Whirlpool's Troubled Enterprise Resource Planning Implementation
ABSTRACT
The trend to successfully implement enterprise resource planning systems (ERP) has resulted in companies investing millions of dollars, only to find out business performance did not improve. Whirlpool, one of the largest home appliance manufacturers learned the harsh consequences of SAP ERP project failure. The company suffered delays in shipping products in the United States contributed by the decision to ignore the red flags, inadequate testing, adherence to the schedule, and an unprepared supply chain. This study will examine why the implementation of an ERP system is not a complete solution and provide recommendations to avoid ERP failure.
Key words: enterprise resource planning (ERP), process-thinking, integration, planning.
I. INTRODUCTION
Enterprise resource planning (ERP) programs are core software used by companies to coordinate information in every area of the business by sharing data and management reporting tools (Monk & Wagner, 2006). The successful implementation of an ERP system can improve costs, operational efficiency, increase customer satisfaction and gain a competitive advantage (Monk & Wagner, 2006). Unfortunately, Whirlpool was not successful in its implementation of a SAP R/3 System. Whirlpool a supplier of washing machines, refrigerators, and other products to retailers had several warning signs of problems just before a Labor day go live in 1999. Interfaces and batch jobs that fed external systems had indications of performance troubles, but Whirlpool management and SAP implementation vendor Deloitte decided to continue with going live. Whirlpool wanted to take advantage of the holiday weekend and had a plan to complete the implementation before the end of the year (Devaraj & Rajiv, 2002). The idea was that the known errors would be fixed within a week after going live. Instead the interface problems caused a lot more difficulties than expected. The result was shipments sitting in warehouses and retailers waiting
The trend to successfully implement enterprise resource planning systems (ERP) has resulted in companies investing millions of dollars, only to find out business performance did not improve. Whirlpool, one of the largest home appliance manufacturers learned the harsh consequences of SAP ERP project failure. The company suffered delays in shipping products in the United States contributed by the decision to ignore the red flags, inadequate testing, adherence to the schedule, and an unprepared supply chain. This study will examine why the implementation of an ERP system is not a complete solution and provide recommendations to avoid ERP failure.
Key words: enterprise resource planning (ERP), process-thinking, integration, planning.
I. INTRODUCTION
Enterprise resource planning (ERP) programs are core software used by companies to coordinate information in every area of the business by sharing data and management reporting tools (Monk & Wagner, 2006). The successful implementation of an ERP system can improve costs, operational efficiency, increase customer satisfaction and gain a competitive advantage (Monk & Wagner, 2006). Unfortunately, Whirlpool was not successful in its implementation of a SAP R/3 System. Whirlpool a supplier of washing machines, refrigerators, and other products to retailers had several warning signs of problems just before a Labor day go live in 1999. Interfaces and batch jobs that fed external systems had indications of performance troubles, but Whirlpool management and SAP implementation vendor Deloitte decided to continue with going live. Whirlpool wanted to take advantage of the holiday weekend and had a plan to complete the implementation before the end of the year (Devaraj & Rajiv, 2002). The idea was that the known errors would be fixed within a week after going live. Instead the interface problems caused a lot more difficulties than expected. The result was shipments sitting in warehouses and retailers waiting
References: Asia forum for ERP Software and Business Strategies. Retrieved April 15, 2011from http://www.erp.asia/erp-failures.asp Buxbaum, P. (2001). Lawsuit against an ERP consulting firm could signal more litigation for the industry Technology Investments. Retrieved April 20, 2011 from http://mysafaribooksonline.com/book/technology-management/0130650749 Donovan, R. M. (n.d.). Successful ERP Implementation the First Time. Retrieved April 19, 2011 from http://www.idii.com/wp/donovan_erp_success.pdf Girard, K., & Farmer, M.A. (1999). Business software firms sued over implementation. CNET News Wood, B. (2010). SAP ERP Project Failures Lessons Learned and Mini Case Studies 3. Retrieved April 20, 2011 from http://www.r3now.com/sap-erp-project-failures-lessons-