information are useful but often/sometimes not complete? Getting information too slow or too less (or not all)? Some others information could be helpful but don't know how to get them? Too complicated ways to get the "final" information you want or need to know?

5

Do you see potential of improvement for your department? (If so, where and how?)

D 1

SAP utility If you know: how much SAP will be used in your department compare to the current situation (as basically/standard system, a little bit, not at all, you don‟t know)?

1.1

How many of your department will work with SAP in future?

2

What will be the use of SAP for your (to proceed which processes?)

2.1

What will happen with the current system and processes? No use anymore or beside or together with SAP?

Answer (Activity)

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"Information island(s)"

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Contact person (Manager,KU)

Question No.

Question

3

Do you see potential of improvement for the department (due to SAP implementation)?

3.1

Do you see any disadvantages in using SAP in future?

Answer (Activity)

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"Information island(s)"

A2: SAP Project Status Questionnaire TKE ES/PBB Zhongshan Quality Assurance / Ledger SAP Implementation Project

Interview Department's activities Name & Department: Contact person (Manager,KU)

Question No.

Question

Introduction/Purpose of the question list below: - For my study - Understanding the SAP implementation: requirements, how to do, what to do, etc. - Comparing previous and to be situation according to the SAP implementation project and check how it (could) improve(s) the processes and eliminate those "information islands"

A 1 2

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3 4

5

6 B 1

Answer (Activity)

Information islands are fields or lacks in the information flow. Main questions: why do they exist, how to eliminate them (make it more transparency, easier to get the right information at the right time at the right place in the right way).

SAP basically info SAP Version SAP Components/Modules SAP "something else" how many workers are involved? (from HP, from TK, from somewhere else, in total) role and responsibility structure (HP Project Manager, Team leaders, and similar) others/more/something else Company's requirements Project schedule XVIII

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"Information island(s)"

Contact person (Manager,KU)

Question No.

Question

2 3a

Milestones Main purpose of SAP implementation (additional) purpose/advantage of SAP implementation (advantages) which departments are intensively involved which systems will be exchanged (complete or more or less)

3b

4 5

6

any additional implementations planned for the future?

C

Implementation requirements

1

hardware requirements

2

software requirements

3

additional requirements (architecture structure/ network / technical requirements, other) Method for implementation and approach of implementation (step by step description but not too deep. For example: ASAP method explanation and/or others. What when how to do - keywords) main implementation phase(s) (most difficult, longest time)

4

5

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6

7

8

Answer (Activity)

How many end user (around) (exists a list for each department? How many in total?) time schedule (plan)

which other systems will be linked/working with SAP (already existing systems collaborate with SAP) XIX

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"Information island(s)"

Contact person (Manager,KU)

Question No. D

SAP implementation methodology (what means…)

1

ASAP (Roadmap)

D1

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Question

D2

Testing (explaining), Cut over and trainings: - what is it, how will it be proceed, what is important? What are expected results (to be), what is/was difficult? Configurations

D3

Unit test =

D4

SIT =

D5

UAT =

D6

Cut over

D7

Trainings

E

Project feedback

1

what things are/were going "not well" (could be have worked better)

1.1

Why they are/were not going well?

1.2

How is the time schedule working? Too tight? Good? How/what could have been made better? How is the result of the project plan?

2

Answer (Activity)

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"Information island(s)"

Contact person (Manager,KU)

Question No.

Question

3

How do you expect the 'go live' will work? Which problems are most expected and how to solve them? Which steps during after going live - are planned to support the SAP running?

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3.1

Answer (Activity)

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"Information island(s)"

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