Requirements For Implementing An ERP System For Grunfolds World Of WaterPumps

Current Situation

Grunfolds World of WaterPumps is a manufacturer of water pumps, which are sold to plumbers and retail outlets. The home office is in Melbourne, which is also the headquarters for the main sales office. A sales office is also located in Albury. The company has two manufacturing plants in Australia: one in Melbourne, and another one in Albury, NSW. Distribution centres are also located at each of the current manufacturing plants. The company has recently added a China sales force in Beijing, on January 6, 2011. This also includes a manufacturing facility. The facility includes a distribution centre. The company is keen to expand into India – a niche market in which to sell a variety of ‘green’ waterpumps.

In the past, each of the manufacturing plants has acted as an independent company maintaining separate sets of books and operating more or less autonomously. The company thinks an ERP system will allow for process standardisation and to enable centralized procurement and sales functions. They also want to be able to consolidate financial statements as well as look at sales by product. Selling of the products is done with a sales force that calls on plumbers, Bunning’s, Home Hardware stores and other home hardware retail outlets. They also handle replacement parts, and have been looking into starting a home shopping cart web site where they could sell parts directly to farmers, plumbers and plumbing outlet stores.

Current Situation:

Grunfolds is a company that requires a progressive enterprise system that will enable it to support its growth over the next decade while improving their decision-making capabilities. Grunfolds World of WaterPumps is yet to develop a ‘green’ water system that will help them meet their growth objectives and which can be used in third world countries. The key strategy for Grunfolds is its commitment to customer satisfaction by delivering the product(s) at the right time, right place, and at the right price. Grunfolds is organized around processes that are focused on the value added to customers. Some additional high-level facts about Grunfolds are as follows:

•    Produce standardized components for waterpumps to stock.

•    Products are customized for VARs (value added resellers) by application of the company’s logo at assembly.

•    Individual customers do not have direct influence over the product or its function, shape, and size; however this is something that the Board of Directors is considering changing in the future to allow individual customers the opportunity to create specialised pumps.

•    CEO and Board of Directors want to increase productivity and have access to new technology

•    Sales planning and product design are determined by management in cooperation with other staff members. Grunfolds currently sells in Australian/US currency only, even though they do business with companies globally.

•    Grunfolds operates under one common set of general ledger accounts. Costs are allocated among departments and are managed centrally at Grunfolds headquarters. Management will use this information to collect and analyze costs/departmental performance and marketing requirements.

•    Grunfolds wants to track profitability and manufacturing costs of each of its products. At the main headquarters the board of directors of this public corporation likes to review one consolidated financial statement. In addition, management wants to know which of their products were profitable in the market. The marketing department needs sales reports for each region, product, and distribution method. Grunfolds currently produces two components internally and procures one product through a contract manufacturer. The products are sold directly on a contract basis. The products and parts information are as follows: Solar thermal water pump comes in two output sizes 50 litres and 100 litres per hour and can be powered by electricity or diesel; a standard water pump comes in three capacities: capacity 1 is capable of producing up to 1,000 litres of water per hour at 12rpm from a depth of 20 meters, it is effective up to a depth of 60 meters and can be used for farm use; capacity 2 is capable of producing up to 1,200 litres of water per hour at 14 rpm from a depth of 30 meters, it is effective up to a depth of 80 meters or capacity 3 which is capable of producing up to 1,400 litres of water per hour at 16 rpm from a depth of 40 meters, it is effective up to a depth of 100 meters. Parts and sub assemblies for the waterpumps are onsold to contracted retailers. Some of the raw materials and subassemblies are purchased from China, Korea and Vietnam; this has helped to reduce the cost of the waterpumps.

Additional Business Drivers

•    Additional business drivers behind the implementation:

•    Be competitive with their nearest company rival who has just implemented SAP
•    Enable online customer orders and customer order transparency

•    Enable on line vendor managed inventory stocks and communicate effectively with their overseas vendors
•    Build and supply products in China

•    Be able to perform current data analytics for marketing and decision making purposes
•    Be able to interact with business partners using up to date software technologies
•    Integrate 15 legacy systems with the new system

•    The company has approx 10000 staff worldwide; this includes 20 top level managers, 35 middle managers and 25 operational managers and a large variety of contractors. As well as 8,250 users of the system from a variety of departments; such as, warehouse, production and manufacturing, research and development, call centre personnel, sales and distribution and HR staff to name a few. These end users can be broken down into four main groups with various levels of computer literacy: experienced ERP system users, inexperienced core users, inexperienced casual users, and users requiring simple system awareness. These end users will be impacted by the implementation in various ways.

Requirements

You are employed as a Business Systems Requirements Analyst on a contractual basis. You have had some experience with SAP implementations in manufacturing organisations, you are a certified SAP TERP10 consultant and an expert in manufacturing business processes. Your knowledge in this area includes:

• Materials management software

• Inventory and warehouse management software o Procurement

• Sales and Distribution

Work Breakdown Structure

WBS	Task Name
1	SAP Implementation
1.1	Necessities, Strategy &Development
1.1.1	Requirement Gathering
1.1.1.1	Questionnaire prepared for the gathering of resources
1.1.1.2	Interviews conducted with major business owners
1.1.1.3	Focus group interviews with major business owners
1.1.1.4	Availability of resources understood with brainstorming sessions
1.1.1.5	Extent of employment frozen
1.1.2	Strategize
1.1.2.1	Identification of major success factors
1.1.2.2	Identification of important indicators of performance
1.1.2.3	Acceptance of all strategies and CSF/KPI documents
1.1.3	Hardware Sizing
1.1.3.1	Present hardware configuration identified
1.1.3.2	Hardware redundancies identified
1.1.3.3	Estimation of upgrade of hardware configuration
1.1.3.4	Fit-gap analysis of hardware configuration to be done
1.1.3.5	Suggestion for required upgrade given
1.1.3.6	Preparation of budget for upgrade
1.1.3.7	Selection and identification of vendor required for upgrade
1.2	Analysis & Design
1.2.1	Analysis
1.2.1.1	Present environment study
1.2.1.2	Business workings study
1.2.1.3	All accounting processes and structures study
1.2.1.4	Required customization study
1.2.1.5	Present 3rd Party Applications study
1.2.1.6	Readiness for change study
1.2.1.7	Fit-gap analysis done
1.2.1.8	Impact analysis done
1.2.2	Business Blueprinting
1.2.2.1	Future system landscape preparation
1.2.2.2	Workings of various processes preparation
1.2.2.3	Blueprinting workshops
1.2.2.4	DoD RICE Concept of Operations confirmation
1.2.2.5	SAP Bolt-On Evaluation completion
1.2.2.6	Specifications development
1.2.2.7	Custom specifications development
1.2.2.8	Specifications acceptance
1.3	Implementation
1.3.1	Finance
1.3.1.1	Basic planning
1.3.1.1.1	Unique company code defined
1.3.1.1.2	Fiscal year variant to company code assignment
1.3.1.1.3	Posting period variant
1.3.1.1.4	Period variant to company code assignments
1.3.1.1.5	Sample Document and postings creation
1.3.1.1.6	Recurring entry document and postings defined
1.3.1.1.7	Account assignment model and posting creation
1.3.1.1.8	Line layouts for display of General Ledger line items configuration
1.3.1.1.9	Individual documents and accrual and deferral documents reversal
1.3.1.1.10	Transactions in foreign currency posting
1.3.1.1.11	Interest on short-term and long-term term loans calculation
1.3.1.1.12	Accrual/Deferral documents
1.3.1.2	Accounts Payable
1.3.1.2.1	Vendor account groups
1.3.1.2.2	Number ranges to vendor account groups assignment
1.3.1.2.3	Void reasons creation
1.3.1.2.4	Issued checks cancellation
1.3.1.2.5	Purchase returns
1.3.1.2.6	Automatic payment program configuration
1.3.1.2.7	Vendors paid by Automatic Payment Program
1.3.1.2.8	Correspondence & account statements created
1.3.1.3	Accounts receivable (AR)
1.3.1.3.1	Customer account groups+B111
1.3.1.3.2	Customers tolerance
1.3.1.3.3	Customer master creation by blocking& unblocking of vendor master
1.3.1.3.4	Customer transactions posting
1.3.1.3.5	Advance payments set
1.3.1.3.6	Statement of accounts defined
1.3.1.3.7	Bills of exchange
1.3.1.3.8	Sales returns posted
1.3.1.4	Asset Accounting (AA)
1.3.1.4.1	Depreciation chart
1.3.1.4.2	% tax codes creation
1.3.1.4.3	Multi-level methods created
1.3.1.4.4	Period control methods defined
1.3.1.4.5	Main asset records created
1.3.1.4.6	Sub-asset records creation
1.3.1.4.7	Acquired fixed assets accounting
1.3.1.4.8	Sale of fixed assets accounting
1.3.1.4.9	Transfer of assets accounting
1.3.1.4.10	Assets scraping accounting
1.3.1.4.11	Depreciation process
1.3.1.5	ew General ledger Accounting
1.3.1.5.1	Parallel ledger
1.3.1.5.2	Document Splitting
1.3.1.5.3	Segmentation
1.3.1.6	ports
1.3.1.6.1	Financial Statement reporting
1.3.1.6.2	General Ledger reporting
1.3.1.6.3	Accounts Payable reporting
1.3.1.6.4	Accounts Receivable reporting
1.3.1.6.5	Assets status Report
1.3.2	Human Resources
1.3.2.1	Organizational Management
1.3.2.1.1	Organizational Management Introduction
1.3.2.1.2	SAP HCM structure defined
1.3.2.1.3	Define Objects
1.3.2.1.4	Define Relationships
1.3.2.1.5	Menu, Open and Action guided methods defined
1.3.2.1.6	Objects and Relationships edit
1.3.2.1.7	Validity Period defined
1.3.2.1.8	OM Info type defined
1.3.2.1.9	Define Objects Number Ranges
1.3.2.1.10	Define Evaluation Path
1.3.2.2	Personnel Administration
1.3.2.2.1	OM and PA integration
1.3.2.2.2	Development of enterprise structure
1.3.2.2.3	Define Company Code
1.3.2.2.4	Define Personnel Area
1.3.2.2.5	Define Personnel Sub Area
1.3.2.2.6	Define Personnel structure – Definition and Assignment
1.3.2.2.7	Define Employee Group
1.3.2.2.8	Define Employee Subgroup
1.3.2.3	Payroll Area and Control Record
1.3.2.3.1	Define Financial Accounting Global settings
1.3.2.3.2	Define Global Parameters
1.3.2.3.3	Define Fiscal Year Variants
1.3.2.3.4	Define Info type Menus
1.3.2.3.5	Activations and use of additional action
1.3.2.3.6	Define Customizing User Interfaces:
1.3.2.3.7	Modification of Info type screen
1.3.2.3.8	Modification of Type Header
1.3.2.3.9	Administrator group
1.3.2.3.10	OM and PA mapping
1.3.2.4	Time Management
1.3.2.4.1	Applicability with Enterprise Structure of holiday calendar of business
1.3.2.4.2	Define Factory Calendar in HR Perspective
1.3.2.4.3	Work schedules
1.3.2.4.4	Define Counting Rules for attendance
1.3.2.4.5	Define deduction Rules
1.3.2.4.6	Define Time Management Info types
1.3.2.4.7	Payroll
1.3.2.5	Payroll periods generation
1.3.2.5.1	Payroll processing
1.3.2.5.2	Relevant data maintained for payroll process review
1.3.2.5.3	Wage type model defined
1.3.2.5.4	Basic pay info type configuration
1.3.2.5.5	Annual salary defined
1.3.2.5.6	Other configuration payroll info
1.3.2.5.7	Multi Country payroll defined
1.3.2.5.8	Benefits
1.3.2.5.9	Benefits Area defined
1.3.2.6	Benefits provider defined
1.3.2.6.1	Plan categories
1.3.2.6.2	Define Pre- Requisite and co- requisite plans
1.3.2.6.3	Define Benefits Adjustment
1.3.2.6.4	Define Employee eligibility
1.3.2.6.5	Define Benefits info types
1.3.2.6.6	Benefits of payroll defined
1.3.2.6.7	Results in Payroll checking
1.3.2.6.8	Training & Event Management
1.3.2.6.9	Training requirement
1.3.2.7	Defining training cost
1.3.2.7.1	Set up of business events
1.3.2.7.2	Business Event Group and type
1.3.2.7.3	Maintaining the employee data w.r.t. event type
1.3.2.7.4	Manufacturing
1.3.2.7.5	Material Planning
1.3.2.7.6	Safety time range of coverage and period profile
1.3.3	Master Resource Planning defined
1.3.3.1	Material bills
1.3.3.1.1	Material master processing
1.3.3.1.2	Bills of Material processing
1.3.3.1.3	Work center and routing display
1.3.3.1.4	Production Planning
1.3.3.1.5	Production material scheduling
1.3.3.1.6	Material master processing
1.3.3.2	Material BOM processing
1.3.3.2.1	Material requirement planning
1.3.3.2.2	Work center and routing display
1.3.3.2.3	Planning calendar maintenance
1.3.3.2.4	Production lot maintenance
1.3.3.2.5	Quota file maintenance
1.3.3.2.6	Demand management
1.3.3.2.7	Cost Accounting
1.3.3.2.8	Cost elements defined
1.3.3.2.9	Standard, Simulated and budgeted cost calculation
1.3.3.3	Actual production costs calculation
1.3.3.3.1	Variance analysis
1.3.3.3.2	Repetitive Manufacturing
1.3.3.3.3	Repetitive manufacturing master data display
1.3.3.3.4	Repetitive production plan, sequence and schedule change
1.3.3.4	Production line work process recording
1.3.3.4.1	Logistics and production cost analysis
1.3.3.4.2	Build & Install
1.3.3.4.3	Setup development instances
1.3.3.4.4	Conversions, Reports, Interfaces and Enhancements coding
1.4	Initial run conduct
1.4.1	Create Security Authorizations
1.4.2	Test scripts and code preparation
1.4.3	Conduct unit testing
1.4.4	Design Instructor Training Material
1.4.5	Training Programs for the end users
1.4.6	Review and feedback
1.4.7	Training content Acceptance
1.4.8	Data Migration, Testing & Training
1.4.9	Data Migration
1.4.10	Historical data migration
1.5	Data Archiving Planning
1.5.1	Testing
1.5.1.1	Testing instance setup
1.5.1.2	System and integration test cases and scripts creation
1.5.2	Conduct integration testing
1.5.2.1	Conduct regression testing
1.5.2.2	Conduct User Acceptance Testing
1.5.2.3	Acceptance of test scripts and SIT/UAT
1.5.2.4	Training
1.5.2.5	Setup training instance
1.5.2.6	Train power users
1.5.3	Train end users
1.5.3.1	Training and training content review
1.5.3.2	Acceptance of training and training content
1.5.3.3	Go-Live & Support
1.5.3.4	Pre-Go-Live Activities
1.5.3.5	Conversion Planning Preparation
1.6	Recommendations Assessment
1.6.1	Go-Live Quality Assurance / Check planning
1.6.1.1	Final Preparation Acceptance
1.6.1.2	Go-Live
1.6.1.3	Configuration Production Environment(s)
1.6.1.4	Install Quality Assurance (QA) Environment
1.6.1.5	Support
1.6.1.6	stablish Service Level Agreements
1.6.1.7	Help Desk
1.6.2	Continuous Improvement Plan
1.6.2.1	Post Implementation Review
1.6.2.2	Provide Production Support (Help Desk)
1.6.2.3	Develop Continuous Improvement Plan
1.6.2.4	Produce and Deliver Program Management Status Reports
1.6.2.5	Post Implementation Review

Labor costs

Resource Name	Type	Material Label	Initials	Group	Max. Units	Std. Rate	Ovt. Rate	Cost/Use
Business Analyst	Work		B		100%	$80.00/hr	$50.00/hr	$0.00
Project Manager	Work		P		100%	$90.00/hr	$78.00/hr	$0.00
Technical consultant	Work		T		100%	$75.00/hr	$60.00/hr	$0.00
Functional consultant	Work		F		100%	$70.00/hr	$55.00/hr	$0.00
Finance Consultant	Work		F		100%	$90.00/hr	$65.00/hr	$0.00
HRM consultant	Work		H		100%	$75.00/hr	$60.00/hr	$0.00
Service Expert	Work		S		100%	$55.00/hr	$45.00/hr	$0.00
Developer	Work		D		100%	$70.00/hr	$60.00/hr	$0.00
Senior Tester	Work		S		100%	$55.00/hr	$50.00/hr	$0.00
Tester	Work		T		100%	$45.00/hr	$40.00/hr	$0.00
System Analyst	Work		S		100%	$80.00/hr	$55.00/hr	$0.00

Element	Cost
Labor cost	$679,840
Project Management cost	$1,200
ERP software	$300
Forms and report modification	$500
Estimated trips	$1,500
Operational costs	$3,500

1. Project manager – First of all the responsibility of a project manager is that of authorizing as well as approving all the expenditures relevant to the current project. The next important responsibility is to make sure that every work related activity fall not only under the acceptability criteria but also under the acceptable variance range. The manager is again responsible for reporting timely about the status of the project, which ought to according to the designed communication plan. Lastly, evaluating and monitoring the performance of the team members in his team and informing this to respective functional managers is the ultimate duty of a project manager.

2. Technical consultant – an Implementation engineer is responsible for implementing, distributing and monitoring the total network related up gradations. An implementation engineer shall be working with a network engineer for ensuring the coding of any required software goes according to the plan and security regulations.

3. Functional Consultant – Functional consultants aren’t members of the company’s functional team, yet they keep providing resources for carrying out the staffing plan of a particular project. Functional managers ought to work alongside the project manager to determine the skill sets required for resource assignments.

4. System/Network analyst – System/Network analysts analyze the system configuration and also develop an implementation plan for upgrading the plan. Their work is to develop an accessibility criterion for the much needed network planning.

5. Tester – Network- the engineers are to test out the network plan that has been drafted by a network analyst and have to be implemented by an implementation engineer.

6. HRM consultant – A HRM consultant generally acts as a medium of interaction between the new applicants and a company. Since they are aware of the internal working as well as the information of a company, they also specialize in giving out information about the organization, the personnel administration, and the payroll generation, management of the timesheet, training and also event management.

7. Service Expert- A service expert’s main duty is to ensure the outcome of flawless service, which includes figuring out the demands of users and if the demands are met.

8. Business Analyst – The Business Analyst engages in solving the crucial issues of any information problem related to an organization, the design computer programs, and suggests protocols along with system controls. Furthermore, he determines the objectives of an organization on analyzing its business functions and gathering sufficient information. An analyst will simultaneously be responsible for evaluating his/her output requirements. Designs a brand new computer program on just studying and observing the requirements and then by creating appropriate workflow diagrams and charts. Business Analyst strives to improve the already existing practices of the systems and the design modifications. Also, recommends appropriate controls on analyzing the critical problems and points out the exact needs of any particular project on identifying the milestones, the phases and the form project team.