Customer: Royal Philips

Category: Consumer Electronics (Personal Healthcare Business)

Status: In progress

Project Description:

Supply Chains have evolved over years and all Companies are moving towards Digital Supply Chain world with more innovative technologies and capabilities. Supply chains today have to be more agile, flexible, responsive and should have the ability to react to customer demands and signals in shortest possible time to gain competitive advantage over their competitors. This means that the Companies who have implemented ERP, SCM Solutions in past need to revisit their solutions to achieve capabilities which are needed in today’s context.

Royal Philips is a Dutch multinational conglomerate corporation headquartered in Amsterdam and one of the largest electronics companies in the world, currently focused in the area of healthcare and personal health.  It was once one of the largest electronic conglomerates in the world and currently employs around 74,000 people across 100 countries.

Philips has put a lot of emphasis on innovation in recent years and the “Blue Heart” project at Philips is huge step towards innovation, which aims at ERP Consolidation, process improvements, drive new capabilities. The Project is so important in context of redefining Supply Chain at Philips that it is directly overseen by CEO’s office.

The Project aims to discontinue fragmented systems from the current complex landscape and create an end-state where all End-to-End (E2E) processes of Sales organizations and factories across the world are up and running on one single ERP System for Philip’s Personal Healthcare business. The seamless integration of all E2E processes into one system from fragmented systems requires in-depth understanding of Philips processes, mapping them to the new landscape with all opportunities for process improvement and migrate these processes to ensure that processes are up and running without issues after go-live. It also involves deploying the solution to other surrounding systems like APO, BW, JDA etc. with proper impact assessment for these systems to ensure that they are aligned in context with the changes done due to landscape consolidation. The Complexity of the Philips landscape can be imagined from the fact that there are 2 old legacy ERP systems, one SAP ECC and 2 APO systems connected with other systems like JDA, BW, GPT etc.

The project is very challenging in terms of aggressive time lines. Different Deployments for different markets like for India, Japan, Europe, China, Asia-Pacific (APAC), s-LATAM, Central and Eastern European (CEE) run in parallel which means that the Consultants working on projects should have exceptionally strong Business, SAP, Project management skills.

 Challenges:

Impact assessment on surrounding systems and processes due to landscape consolidation and drive process improvement initiatives

One of the biggest challenges in the Blue Heart Project was to assess the impact on systems such as APO, BW, JDA etc. due to harmonization in ERP landscape. Due to change in codes for Plants and network improvement opportunities in Business, it was imperative to do proper impact assessment for Demand Planning, Supply planning solutions in APO along with proper integration to surrounding systems like ECC, BW, GPT, JDA etc.  Once that was done, the next step was to identify rooms for improvement in Business processes so that non-value adding steps in the processes were scrapped and best practices of Digital Supply Chain were incorporated.

Design and build solutions to cater to changed processes in shortest time frame

Due to the change in processes and improvement opportunities along with landscape consolidation, it was important to ensure that the template solution was fit for all the new and existing processes. The Build Phase had a very short due to aggressive time lines for multiple deployments running in parallel for different markets. Similarly, the time lines for testing, cutover, training were very challenging and demanding resulting in lot of effort being put in by all people working on the deployments.

Drive Change management towards Markets

ERP landscape consolidation and harmonization of processes meant change in processes for the markets with fine tuning in some cases. This implied Change Management within markets, factories were properly addressed via training, testing and with support from Consultants and Process Experts. In addition to the existing Demand and Supply Planning capabilities, new Production planning and Detailed Scheduling capabilities were rolled out to Factories to leverage automated scheduling and sequencing from the PPDS module. This implied that Planners had to come out of their comfort zone of using their conventional Excel based / legacy tools and start using capabilities offered by APO and ECC which is a must in today’s scenario of digital Supply Chain.

Improve Demand Accuracy and fulfil customer demand with lowest possible inventory and Cost

Seamless integration of new ERP solutions with APO, BW, GPT and JDA ensured capturing real time customer demand into Planning. The constrained Planning feedback from Supply Planning solution in APO to Demand Planning Solution in APO and other systems like GPT, JDA ensured that right adjustments were considered by Demand Planners and improved the Forecast accuracy in a short time. This is very important in context of today’s scenario where Supply Chains are moving to Demand Driven processes. Similarly, integrating Downtimes, Maintenance schedules etc. into capacity of Resources ensured coming out with the correct levelled plan from the Factories, considering the correct available capacity of resources, which was then used for Scheduling/Sequencing via APO PPDS capabilities.

Solutions:

All the challenges encountered in deployments were successfully handled by Consultants working from Bolders Consulting Group. Leveraging the extensive experience acquired in previous implementations, they worked closely with their counterparts from Philips. These included Business Process Experts (BPEs), Business Process Owners (BPOs), Testing Coordinators, Senior Leadership etc. and ensured Best Practices and best-of-breed solutions were implemented for Philips.

Bolders CG Consultants gave proper alignment on progress, achievements and roadblocks faced during the course of implementation with all stakeholders involved. The Consultants acted not only as Trusted Advisors but also as Subject Matter Experts (SMEs) and Project Managers for managing the end to end delivery of the APO Solution to Philips. They completed all phases of the implementation including, design, impact analysis, project planning, build, testing for other tracks and alignment with other areas like GPT/BW/JDA for APO internal tests. The Consultants also did the system changes and the batch job planning and were responsible for leading in-depth cutover planning and execution for all APO go live activities.

They worked relentlessly and closely with other teams for transactional data migration and also to manage all the administrative part for changes involved. They ensured that all pieces required for go live: master data and transactional data along with integration with other systems was set up and thoroughly checked with analytics before go-live through capabilities offered by Bolders Consulting Group.  

They say, “Hard work pays dividends” and all the hard work of the Consultants from Bolders Consulting Group eventually paid off in terms of successful go lives with no issues. If there were queries from the Users, they were promptly addressed and resolved as part of Hyper care and the Projects were then handed over to Support at the end of the Hyper care process.

Results:

Good Project Implementations always yield benefits for IT and for Business. Implementing best practices and best of breed technological solutions resulted in following benefits for Philips:

• Simple landscape avoiding complicated interfaces that were present in old legacy solution.
• Reduction in Total Cost of Ownership (TCO) for IT solutions in Philips Landscape.
• Significant Improvement in Demand Accuracy in short term horizon by real time integration with ERP and feedback of constrained plan from Supply Planning to Demand Planning
• Reduction in Inventory Holding costs through adjustments in Safety Stocks and Target levels by assessing the supply chain and network every quarter.
• Improvement in Customer Service levels through proper allocation of Supply to Demand.
• Visibility of Demand and Supply situation in E2E supply chain including OEM suppliers.
• Fully automated PPDS Sequencing and planning capabilities replacing the conventional Excel based tool of Planners, simplifying their day-today tasks and operations.
• Reduction of Work in Process Inventory using SNP and PPDS capabilities.