Potential Mistakes in a Complex QAD

jazzydoeSoftware and s/w Development

Oct 30, 2013 (3 years and 7 months ago)

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Potential Mistakes in a Complex QAD
Implementation


MWUG

Tuesday September 25
th
, 2012

1

Introductions

Chuck Macke


Director of IT for Ralcorp Frozen Bakery Products


Started in IT with the Chicago Transit Authority in 1980


MBA from University of Chicago Booth School of Business


Computer Engineering degree from University of Illinois


CPIM certification from APICS


Non
-
IT titles of Sales & Operations Planning Manager and Director of Distribution for Elkay
Manufacturing, where he spent 19 years prior to joining Ralcorp

Tim Lovely


Principal at Logan Consulting since 1995


17 year of various ERP projects


with focus on QAD


QAD Certified Fin., Mfg., Dist.


Master of International Business from the University of South Carolina


BA in Political Science from Emory University


Prior positions at PPG Industries, Inc. Fresenius Sistemi Terapeutici S.p.A, and Borg
-
Warner
Chemicals Inc.


2

Agenda

1.
Goal of Presentation

2.
Ralcorp Background

3.
Acquisition Summary

4.
IT Integration Summary

5.
Top Integration Mistakes to Avoid and How

3

Presentation Goal

Ralcorp Frozen Foods acquired a division of Sara Lee in October 2011.


The team structured the project to ensure it addressed five common mistakes
seen in complex system integration and implementation projects


The goal of this presentation is to discuss how the team proactively addressed
them and the impact it had on the project


4

Ralcorp Background


Ralcorp Holdings


Two Divisions of a $4B+ company


Ralcorp Food Group


Ralston Foods


American Italian Pasta Company


Ralcorp Sauces Snacks and Spreads (RS3)


Ralcorp Frozen Bakery Products


5

Ralcorp Background

6

Acquisition Summary


Ralcorp Frozen Foods acquired Sara Lee’s North American private brand
refrigerated dough business
-

$400M Net Sales


Carrolton TX Plant


Forest Park GA Plant


Shared Services Processes


St. Louis MO Shared Services Operations for Ref. Dough


Manila processing for Ref. Dough



Two Plants would remain


All Financial Shared Services, Centralized Supply Chain, and
Customer Service would be carved out and absorbed by Ralcorp

7

Mergers Are Complex Projects

Collaboration


As strangers we must come
together to build a $500 million
store brand company


Innovative thinking


what is the
best way to operate


Find new ways to grow

Fast Results Expected


Companies merge to create value


Mergers are expensive


Setting short term and long term
goals encourages collaboration


Communicate results, changes
and risks

8

Here Are a Few Strategic Goals


Store brands refrigerated
dough delivers on EBITDA
goals for FY 2012


Identify all product offering
gaps at customer by the end
of October


Develop new cookie products
to drive category share


Reduce input costs annually


Ensure our products are the
highest quality


Ensure capital spending in FY
2012 drives material cost
reductions


Implement new IT structure
within 9 months

9

9 month timeframe, 6 month goal
from close date of 10/1/12!

IT Integration Summary


Assume the Ralcorp Frozen QAD footprint and process model!


First assess gaps between the Ralcorp Frozen model and the new business


Minimize any changes to standard process model


Transition all shared services functions to Ralcorp Frozen (AP, AR, Finance)


Number and scope of systems is significant (25+ applications to integrate)


Do not impact business or customers at cutover!

High Level Plan and Timeline

11

BUSINESS PROCESS

Oct 2011

Nov 2011

Dec 2011

Jan 2012

Apr 2012

Aug
-
Oct 2012

Mar 2012

10/31/2012

End State

Feb 2012

May
-
Jul 2012

10/1/2011


Day 1

Refrigerated Dough Core ERP Implementation Timeline

Ceridian

Kronos

Payroll

Asset Keeper

QAD/TMS/Eagle/EDI

Ariba, Futurion

Axiom

HFM

T&E Cr..Card

Product Vision

MP2

Infrastructure

Applications Assessment

Project Approval

QAD Envt. Prep

Team Training

Static Data Conversion Testing

Change Dev. & Unit Testing

SIT

EDI Development & Customer Testing

Dynamic Data Conversion Development & Testing

User Procedures

M1

UAT

SIT

EUT

M2

Ongoing Training

Support

TSA Exit

System Integration (IT) Testing

User Acceptance Testing

Mock Conversions

End User Training

Go/No Go

-
30

Go/No Go

-
15

Go/No Go

-
2

Application

Go
-
Lives

Independent Plans


Running in Parallel with Core ERP Implementation

11/11

11/18

12/6

12/23

1/31

1/31

1/31

1/31

2/15

2/24

2/24

2/24

3/9

3/23

3/31

4/1

4/30

Eagle

POR

6/1

11

1/31/12


Key Static Data
Validation Milestone

Go/No Go

-
60

Application Roadmap

Summary


I2O

No significant GAPs


team recommends moving to Discovery from Dough Nexus for sales team


OTC

No significant GAPs


use of IRM by RD sales team and EDI Customer Testing critical to go
-
live


PLN


Lean Logistics / Manugistics Trucks is key GAP for team. MP2 plan driving to late Feb / early Mar plant go
-
lives



Eagle implementation phased


end item warehouse / shipping 4/1 with receiving / line feed 6/1 and 6/15.



Print and Apply / CIMS plant level systems included in cutover plan


12

Application Roadmap

Summary


PRO

RF Lack of Supplier Portal for PO entry a GAP


team recommends forming longer term supplier strategy and not

addressing for initial cutover.


FIN

No significant GAPs


HRB

No significant GAPs

SDW Integrated
with Core RF
Applications

13

Project Organization

Order to Cash

Procure to Pay

Finance &
Reporting

Plan to Produce

Benefits &
Culture Mgmt

Infrastructure

Initiate to Order

End State Integration Workstreams

Chuck Macke

IMO Executive

IT Lead


Matt Pudlowski

IMO Executive

Business Lead


Tim Mauch

IMO Executive

Business Lead


Cheryl Anderson

IMO Support

Mike Brennolt

IMO Support

Logan Consulting

Tim Lovely

Integration PM

Logan Consulting

Failure to Properly Define Business
Requirements and Address Gaps At
Beginning of Project

15

Common Mistake #1

Assessment Process

Major Milestones


10/10


Assessment Kickoff


Earth City


10/24


Assessment Kickoff


Carrollton


10/31


Assessment Kickoff


Forest Park


10/31


Week of 10/31
-

Review of Initial Gap Analysis


11/11


Complete Assessment Deliverables

Approach:


Targeted review /discovery sessions for each area within a Major Business Process (i.e. Pricing within Order to Cash)


On Site Follow Up after Assessment


Logan Consulting (LC) will facilitate Business Process and Application Assessments with Core Team leads from RF and RD


RF Standard Model will be used as baseline for each session

Assessment Deliverables (Check marks)


Detailed GAP Analysis


Detailed Implementation Plan of Std. Model


Data Conversion Approach


RF, RD and External Resource Plan


Responsibility Matrix


End State Process Models


End State Application Map


Bottom Line: Plan, Costs, Timeline, Resources, Applications

16

Fit Summary

The fit of Refrigerated Dough business processes into the Ralcorp Frozen
standard model is very high.










Only 1 critical GAP has been identified, Transportation Logistics.


5 other notable GAP’s were found, but proposed solutions have already been determined
with none of them being major in cost or scope.


12 other GAP’s were identified for management with solutions offered and approved.


A working list of Process Change and Implementation notes has been created and factored
into the integration plan


Several business practices are also noted as being significantly different between the RD
model and the RF model










1

5

12

Critical
Noteable
Other
17

GAP Analysis

#

Gap/Issue

Potential

Impact

Description

Next

Steps / Recommendations

Owners

Status

1

Truck

Routing


High

Currently Manugistics Trucks is used for RD. The RF
Lean Logistics (TMS) functionality and process
needs further examination to determine if it can
support the detailed requirements for the RD
business.

Next Steps

-

RD

and RF detailed review of
Manugistics Trucks and RF TMS confirmed gaps.
New SW functionality offered in Lean for detailed
routing

reviewed by
Bruno / Smith / Hefley / Lies
/ Levy on 11/9
.


$50k PO / commitment may be requested to
proceed. $6k/month ongoing license charges


Bruno /
Hammack

Open

2

Frozen
Schedules /
Orders

High

Frozen Schedules


RD Does not enforce

a time
based freeze of schedule changes or order changes

Management Decision

Needed


Decision
needed o
n tightening control of changes,
potentially in 48
-
72 hours window for schedules
and order changes after pick/stage has begun.


Jerome /
Gatto

Open

3

Plant Level
Systems
Integration

High

Print and Apply system

takes

information from SAP 2x
per day
and uses for robotic case labeling.

Electronic
Scale system

is integrated to plant recipe systems (not
SAP)
.


Recommendation



Integrate with QAD
as
needed to RF systems and include in plan.


Truxell /
Jerome

Pending

Approval

4

RD CIMS
System

High

RD CIMS System


Custom SQL

system for mfg info


Assess need to move forward. Both plants utilize a
custom SQL system for recording batch mfg
information. It sits on a SL server in GA. Mfg requires
this information, which is used to report SAP
production (not integrated).


Recommendation



CDC will

not be ready for go
-
live


incorporate use of CIMS into workplan


move off of SL server to RF server.

Jerome /
Truxell

Pending

Approval

5

Mixed Pallet

/
Case

Picking &
Blown Cans

High

Mixed Pallet / Case Picking .

RD ships ~40% mixed
pallets

and often needs to manage blown cans after
putaway into finished goods.

Recommendation

-

C
urrent RF processes and
transactions have required functionality ,

but their
efficiency is in question. A new Eagle transaction
to streamline the process of splitting a pallet (and
recording a blown can) is desirable.



Truxell /
Friedli

Pending

Approval

6

VMI Portal
Direction

Low


5
-
7

RD suppliers use a web based portal to enter PO’s
on behalf of RD, which feed SAP to create PO’s. No
QAD or RAH solution available, so custom development
would be likely solution . Each plant enters 30
-
35 PO’s
per week to manage without this solution.

Recommendation

-

Team agreed to defer into a
post go
-
live project and not include in the scope of
the integration. Longer term strategy of vendor
portal / VMI is desired across Ralcorp.

Lovely

/
Brooking /
Raymer

Pending

Approval

Potential Deviation
from RFBP
Standard Model

Potential Deviation
from RFBP
Standard Model

18

GAP Analysis

#

Gap/Issue

Description

Next

Steps

Owners

Status

7

Forecasting


RD currently uses Manugistics Forecasting, with forecast
maintained in weekly buckets, interfaced into SAP and a stand
-
alone, unsupported MS Access database. The weekly buckets
allow additional flexibility to manage promotions in weekly
periods. RF uses Futurion, in which monthly period forecasting is
maintained. The forecast then interfaces into QAD split by
percentage into weekly buckets.


10/19

review confirmed Futurion can support
weekly forecasting


will add to plan and
implement for RD. RF will continue current
process.

Gatto / Mitchell

Closed

8

Sales Team

Support Application

The RD sales team currently uses a stand
-
alone MS Access
database containing sales and forecast data. Data is periodically
distributed to each salesperson, who can then use their MS
Access databases to review information with their customers. RF
uses Discovery for this purpose


Initial review meetings conducted 10/19. Team
agreed that the direction is to use Discovery.

Gatto / Mitchell


Closed

9

Shelf Life / Lot
Tracking

Shelf life and case expiration date is handled and tracked in the
RD SAP system. Transactions are stopped if product has
expired and detailed case tracking is available by expiration date.
RF does not currently track this in QAD and does not use QAD
enforced lot control to manage this detailed tracking.


Requirements have been confirmed.

Both shelf
life and expiration date will be handled via Eagle
deployment at both plants. Not using QAD lot
control.

Jerome /
Hammack /
Truxell

Closed

10

Sales Order / Invoice
Pricing Structure

RD SAP uses a series of pricing conditions off of a base price
(EDLP or Hi/Low) to arrive at a net line price and invoice amount
(some

have called this bracket pricing)
. These various discounts
are all displayed on the printed invoice (i.e. promo,

cash, early
pay, etc..). RF prices at a net price (best pricing) and displays the
final net price on the invoice with less discount detail


Gatto, Mitchell, Santoro/Stanley, Koehler, Lovely,
McGhee

reviewed issue 10/28 and agreed on
approach to use RF pricing model and invoice
format. Customer communications will be added to
plan for change.

Santoro
-
Stanley

/ Gatto
/ Mitchell

Closed

11

Customer Service
Change Management


For system order entry and management, the

RD team has

concerns related to the lack of single screen visibility into all sales
order lines with weight and price totals while in the sales order
entry function. The RD CSR team thought productivity could be
negatively impacted with a move to QAD. The RF DRM team did
not think this would be a significant functional gap.


Ongoing one
-
on
-
ones

and team reviews of RF
DRM processes and systems between RF DRM
team and RD Customer Svc team.

Santoro
-
Stanley

/
Deitzler

Closed

12

VMI using IBM CRP



RD uses IBM CRP to create

orders for its customers. RF does
not currently use this software. Will likely use RAH version /
licenses of its IBM CRP and implement for RD



Plan in development to

implement RAH version of
IBM CRP.

Lovely/
Broccard

Closed

Potential Deviation
from RFBP
Standard Model

Potential Deviation
from RFBP
Standard Model

19

GAP Analysis

#

Gap/Issue

Description

Next

Steps

Owners

Status

13

Finite Scheduling

and
Line Sequencing



RD currently has solid finite scheduling /

sequencing
functionality, not supported by QAD.

Team has propose d that Truxell implement QAD
Schedule Workbench at am RF plant, then roll out
to RD as part of implementation (not used at RF
currently)





Truxell

Closed

14

Directed

Putaway

Directed putaway is used in CTN (likely FP also) for
finished goods pallets. QAD / Eagle does not support

directed putaway.

Carrollton

and Forest Park assessment teams
agreed loss in directed putaway efficiency more
than offset by gains in pallet license plate tracking
and real time Eagle transactions.

Truxell /
Jerome


Closed

15

Timing of AP Move to
STL

Confirm Feb

Timing of AP Move to STL (also on PRO)

Peterson

spoke with Henquinet
-

pushing for Feb
2012


will confirm scope (ie Bottomline) 11/17 .


Peterson

Open

16

Sales & Marketing
Management of
Promotions in

IRM

DRM / IRM Process


Organizational GAP may require
re
-
allocation of current resources at RD to perform the
DRM/IRM processes. Currently,

RD Sales and Marketing
do not enter . Maintain Promotion detail like RF in IRM


Continued review scheduled for week of 11/8 in

DG.
Santoro
-
Stanley / Koehler confident of fit.

Gatto/Mitchell

Closed

17

SKU Driven Bill
-
to


In RD SAP,

the SKU can drive a separate bill
-
to address
for certain line items of an order.

EDI

assessment will confirmed approach to create
separate sales orders in QAD. S.Wiest should have
recommended approach 11/11.


Santoro
-
Stanley

/
Deitzler

Closed

18

Old Material Number
Access / Visibility in
QAD

QAD does not have and will not have functionality for an
intelligent part number. It will be discontinued as the
Ralcorp Frozen model is stood up.

As a team we’d suggest having crystal clear
捯mmuni捡tion猠on the old mate物al numbe爠that p牥
-
dates 十倮 cull fun捴ionality will be p牯vided by using
two fields in the item master. One will indicate the
type of product and the other the customer on the
private label. Both those fields will be selectable and
sortable on reports for planning, purchasing, and
other purposes. The use of the old material number
will be discontinued and new parts will not be issued
such a number.


Truxell /
Donahue /
Hammack /

Closed

Potential Deviation
from RFBP
Standard Model

20

Key Management Decisions

The Assessment has identified business practices that differ between
Ralcorp Frozen and Refrigerated Dough, requiring management direction












Definitive direction is required prior to 12/15/11 in order to manage scope and plan

Proposed Blackout Period on key business policy changes after 12/15/11 until Go
-
Live


#

Decision/Area

Description

Current

Plan Assumption

Owners

Status

1

Pricing



Need Management confirmation

to use bracket pricing or
not.
Pricing will be configured for Production in
January/February, so decision and data is required.

Moving to bracket pricing



Gatto

Open

2

Less

than Full Pallet
Qty Orders / Partial
Pallet Picks

Need

Management Decision to Continue Current Practice
or Set Policy on Partial Pallets.
Will

ordering guidelines be
established for customers to order in pallet quantities.
Currently they do not have to, which can result in mixed SKU
pallets and partial pallet picks

Although

RD may push for more full pallet
orders and potentially use bracket pricing to
help influence order quantities, the team
believes that mixed / partial pick pallets will
continue and need to be accounted for.


Gatto


Open

3

Lack

of Locked
Production Schedules
or Sales Orders

Need

Management Decision to Continue Current Practice
or Set Policy. On Order Changes
Refrigerated Dough does
not enforce the concept of either a time based freeze on
manufacturing schedules or customer order changes. Review
the concept of firming

up

manufacturing schedule changes at
48
-
72 hours. Similarly, review the concept of a freeze to
customer order changes when the Finished Good picking and
staging process has begun.



The team believes changes will continue to
happen, but would like policies

discussed to
reduce the last minute schedule and order
changes to minimize impact to production and
loading/shipping.

Gatto

Haslebacher

Open

21

No Plan for Change Management

22

Common Mistake #2

Change Management


Refrigerated Dough has been on their integrated ERP platform (SAP) for 12
years.



Standing up the Ralcorp Frozen model (the clear mission) will require changes
to systems transactional processes, as well as the organization and business
processes. Some examples to consider:


Role and Autonomy of Earth City shared services changing


Fitting into the RD organization


Nomenclature rules and conventions changing (ie item numbers)


Keeping plant best practices while moving to the RF model


Adopting RF policies


Discussing Alternatives and then supporting the ensuing decision in a supportive and timely
manner






People

Process

Technology

April 1, 2012

23

Change Management

24

How can the plant core team best communicate and manage this change
with their teams?



Communicate.

Core team members should update others that will be effected every week if
not more often.


Demonstrate.

While acknowledging that full user training is not until March; the Pilot
environment is for the Core Team to use. Showing others not only reduces uncertainty but
also is a great vehicle for Core Team members to better internalize their own training.


Question.

Use on site Logan resources to help answer questions and concerns. Use the
IMO team to address areas of concern.


Execute.

Do not fall behind, the schedule has no padding for delays.


Honesty.

Change is occurring; confront it and embrace it.


Commit.

Make this change for the better, not just for change sakes.


Fun.

This is hard work but let’s do it with a spirit of fun and co
-
operation.


Accomplishment.

It’ll feel really good when a successful Go Live cutover is accomplished
and you’ll know that you played a key role.



Change Management

25


What changes of note that the teams/users can expect ?


Hardware and Software


New Equipment


Scanners, Computers, Printers, etc.


New Source Documents and Reports.


Picklists, Distribution Orders, MRP, DRP, etc.


New system (QAD) with new look and feel


Ariba, MP2, etc.



Major Process Changes


Production involved in real time case reporting (Hawk)


All Finished Good moves (putaway, pick, stage) are real time and visible on both
screens and scanners. No directed putaway.


Costing (policy changes)


Discontinuation of Old Material Number (the two critical field values will be in
QAD)


Accounting Period Change to Monthly


No offshore group involvement (Manila)

Change Management

26


Process stays the Same or Similar
(but potentially with New tools)


Planning and Scheduling


Master Contracts and Purchasing (but no Auto Fax)


Interplant Distribution


Ingredient and Packaging Receiving and Inventory

(this will change in later 2012 with second phase Eagle)


CIMS and its use for backflush transactions


Plant PLC controls


Print and Apply


Communications with Sonoco


Master File Management

Focusing Only on Technology

27

Common Mistake #3

People, Process, Technology

28


People


As discussed, Change Management is a key requirement of a complex
integration and implementation


Process


Users need to see that the business processes are supported by the application


The Sara Lee Refrigerated Dough users were in a mature SAP environment


Focus on business process, ongoing training, and detailed User Acceptance
Testing was critical


A process based plan was critical to our success


Technology


Application Roadmap was complex


Hardware and Infrastructure team was critical


Migration of Applications, PC’s, Printers, Scanners, Print and Apply, Email, etc..

People, Process, Technology

29


Process


Ralcorp Frozen QAD was the presumed standard process model


Process scripts and flows were reviewed and confirmed during the assessment


Process scripts and user procedures and training aids were developed


Ongoing training and workshops started 3 months prior to go
-
live


By UAT


users had a solid understanding that QAD would meet the business
requirements


Failure to Anticipate How Project
Will Impact Customers and
Stakeholders.

30

Common Mistake #4

Customer and Stakeholder Impact

31


Everyone is OK with change


as long as it doesn’t effect them!


Insist on two way communication


Established a Benefits and Culture Team


served Internal Customers


New payroll / HR / 401K system and provider


Monthly Integration Newsletter


Multiple On
-
Site Road show presentations of status and plan


Corporate Communications Group


served External Customer


Professionally prepared communications


Customer actions were required


Customer acknowledgement was required and tracked weekly


Order to Cash and Purchase To Pay Teams supported customer and
supplier communications

Lack of Executive Buy
-
In

32

Common Mistake #5

Executive Buy
-
In

33


Many Executive Teams that say they back project


but do they?


Ralcorp Corporate Steering Committee


Monthly


Included Ralcorp CEO and Ralcorp Frozen President


Ralcorp Frozen Divisional Steering Committee


Bi
-
Weekly


Included Ralcorp Frozen President and Ralcorp Frozen Executive Team


Supported IMO (Integration Management Office)


Critical Issues elevated quickly and resolved


Management and staff incentives helped drive attendance


Resource support and project prioritization


Helped enforce late stage project “no
-
fly” zones


Inadequate Budget

34

Common Mistake #6

Budget

35

Two budget gates were defined:

1.
Pre
-
Close
-

Prior to acquisition close, a holistic Business and IT
Integration budget was defined


Business


staff, synergy savings, IMO support, etc…


IT


application licensing, implementation consulting, etc…

2.
Post
-
Assessment


Assessment phase confirmed and adjusted pre
-
close
budget


New licensing requirements for Lean Logistics


Additional cost for Print and Apply


Sara Lee TSA costs


Refined consulting estimates

Early December approved and finalized project budget with Steering Committees


Budget

36


Stressed importance of defining and validating business requirements


Plan for contingencies where possible


Contingencies driven by uncertainty of TSA costs and SAP complexities


True carve outs are complex


team wanted minimal to no budget surprises
after assessment phase


Not Setting and Gaining Agreement
on Resource Expectations Early

37

Common Mistake #7

Resource Plan Overview


Goal is to show general allocation per month per core team member for the
project


Assumptions:


Assume a 40 hour week


You likely spend 4
-
8 hours on Ref. Dough Integration Meetings today


This is approximately 10
-
20% and will continue


Future State
(December 2011 through April 2012)


Time required will increase


Decembe
r


Team Training Workshops for each functional area, Data validation
and configuration finalization


January



Training Workshops continue, Procedure Development


February



Validation and Testing


Engage plant supervisors, begin End User
Training planning and cutover planning


March



Final User Acceptance Testing, End User Training, Cutover


The following pages address core team only, including plant team


shop
floor, end users, etc…engaged closer to go
-
live with focused end user
training


Team needs to review and identify key resource gaps









38

Resource Planning

Minimum Required Percentage and Hours Per Month to Go
-
Live


Finalizing SLT Owner Approval

Examples
For Review

% Allocation
to
Integration
per Initial
Plan

39

Post Cutover Support 2 Week Plan


Plan early


key is Supervisor Training as First Line of Support


Per Shift


important to note level of resources required for
multi
-
site concurrent rollout, but note drawdown


Optionally, 10 or 12 hour approach could be used


UAT and Plant Management guidance will be used to determine
support team requirements


Message:



Plan early for support resources from DG and other plants


RF and RD need to start planning for cutover weekend and
support early


Sample Cutover Support Plan for Carrollton


Week 1

Week 2

Support
Plan
Needed for
Two Plants!

40

Good Friday

Plants Down

Summary

1.
Focus on Business Requirements

2.
Plan for Change Management

3.
Focus not only on Technology

4.
Anticipate and Address Customer and Stakeholder Impact

5.
Gain Executive Buy
-
In and Participation

6.
Budget Based on Business Requirements and Contingency Plan

7.
Define Resource Requirements Early


End Result:


6 week assessment


4 month implementation


1 month go
-
live support for two large sites and shared services team


Project completed significantly under budget.










41

Thank You!


Questions?

42