What are the current challenges facing Bombardier?
Bombardier has grown substantially through acquisitions since 1989. These acquisitions have allowed Bombardier to expand its operations. However, in doing so, they inherited multiple different information systems, processes, and business practices. Bombardier had become a textbook silo company. They quickly realized that their aggressive acquisition strategy had become a much more expensive endeavor.
By creating a silo environment, they created inefficiencies throughout the entire supply chain. Systems did not communicate with each other, creating process delays, low inventory turnovers, price inconsistencies and multiple bills of materials. Additionally, they had to hire personnel to maintain multiple legacy systems.
How integrated is Bombardier as a company?
Until October 2001, Bombardier’s information systems were being maintained by the Bombardier Manufacturing System (BMS). The system had been put in place in early 1990 and had done an excellent job. However, with the ever-changing landscape of the aerospace industry and Bombardier’s vision, it was widely agreed that BMS was limited and showing signs of aging.
One of the major problems that Bombardier was facing was stand-alone, user-developed databases throughout the company catering to specific operations and their functions. Employees were not aware that by fostering such an environment, they were putting future initiatives at risk and ultimately jeopardizing the company’s own future.
Management realized that in order to move forward and make their future visions a reality, they needed to take action. Over the past 12 years, they had been attempting to address inefficiencies by implementing common roles, responsibilities, values and utilizing six sigma tools to refine common processes. The Vice President of Operations envisioned an integrated organization where data would be shared across all sites using a single, unified information system. This vision led to the development of the Bombardier Manufacturing Information System (BMIS) project.
What are the challenges associated with integration?
Bombardier has a challenging task ahead! They need to integrate 63 systems for successful integration. This is a major undertaking as most sites have established their own information systems and databases. Merging all the databases into one global data warehouse will be a significant feat. To ensure SAP functions as intended, they must redesign their database architecture and endure the rigors of data cleansing and preparation.
Another challenge will be the need to redesign processes. This will involve finding points where processes cross functional boundaries, which is an extremely important aspect. It will change their current processes and departments from silos to horizontal processes.
However, the biggest hurdle that companies often face when implementing or integrating a new system or process is the users. It’s common for users to resist change because they see it as a potential threat to their jobs and it takes them out of their routine and comfort zone.
What benefits can be expected from integration?
Bombardier expects to save a substantial amount by integrating all their systems. They estimate that they will save approximately 1.171 billion, including a one-time reduction in material inventory of 219 billion. Material acquisition accounts for 75% of their total costs.
By integrating all of their systems, they could move towards global strategic purchasing. It is estimated that they could save approximately 7.1 million per year in procurement overhead.
What were the strengths of the implementation process for the Mirabel roll-out?
Bombardier formed a BMIS team consisting of both business and IT employees. The team members were relocated to work under the same roof, and all their previous work assignments were reassigned to allow them to focus entirely on the ERP implementation.
Bombardier recognized the need to review their processes across all functions and create functional councils at each of the company’s main facilities. The functional councils were Methods, Quality, Production, Work and Material Planning, and Procurement. Creating these functional councils allowed all main facilities to have a say in the project which was deemed as a very important step in creating inclusivity. This ensured that the project could not be labeled as a Montreal-only project.
The councils were tasked with undertaking a visioning process in which the different functions could propose their prospective form in an ERP environment and outline the benefits expected from the BMIS implementation. This would outline the KPIs required to successfully run the business and also set the skill requirements for each function to meet their proposed benefits.
The Vice-President of Operations and Project Sponsor played an active role in promoting the project. He communicated the overall vision of the BMIS through roadshow presentations at each facility. Messages promoting the One-Company vision were also included in company newsletters, emails, and posted on the company’s intranet.
What points need improvement?
Although the VP of Operations and Project Sponsor remained supportive of the project, the plant manager at Mirabel disagreed with its scope. Additionally, some internal managers and users felt that the system was being imposed upon them, leading to a lack of enthusiasm for implementation. This was evident in meeting attendance, which had been delegated downwards towards employees who were not empowered to make quick decisions on key topics.
Management of business units was instructed to pass down information regarding the project vision. While some managers held regular meetings with employees, others made no effort to communicate the information, which frustrated both the BMIS team and employees.
Due to the lack of interest from plant and department managers, some employees showed up at the training sessions without knowing why they were there. The Mirabel plant felt that they had insufficient training, as it was too far away from the implementation site. When it came time for implementation, they could not remember everything they had learned during training. Users also felt that support left too soon after implementation. Management at the Mirabel plant noted that issues may not arise within the first few weeks of implementation but rather several weeks or even months later (at this point, there was no support staff on the premises other than power users).
How was the project team managed?
During the implementation, the VP of Operations provided strong support but had limited visibility in the project, aside from a monthly meeting. There was a lack of clear communication to the management staff, resulting in various issues with directors and managers failing to fulfill their responsibilities. These issues ranged from non-participation to delegating tasks to lower levels. As a result, this had a severe negative impact on the implementation.
Therefore, when new processes needed approval from the department manager, the representative lacked the necessary knowledge and authority to make a decision.
The Senior Project Manager had each of the five functional councils at Mirabel review processes to determine their respective KPIs. However, most managers were not involved in the project and only became interested in the KPIs after the implementation was completed.
