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Ferro Corporation Message Board

  • wob_beaver wob_beaver Feb 15, 2000 1:46 PM Flag

    SAP, Corporate communication.

    Friends of mine that work close to Ferro tell me
    that SAP is moving ahead. As an investor I am again
    wondering what is the corporate communication on SAP? What
    is upper management stating about the
    implementation.

    Research tells us that SAP is a major
    change from most older business systems.

    I would
    be interested in hearing from the employees on this
    board what is being communicated in writing or verbally
    at company meetings.

    I am sure there will be
    a public message at the stock meeting.

    Now
    that the year end figures are in what is being said
    about the sales growth?

    I appreciate what
    someone said about Ferro being a company that makes
    tangible goods. If the market takes a downturn this should
    help Ferro versus companies like Yahoo that make
    nothing but paper money.

    I continue to rate Ferro
    a strong buy.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Currently in the US, only powder coatings
      (Nashville and Brecksville) are live on SAP. Off shore,
      Holland, Italy and Australia are live. Much of the
      background structure to Ferro's SAP has already been put in
      place but much of real work with each new business/site
      is loading current data bases (for customers,
      products, pricing) into SAP and making sure it's all
      correct. There's also the issue of training employees at
      each site on how to run SAP since it pulls in many
      more functions (i.e.-shipping/receiving, production,
      sales, etc).

      Yes, there are TIGER members outside
      US but many of current US TIGER members were used
      off shore to start up Holland (this is basically
      where they got their on the job training), so as you
      said, there's not a lot of extra bodies.
      Which
      brings up another issue:

      The current method is
      with each new business/site to be added to SAP, the
      TIGER team "borrows" employees from that business to
      work with the implementation. If there are multiple
      plants, each plant contributes people. This is done for
      two reasons: 1) hopefully they have a good
      understanding of how their business operates and what must be
      taken into account when switching to SAP and 2) these
      people will serve as SAP "experts" when they go back to
      their businesses. As you stated, Ferro most recently
      has not tended to keep a lot of extra bodies around
      due in part to the mandate to run lean and mean.
      Borrowing people from the current businesses could possibly
      be a real hardship as there are few if any people
      available to pick up the slack. I predict in the short
      term, these businesses will have a downturn in
      profitability. This is due in part to the fact that members
      loaned to the TIGER team still have their salaries drawn
      from their respective businesses. So these business
      managers have the pleasure of paying for employees who are
      not providing any short term benefit to their
      business.

      Now having said that, I still think SAP is a great
      idea for Ferro. But the real benefits will only be
      realized if re-engineering takes place. Obvious area of
      consolidation: 1) customer service 2)raw material purchasing 3)
      sales support and management come to mind right away. I
      also think several businesses could be combined under
      one general/business manager, allowing Ferro to
      reduce the number of business managers who, by virtue of
      seniority, have inherited businesses and continue to run
      them the same way they did 15 years ago.

    • I've been known to watch the pennies, and I've been called worse. I wouldn't want to be on the Tiger Team, tough job.

    • My understanding is that there is more than just
      an American team in place.

      I can't comment
      on how many sites are live with SAP and how many are
      left to implement outside of the U.S.

      Your
      points about burnout and getting other people up to
      speed are well placed, but Ferro isn't the type of
      company too have "excess" head count about.

      Your
      comments regarding re engineering certainly sound good,
      but I am not sure what specifically you think needs
      to be reengineered. Why do you think Ferro selected
      SAP? What is management hoping to accomplish? I don't
      think SAP will help increase sales. What are the
      obvious areas of consolidation or elimination?

    • I will admit my dates were off but let me put my
      argument another way:

      Ferro is currently
      implementing SAP in its "domestic" specialty color group
      (which actually does not formally exist as a group).
      Timetable plans to have this completed by 3rd Q 2000.
      Though Ferro is moving up the learning curve on these
      implementations, I find it unlikely they will improve beyond 6
      months per implementation.

      The stated goal of Sr
      Mgt is to install SAP in Ferro globally. And they've
      got a lot of businesses/locations left to do. At my
      last count, there are roughly six domestic businesses
      left to do (including Cleveland Frit and all
      Chemicals). I suspect these two will take more than 6 months
      each. Some of these businesses involve multiple sites.
      Internationally, there are at least 9 different sites which need
      to be brought on line. Due to language differences
      (remember most of the current TIGER members speak
      American), these will probably take more than 6 months each,
      though some could probably be combined (England & France
      for instance). My point is, at 6 months per
      implementation, Ferro could be facing at least 5.5 more years of
      SAP installation. Do you think the current TIGER
      members (almost half of which do not live in Cleveland)
      will be wanting to live out of their suitcases for the
      next 5 years? Team member burnout will be a concern
      and should be addressed sooner rather than later. My
      suggestion would be to add to the current TIGER team. Rookie
      members could get up to speed over the next year or so
      and if you add enough people, you could cover both
      attrition and possibly develop leap frogging teams to speed
      up global implementation.

      The other point I
      want to repeat is that so far there have been few if
      any efforts to re-engineer these businesses prior to
      or during SAP implementation. If Ferro doesn't
      reinvent or refine its businesses, all SAP will provide to
      Sr Mgt is real time reporting that Ferro's sales are
      STILL flat!

      One stumbling block to
      re-engineering is the current structure of implementation. Each
      implementation is overseen by a steering committee typically
      made up of general /business managers from the plants
      involved. They have a very vested (and selfish) interest in
      NOT re-engineering their businesses. What appear to
      be obvious areas of consolidation or elimination
      will probably be squashed by the powers that be.

    • From what I've read on here, SAP is stalled all
      over, not just here. It did start out as a massive
      implementation that was supposed to take only 2 or so years to
      put into place worldwide, once the pilot plant was
      set up and running. From what I've heard, besides all
      the hype about "centralization of data, etc...", it
      was also due in no small part so that corporate
      management could have something in writing to show
      stockholders that they were "on top of the problem and doing
      something about it" regarding the Y2K scare of last year.
      It also seems to have been a lot of doubletalk from
      people who didn't know what "Y2K" meant, except that it
      was another "buzz word" for them to memorize and get
      used to using.
      However, SAP does have a lot of
      merit if implemented correctly. I've heard several
      horror stories, just like all of you... but I've also
      heard of some well thought out installations that
      worked out great! You just don't hear about that in our
      "modern" society, where the greater the shock-value or
      catastrophy, the better the story for the news crews. SAP is
      supposed to allow corporate management to have a readily
      available, accurate, and precise report on how the
      corporation as a whole, as well as each division, is doing
      right now. It's also supposed to give each division the
      same kind of handle on their own information.
      Unfortunately it involves a lot of planning and cooperation
      between EVERYONE! (Something that seems to be a major
      problem here, unless corporate sees an oportunity to take
      control of something else)
      Some of Ferro's problems
      on implementing SAP have been self-created, not just
      by corporate, but by the pilot plants themselves.
      One of them involved one plant doing an inventory,
      just like it was supposed to perform, but they didn't
      start using the SAP program for over two weeks AFTER
      the inventory was performed! During which time the
      plant was in full operation and using the inventory
      that was then entered into SAP as still on the
      shelves! Everyone there started griping and moaning about
      SAP, when the majority (but not all) of the problems
      stemmed from their own lack of planning and
      follow-through.
      I am not directly involved in the SAP
      installation here, but I have listened a lot over the last
      year plus. Some of the complaints point out, correctly
      I assume, that the SAP implementation at Ferro is
      being micro-managed to death! At the sites that have
      SAP, much information that was previously available
      for the local managers, controllers, etc to do their
      jobs are now controlled and doled out by corporate -
      sparingly. This may have been fixed, or have been a training
      oversight, but as of last summer became a real problem when
      quarterly reports were sent to corporate. After all, how
      can you put together a report if you are not allowed
      to have access to your own information? run two
      systems? Guess? Maybe this is oversimplifying what
      happened, but this is the gist of some of the information
      being passed around last spring/summer. Not too much
      has been said since then. Maybe the problems have
      been worked out or people just got scared of being
      pegged for complaining.

      Maybe this is more
      information than you really wanted or not what you were
      interested in at all. But some of this hasn't been brought
      up until now and since you were interested in what
      was going on with SAP here... now you have some
      background, both good and bad.

      As a closing note,
      addressed to your comment about the end-of-year figures.
      Yes, corporate has the figures, but what several of us
      have been told is that they are "still playing with
      the numbers". What exactly does that mean? "Playing
      with the numbers"? Are they finding more ways to screw
      the employees out of any kind of "profit sharing"?
      Word has it that few, if any, of the divisions met the
      goals that corporate set for them last year.

      • 2 Replies to i_own_no_shares
      • It didn't go as initally planned, no. A lot of
        variables, it's a real learning curve. Especially when
        you're using a lot of and relying on outside resources.
        As you probably know, that has changed. I believe
        they are beginning to "beef up" the team and / or
        rotate some people out. It will be interesting to see
        how it proceeds now under new direction. Our new CIO
        is quite different than his predecessor who was
        always 3 deep in consultants who were all on their cell
        phones!

        I've heard that it's not really that information is
        being "controlled" at corporate but that all of the
        information that they're used to seeing is may no longer be
        available - at least not yet - or in the formats they are
        used to seeing it. I've also heard that previously it
        was more a lack of good communication which caused
        problems such as the inventory snaffu you mentioned. Too
        many cooks?

        On your last comment about playing
        with the numbers, well honestly, what do you think our
        / any financial people do? Nothing new
        there!

        I haven't heard anything yet regarding the
        division's goals. But if you get a chance, please explain
        "mine". How do I know if I've met "the overall Corporate
        goals"? There has been lots of discussion on this and
        nobody I've talked to seems to understand.

      • Ferro has a long way to go to complete
        installation of SAP system in all plants globally.
        Domestically, they're working with the Color group right now:
        pigments, glass deco and forehearth color. Two of the
        Ferro's biggest businesses, domestic frit and chemicals
        are still down the road. Added to this, the current
        installation team (TIGER) has been at it for over 3 years.
        Common sense dictates some of those people are going to
        want out pretty soon to go back to their respective
        businesses and have a normal life. As far as I know, no one
        has even identified their replacements, let along
        started training them. That will certainly add time to
        the whole process as well as frustration and
        skepticism on the plant level.

    • No official word that I've heard Wob Beaver.
      We're moving beyond the pilot progam now and starting
      the next site implementation. I think it may have
      been stalled due to all of the preparation for Y2K. I
      don't know much about it compared to our previous
      system. I'm glad to hear you're an investor and that
      you're rating us a "strong buy". Look forward to meeting
      you at the shareholders meeting!

 
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