Assignment - Case Study - Geneva ERP Implementation

Introduction

Geneva Pharmaceuticals Inc., is a generic drugs manufacturer. There are many key points in the case study, the most important being the fact that the manufacturing industry is highly competitive meaning there is a constant pressure on Geneva and its competitors to reduce their cost of operations in order to increase the efficiencies within the company. To do this they decided to implement an Enterprise Resource Planning System (ERP). We will therefore look at the key decision-making processes behind the implementation and the main points that can be learned from this process.

Phase One - Supply Side Processes

The first stage of implementation concentrated on the 'Supply Side Processes'. During this phase there were a number of key decisions made which had a substantial effect on the progress of the implementation.

Firstly, Verne Evans, a "super user" of MacPac was selected as the project manager of this phase. This proved to be disastrous as he had no prior knowledge of R/3 systems and was unable to resolve problems or provide leadership. On top of this, Geneva decided to employ ten Information Systems personnel along with twenty users from across the business units who had no experience with R/3 systems, and hire Whitman-Hart to oversee the migration. Whitman-Hart employed six specialists to aid the implementation, however, with no knowledge of the business process on their part, there was a severe lack of communication and co-ordination during the project.

To combat this problem, Geneva hired Randy Weldon as the new CIO, who had prior experience using R/3 systems. This was a valuable decision as he put in place a new project management team consisting of one person from each stakeholder group (functional users, IS staff and consultants). In addition, Anna Bourgeois, who had over three years experience working with R/3 systems, was employed to lead the internal IS team.

Another key decision was selecting to follow the ASAP methodology, which meant that the implementation was as short as possible. This had a detrimental effect on the project as it turned out that this system was highly inflexible, however, Geneva decided to persevere with it until the end of phase one for the purpose of project expediency.

Phase Two - Demand Side Processes

During phase two, the main goal was to “improve sales and operations planning”, and there were a number of important decisions taken which made this possible.

One of the key decisions made was assigning an efficient management team. Whitman Hart was replaced with consulting firm Oliver White and Arthur Andersen Business Consulting. The roles of the two firms were clearly identified so that each could concentrate on their strengths. Both of these firms had extensive experience which was a virtue during this implementation.

Geneva set up three clear stages in this Phase, conceptual design, conference room pilot and change management. Having clear goals helped to give the team something to work towards and made sure that each stage was completed before moving on to the next.

Conceptual design involved gain sharing, where the most knowledgeable in the firm were identified, interviewed and had their input into any beneficial changes that could be made to the system. This was done through identifying the value adding processes against the unnecessary processes which finally led to the final R/3 system.

Stage two was the conference room pilot. Geneva spent a lot of time and capital using prototypes to fully test their system processes before it went live. This was a highly useful and invaluable decision, as leaving testing to the last minute could create a lot of problems and delays.

The final stage was change management. Geneva recognised that a new system implemented could bring a change in corporate culture within the firm. They therefore thought it was essential for extensive training of the staff before the system came into place. Each employee received in-depth, detailed training and was provided with support if they had any problems or questions.


Phase Three - Integrating Supply and Demand

During phase 3, the primary focus was to integrate the supply and demand processes.
In 1997 Geneva decided to implement a manual Sales and Operations Planning (SOP) process. Initially, this seemed to be worthwhile, however it emerged that the process created a huge time delay and mistakes were made when re-entering data manually. Worst of all, the process took a whole month to complete and so Geneva decided it was time for a change. They chose to implement Manufacturing and Resource Planning (MRP-II) and SOP processes to create 'just-in-time' production scheduling. Although a vast improvement on the manual process, Geneva felt this was still lacking in the advanced technology they required, and so took the decision to add Advance Purchase Optimiser (APO) software to aid data analysis.

This enabled Geneva to satisfy their primary business metric, 'available to promise' (ATP). This measures whether they are able to deliver to a customer by the promised time, which according to them is the key element of their business.

Conclusion

By considering all the key decisions made by Geneva, there are a number of things to learn from their experience.

Firstly, choosing an appropriate number of staff and the correct people for the job is a necessity for communication and co-ordination. Where this went wrong, Geneva rectified it quickly and efficiently. In addition, setting clear goals and strategies for the workforce is extremely important so they all have a common target to reach and can work in unison.

Also, choosing a methodology which requires implementation of the system so quickly was an error on Geneva's part. For successful implementation, the process should be completed over a long period so problems can be tackled effectively and not rushed.

Another lesson to be learned is the strategies employed by Geneva during the implementation. Such things as gain-sharing, using prototypes to test system processes, and extensive staff training are extremely important for effective implementation as they ensure that the process is running smoothly and efficiently.

Finally, for a completely successful implemented system, it is important to always look for improvements. Geneva went from manual to computerised and added further improved software systems over time. For companies to be an all round success, they must always strive to improve themselves, and Geneva are a perfect example of this theory.


This assignment was prepared in collaboration with Katherine Keane.