Federal-Mogul
Program Everest
October 2007
Company at a Glance
Sales:
$6.3 Billion
Employees:
45,000 Globally
Global
Locations:
109 Manufacturing and 21 Distribution sites worldwide
operating in 35 countries
Research &
Development:
15 Globally-Networked Technology Centers in North America,
Europe and Asia
Key Industries:
Automotive, light commercial, heavy-duty truck, off-highway,
agricultural, marine, rail and industrial
Information Systems
Data classification: Public
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Global Business
Sales by Geographic Region
$6.3 Billion
Global Sales
$6.3 Billion
OE
60%
Light Vehicle
$2.2 Billion
Industrial &
Heavy-Duty
$1.6 Billion
EMEA
40%
Asia Pacific*
8%
Aftermarket
$2.5 Billion
Aftermarket
40%
Americas
52%
*Includes 100% of sales through minority held Joint Ventures
Information Systems
Data classification: Public
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OE Global Market Position
Pistons and
Rings
Information Systems
Bearings
Valve Seats
and Guides
Data classification: Public
Friction
Sealing
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Aftermarket Market Position
Europe
Friction
Chassis
#1
#1
Gaskets
Engine
#1
#1
Gaskets
Engine
Wipers
Ignition
#3
#3
North America
Friction
#1
Information Systems
Chassis
#1
#1
#1
Data classification: Public
Wipers
Plugs
#1
#2
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Original Equipment Customer Base
OPTION 1
Each of the logos/trademarks shown above are the properties of their respective owners.
Information Systems
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Customer Base
OPTION 2
Original Equipment (OE)
Global Aftermarket (GA)
Each of the logos/trademarks shown above are the properties of their respective owners.
Information Systems
Data classification: Public
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IS and Business Units: Friend or Foe?
Achieving the Goal
• First, agree on where you are going
• Agree on barriers to success that can be influenced
• Align each function with that vision and ensure that the
strategies are translated into coordinated tactical plans
that break the barriers
• Get the right team and focus on execution
It’s About Teamwork
Information Systems
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Strategic Alignment Comes First
Path to Global Profitable Growth
Global Profitable Growth
Execution
Tactical
Planning and
Collaboration
Strategic
Alignment
Agree on where you are going, what
barriers need to be broken and align all
departmental strategies
Information Systems
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Driving Global Profitable Growth
The Target is to Satisfy Customer, Employee and Stakeholder
Expectations
• Develop a global leadership team to achieve breakthrough performance
• Anticipate customer and market requirements to accelerate delivery
of value-added solutions to the marketplace
• Provide leading technology and innovation in products and services to
improve vehicle performance and exceed customer expectations
• Create a global lean enterprise with world-class engineering, best cost
manufacturing, sourcing and supply chain
• Grow global profitable business and develop long-term sustainability
The Drive for Global Profitable Growth
is a Must, not an Option
Information Systems
Data classification: Public
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Global IS Strategy
• Investments focused on strategic projects
• Standard enterprise solutions
• A buy vs. make approach to software
development
• SAP integration across the business
• Intellectual capital maintained in the function
• Selective sourcing of non-strategic
assets/activities
Information Systems
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Current Environment
• Heritage of multiple acquisitions
• Chapter 11
• Intensive scrutiny
• Customer diversity
• Distribution channels
• Technology leader
• Global player
Information Systems
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Constraints to Business Change
• Federal-Mogul’s stand-alone systems, archaic point-to-point
interfaces, and off-line analytic tools result in high maintenance costs
and multiple single points of failure
• Islands of information across the company result in a need for
hundreds of company IS and Business staff to maintain, adjust, report,
reconcile, reformat, and re-report
• Business processes are not uniform and consistent across the
enterprise, a barrier to rapid decision making
• Multiple data sources from disconnected systems lead to duplication
of effort to synchronize critical business information (customer,
supplier, materials master data)
Information Systems
Data classification: Public
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Where We Moved From…
In 2005 IS was not representing an adequate lever to enable the priorities set by the new management
THE IS SITUATION AS OF SEP. 2005 …
… AND THE IMPACT ON THE BUSINESS
Historically F-M has operated in a very
decentralized manner from both a
business and technology perspective.
This has resulted in a very fragmented
application landscape.
1
Limited ability to serve the business
and improve customer satisfaction
2
Lack of integration and visibility
across the supply network
3
Lack of consistent, common,
accurate, business measurement
4
Business Continuity Risks,
Compliance
5
Stifled innovation and poor capability
to follow business growth strategy
6
High IS costs, high complexity to
manage, low IS effectiveness
# unique
application
382
# application
instances
690
# SAP
environments
11
# Master
data bases
Process
Proliferation
Master Data
Proliferation
Technology
Proliferation
633
See the Appendix for details
Information Systems
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The IS Situation as of Sep. 2005
Master Data Proliferation
Federal-Mogul currently uses approximately
633 different master data bases:
MASTER DATA FILES
CUSTOMER
PRICING
PART
ITEM
#81
#67
#76
#84
SUPPLIER
INVENTORY
LOCATION
ORDER
#55
#54
#14
#64
FIN. ACCT
EMPLOYEE
PRODUCT
#47
#48
#43
Back
Information Systems
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The IS situation as of Sep. 2005
Process Proliferation (Order To Cash)
•
Federal-Mogul operates multiple distinct order to cash processes/systems that differ
by business and geography
•
The diversity is a result of a historically autonomous business unit alignment, with a
decentralized approach to IS (i.e, IS was a friend at the BU level)
•
System platforms have developed as non-integrated enhancements within
themselves. Roll-outs within the Business Units are based on proprietary knowledge
•
Information reporting above the business unit level is difficult due to inherently
different system logic and lack of drill down capabilities (i.e., IS was a Foe at the
corporate level)
Back
Information Systems
Data classification: Public
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Align Investments and Teams
Path to Global Profitable Growth
Global Profitable Growth
Execution
Tactical
Planning and
Collaboration
Strategic
Alignment
Focus investments on achieving the goal
Align organizational structures
Develop and enforce a strong governance model
Information Systems
Data classification: Public
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Business - IS Value Map
Roadmap to the Global Enterprise
Revenue Enhancement and SG&A reduction
IS
Investment
Business Process
Standardization
Cost Savings
Infrastructure
Standardization
1. E-mail
2. Desktop Environment
3. PCs
4. LAN/WAN
5. Knowledge Systems
6. L.Notes ,Sharepoint
Information
Integration
1. HR & Finance
1. Common product
Processes
2. Order Fulfillment
processes
3. Bid to cash
processes
customer codes
2. Comprehensive
Global Information
repository
3. Real Time business
intelligence
Hardware
Consolidation
1. Server
Consolidation
2. Data Center
Consolidation
3. Regional Help Desk
Time
Information Systems
Data classification: Public
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SAP as the New Systems
Backbone
It is the industry leader in global ERP applications, including automotive
ONE SAP FOR ONE FEDERAL MOGUL
SAP offers
“best in class”
functionalities
We already used it
(and paid for it)
SAP guarantees
continuous
evolution
Most Competitors
and Customers
do the same
SAP is the perfect base to build a Corporate environment
that spans multiple regions of the world, has diverse business units
and is oriented to have an organization and business processes that
adapts quickly to emerging business needs.
Information Systems
Data classification: Public
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Program Everest
Launched in late 2005, it represents one of the biggest investments of the corporation
GOAL, APPROACH AND PHASES
Goal
Implement common, global
business processes
utilizing SAP as the ERP
application for the entire
corporation
Phase 0
Global Model Design
for the core corporate processes
(Finance, Sales, Material
Management)
APS Distributions Centers
Phase 1
Solution Extension (pricing,
rebates, commissions,
warehouse management, …)
Design
Approach
Pilot
Roll-Out
Information Systems
Conceived to
manage
complexity,
minimizing costs
and risks
Manufacturing
Phase 2
•
Solution Design and Prototype
•
Implementation
Asia Pacific
Phase 3
Data classification: Public
Deployment in some selected
facilities (SPG Japan, Wuhan,
Quingdao, …)
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Program Everest: The Challenge
Managing Program Everest means to manage a huge change both from a business and a IS perspective
THE CHALLENGE BEHIND PROGRAM EVEREST
Homogenize business practices
A quantum leap
for the business
Reduce complexity, manage risks,
ensure compliance
Increase efficiency and effectiveness
Improve Business Control
Demonstrate the capability to successfully
manage a complex program
A quantum leap
for the IS function
Provide the ability to manage and govern
the new platform
Reduce complexity and costs,
increasing the service level
Information Systems
Data classification: Public
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Strong Governance Model
Focus Resources on the Goal
• Strong management and governance over a smaller number of
projects drive improved performance
• Manage the demand for IS services
• Measure performance and particularly on-time delivery
Information Systems
Data classification: Public
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IS Organization
CISO
Process Design
Organization
(Solution Design)
Governance and
Performance
Management
Information Security
Service Delivery
Organization
(The Factory)
Business Unit
Leaders
(Client Focused)
IS Business Unit Leaders
report directly to the CISO
and sit on the staff of the
Leader for each Business
Unit
Information Systems
Data classification: Public
Strategic Programs
(Delivery Focused)
Responsible to understand
• Business Unit and Product Strategies
• Business Plan
• Tactical business requirements and IS
support needs
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Everest Program Organization
Core
Central Team
Executive
Committee
Local
Leadership
Key Users
Deployment
Business
Leadership
Business Experts
Support
Information
Systems
IS Roles:
Business Roles:
Central Team (Everest Core Team, Business Unit
Manager and PEGs, Security, Infrastructure)
Business Experts (BPOs, BPLs, SMEs, Central
Functions, e,g. Finance)
Deployment Local SAP consultants
Local Leadership Team (Site Director and his
direct reports)
Support Organisation (T-Systems, Change Board,
Security, Legacy Systems )
Key Users* (from deploying site and future
deployment locations)
* Resourcing business activities (testing, training, data validation) with key users from future deploying
sites will accelerate those deployments and decrease resource strain on currently deploying site
Information Systems
Data classification: Public
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Execution
Path to Global Profitable Growth
Global Profitable Growth
Execution
Tactical
Planning and
Collaboration
Focus investments on achieving
the goal
Strategic
Alignment
Information Systems
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Program Everest
Global Business Organization
Information Systems
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Our Achievements
Success of the initiative evaluated from different perspectives
PROGRAM EVEREST RESULTS
1
Business
Coverage
2
New
Integrated
Processes
3
Master Data
4
Technology
Platform
5
Information Systems
IS
Organization
• Everest is now supporting a significant portion of the
F-M business
• New, common and integrated processes are now in
place
• A unique, cleansed, consistent and centrally
managed repository is available
• Several legacy applications have been switched off
• A new, unique and standard system architecture is
now in place
• A complex program organization is now capable to
manage quickly different streams in parallel
• A single organization is supporting all our users
Data classification: Public
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Business Coverage
The F-M Business currently supported by Everest is significant after only 18 months
CURRENT EVEREST BUSINESS SCOPE
Business Units
APS BE Kontich (CH Geneve)
APS IT Verona
APS IT Mondovì (R&M)
APS ES Madrid (Espana)
APS ES Barcelona (Iberica)
APS FR Boulogne (Gif)
APS UK Bradford
APS DE Marienheide
APS CZ Kostelec
SPG Japan
Countries
Legal
Entities
Business
Units
9
10
10
Locations
SAP
Users
21
719
See the Appendix for details
Information Systems
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Integrated Process
The Everest solution enabled to manage in the same environment a full set of integrated business processes
EVEREST PROCESS COVERAGE
 To support the different business models, different “solution sets”
Solution
sets
Process
Scope and
Integration
Degree of
sophistication
Information Systems
were implemented inside Everest: Large CDC, Medium LDC,
Small LDC, Local Commercial Agency,
“Light” Manufacturing Facility
 A wide range of processes (OTC, PTP, SCE, FIN) are supported
by Everest
 A unique degree of integration is ensured within SAP and with
other external applications
 A significant degree of sophistication and automation was
introduced to improve the core business processes, especially in
the SCE and OTC area
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Master Data
They are the cornerstone of the system as they drive the process behavior
MASTER DATA REPOSITORY
A common,
shared
repository
Centralized
Management
 All relevant master data are stored in the
same environment (with a single naming
convention) and shared by the business
across the different countries and business
units
Contracts
11 K
3K
Materials
Source Lists
117 K
912 K
Vendors
Pricing &
Discounts
5K
> 12 M
 SAP enabled the centralized management
of our master data, to ensure consistency,
stewardship and flexibility
 The data migration task represented a
Migration
Customers
(Sold-To)
critical task for Everest in terms of:
- management of high volumes of data
- ensuring the proper cleansing activities
Information Systems
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Technology Platform
We introduced a sophisticated, lean architecture based on our new SAP backbone
INFORMATION SYSTEM ARCHITECTURE
 Everest brought a drastic simplification of our
application map
 We switched off several applications, stopping their
Application
Architecture
maintenance costs
 The IBM Mainframe (POPIMS) Platform is no longer
needed to support the Business
 SAP has been interfaced with several different
application to ensure reporting and extended supply
chain capabilities
 Together with the introduction of the new SAP based
Infrastructure
Architecture
application layer, also our technology infrastructure
made a quantum leap towards innovation and
standardization
 We integrated several components to build a
sophisticated architecture
Information Systems
Data classification: Public
Migrated
Applications
20
Switched Off
Applications
13
Interfaced
Applications
>10
New SAP
Data Center
New Global
Network (Nexus)
New Xerox
Printers
New RF
Technology
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IS Organization
We increased our ability to manage the project and the maintenance cycle
OUR IS ORGANIZATION EVOLVED TO MANAGE COMPLEXITY
Program
Everest
Organization
From …
… To
One Project Team
> 10 Project Teams
One single stream
6 parallel streams
One Prime Contractor
4 Consultancy Companies
Strong presence of external
F-M internal resources in key
consultants in the key positions
management positions
A new, not consolidated
A Standard and run-in approach to
methodology to run the project
manage the deployment phase
8 months to manage the 1st roll-out
5 months to manage the UK roll-out
 More than 700 users in 9 countries are now supported by the same
Service
Delivery
Organization
Information Systems
organization (powered by Dell and T-Systems), adopting a global procedure
and ensuring local business (language and time) coverage
 Our infrastructure team (located in Southfield and Manchester) is committed
to a 7x24 availability of our network and data center and support the other
components of the Everest technology (RF, printers, desk-tops)
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Managing the Change
Organizations
Work Together
Processes
Work Together
Business, functions, and employees can
leverage a world wide dimension
and face the market as a Corporation
•
•
•
Design and implement uniform and lean •
business processes, oriented to
•
customer (internal or external) loyalty
•
•
Data
Work Together
Data is
unique, updated real-time, and aligned •
•
•
Systems
Work Together
Information Systems
Move to a system environment,
with specialized, flexible modules
Data classification: Public
•
•
Build Knowledge
Spread Corporate Culture
Share Experiences
Reduce Lead Time
Improve Change Readiness
Increase Customer Service
Increase Data Availability and
Accuracy
Improve Analysis Capabilities
Accelerate Decision Process
Reduce System Costs and
Investments
Improve Customer Support
Faster Deployment of New
Solutions
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Concurrent Change - Desktop &
Networking
We increased our ability to accelerate deployments of Program Everest by standardizing and simplifying many
components of the overall IS solution
Federal-Mogul 2006
F-M DESKTOP &
NETWORKING STRATEGY
TARGET BENEFITS
• New features & collaboration
based services
•Alleviate user frustration
•Raise the workforce capability
• Eliminate redundancy & overlapping
Legacy desktop and network technology platform
was unnecessarily complex, with redundant
components and poor system integration
performance.
Information Systems
Migration to Microsoft products providing
seamless, integrated technology platform for
the desktop and network.
Data classification: Public
expense
• Part of broader strategy that
facilitates enterprise mgmt.
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Business Priorities and Trends Emerging & Developing Technologies
Automotive suppliers will continue to focus on the integration of internal
and external operations. A number of new and emerging technologies
are helping to drive that trend. These include:
Web-based supplier
portals
•Simplifies the task of linking various partners and enabling collaboration among
decentralized operating groups
Online exchange of data
•Enables extensive information sharing and the linking of processes – and an
enhanced ability to control costs
Master data management
•Allows collaborating organizations using disparate systems work with consistent,
accurate information across the supply network
Product life-cycle
solutions
•Display digital models and increase speed, precision, and efficiency in product
engineering, manufacturing, and life-cycle support
RFID technology
•Enables the automatic tracking of goods through the supply network. RFID has the
potential to streamline parts management and distribution, and provide new levels of
visibility into product life cycles
Business intelligence
tools
•Allows suppliers to analyze costs, production, and markets, and gain insights that
can boost efficiency, target and accelerate product development, and improve overall
profitability
Integrated software
•Links processes in critical areas, including ERP, supplier relationship management,
supply chain mgt, service parts planning and mgt, customer relationship mgt, and
product life-cycle mgt. These integrated systems can cut time and costs out of
process
Source: Strategies For Profitable Growth - SAP 2004
Information Systems
Data classification: Public
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Way Forward
“Ex-e-cu-tion (ek si kyoo shun), n. 1. The missing link. 2. The
main reason companies fall short of their promises. 3. The gap
between what a company’s leaders want to achieve and the ability
of their organizations to deliver it. 4. Not simply tactics, but a
system of getting things done through questioning, analysis and
follow-through. A discipline for meshing strategy with reality,
aligning people with goals, and achieving the results promised. 5.
A central part of a company’s strategy and its goals and the major
job of any leader in business. 6. A discipline requiring a
comprehensive understanding of a business, its people and its
environment. 7. The way to link the three core processes of any
business - the people process, the strategy and the operating plan
- together to get things done on time. 8. A method for success
discovered and revealed in 2002 by Larry Bossidy and Ram Charan
in Execution: The Discipline of Getting Things Done”
Information Systems
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