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[2005-06-15]

Enterprise Process Management on a Global Scale-Using Wintech Microelectronics, a distributor of professional components, as an example.

2005

Enterprise Process Management on a Global Scale-Using Wintech Microelectronics, a distributor of professional components, as an example.

Article From/ Taiwan Association of Logistics Management by / Y.T. Lee Chairman of AboveE

Faced with shrinking margins in the competitive globalization process, enterprises of often face the crude test of speed and time. In this situation, to be successful in a global competitive environment, enterprises must apply appropriate strategy to build a global operations system. With the assistance of information technology, logistics processes, finance processes, business processes, and human resource processes can be comprehensively integrated to optimize the management and allocation of an organization's finance, manufacturing, logistics, and marketing activities to lower the cost of business operations while raising its prominence in the market, creating a “continuous competitive advantage” operating goal. Using Wintech Microelectronics as an example, when faced with the industry environment of lower profit margins, higher product turnover rates, and shortened lifecycles, Wintech Microelectronics must expand the scope of its business operations to lower management and marketing fees, increase the level of technology, increase technology support with upstream IC design semiconductor venders and downstream system venders, increase product turnover rates, and continue to add more product types to increase the company's profits.

Yet, even with a good strategy, the strategy itself is not enough to ensure that it can be effectively executed. When expanding globally, many operation problems would start to appear. The first problem that needs to be faced is the increased difficulty of financial management: IC distributors have a capital intensive industry cost structure. As the organization continues to grow in size, goods in stock and accounts receivable increases. When this unfolds, how to appropriately and soundly operate its financial operations to ensure capital is being put to good use is an issue that Wintech Microelectronics must seriously consider. Also, faced with a global marketplace, Wintech Microelectronics personnel must travel on business trips around the world to maintain close relationships with customer and grasp the new industry and market trends. When this occurs, managing and utilizing human resources around the global marketplace is a problem. Aside from this, having a flexible logistics and dispatchment system: such as how to efficiently dispatching products / inventory at various locations in the most cost effective and correct manner, in correct quantities to the correct location and the right time? Last, how to coordinate operations on a global scale: Global professional division of labor forces enterprises to be able to coordinate supply / demand chains across regions and across many organizations. This results in process management having to extend externally. Such a large and complex organization relation cannot be efficiently managed without proper integration with information systems.

To succeed in these challenges and strengthening the advantages held by the enterprise, plans by Wintech Microelectronics to convert to electronic processes that were devised under the leadership of its CIO, Jinnan Chen, started first to strengthen its Information Communication Technology (ICT) basic infrastructure, enabling employees of Wintech Microelectronics traveling across the globe to have stable and correct data / information to support them in making the correct decisions in completing their missions. Then in 2001, Wintech Microelectronics started a comprehensive deployment of SAP ERP. Originally, Wintech Microelectronics used different ERP systems at each location. But as the size of the enterprise grew, integrating systems became more complex. Deploying SAP ERP indeed solved many organization coordination problems in its global operations. But in 2003 when the system was fully online, Wintech Technology faced the following management problems:

Strengthening control of various locations in its global operations without reducing decision and communications efficiency.
Approvals of decisions need to be integrated with the business processes of the ERP.
Increase in revenues resulted in significant increases in paperwork.
The ERP system is too complex, making it difficult to use and train new personnel to use it. It also has a high maintenance cost.

After discussions, Wintech Microelectronics urgently needed to integrate more complex business processes due to organizational growth. Internally, it must increase its planning and management abilities of its overseas locations without decreasing decision and communication efficiency, and actively manage its foreign exchange, transaction conditions, credit limits, dispatchment of goods in stock, and human resources. Externally, it needs to maintain a good relationship with its upstream and downstream partners and customers to effectively grasp the latest market trends and product dynamics. Therefore the new electronic process solution needs to meet the needs of Wintech Microelectronics, flexibility to adjust to the whole enterprise process, and appropriately respond to exceptional events that may occur. Furthermore, since SAP ERP can also support Wintech Microelectronics' multiple organization / location structure, then the new information system needs to be able to seamlessly integrate with existing ERP and other legacy systems. After detailed analysis, Wintech Microelectronics selected AboveE, a professional BPM vender, to assist with solving many of the issues above. After the project was kicked off, the consulting group investigated from a management need point of view, and after comprehensive considerations proposed the following solution:

re System: Power Process BPM Suite
Integrate approval processes and back end business processes.
Extended Planning: Use the Power Process Suite as the connector (of SAP and B2B). Externally, it is a platform linking partners and customers. Internally, it integrates the ERP system.

The whole project as completed very smoothly. Aside from the support and sufficient authorization by senior management at Wintech Microelectronics, also worth mentioning is that Wintech Microelectronics also established a “Policy and Process Planning” group that is directly responsible to the office of the general manager. With the guidance of the consulting group, it introduced the BPM concept. Through the deployment of the Power Process Suite, with the objective of increasing the overall operating efficiency of the business, anew information system architecture that can support future development was deployed. The benefits of deploying the BPM solution by Wintech Microelectronics can be analyzed from the following two aspects:

1. Expending the Benefits of Using the ERP System

Combining the approval authorization decision process and business process with the ERP as the Business Transaction Center and Data Storage Center .
Transition the approval process to an electronic process to increase the degree of automation of the information system as well as increasing employee productivity.
Lower operating costs.
Establish a flexible enterprise business information system environment.
- Using simple to use operating interfaces and flexible process management to increase the desire to use the system, this increases the usage rate and value of the ERP system while conducting
- business process re-engineering and managing.

2. Increase of Operating Benefits

Lowering Costs.
- Using appropriate levels of investment in IT/S in exchange for savings in domestic and international traveling expenses and time.
Increase in work productivity.
- Decrease in system operation complexity to lower the total cost and time used.
- Increase in the amount of concurrent orders and back end processes.
Increase in management benefits.
- Stabilizing of fix costs and management tasks so that it does not grow significantly with the growth of the organization.
- Maintaining the current number of employees while increasing the support for the burdens from higher revenue growth without deducing the operating flexibility of the enterprise.
- The IT department can make adjustments to the system any time to meet the needs of a changing organizational structure and the needs of flexible enterprise process changes

Managing an enterprise was never an easy task. Especially when faced with an ever changing and treacherous business environment. The amount of time that enterprises have to respond to changes in the environment is becoming shorter! This is when enterprises must make appropriate investments in information technology to use tools in assisting execution of tasks or polices in order to convert strategy to competitiveness; making steady inroads into the small group of outstanding successful enterprises. The Wintech Microelectronics mentioned in this article is an example of such company to construct and utilize an information platform to support its enterprise operations in the wave of globalization.

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