keda's SAP implementation case

Topics: Management, Marketing, Supply chain management Pages: 3 (615 words) Published: January 24, 2014

History: -
Founded in 1992 by Lu Quin with a small investment, a ceramics machinery manufacturer. They modeled their business after the European market leaders. By 2002, they got listed on the shanghai Stock Exchange, in 2009 they reported revenues of US$209M almost double the amount of 2006.

Nature of Keda's business: -
Their sales orders were typically characterized by customization, low volumes and high margins. Their business also offered plant design and technical consulting services to industrial clients Keda's business heavily relied on key business functions - such as R & D, purchase of raw materials, inventory management, production - that comprised mainly of assembly line and workshop process, logistics and S&M. Each of the areas functioned autonomously, giving rise to freewheeling culture where non-standardized processes were adapted on the fly and problems resolved in adhoc manner

While this led to pursuit of perfection through endless innovation and they were able to establish themselves as Product as well as business innovators, this sort of culture led to silo-style of working and decentralized decision-making.

Disconnected business units, duplicate processing tasks resulting in redundancy and heightened costs. Lack of integration prevented Keda's leaders from acting strategically. Hence when faced with a decision on whether to compete for orders for a line of polishing machines in foreign markets, their final quote was based on a hunch.

In addition to this, Keda faced an issue with inventory management, where they had difficulty keeping a track of the many unique, individual parts. They were in a mess in material management, production was getting impacted and pricing issues. Overall Keda struggled to meet demand. Adding on this, the competitors both local and abroad, prompted Keda to diversify its business and product lines, resulting in a greatly expanded product line, which the company was unable to cope with. At the...
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