1. the Information System and the User: Baan Scm in Rolls-Royce Brattvaag

CONTENT:

Acknowledgments...... 3

1. THE INFORMATION SYSTEM AND THE USER: BAAN SCM IN ROLLS-ROYCE BRATTVAAG......

2. WHAT IS SCM BAAN IV?...... 5

3. MORE ABOUT THE INFORMATION SYSTEM BAAN IV (almost promotion)......

4. HOW IS THE INFORMATION SYSTEM STRATEGIC?...... 6

5. Where does the Information System add value for those that are implementing it?...... 7

6.Discuss the kind of Value or Risk Analysis that might have been done by those selecting to use this technology. This should be more detailed. Do an analysis yourself based on as much evidence as you can find.

CONCLUSION 7TH. APRIL 2000......

7. References to my Report......

(ATTATCHMENT 1)......

1.THE INFORMATION SYSTEM AND THE USER: BAAN SCM IN ROLLS-ROYCE BRATTVAAG

1.1 THE BAAN COMPANY AND THE INFORMATION SYSTEM

The Baan Company is one of the world’s leading providers of scalable enterprise business solutions. Baan delivers a comprehensive and flexible suite of enterprise business applications that address the complete value chain, from Enterprise Resource Planning (ERP) and Supply Chain management, to customer interaction software. Companies in the hybrid manufacturing, as well as automotive, electronics, project, and process industry use its products to streamline their business processes. Through several buy-ups and integrating with other companies BAAN has build their Information System Product-Platform.

The Baan Company is active in more than 60 countries, with 4,500 employees and 5,000 customer sites. Founded in 1978, The Baan Company which has dual headquarters in Putten, The Netherlands, and Reston, Virginia, USA. The Baan Company is traded on NASDAQ (BAANF) and on the Amsterdam Stock Exchange (BAAN).

Among Big Customers are The Boeing Company, Volkswagen and General Mill. For further references visit Baan Company on WEB:

BAAN IN NORWAY: The Four Biggest Customer are:

ABB, Glamox, Rolls-Royce (Earlier Vickers Ulstein Marine Systems - VUMS) and Kongsberg-gruppen. ( ).

1.2 ROLLS ROYCE LTD - Brattvaag

Through several take-overs the latest one when Vickers Rolls-Royce Marine Systems (VUMS) became a part of the Rolls Royce group. (Click here for Rolls-royce website ) . The company was established in 1941 and is located on the West Coast of Norway - in Brattvaag - a small village outside the city of Aalesund. The plant in Brattvaag is a very small part of Rolls Royce. Though this is a very advanced fabric, with one of the largest fully automated production-fabric. In 1997 the former Ulstein Group decided to invest in an ERP-system to replace several different planning systems and data-programs. After thoroughly evaluation they chose BAAN IV as the best system at that time. The BAAN IV was the only ERP-system that was possible to fully integrate with their business process. Even though not all part of the system is enough efficient.

In Brattvaag there are working about 500 persons mainly developing, selling and producing advanced hydraulic winches for use on fishing boats and offshore-ships.

Rolls-Royce Brattvaag is a leading developer and supplier of winch systems based on low-pressure hydraulic technology. Rolls-Royce Brattvaag is a central member of the unit Rauma Brattvaag Deck Machinery. The company's range of products includes amongst other things – windlass and moorings winches for the merchant segment. Furthermore, it delivers complete deck machinery solutions for long liners, purse seine and trawlers. The company delivers anchor winches, anchor-handling winches, turret bearings, bulk handling and fairleads for the offshore sector. Rolls-Royce Brattvaag proudly opened in Oct. -99 a new FMS-system. This is a flexible production system - for the moment the biggest in Europe. The system actually constitutes a complete hydraulic factory. Production and warehouse administration within this system is built on the principle of "on-piece float" (in contrast to batch production) and Kanban control to regulate production. (In my presentation I will show some of their products, just to illustrate how complex their production is).

2. WHAT IS SCM BAAN IV?

BAAN IV is meant to support the Supply Chain Management Process in Rolls-Royce Brattvaag.

So therefore let me first explain SCM – Supply Chain Management: (briefly)

Supply Chain Management is the management of the flow of material and information through the Supply Chain. This is a complex process requiring the co-ordinated effort of several knowledge workers distributed functionally and geographically.

The competitiveness of an organisation in today’s marketplace is directly related to how well it can synchronise and accelerate the flow of material and information through the enterprise and externally among business partners. BAAN IV supports these operations

In the past several years' significant advances have been made in the area of advanced planning systems to help practitioners manage the supply chain. While companies have realised benefits from these applications, their impact has primarily been felt in the optimisation of specific functional areas. Largely untapped are the opportunities that exist to optimise performance when it is about implementing BAAN across different functional areas, among locations and among trading partners in the extended enterprise. At this point Rolls Royce Brattvaag has not yet achieved this level of performance. This project will focus on how BAAN IV are implemented in Rolls Royce, Brattvaag and challenges they met on the road to both benefits and risks.

Ernst &Young helped with the implementation of BAAN IV. Consultants from Sweden and Netherlands knew the application but they did not know the Industry and their business process. This I will describe more about below.

3. MORE ABOUT THE INFORMATION SYSTEM BAAN IV (almost promotion)

The BAAN Company’s flagship product, BAAN IV, is a suite of open-systems-based, software applications for enterprise information management. The software enables companies to manage all aspects of the business; from sales forecasting and inventory control, to manufacturing, distribution, and finance in one, integrated environment.

The foundation for the products is "Orgware", a suite of tools and methodologies, which reduce the time and costs associated with implementation and enable continuous improvement. With Orgware, Baan is enabling a new paradigm called Dynamic Enterprise Modelling, which delivers a framework for insuring that enterprise applications are in close alignment with an organisation's changing processes and business model. (This I will try to describe in my presentation).

Baan supports popular Unix platforms as well as Microsoft NT, and was the first solution provider in its class to earn the "Designed for Microsoft® BackOffice " Logo certification. Baan software also support major relational database systems (Oracle, Informix, IBM (DB2), Sybase and Microsoft SQL Server), and were Year 2000 compliant. Products: Baan’s integrated software products support the entire spectrum of a company’s critical business processes.

4.HOW IS THE INFORMATION SYSTEM STRATEGIC?

From the Book[1].: ”A strategic information system change the goals, operations, products, services or environmental relationships of organisation to help them gain an edge over competitors. Systems that have these effects may even change the business of organisations".

Strategic information system can be used at all levels of the organisation and are more far-reaching and deep-rooted than the other kinds of systems.”

The Information System is strategic in several ways:

Integration of the several different businesses processes.
Before BAAN the production were based on more than 40 years old production practice. The new system changed their thinking in the way that they saw the entire value chain[2] from raw materials, outsourcing, and suppliers - through production- sales marketing - to the customer in the other end.

5.Where does the Information System add value for those that are implementing it?

The quality and consistence of basis in data (to the Production-masterplan) to their information system is better than before. Also earlier input of data. This gives better execution of the process after schedule, which next will lead to higher quality to the products. The information is also easier and earlier available. With BAAN they register data were and when data occur. With shorter information line (fewer intermediary passages), less chances for mistake = better quality. It is also easier to correct wrong information when it is found near the source.
Higher knowledge about the procedures and process among the personnel.
Less paper planning, but better documentation, and more integrated planning.
More and better involvement of suppliers and co-operating organisations.
More integrated applications easier updating of information.
Better delivery precision. Rolls Royce Brattvaag now can tell their customer more exactly than earlier when they can deliver an order. This is very important for the customer, because installation of a winch-system may be a part of the building process of i.e. a fishing vessel.
Better forecasting on lead-times (time from a demand occur until it is satisfied). Especially parts, which they outsource it, are vital knowing when the parts are delivered for gathering.
Better overviews were the costs arise, and they can also uncover bottlenecks.

When they receive an order in BAAN they now are able to drop parts from the order directly to the production line, were there are free capacity. BAAN and the exact order will be updated for the finished part. More dynamic work-execution is the result.

6.Discuss the kind of Value or Risk Analysis that might have been done by those selecting to use this technology. This should be more detailed. Do an analysis yourself based on as much evidence as you can find.

An ERP-information system is a complex system, and when integrated in a business, success depends of several factors.

6.1 FIRST I HAVE TO WRITE SOMETHING IMPORTANT I LEARNT IN ROLLS ROYCE BRATTVAAG:

TO IMPLEMENT A BIG ERP-SYSTEM IS NOT A ONE-TIME INSTALLATION AND THEN FINISHED - WE ARE RATHER TALKING ABOUT A CONTINUOUS PROCESS OF IMPROVEMENTS. THE PROCESS IS STILL GOING ON...

Rolls Royce started the implantation late in 1998. Not on all areas the implantation is finished yet. The reason for this is also that Rolls Royce Production is complex and with a great deal tailor made production, BAAN IV is not tuned for tailored production but more tuned to mass-production or serial production.

Mr. John White[3], chief Manager in Compaq has said that installing Compaq's ERP system could be compared with changing wings and motors on a jet-plane while it is in the air. When installing the system the ordinary business process must go as usual. It can't stop up. The implementation process may drive the organisation tired of such long-lasting process with work overload.

6.2 UNLUCKY SOLUTIONS?

If the program-provider does knew the application but not knows the Industry and their business process, is it possible that they may suggest solving the defined tasks not in the best way for the fabric. This may also be some of the reason why the implementation not is finished yet in RR.

BAAN IV demands a thoroughly and in detail registry of layout-parameters. An obvious risk is when the consultants from the ERP-provider do not understand the underlying production-process and therefore set wrong parameters in the ERP-system and therefore are not functioning as expected.

6.3 DIFFICULTIES TO DO COST-/BENEFIT ANALYSIS

Last year RR Brattvaag had their best result ever. But is it possible to say that this was because of the implementation of BAAN IV? Some will say that despite of BAAN IV they did it so well. Better and more sales, better qualified personnel, other special information systems installed in the same period. The excellent result seems more like a mix of many things rather a one single reason.

6.4 WHILE TIME IS RUNNING...

Like other software-suppliers BAAN COMPANY continuous developing better ERP-solutions and software. There is a risk that better system will be developed. The big dilemma for RR Brattvaag and others ERP investors is whether they shall upgrade or work with the an foraging ERP-system.

6.5 ROLLS ROYCE BRATTVAAG A DEVELOPING COMPANY

When they decided to invest in BAAN IV RR Brattvaag belonged to "Ulsteingruppen"[4].

Today RR Brattvaag is a small part of the multinational company Rolls Royce. Which information strategy RR will follow in the coming year will decide whether or not BAAN will be chosen when RR Brattvaag need an upgrade of their ERP-system.

6.7 DEPENDECY OF SINGLE SOURCING

When choosing an ERP-supplier, the software is so complex that it is impossible to change system from one day to another; it is long time relationship. To change supplier result in big costs and a heavy reorganisation process within all business processes. It is therefore important to be obvious this, and that an investment in software also is an investment in supplier-relationship.

6.8 BAAN COMPANY STRUGGLED LAST YEAR

Last year BAAN COMPANY lost 2 billion NOK, which resulted in a dramatically bad result last year and the shares dropped dramatically in value. This makes it possible for others to buy the company or to merger with others. Uncertainty around a company; that is not the best way to sustain strong and be the first choice when potential customer are evaluating which ERP-software to invest in the future.

CONCLUSION 7TH. APRIL 2000

Looking for a business preference? Invest in an SCM-system. It gives the management co-ordination and integration of all aspect of the entire organisation from production, to accounting and personnel. This co-ordination of all information, more or less result in better control over internal processes, reduced costs, better efficiency and effectiveness and at last but not least: The organisation will be able to work out more optimal production plans. The mail lesson in this project will be the following:

TO IMPLEMENT A BIG ERP-SYSTEM IS NOT A ONE-TIME INSTALLATION AND THEN FINISHED - WE ARE RATHER TALKING ABOUT A CONTINUOUS PROCESS OF IMPROVEMENTS.

7. References to my Report

You should use BIBSYS and article databases (ie. ProQuest) in your search for reference materials.

7.1 Rolls-Royce Brattvaag: Homepage not yet converted to Rolls-Royce

7.2 Article in Informationweek about supply chain

7.3 From the book: ”Management Information System” by Kenneth and Jane Laudon, p-492-495, The Boeing Case

7.4 BAAN STRUGGLE TO RAISE AGAIN: (An article from "Dagens Næringsliv" 5.1.2000 Via Database ATEKST) (ATTATCHMENT 1)

7.5 An article from Traffic World, Washington; Mar 20, 2000; Vol. 261, Iss. 12; pg. 28by Kathleen Hickey about the turbulense in BAAN the last few months. (PROQUEST)

7.6 BRITANNICA ONLINE:

(ATTATCHMENT 1)

TEXT IN NORWEGIAN:

HEIDI EGEDE-NISSEN
5.1.2000
Oslo
Det nederlandske programvareselskapet Baan opplevde et
kursfall på 18 prosent etter at selskapet igår måtte melde om et
tap på to milliarder kroner siste kvartal ifjor. Konsernsjef Mary
Coleman går av etter katastrofetallene, melder nyhetsbyrået
Bloomberg.
Baan, som utvikler og selger forretningsprogramvare for
større virksomheter, varsler at fire prosent av arbeidsstokken må
sies opp og at 14 kontorer blir lagt ned. Administrerende
direktør Øyvind Aronsveen i Baan Nordic sier at den norske
virksomheten ikke vil bli berørt. Selskapets største kunder i
Norge er ABB, Glamox, Vickers Ullstein Marine og
Kongsberg-gruppen.
- Ingen kontorer i Norden skal legges ned. Hvis det blir
effekter, vil vil se på om enkelte stillinger har gitt
resultater, sier Aronsveen.
Baan har 17 ansatte og en omsetning på 43 millioner kroner i
Norge. I Norden har Baan 150 ansatte og 282 millioner svenske
kroner i omsetning.
Baan er et av selskapene innen nisjen forretningsdatasystemer
som er hardest rammet av investeringsstoppen i store virksomheter
før år 2000. Svært få bedrifter satte i gang nye store
it-prosjekter ifjor. Alle ressurser ble satt inn på at
datasystemene skulle takle overgangen til 2000.
- I Norden har vi også merket av svært få virksomheter har
investert i nye store forretningsapplikasjoner før årsskiftet.
Men vi ser positive utviklingstrekk for 2000. Nå vil næringslivet
dra nytte av investeringene som er gjort ved å gjøre it-systemene
klare for e-handel og knytte det til CRM
(kundebehandlingssystemer, red.anm.), sier Aronsveen.
Også den tyske konkurrenten SAP og norske Agresso har vært
rammet av år 2000-frys i næringslivet. Baan er den nest største
leverandøren av forretningssystemer i Europa etter SAP. Baan
omsatte for 735 millioner dollar i 1998 og noe mindre i 1999. De
siste seks månedene har Baan tapt enorme beløp.

[1] Management Information Systems: Laudon & Laudon p. 48

[2]Value chain The series of interdependent activities that bring a product or service to customers, These include: (1) "core" value activities that directly contribute to designing, building, marketing, selling and maintaining a product or service; and (2) "support" activities that enable core activities to take place (for example, human resource management, facilities operations, finance, and activities related to management, coordination and control); and (3) "information processing" activities that enable the company to access, index, filter, store, analyse, package and communicate information.

[3] From Bill Gates book Business @ the Speed of Thought