Keda

Only available on StudyMode
  • Download(s) : 125
  • Published : December 18, 2012
Open Document
Text Preview
-------------------------------------------------
Case Study
-------------------------------------------------
Keda's SAP Implementation
Company Overview

Keda Company Logo
Keda was founded in 1992 as a small manufacturer of ceramics machinery in Shunde, China. 

At that time, the ceramics industry was mostly dominated by Europe. Hence, Keda modeled its business processes after them and enjoyed rapid growth in China during the 1990s. And so, with a successfully tested and proven business model provided, Keda flourished.  In less than a decade, It became one of the top 500 national machinery manufacturers and a top 10 materials machinery enterprise in the world. It officially became listed in 2002 with a total reported revenue of CNY931 million in 2009. 

The Early Years
How did Keda operate? Keda’s business relied on several key business functions such as:  * Research and Development (R&D) 
-------------------------------------------------
Spent more then CNY45 million to set up a state-of-the-art ceramic engineering R&D testing center for research.

* Purchase
* Inventory Management
* Production
* Logistics
* Sales and Marketing

Each of these areas functioned autonomously, resulting in a "free-wheeling" corporate culture where non standard processes were adapted. Problems were hence, solved in an ad-hoc manner resulting in a highly flexible culture within the Company itself.  With this flexibility, Keda managed to achieve a "innovative" reputation among the industry as one of the key leaders in innovative new machinery.  As such, besides concentrating on business, Keda invested a fair amount of money over the years towards R&D on ceramic engineering, supply chain management and human resource management. Establishing itself not only as a leader in market share and revenue of the industry but also a leader as a product and management innovator. 

How did Keda earn its money?
* Keda’s products were mostly customized to fit its customer’s requests and requirements.  * As such, their products were diverse and in huge amounts. * They also provided plant design and technical consultation services to its customers.  * Over the years, Keda received reputation from its industry as well as its customers on the successful business model adapted.

What was wrong with the system?
Because of this ad-hoc and highly flexible culture within the company, several problems arouse. They include:  * Decentralized business 
* Individual element decision making with no central thought making process  * Duplicated identical process tasks across the business causing redundancy and increased costs  Managers were unable to make strategic decisions due to the lack of information that flowed between the departments and elements.  The business itself was also unable to properly access its costs and profitability potential.  All of which was especially taxing to the company in the face of rising competition that kept growing within the industry. Keda sees them as threats, threats that will pose a problem to them if they continued with their ways. 

Combined together, Keda found itself in bigger trouble as it now was unable to fully optimize the resources of the company. This resulted in significant loss of opportunities for the company in terms of profit and reliability. Production delays were common and reusable parts were often scrapped. One of the main reasons that led to the compiling problems in Keda was the fact that each department functioned autonomously. Although this scenario gave Keda its initial edge over its competitors to be a leading innovator. The problems of such a structure got worse as the company grew. Not to mention the rate it grew with. Problems include: -------------------------------------------------

a. Duplicated identical processing tasks. -------------------------------------------------...
tracking img