The SAP Initiative to Design and Develop Standardized, Globalized, and Integrated Processes
By Dr. Frank A. Morelli DPS, SVP Global Business Processes, Operations & CIO, Movado Group Inc.
Movado grew from a company where almost everything could be managed from the owner’s desk to an organization that is multi-branded and global. As you might imagine; we had a few pain points and challenges. Order processing was done differently for each of our brands and there was a great deal of manual order handling for credit checks, pricing and inventory allocations. Purchase orders were not always being used. So, full commitment visibility, optimal procurement and vendor management were not possible and this meant missed balance sheet opportunities.
We closed the books formally on a quarterly basis and did monthly soft closes because it took weeks to gather and validate the information. Taking a global view of brand activity was extremely difficult and time consuming. Another huge pain point was inventory. It was difficult if not impossible to get a read on our inventory position. Where it was, how it was classified, how the inventory was selling through, visibility of inbound and planned deliveries were all challenges.
The SAP initiative was positioned as a company wide event to design and develop Standardized, Globalized, and Integrated processes that could be system enabled.
By having a single global instance of SAP with one consistent set of master data accessible to everyone, we made a huge leap
The major key to success was that our senior group recognized the need, was very much on board, and actively supported the initiative. It goes with out saying, you must set expectations. Understanding the requirements, locking them in, getting your master data correct, and making sure your people are trained, are all important.
Most important to success is thinking through where you want to be and design for the future in terms of building blocks. Today, our company runs smoother. People understand their roles and responsibilities and the impact of their function on other groups. We are seeing some really great results. Our balance sheet is very strong, we have automated order and credit management processes in place, we have taken 10s of millions of dollars out of inventory while simultaneously growing sales and we are now able to close our books in days. The planning disciplines and the measurements we put in place allow us to continue to look for improvements. If you don’t measure it, you don’t respect it, and you cannot improve it. We have become a much more collaborative and integrated company.
By having a single global instance of SAP with one consistent set of master data accessible to everyone, we made a huge leap. Building on the foundation allowed us to innovate in several areas. We were able to leverage master data for our consumer and repair websites and to process and fulfill orders from both these applications in SAP. We utilized SAP to allow our key suppliers to update information on their inbound deliveries. We developed Supply situation reporting that brings our supply and demand together over a twenty six week horizon. We also created three tiers KPI reporting to analyze performance from vendors to our supply plants, our intercompany performance and ultimately our delivery performance to our customers.
The level of professionalism has been raised. Dealing with facts and reliable information has allowed us to better plan and collaborate with both internal and external customers. SAP has become an enabling technology and it is truly integrated in the company. So, as opportunities arise we consider how we can build on our foundation.