Pegatron Corporation
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C a s e S t u d y S A P ® E R P S o l u t i o n PEGATRON CORPORATION PEGATRON is a leading Taiwanese OEM/ODM company specializing in electronics. Spun off from ASUS in 2008, the company inherited a local Taiwanese ERP solution, but executives preferred to have their own system. They decided to implement SAP® ERP 6.0, and turned to ABeam for assistance. Drawing upon its depth of knowledge on the best practices of the OEM/ ODM industry, ABeam worked closely with PEGATRON, helping them to create add-ons that could meet their unique requirements, while providing them with the skills they needed to maintain and expand the new system in the future. And ABeam did it all in two-thirds the projected timeframe. Challenges ・The SAP® ERP implementation needed to be adjusted to fit PEGATRON’s unique business model, in which all decisions are made in headquarters and plants only carry out manufacturing operations ・The system needed to be able to accept data from vendors and meet the requirements of each major brand company PEGATRON does work for ・PEGATRON hoped the project would encourage employees to think about methodology for changing business practices Solutions ・SAP® ERP 6.0 was implemented for a whole range of business operations (financial accounting, management accounting, business management, distribution, sales, supply chain, etc.) ・The system was installed in plants first and headquarters last ・While the team was rolling out SAP ERP in each plant, they also worked to integrate each location with a virtual system set up in the headquarters, necessitating less work in the final phase Success Factors ・ABeam and PEGATRON worked as a single team throughout the project ・The SAP® ERP implementation had the full support of PEGATRON’s Chairman, who assigned General Manager Denese Yao to the project and instructed that each business unit make their best personnel available to her ・ABeam explained each part of the project thoroughly to PEGATRON’s IT department, giving them the skills they needed to maintain and update the system in the future C a PEGATRON CORPORATION s e S t u d y S Improving PEGATRON’s Business Practices A P ® E R P and Empowering its Employees S o l u t i o n through a Speedy SAP® ERP Implementation Ms. Yao hoped the system would help PEGATRON initiate A New Company’s First Project Business Process Reengineering (BPR), and wished to see measur- Taiwan – a hub for the OEM/ODM industry in Asia, and able success using Key Performance Indicators (KPIs). PEGA- home to ASUS, one of the region’s foremost computer compa- TRON realized that this project would be no easy task, and that nies. Around 2007, ASUS executives began to worry that along it was going to need some assistance. It turned to ABeam for help. with continued growth they risked competing with the compa- “Actually, at the time there were only really three parties in Tai- nies they undertook OEM/ODM work for, and so they spun off wan that could support this type of project,” explained Ms. Yao, their manufacturing operations, creating PEGATRON. This new looking back over the consultant selection process. PEGATRON company inherited the business processes and infrastructure of sent these three companies – ABeam and two other global con- ASUS, including the local Taiwanese ERP solution it used. How- sulting firms – a Request for Proposal (RFP) detailing the project’s ever, the Chairman of PEGATRON wanted to implement an objectives, complexity, and the number of sites involved. “We ERP system of a higher, global standard. He decided that the managed to screen out one company during the proposal stage,” switch to a new system would be the young company’s first proj- continued Ms. Yao, “We then had face-to-face discussions with ect, and assigned PEGATRON’s General Manager of IT Refor- each candidate project leader. Why did I pick ABeam? During mation Denese Yao to take charge of this. Each business unit the screening process, we first tried to check which company had leader was instructed to provide their best personnel to the proj- the professional knowledge and skills we needed. Our next con- ect. Ms. Yao worked with her team of PEGATRON’s finest to re- sideration was culture. People are the most important factor in search which ERP system would be best for the company. They implementing this kind of project. We needed a partner who chose SAP® ERP 6.0 for the benefits it offers to manufacturing- could both fit into our culture and push for change.” oriented operations. Planning for Change Finding a Real Partner With ABeam on board, the two companies set out on a three- With operation sites in Taiwan, China, Japan, Czech Republic, month planning period to work out the best implementation Mexico and the United States, reconsidering PEGATRON’s ERP process for the project. One particular benefit of organizing this system looked to be a difficult task. PEGATRON needed the sys- planning period is that it allowed the two sides to get used to tem to work with their unique business model, in which all deci- working together as one team. “We talked to many companies sions regarding procurement, supplies and other matters are made about how they had implemented an ERP system, and most of in the headquarters, and plants only handle manufacturing opera- the stories we heard were of pain – how people resisted change tions. The company also wanted the new system to integrate and resisted the consultants. Although people want change, they seamlessly with data provided by vendors and customers. Finally, want it done their own way. However, in reality SAP ERP is rigid. Project Plan 2008 2009 2010 Feb Mar Apr May Jun Jul Aug Set Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Set Oct Nov Dec Jan Feb Mar Apr May Jun Phase 0: Group Blueprint Design (Taiwan HQ) Steering Committee Meeting Phase 1: Shanghai (China) Implementation Project Golive Phase 2: Suzhou (China) Rollout Project Golive Phase 3-1: Taiwan HQ Rollout Project Golive Phase 3-2: Songjiang (China) Rollout Project Golive 8 C a s e S t u “ ABeam had the professionalism needed to d make this project a success. I think they are good y at step-by-step implementations, and they do it S A all with a soft attitude. They had really good P ® ’ interactions with the users. Before, we didnt have E R any methodologies for systematic processes – P this project empowered our employees.” S o l u Ms. Denese Yao t i o General Manager IT Reformation, n PEGATRON CORPORATION For the first three months, I let ABeam explain and inform the said something was impossible, she would make it happen.” users about the system,” explained Ms. Yao. Implementation and the Resulting Benefits Andrew Chen, Principal, ABeam Taiwan, recalled this period, “The most important aspect of this project was the cooperation Once the planning stage was completed, the project unfolded model we used from the very beginning. We did not separate over three phases. It was decided that the first phase would occur roles and responsibilities between our two sides. We worked with in Shanghai, so selected because PEGATRON’s plant there was their IT department and users together as one team.” both moderately sized and made use of every operation model the The two sides knew they would need to closely cooperate, as company had in place. The project team spent eight months they faced a unique challenge. Mr. Chen explained, “PEGA- working out the overall specifications for the SAP ERP imple- TRON uses a unique model in the OEM/ODM industry, which mentation in this plant before moving on to phase two in Suzhou. we call the ‘consignment model.’ Basically, all materials are owned The lessons learned from Shanghai helped ABeam and PEGA- by headquarters. Plants only manufacture, they don’t make deci- TRON wrap up work for phase two in six months. After that, it sions about supplies. This was a big challenge for the system as it took just another six months to complete the third phase in PE- changes the way we need to calculate costs, ownership, and other GATRON’s Taipei headquarters. This was thanks to careful plan- issues. It required us to set up a very unique synchronization pro- ning on the part of the project team – during phases one and two, cess for the database.” The team used the first three months to fig- team members worked to set up a virtual SAP ERP system in ure out how to integrate every section of the system, eventually PEGATRON’s headquarters to act as a sandbox environment in deciding that the process would start in PEGATRON’s two larg- which they could simulate the integration of plant operations and est plants in Shanghai and Suzhou before moving on to the head- headquarter decision processes. Thus, by the time the project quarters. “If we had started in the headquarters,” clarified Chen, reached phase three, 80% of the work for the headquarters system “it would have meant changing about 50,000 different items at had already been finished. The project completed in January once every time PEGATRON wanted to change a part number, 2010, within budget and a year ahead of schedule. for example. We did this so that such changes could be done in When asked about the speed of the implementation, Ms. Yao phases, starting from the plants.” commented, “I think the key factors that sped up this project Although the project required an unusual workflow, ABeam were that the team believed it could be done, and that everyone knew it was possible because of the commitment shown by PE- worked seamlessly as one.