Nibco's Erp Implementation

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A Miracle? – Nibco’s Successful ERP Implementation

Table of Contents

1.Executive Summary4

2.Statement of Issues4

2.1The Background4
2.2The Need for Integration – Key Drivers for the Solution Change5 2.3Organizational Risks during the ERP Implementation6
2.3.1On Budget6
2.3.2The functionality must work, there was no other alternative6 2.3.3The Implementation had to be on time6
2.3.4Business Process Change7
2.3.5Lack of Related Knowledge7
2.4Technical Issues during the ERP Implementation7
2.4.1Delay of the Consolidation of Distribution Centers7 2.4.2Data Loading Difficulties8

3.Data Analysis – the Outcome8

3.1Short Term Results8
3.2Long Tem Results9

4.Nibco’s Solution Analysis12

4.1Sustained Management Support12
4.2Accurate Vision and Planning12
4.3Appropriate Usage of Consultants13
4.4Focus on Change Management13

5.Nibco’s Change Management Approach14

5.1The Application of Kotter’s Change Management Process to Nibco14 5.1.1Establishing a Sense of Urgency14
5.1.2Forming a Powerful Guiding Coalition14
5.1.3Creating a Vision15
5.1.4Communicating the Vision15
5.1.5Empowering Others to Act on the Vision15
5.1.6Planning for and Creating Short-Term Wins16
5.1.7Consolidating Improvement and Producing Still More Change16 5.1.8Institutionalizing New Approaches16
5.2How to Deal with Resistance to Change17
5.2.1Administrator – Enhance communication, Reduce misunderstanding17 5.2.2Staff People – Eliminating Self-preoccupation18 5.2.3Foreman – Specifically Selected; Identify Changes from User’s Point of View18 5.2.4Operating People – Open Communication and Incentives18 5.3Study of Dialectics of Change19

5.3.1Overcoming Configuration Barrier19
5.3.2Overcoming Assimilation Barrier20
5.4Change Management Program and Culture – Critical to ERP Success21

6.Conclusion22

6.1Key Factors to the Success of Nibco’s ERP Implementation22 6.2Is there a generic Change Management Process?23
6.3So where is the miracle?23
6.4Future Research24

7.References25

A Miracle?

– Nibco’s Successful ERP Implementation

Executive Summary

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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