A Miracle? – Nibco’s Successful ERP Implementation
Table of Contents
Statement of Issues
The Need for Integration – Key Drivers for the Solution Change
Organizational Risks during the ERP Implementation
The functionality must work, there was no other alternative
The Implementation had to be on time
Business Process Change
Lack of Related Knowledge
Technical Issues during the ERP Implementation
Delay of the Consolidation of Distribution Centers
Data Loading Difficulties
Data Analysis – the Outcome
Short Term Results
Long Tem Results
Nibco’s Solution Analysis
Sustained Management Support
Accurate Vision and Planning
Appropriate Usage of Consultants
Focus on Change Management
Nibco’s Change Management Approach
The Application of Kotter’s Change Management Process to Nibco
Establishing a Sense of Urgency
Forming a Powerful Guiding Coalition
Creating a Vision
Communicating the Vision
Empowering Others to Act on the Vision
Planning for and Creating Short-Term Wins
Consolidating Improvement and Producing Still More Change
Institutionalizing New Approaches
How to Deal with Resistance to Change
Administrator – Enhance communication, Reduce misunderstanding
Staff People – Eliminating Self-preoccupation
Foreman – Specifically Selected; Identify Changes from User’s Point of View
Operating People – Open Communication and Incentives
Study of Dialectics of Change
Overcoming Configuration Barrier
Overcoming Assimilation Barrier
Change Management Program and Culture – Critical to ERP Success
Key Factors to the Success of Nibco’s ERP Implementation
Is there a generic Change Management Process?
So where is the miracle?
– Nibco’s Successful ERP Implementation
Many mangers wander whether a large ERP implementation can be achieved on time and within budget. Nibco’s successful story is a good example. The company not only managed to make the application live within schedule, but get fast ROI as well. What’s the secret?
By critically analyzing Nibco’s ERP implementation process, especially the change management initiatives and actions, the author identified the following critical factors for the success of Nibco’s ERP Implementation: Sustained management support (both top and middle level), accurate vision and planning of the implementation, appropriate usage of consultants, and change management with effective communication and a good incentive-reward system. Furthermore, the author will focus on analyzing the change management initiatives the company took and show how these efforts led to the fairy tale.
Statement of Issues
1 The Background
As stated in the case text, Nibco is a world leading plumbing supplier based in Elkhart, Indiana. In year 1996, when the company took the initiatives toward a better information system solution, the company’s annual revenue was 461 million dollars. Today, NIBCO is still privately owned company that have 12 manufacturing plants and 5 distribution centers throughout the United States, Mexico, and Poland employing more than 3,000 people. (About Nibco.)
After more than 18 months of internal and external (conducted by Boston Consulting Group, BCG) investigation on company’s legacy system and supply chain processes, the company decided to replace the old...
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