FOUNDER: HH Sheikh Saud Bin Saqr Al Qasimi, the Ruler of Ras Al Khaimah
CHAIRMAN: HH Sheikh Mohammad Bin Saud Bin Saqr Al Qasimi, the Crown Prince of Ras Al Khaimah
OPERATIONAL EXCELLENCE AT RAK CERAMICS
Dinesh Mohan, CIO [email protected]
Annual turnover of $1 billion, exports to over 160 countries
Annual output: Tiles-117 mil sq.m., Bathware-4.5 mil pcs, Tableware-20 mil pcs
Manufacturing plants in UAE, Bangladesh, China, Sudan, Iran & India
Over 8,000 models of ceramic tiles and sanitary ware
8,000 employees in UAE, 15,000 employees worldwide
RAK CERAMICS
World’s Largest Ceramics Manufacturer
2
- Diversified portfolio
- Complex interdependencies; poor visibility at the top
- Critical knowledge only with few executives
- Restructure around core competencies
- Make SBUs more accountable for their respective performance - Transform from ‘person-driven’ to ‘process-driven’
RAK CERAMICS PSC
2010: Restructuring Around Core Competencies
•India
•B’desh
•China
•Sudan
•Iran
UAE
RAK CERAMICS
AL-HAMRA REAL EASTATE
RAK PORCELAIN
KLUDI-RAK AL-HAMRA CONSTRUCTION
3
THE RIGHT MARKETS AND CUSTOMERS
To drive the right mix of customers and products in each geography, to achieve profitable growth
WORLD CLASS OPERATING SYSTEMS AND PROCEDURES
To create common world class operating systems and procedures, facilitating sustainable, profitable growth
PERFORMANCE BASED CULTURE
To create a performance based culture managed by a measurement structure that will enable continuous improvement
THE BEST PEOPLE
To create a development programme that provides opportunity for our employees and attracts the people that we need for the future
Become the
most competitive company in our business
Increase
EBITA margin by 2%
THE CERAMICS BUSINESS
2011: Envisioning The Future
Integrate Products, Processes and People with
SAP as integrating mechanism
4
Innovation Priorities
Are we Continuously Improving?
“ “
Are we geared up to be in sync with the Business Roadmap?
“ “ “ “
Financial Impact
Realization time and effort
Technology innovation (hardware/ software)
High
Medium
Low
High Medium Low
Today
Future
Scalability
Business IT
Alignment
Execution Excellence
Optimization
We need to focus our funds & resources for Business Growth
THE CIO AGENDA
Setting The Priorities
Is our Business getting Benefit?
5
BUSINESS- IT ALIGNMENT
SCALABILITY
OPTIMIZATION
PROLIFERATION
EXECUTION EXCELLENCE
Business Vision Drives IT Vision
Joint Business-IT Planning
User driven IT
SAP Best practices Implementation
Tier-2 Data Centre
Decommissioned legacy systems
Reduction in number of applications
Business process improvements
Implement best practice s (ITIL)
Established CoE concept
Right sizing IT organization
Global Template creation
Rollout to other locations
Rollout to other Subsidiaries
Data Analytics
Financial Consolidation
Cloud Infrastructure
Global Support Center
Right sizing DRP
Archiving optimization
2011 2012
THE IT ROADMAP
Aligning With The Transformation
2013 2014 2014-2015 6
Financial Excellence
Finance
Financial Compliance/IFRS
Financial Performance and Risk Management
On-line Banking
Finance Shared Services
Superior Customer Value
Sales Effectiveness
Customer Contact Center
Customer Service and Support
Consumer Products: Trade Promotions Mgt.
Product and Service Leadership
Product Lifecycle Mgt.
Responsive Supply Networks
Supply Chain Planning
Warehouse Mgt.
Transportation Mgt.
Demand Planning
Distribution
Supply Chain Planning
Professional Business Networks
Operational Excellence
Manufacturing
Procurement
Preventive Maintenance
Lean Enterprise
Quality Management
End to End Processes
Enterprise Healthcheck – Manufacturing
Enterprise Healthcheck - Services
Public Sector Healthcheck
Order to Cash
Fashion: Order to Cash
Retail: Merchandising
Private Equity: Operational Assessment
Best People and Talent
HCM
Talent Management
HR Shared Services
Strategic IT
Business Intelligence
Enterprise Information Management
High Performance Analytics
Enterprise Mobility
Total Cost of Ownership
Best Run IT
Value Management
Enterprise Architecture
Implementation Services
High Performing Assets
EH&S Compliance
Enterprise Asset Mgt.
Optimized Asset Mgt and Operations
Benchmarking Survey
Best Practices Survey
Industry Specific Benchmarking Survey
PLANNING FOR SAP
Driving Change Through Best Practices
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SALES can rapidly put new designs into SOP
PLANNING production flexibly
QUALITY is maintained through value chain
MANAGEMENT can identify and resolve constraints to maintain optimal production
OPERATIONS efficiently utilizes labor, material and assets
MAINTENANCE effectively allocates capital and ensures asset availability
SUSTAINABLE resources and operational risks are managed
Distribution Center
Planning & Execution
Sales & Service
Raw Materials
Component Supplier
Contract Manufacturer
Planning & Control
Quality
Management Operations
Sales Sustaina
bility Maint
PLANNING FOR SAP
Benefits And Value Creation
8
Project name: RAK-on-SAP (Read as “Rock-on-SAP”)
Scope: SAP ERP 6. EHP5, SAP CRM 7.0 EHP1, SAP Netweaver 7.3 (JAVA),
SOLMAN 7.1
Process coverage: Comprehensive coverage of processes across Sales, Manufacturing, Procurement, Logistics, Maintenance, Marketing, Finance and HR
Implementation type: BIG BANG – All Modules
Rollout scope: UAE operations - 13 manufacturing units, 15 warehouses, 6 retail showrooms and all administrative offices
Implementation partner(s): SAP
Estimated project effort: 14600 person days
Duration: 8 months
THE SAP PROJECT
Scope and Scale
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Business speaks to the Implementation Team with “One Voice”
Project success means profitable business
The Challenge
Our Strategic Goal
No surprises - issues and risk are addressed at the right level at the right time Our Immediate
Objective
THE GOVERNANCE AGENDA
Effective Execution
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RAK Ceramics Board Chairman, Executive Director, CEO
Executive Sponsor Executive Director
Project Owner CIO
Project Manager CFO
Top Level Ownership
Business Drive
Scope Management
Accountability
Change Managers CXO’s
Integration into strategic program
KPI Owners
Benefits Accountability
Quality Assurance KPMG
End to End Quality Compliance
Outside In View
Enterprise Standards
Project Team SAP MENA
Product Owners
Delivery Assurance
Best Practice
First Level Issue and Risk Mitigation
Core Team Leads - 14 Senior Business Managers
Master Data and Core Team Associates - 72 Business Managers and Executives
Steering Committee Executive Director
CEO All CXO’s
PROJECT ORGANIZATION
The Best Practice
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THE BACKBONE
Building The Data Center
Private Cloud
Complete redundancy
Scalable architecture
Highly Available
Disaster recovery
BS7799 based security
Phase 1 Applications • SAP ERP for Manufacturing Hardware • HP integrity rx2800 i2 Servers • HP Integrity BL860C i2 Server Blades • HP Integrity BL890C i2 Server Blades • HP ProLaint BL460c Server Blades • HP EVA P6300 Storage • HP Switches for Core and Edge 12
Software • HP-UX 11iv3 • Microsoft Windows • HP Data Protector for rapid backup and recovery Phase 2 • HP Matrix Cloud
…an integrated approach
Global landscape control using SAP Solution Manager
Rule-based landscape change management policy
High visibility and transparency
Instant Collaboration between distributed IT (Dev./Ops.), business and Implementation Teams
DEV
IND
CHD
BND
PQA
INQ
CHQ
BNQ
PRD
INP
CHP
BNP
RAK Ceramics UAE
RAK INDIA
RAK CHINA
RAK BANGLADESH
GTD GTQ
Transport route Solution Manager connection
Global Development Server Global Template
Solution Manager
…….
RAK PORCELAIN
…………..
…………..
2012
2014
2015
…….
……. ……. …….
TACKLING THE GLOBAL COMPLEXITY
SAP Solution Manager
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DELIVERING VALUE
SAP - Finance
Group and Local Policies
Faster closing, shorter planning cycles, respond faster to market conditions
Effective credit control
On-line banking
Accurate foreign currency
valuation
IFRS reporting
14
DELIVERING VALUE
SAP - Controlling
Actual costing of each product manufactured
Profitability analysis – LOB, Product, Sales Order, Customer, Salesman, Region-wise
Huge impact on planning and decision making
15
DELIVERING VALUE
SAP - Sales And Distribution
Increase profit - Move from ‘Revenue-based targets’ to ‘Product-mix based profit targets’ for each salesman
16
DELIVERING VALUE
SAP - Production Planning
Flexible production planning and scheduling over multiple production lines
Online production monitoring and control
MTO - production strictly against sales order
Match supply to demand
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DELIVERING VALUE
SAP – Materials Management
Regulate Inventory levels thru MRP and ageing analysis
Empower lower/middle managers thru workflows for requisitioning and purchase
Faster inventory reconciliation
Real time visibility on production & dispatch schedule
Spend analysis for smarter sourcing
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DELIVERING VALUE
SAP – Quality Management
Customer complaints
Vendor analysis
Visibility into ‘B’ grade inventory throughout the supply-chain
19
DELIVERING VALUE
SAP – Plant Maintenance
Move from ‘Corrective-maintenance’ to ‘Preventive-maintenance’
Repair vs Buy decisions
20
DELIVERING VALUE
SAP – Human Capital Management
Largest GCC payroll on SAP
Online leave and benefits calculation
Annual leave/tickets
ESS/MSS
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Big bang approach for Go-Live
CIO reporting to the Board of Directors
Distinct SAP PMO in addition to the Project Org
Innovative contract – reciprocal penalties
Quality Assurance from KPMG to avoid costly errors/rework
Systemic balancing of various interest groups
ASAP methodology
Adoption of Standard SAP processes and reports
Second-in-command from each department as the Core Team
Ex-stock availability of sandbox machine as essential condition for
Hardware Contract
SOLMAN and RWD for simultaneous documentation
and control
11 Steering Committee reviews in 8 months
Off-shore ABAP delivery
Realization and Unit Testing delivery planned for Ramadan
Upfront identification of Strategic, Op and Tech risks –
mitigation plans
CxO-level Change Managers
Master Data Cell established under CFO
‘Train-the-trainer’, 100% coverage before Go-Live
Computer awareness for shop floor
User manuals prepared by Core Team
Identified post Go-Live Support vendor early, ensured knowledge
transfer
SAP Support Vendor identified for Quick Stabilization
At Go-Live, Core Team converted into L1 Support Team
SAP COE
STRATEGY OPERATIONS
MANAGING CHANGE
STABILIZATION
IMPLEMENTATION
Speed And Quality As Key Deliverables
Project Go-Live in 8 m. On budget, on time No deviation in scope
STRATEGY
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Cloud-based Infrastructure
Minimized downtime (e.g. during upgrades)
Right sized backup / recovery
Performance Optimization
Automated Job Scheduling
Standardized Template-based Testing
Implemented best practice ITSM processes (ITIL)
Established Super User Concept
Global Support Center
From Service SLA’s to Output Based Management
EXECUTION EXCELLENCE The IT Paradigm Shift
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MEASURING THE OUTCOMES
The Short-term Win
RAK Ceramics delivers more than 200,000 sq.m. every day from the RAK facility
On Day-4 we were shipping this quantity
And we have been on steady state ever since
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MEASURING THE OUTCOMES
Auditing The Business Benefits
Metric Pre-SAP 9 m after Go-Live Future Target
Time to close monthly accounts 12 days 5days 4 days
Time to prepare Quarterly accounts for publishing to Abu Dhabi Stock Exchange
60 days 45 days 30 days
Credit/Debit Notes per month 100-150 50 25
Cost Report Coverage Select Few Complete Complete
Costing of new products 3 days 12 hours Real-time
Publishing of Monthly Cost Report 6 days 2.5 days Real-time
Reduction in Net Debt 4% 10%
Reduction in Av. Overdue Receivables 6% 10%
Reduction in F&A Manpower Cost 7% 20%
……………..and many more across departments
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MEASURING THE OUTCOMES
The IT Benefits
Metric
One Production Landscape - Cloud based scalable Infrastructure
Zero Downtime (planned and unplanned)
40 Incidents per month lowest in industry
3 Changes per quarter lowest in industry
IT Spend at 1% of Revenues industry average spend for manufacturing
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THE FINAL TEST
Realizing The Value
Metric Pre-SAP Present
NET PROFIT (m. AED) 224 272.3 (Up 21.55%)
EARNING PER SHARE 0.38 0.78
SHARE PRICE (AED) 1.34 3.89*
Realizing the Leadership Vision through effective IT
* As on May 1, 2014 27
“Even executives and staff who would not be directly involved with using the finished implementation were included in training and briefings, to ensure an enterprise-wide view was taken……………the realization that there are certain elements outside of the traditional technical skill sets or hardware requirements, that are essential to successful deployments.” MARK SUTTON
Senior Group Editor, ACN
LARGE IMPLEMENTATIONS CATEGORY
CITED FOR INNOVATION
Exceeding Expectations
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THANK YOU.