Rolls-Royce Description
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In the world of engineering, if we talk about most renowned names that are present all over the globe, Rolls-Royce marks itself in one of them. Henry Royce in the year 1884 started with electrical and mechanical business and carried it forward until the year 1904, when the first car was built by him, later in the month of May, 1904 Henry met a guy named Charles Rolls who was having a good name in selling eminence cars in London at that particular time. Under an agreement it was decided Royce Limited will manufacture cars ought to be sold exclusively by “Rolls & Co.”, finally name Rolls-Royce emerged and when success touched the feet of cars which got manufactured initially, the company was formed in March 1906. Rolls-Royce first launched car named “Silver Ghost” and it was declared as best car within that particular year (Rolls-Royce 2018).
Above was a small sketch of the company how it was started yet more stories are there of the company’s evolution which are there, although the report is concentrated on the problem, challenges faced by Rolls Royce when a plan of implementing of Enterprise Resource Planning (ERP) got into picture in the late 1990s. There was once a time when rival organizations used to take competitive advantage on one or two attributes, but this is not the picture right now and nor for the Rolls-Royce back in the 1990s as other organizations that time already started using ERP systems. Until 1996 it managed by outsourcing information technology (IT) operations, further, the company decided after realizing the need for ERP became crucial for future operations as software advantages of cost reduction, instant implementing, and high-quality assurance were vital elements (Bangniyel 2012)
Long back in Manchester once; at Grand Central Hotel two extraordinary men met over a lunch one was Charles Rolls a mechanical engineer from Cambridge, an enthusiast and charming being and had a passion for speed. After some time he was named as best “autocarist” by a newspaper in England. For few years sold foreign cars by importing them with his partner Claude Johnson, but Rolls dreamed something different in mind, wanting to inscribe his name in a car which would steel away roads. Another one was Henry Royce a solid bearded obsessive workaholic man, only fourteen years old, a farmer’s son studied at night school did engineering apprenticeship, before building his first car was into electrical engineering business in Manchester (Rolls-Royce 2018).
Problems faced
The car which Henry built attracted an intense motorist Henry Edmunds because of speed and reliability, knew Charles Rolls and fixed up meeting in Manchester. Both met; agreed right away to create Rolls-Royce Car Company, even Rolls borrowed Royce’s car which he built and drove it to London to give a ride to Claude Jhonson in middle of the night. Nobody can guess at that particular time it was a meet which will bring a new turn in automobile sector when motor cars were seen very few (Rolls-Royce 2018). Rolls-Royce is 21st-century British maker of finest luxury automobiles, also manufactures aircraft engines, marine propulsion systems, and power generation, headquartered in London.
Throughout world; for land, sea, and air power systems are being provided by company, manufacturing, and service facilities are staffed by remarkable people which are keys for being on leading position (Rolls-Royce 2018). Production of civilian and military aircraft engines, a global leading supplier of marine equipment, for Royal Navy nuclear power systems, and for oil and gas industries; gas turbines are being manufactured by the company (Amir and Weiss 2018).
Being a global company and dealing in four major global market is a big thing, a lot of hard work is needed to achieve so much of success, for Rolls-Royce it was the year 1996 when it used to outsource IT functions from a contractor named Electronic Data Services (EDS) which used to look out IT structures and solutions for company’s growth. The company had 1500 mainframe systems which were developed internally but were costly, inaccurate, and complicated maintenance were its flaws, growth and new acquisitions produced a big volume of data which was getting difficult to be processed. This was the major problem which created the need for ERP, except this there were few more problems which are stated below (Garrehy 2017).
- First was of culture, project team which was allocated for implementation expected high acceptance towards areas which were functionally good in comparison with mainframe systems, although few functions were not getting up to the mark appreciation.
- The second was related with business structure of Rolls-Royce as SAP R/3 (former ERP software of a German company) demanded rigid structure for working effectively and efficiently, it demanded cross-functional teams to adjust their working practices to appropriately fit with SAP platform requirement. This ultimately exaggerated in the way Rolls-Royce use to do business earlier.
- The third was a technical problem in which was of accuracy in data as Rolls-Royce required data from old mainframe systems in a transformed form so that it can be uploaded onto new systems repository in a sequenced manner. Also, another concern in this was of data replication which was needed to be avoided at any cost.
The ERP system that Rolls-Royce opted for was SAP R/3, a product of an SAP SE company started by German entrepreneurs in the year 1972. SAP R/3 system was based on the client-server concept, constant graphical interface, effective use of linked databases, and numerous manufacturer server support (SAP 2018). In SAP/R3, “R” is used for real-time in context with the feature of software i.e. integration capability. SAP have a large number of features that help in solving business processes, providing possible benefits and ways to improve business processes and requirements, talking especially about SAP R/3 is that system which can run across different modules with functional chain involved in business practices (Mereddy 2011).
Rolls-Royce ERP system
SAP R/3 contains a feature by which business can react on immediate information and changes when the input goes into a system, logical application links update module simultaneously which reduces manual processing, and communication proving to be a valuable tool of business intelligence which facilitates better planning and exceptional decision making. Another feature of SAP R/3 is that it is implemented in organizations for re-engineering business processes by analyzing current processes and suggesting ways for improving them (SAP 2018). Most critical areas, relevant process models of the company can be easily analyzed. For customer specific process chains R/3 have a customizing feature which facilitates better implementation of the system (Hoover 2011).
In client-server technology i.e. SAP R/3 users have total control and bigger power over software architecture, because of its Graphical User Interface (GUI) that gives substantial flexibility and control in processing information for its users. These software applications allow the application server/workstations in getting more power, also complexity is avoided as employees do not have to deal with accurate programming commands while getting information related to customers need (Hoover 2011). Although above are SAP R/3 features, but Rolls Royce implemented “SAP Vanilla” because of the business process of the company required modifications in SAP R/3 which were too expensive and have created difficulties in installations of modifications, features were same as SAP R/3.
“Vanilla ERP” was introduced by top software vendors (SAP/ORACLE) in the 1990s; it was named after Vanilla ice-cream flavor because it is considered to be most popular and least served ice-cream flavor. With reference to this logic SAP Vanilla software is out of the way implementation method in which basic design is kept intact and no or little modifications are done, it pushes back the concept of customizations in software and also encourages the use of core ERP functions (Batchmaster 2018).
ERP selection a crucial decision making step as it influence performance directly, Rolls-Royce considered the first factor for selection by identifying the need for competitive advantage it can get from ERP implementation, which earlier outsourced mainframe systems were unable to ensure. The second factor which was being considered for selection was that ERP software resolves the problem of managing the big volume of data produced from years in mainframe systems, by providing data accuracy. The third factor for selection was that ERP must not affect business processes of the company and blend within them and give all needed advantage. A fourth factor that Rolls-Royce took into account that ERP helps in providing support to cross-functionality of departments, as many departments were there which were isolated in the company (Molnar, Szabo and Benczur 2013, 27).
Selection of ERP
Well, they opted for SAP R/3 as it was suitable software for the company which consisted capability to deal with all essential needs and dealing with factors which were crucial on which selection was based, still a problem of modification prevailed as discussed earlier; due to which instead of SAP R/3, SAP Vanilla was implemented.
Implementation started when Rolls-Royce made a committee and an implementation team which initially defined strategy for project. As company was upgrading IT solutions; foremost concern was of security during this process. Two million pounds were estimated for network infrastructure and over one thousand additional PCs were needed, six thousand SAP licenses were given for users across all business. Implementation was segregated in three major phases and total of 9 quarters in which key attributes were sub-divided accordingly (Leon 2013).
- Phase 1:Basic or initial phase in which intense study related to setting the scope and determining a plan and costing of the project, a committee and core team for ERP was formed. The committee delivered financial assistance and supervising implementation was in hands of ERP team, the aim was to take strategic decisions in this phase so that future occurrence of contingencies stays low (Jacobs, Berry, Whybark and Vollmann 2011).
- Phase 2:In this phase sketching out a thorough plan was done and Vanilla prototype was installed, enterprise model was established and company’s models were merged together for integration of data. Reviewing of technical attributes and acceptance testing took place, users were undergone training and a review system was deployed which monitored post-implementation, identifying core structure was done and the company adopted Integrated Programme Management (IPM) for research purposes which covered all businesses of the company, this phase was complete within planned time. Few changes in time frame were also executed after phase 2, happened because of giving line organization time for preparation, training, and cleaning up data. Five month time extended for pilot testing, completion of projects was managed by old systems, and lastly resolving difficulties in the use of SAP (Motiwalla and Thompson 2011).
- Phase 3:Phase was too huge to be implemented in one swing, so it was decided to be segregated in two sub-phases which company abbreviated as “waves”. Waves were focused upon the alteration in working from within, wave one dealt with replacing legacy systems through new manufacturing system named as Shop Floor Data Management (SFDM). Lastly, in the first wave; company pilot tested SAP at one of its facility and aimed at new capability provision for gas turbine operations. After a year the second wave initiated; in which combining human resource elements, engine assembly, logistics, and spares within the project were done. As with time new systems started showing positivity, older systems were being flushed out. Another thing which was done during phase 2 was legacy systems were modified under three different “suite”, first was related with the planning of supply chain; possible sales scenarios were compared with supply chain volume. Suite two was about scheduling and planning factory according to schedules acquired in suite one and plan ahead production in manufacturing units. Suite three was operating factory; consisted of controlling workflow from paperwork to finished product deliveries (Jacobs, Berry, Whybark and Vollmann 2011).
Few steps were followed by Rolls-Royce which helped the company in facilitating implementing SAP quite brilliantly, firstly Rolls-Royce prepared well for importing data, business processes, modules, and every other related information from legacy systems to new system one by one without rushing through. Second; Rolls-Royce created an ERP team and committee in the initial phase to look at the planned implementation. The third step which company took was of keeping customization minimum because it extends the time of implementation, this helped SAP Vanilla to appropriately merge within business processes (Miller 2018).
The fourth step which Rolls-Royce adhered was the execution of pilot testing system at one of their facility which was vital when they actually ran the whole system for the very first. The fifth step was implementation team on every phase involved every personnel of company so they can infuse new system and processes to work accordingly, the team extended time frame due to employees training and other stuff. Sixth was of accepting ERP system without resisting towards change, this is vital because if Rolls-Royce would have feared of anything like, how so much data would be transferred, how long implementation would be, loss of data, and all these things, then it would not have been successful at all. So these are few of preparatory steps that Rolls-Royce took so that implementation of ERP can be assisted successfully (Miller 2018).
Rolls-Royce at present is producing engines which are of enormous capability in generating power; failures can cost billions and human lives also. If an assessment of success is to be done it is needed to seek what company achieved in these many years, analysis of big data helped Rolls-Royce in sketching insights that drive towards efficiency and progress. Company’s chief scientific officer explained the use of big data is in three key areas i.e. design, manufacture, and after sales support, they have clusters of power computing which design the processes. Executing systems of company’s manufacturing are networked and communicate with each other (Marr 2015).
While assessing the success of ERP a major factor which is reflected is preparatory steps that Rolls Royce took during implementation, like ensuring and involving employees at all levels which created a positive vibe all over in adhering SAP implementation, and also after pilot testing “Go live” in which SAP was actually implemented proved to be success factor as Rolls-Royce turned all paper works into practicality by segregating implementation in form “waves”. Today Rolls-Royce can be taken as old age industrial giant because of their vision by believing that huge amount of data can be processed themselves, and also at the right time they became digitally aware and understood the very need for it (Grubb and Marson 2014, 2).
Success can also be assessed by seeing the way scope of the project was clear with Rolls-Royce and how execution, project management took place in well-managed order while keeping patience as a virtue. Also minimizing modification in systems played as an element of success for the company, as they kept systems simple and accurate as much they can, and keenly applied knowledge related with business process at every stage of the implementation process. So these are all arguments which depict or assess ERP success at Rolls-Royce (Lammers 2014).
Although any metrics related at the time of implementation is not possible to get the hands-on; still annual report of the year 2001 can give a glimpse, as in the year 2000 implementation was completed after the first quarter. Few analyses can be seen in below images:
Above are data from the annual report of Rolls-Royce from the year 2001, in which we can see an increase in the sale of civil aerospace, marine sales, and energy sales that how gradually they are increasing year by year consequently. If the focus is given then it can be seen that years during ERP implementation stage/phase were also increasing sales gradually. If a view is given on gross assets it can be seen that they are also increasing, and reached two billion by the end of the year 2001. So this data gives a crystal clear picture that implementation of ERP was successful and fruitful at Rolls-Royce.
Conclusion
The presented report concludes how the process of ERP implementation got into the picture at Rolls-Royce; when the company started realizing needs regarding their manufacturing processes which were to be enhanced to have a competitive advantage. The company was outsourcing its IT operations from a very long time which they felt were costly to manage and were lacking behind in terms of technology, they were having huge amounts of data from years of operations which was to be integrated for purposeful use in improving the efficiency of Rolls-Royse. SAP system was figured out to be optimum IT up gradation which was having the ability to solve many of the problems which company was facing at that particular time.
Company wanted data accuracy which old mainframe systems were unable to provide, report also states how selection was done of ERP as it was typical to decide which platform will give best results to company, with this whole process of implementing ERP at Rolls Royse is described in detail thoroughly that how company moved on phase by phase by dividing the whole process into parts and sub-parts which helped company to achieve a successful implementation in the end. With this company also took crucial and important preparatory steps which worked as a catalyst in successfully achieving overall implementation, finally report concludes how success is assessed in the end at Rolls-Royce what key elements or factors have been into picture by which it is clear that company was successful in implementing ERP and has brought expected and desired results. Also, some data, in the end, is given which gives a glimpse by which performance of ERP implemented can be judged well.
References
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