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ERP Implementation
Union Carbide

Rohit Vashisht
About Union Carbide

Union Carbide Corporation is a chemical and polymers company with over 3,800
employees. The company possesses some of the industry's most advanced process
and catalyst technologies, and operates some of the most cost-efficient, large-scale
production facilities in the world. Union Carbide primarily produces chemicals and
polymers that undergo one or more further conversions by customers before
reaching consumers. This means that most of the sales that are done by union
carbide are B2B sales.

SAP R/3 implementation

Union carbide decided to go for ERP implementation in 1997.It decided to

implement ERP at all locations present though out the world. However the ERP
implementation done by union carbide was in a phased manner. It decided to go
with SAP’s R/3 system. The rational for going with this ERP was that it has an
inbuilt programming language SAP ABAP and can be modified according to
Union Carbide’s needs. Union carbide wanted its ERP system give low-level
managers, workers and even customers and suppliers much broader access to
operating information. This was crucial for the success of union carbide as a
company. As it was B2B Company, the salesman pitching for sales to a company
should have all the latest quotes that are available for a particular prodcuct.The
should also have the right to modify a bid in response to a competitive bid. The
system allowed the salesman to modify the bid to a certain extent without calling
up his bosses. During the implementation of ERP Union carbide made a project
team specifically to assist the technological team. The function of this project team
was to understand the business processes being followed at union carbide and
ensure that ERP system being implemented are in line with the business processes
being followed. If they were not in line with the processes being followed, then red
flags were raised by this team. Now, it was a call to be taken by the senior
management whether they will modify their business process to suit the ERP
module or the module needs to be reconfigured. Union carbide didn’t opt for a
federalist system which gives individual plants autonomy. On the contrary it
adopted a centralized system which was similar for all its operations the world
over.SAP R/3 financial module helped union carbide a lot. It was already going
through a lot of financial troubles at that time and market was rife with talks of a
sellout. At this crucial juncture SAP financial module helped it in financial
compliance of FAS 133.

Enterprise optimization software.

2 years after the implementation of SAP R/3 system was started by union carbide ,
in 1999 it wet in to an agreement with a software firm called Aspen
Technlogies.This firm had to built Enterprise optimization software for union
carbide. This software was supposed to link real time manufacturing processes and
operation with the ERP system being implemented by union carbide. Although
SAP R/3 business suite could be modified to be used in manufacturing plants
being used by union carbide but the ERP implementation team of union carbide
voted against it as it was turning to be quite an expensive modification which union
carbide was not willing to do. To integrate its system being being used in
manufacturing plants with the SAP R/3 system enterprise optimization software
was developed in partnership with Aspen Technologies.

Trade Winds Solutions.

Union Carbide noticed that the supply chain management module of SAP R/3 will
not be suitable for chemical industry. The module would have to be almost re-
written in order to comply with the business practices being followed by Union
carbide. Union Carbide decided to make its own solution for supply chain
management in association with Earnst & young. This gave rise to Trade winds
solutions. The Trade Winds Solution is the first fully integrated, implementation-
ready solution tailored to support companies in all process manufacturing
industries across all supply chain and financial processes. This system was not only
implemented by Union carbide for its own supply chain management but also
marketed by the consultant Earnst & young. This turned out to be a source of
revenue generation for them.
Dow Chemical Takeover and R/2 implementation

1999 to 2001 was a period of financial turmoil for Union carbide.ERP

implementation which was started in 1997 was not given much importance during
this phase as company faced other pressing matters.Dow chemicals took over union
carbide in 2001.Dow chemicals had R/2 as the ERP being used in all its systems.
The implementation of R/3 was not complete in union carbide. So Dow chemical’s
decided to convert all systems of union carbide to SAP R/2 although R/3 is a
higher version of SAP. But up gradation of Dow chemical’s systems was going to
be more expensive than the downgrading of union carbide’s systems as their
implementation was not complete. This led to R/2 being implemented in all union
carbide’s systems.