ERP CASE : ROLLS ROYCE

SUBMITTED BY-
ANUJ GUPTA (PGDISEM 05)
ANUP GUNJAN (PGDISEM 06)
ARUN CHATURVEDI (PGDISEM 07)
ARUNIMA JAIN (PGDISEM 08)
INTRODUCTION
• Enterprise resource planning (ERP) systems integrate internal and external management
information across an entire organization. embracing finance/accounting,
manufacturing, sales and service, custom relationship management etc.
• ERP systems automate this activity with an integrated software application.
• Their purpose is to facilitate the flow of information between all business functions inside
the boundaries of the organization and manage the connections to outside stakeholders.
• Electronic data interchange (EDI) and WWW facility: the attainment of integrated supply
chain, flexibility and responsiveness
• ERP system as a packaged software has the advantages of reduced cost, rapid
implementation, and high system quality
• Customisation is a crucial, lengthy, and costly aspect in the successful implementation of
ERP system
• ERP systems have the following characteristics:
1) An integrated system that operates in real time (or next to real time), without relying on
periodic updates.
2) A common database, which supports all applications.
3) A consistent look and feel throughout each module.
4) Installation of the system without elaborate application/data integration by the
Information Technology (IT) department.
CONTD..
• ERP systems do contain certain modules that were not originally used within MRPII
such as computer aided design (CAD), distribution resource planning (DRP), tool
management systems (TMS), and product data management (PDM)

• ERP systems offer companies the following three major benefits:

1) Business process automation.
2) Timely access to management information.
3) Improvement in the supply chain via the use of E-communication and E-
commerce.

• Functions and modules: Functions are actual physical tasks that are performed
within a company. While modules are pieces of software that help to provide the
functions
• ERP software package SAP R/3, was selected by Rolls-Royce plc.
• Focus on business, technical and cultural issues at the heart of the Rolls-Royce
implementation.
• Implementation time scales and assesses the tangible and intangible benefits.
EXAMPLES

• While companies such as Cisco Systems, Eastman

Kodak, and Textronix have reaped the expected
benefits of ERP systems, many businesses are
discovering that their ERP implementation is a
nightmare.
• FoxMeyer Drug, a $5 billion pharmaceutical
company, recently filed for bankruptcy. Dell
Computers spent tens of millions of dollars on an ERP
system only to scrap it because the system was too
rigid for their expanding global operations
• ERP software is very adaptable but not very
malleable
QUESTIONS
1. What is the organization background and overall problem(s)
in this case?

2. What are the factors affecting the problem(s) related to this

case?

3. What role do different players (decision-makers) play in the

overall planning, implementation and management of the
information technology applications?

4. What are the possible alternatives and pros & cons of each
alternative facing the organization in dealing with the
problem(s) related to the case?

5. What are some of the emerging technologies that should be

considered in solving the problem(s) related to the case?

6. What are the lessons learnt from the case?

 ROLLS-ROYCE PLC
• Founded in 1906, by
Charles Rolls and Henry Started as Rolls Royce Limited

Royce
• world’s second-largest Entered aero-engine
manufacturing during World War 1
maker of aircraft
engines Split into Roll Royce Plc and Rolls
Royce motors in 1973
• major businesses
Motors division acquired by
• Marine propulsion Volkswagen in 1998 and licensed
to BMW
• Energy sectors
Rolls Royce is a major aero engine
• Defense contractor supplier to Boeing , Lockheed
Martin and Bombardier
 IT PERSPECTIVE

• Rolls Royce currently uses a number of systems,

approximately more than 1500 systems
• The company used a system known as CPA for
monitoring financial transactions which included
pipeline inventory, inter-site transport
• Rolls Royce used a CAD system that supported in
the process of altering the file formats
• MERLIN (Mechanized Evaluation of Resources,
Logistics and Inventory ): a system designed to
manage scheduling
• Corporate Cost Accounting (CCA)
 THE PROBLEM

• Too many individual systems that have trouble

interfacing with each other because each of them had
different file formats
• There was no legacy system
• Data redundancy and data accuracy was a major area
of concern
• Out dated systems often had problems in compatibility
to the new manufacturing environment
• The company had problems establishing direct online
communication with customers and partners due to
multiple systems
• Work within Rolls Royce was purpose oriented and
different departments worked in isolation
• The roles played by various players in the IT
implementation process is not only highly complex but
also varied

• Customer relationship management.

• Pre-implementation attitudes and organisational

readiness for implementing an ERP system

• Forming partnerships and selecting IT systems provider

• Training people to accept change, and getting them to

do business in a totally new way.
• The implementation of ERP has created two new roles at
Rolls-Royce, these key roles were:
• * MRP controllers
• * Capacity owners
EMERGING TECHNOLOGIES – OTHER
OPTIONS
• Executed in 2003 , advanced phase of ERP solution
• Vanilla Form followed for Reporting
• SAP R3 Vs Oracle E- Business Suite
• Other Competitors
IBM  Full Economy Model
INFOSYS  Highly Focused
• Sept 2005 : RR Deploys SSA Global Solutions For
Improved Business Performance
 LESSONS LEARNT

• 3 phase of pilot project launched

• Team Coordination
• Proper Management Team
• Utilizing Existing System – Plant Maintenance
• Risk Register Maintained
• Identifying Opportunity
THANK YOU !!