An SAP Business All-in-One implementation is helping mining equipment and service provider Valley Longwall International to move on from a legacy system and solve critical business issues.
Valley Longwall International (VLI) is a market leader in the supply of specialised equipment and allied services to coal mining and bulk materials handling industries. The VLI operations comprise three business divisions – VLI Diesel, VLI Drilling and VLI Conveyors. The VLI team of over 584 specialist personnel, employed throughout Australia and China, have access to the best technologies available in the world today. This advantage, coupled with its commitment to research and development, enables VLI to deliver high quality, innovative solutions for all types of mining, transportation, bulk materials handling, loading and drilling activities.
VLI provides a comprehensive and diverse range of equipment including diesel vehicles, drilling rigs and conveyor systems, all designed and manufactured by the VLI team to the highest specifications.
Drivers for implementing a new system
VLI had undergone dramatic growth in the last five years, acquiring and then merging a number of companies into three distinct business units. Since 2008, VLI had expanded the existing legacy system to service the three business units with limited success. Business requirements compiled in 2010 indicated an increase in the complexity of VLI’s financial, manufacturing/material resource planning (MRP I), job costing, warehouse and reporting processes. VLI identified that the legacy system was an ageing application which no longer met the requirements of the organisation, and support for the system is less than acceptable. A decision was therefore made by the VLI Board in July 2010 to replace the legacy system with a new ERP system. VLI performed an evaluation of the legacy system and the following critical issues were identified as key failures:
- Materials requirements planning
- Product configurator
- Management of bills of materials
- Work order management
- Vehicle history
- Serial number tracking
- Volume and spare part sales
- Forward price agreements
- Management of multiple warehouses, and
- Centralised purchasing.
Other issues included high levels of manual intervention, a high dependence on spreadsheets external to the system and limited reporting.
Next steps
VLI’s CFO and program sponsor, Gerard Velayuthen, tasked program director, Grant Osfield, and business systems owner, Peter Kelleher, with running the system selection process. The remit was clear and concise – keep it simple for Day 1 and be live on 3 January 2012. With that in mind, Osfield and Kelleher produced a detailed Request for Proposal (RFP) document which was distributed to a small number of vendors in February. Over the course of the following two months, the vendor responses were received, meticulously analysed, shortlisted and product demonstrations were attentively reviewed. The objective was to identify a simple out-of-thebox solution that came hand-in-hand with a proven implementation methodology and a systems integrator with highly experienced resources that had a proven track record in implementing solutions for mid-market organisations.
SAP Business All-In-One stands out from the rest
The solution that quickly stood out from those on offer was SAP Business All-In-One (BAiO). On offer was a low-risk approach for VLI in that the solution was pre-configured, pre-tested and fully documented. The baseline solution had a high degree of compatibility with the VLI business, which meant that changes could be kept to a minimum. This translated to an opportunity for VLI to rapidly implement standard SAP processes across the board and deliver a solution that on Day 1 addressed all the legacy system failures, while providing a stable platform for future growth. From an infrastructure perspective, SAP ticked all the boxes. VLI had performed a hardware upgrade in preparation for the new system and selected IBM® x3650 M2 servers with VMware deployed, all of which provides a resilient platform for SAP.
Selecting a systems integrator – Stream keeps it simple
The selection of the systems integrator proved a little more of a challenge. Two of the shortlisted RFP respondents had proposed SAP BAiO solutions which meant Osfield and Kelleher had to dig a little deeper on aspects such as methodology, approach and cultural fit. It became clear that one of the two shortlisted respondents, Stream – one of Australia’s fastest-growing SAP consulting organisations and an IBM Software ValueNet Partner – had the edge. Not only would two of the Stream directors, Dawie Gerber and Joel Stehr, undertake key roles in the implementation, but together they brought with them over 15 years of experience in implementing SAP solutions for mid-market organisations.
Stream’s ‘don’t over-engineer the solution’ approach fitted perfectly with Velayuthen’s ‘keep it simple’ mandate. In subsequent discussions, both Osfield and Velayuthen developed a level of comfort with Stream’s proposed implementation methodology, what this would mean for VLI and how the VLI team would be utilised. Having made the tough decisions, the implementation kicked off in July. Scoping workshops were held which involved key members from each of the VLI divisions along with Stream consultants. These workshops provided a forum to define the scope from an SAP perspective and to encourage the representatives from each of the divisions to work together to identify synergies that would help streamline the overall VLI business processes and introduce further efficiencies. The findings of the workshops were documented and subsequently agreed to by the VLI General Management team allowing the scope to be bedded down and the next phase of the project to commence. Though it is early in the implementation stage, things are progressing rapidly. Osfield is satisfied with the current status and is well-assured of the project achieving its go-live on 3 January 2012. This is a result of following the implementation methodology and making use of the Stream project toolkit, which contains things like a Change Management Strategy, a Data Migration Strategy and templates and a Testing Strategy amongst others. Osfield’s philosophy is simple – why reinvent the wheel when everything you need is already available? This has allowed the project team to remain focused on their tasks while Osfield steers the implementation down a prescribed path trodden by many others over the years.
This case study is sponsored by Stream and IBM.
This article was first published in Inside SAP Yearbook 2012 (published in September, 2011).
