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Dow Chemical ERP Training

Explore the importance of ERP training in driving successful Business Process Reengineering in Dow Chemical and Owens Corning, examining their history, challenges, and benefits. Discover the critical role of training programs in ensuring effective ERP implementation and transition processes, leading to improved operational efficiency and cost savings.

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Dow Chemical ERP Training

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  1. Dow Chemical ERP Training Importance of Scheduling Hahki [1998]; Schaaf [1999]

  2. Dow Chemical ERP • Adopted SAP R/2 mainframe system in early 1990s • Merged with Union Carbide • Migrated to SAP R/3 • Supply-chain • Performance management • E-commerce

  3. Dow Chemical ERP history • Adopted PeopleSoft HR & Payroll modules in Europe • Large outsourcing contract with Andersen Consulting in 1996 • 550 Andersen & Dow IT personnel to support application development

  4. Business Process Reengineering • BPR needed for ERP led to retraining needs • In late 1990s adopted training program • 50 thousand employees • 900 sites around the world • 80% delivered on-line over 3 years • Payback expected in 17 months

  5. BPR Transition Elements • Preliminary design • Pilot projects • Full-scale implementation • Interrelated activities • Project scheduling

  6. Dow Chemical Training Program • What needed to be done • Designed program to accomplish it • Measures against objectives at every stage • Measurement continued through operation of the training program • Rolling computer technology upgrades • Firm able to deliver enterprise-wide training

  7. Owens Corning ERP Implementation Koch [1999] Hammer & Stanton [1999]

  8. History • 1992 – massive reengineering effort • 1997 ERP installation encountered problems • March 1997 major SAP installation applied over a weekend • Folded 16 customer service centers into 1 • Rest of 1997 spent rebuilding system • Repairing damaged customer relations

  9. Need for Integrated Processes • Departmental & regional managers retained power • Didn’t cooperate with ERP • Rejected ERP or tailored for local needs • Top executives responded • Reorganized company into cross-functional teams headed by process owners • Standardized order fulfillment processes • Motivated acceptance of ERP

  10. Benefits • Inventory turns increased 50% • Administrative costs reduced 20% • Logistic savings $50 million/year

  11. Learning • 7% of original budget allocated for training • Turned out to cost 13% of final ERP budget • Common to underestimate training

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