Grupo Industrial Saltillo (GIS)
Grupo Industrial Saltillo (GIS) is a major industrial group in Mexico manufacturing auto parts, construction materials and houseware products.
Every 7th car in the USA has an engine block produced at GIS. Company IT systems were not prepared to support the growth and business models that GIS was aiming for.
A multi-national project team comprised of Mexican, Chilean, Peruvian, Venezuelan, Yugoslavian and American consultants teamed up with HP and GIS to deliver an Oracle Ebusiness Suite application - one of the largest ever in Latin America. The solution was configured on a multi-site / multi-organisational structure (four companies and three distribution centers with different geographic locations) for 11 legal entities, 11 operational units and
5 inventory organisations with over 20 sub-inventories. A Competence Center/ E-Knowledge Base was created in-house for GIS.
Nominated for an award as Best Project at Capgemini for it’s rapid, nine-month implementation this was the first Oracle Advanced Product and Scheduling (APS) suite implementation in Mexico including manufacturing scheduling and advanced supply chain planning. The OPTTIMA Project because of its scope and fast delivery can be considered the ‘reference model’ for ERP implementations in Mexico.
Client Profile
A major industrial group in Northern Mexico, Grupo Industrial Saltillo (GIS) for over 70 years has been manufacturing auto parts, construction materials and household products. Located in Saltillo, west of Monterrey in the Sierra Madre mountains, GIS is most well known for its engine block castings and ceramic tiles. GIS employs more than 12,000 persons with revenues close to US $750 million.
The GIS conglomerate comprises three divisions: construction - manufacturing floor and wall tiles sanitary fixtures, water heaters, paint brushes, pipe fittings, plastic pipes, sandpaper. The housewares division manufactures stoneware, ceramic tableware. enamel, steel pots and pans. Melanin tableware. The metal division is the world’s largest independent, grey iron foundry for manufacturing internal combustion engine blocks and heads, foundry tooling and automation systems. Every 7th car in the USA has an engine block produced at GIS.
GIS boasts an impressive client list such as - Detroit Diesel, John Deere, Caterpillar, Cummins, Navistar, Daimler-Chrysler, Ford, Volkswagen and GM.
GIS is committed to the growth of Mexico, therefore it invests in resources for its collaborators and creates work opportunities.
Business Issues
GIS wanted to be a leader in the industries where it operates by developing suppliers and offering clients world-class quality and service.
In 1998, a milestone company anniversary prompted management to pause and reflect on past achievement and target goals and objectives for the year 2010. At that time GIS was ranked an impressive 2nd in Mexico in terms of profitability but fell to a ranking of 27th in sales.
Improved information flow would capture trends that could be used for planning to proactively predict market trends. A request for information coming into GIS was sometimes treated in a confusing way.
Also infrastructure and ‘home made’ legacy IT systems at GIS were not prepared to support the growth and business models that GIS was aiming for. System requirements called for a global Financial and Procurement processes solution similar to other GIS divisions. In parallel, manufacturing, materials, sales & distribution processes should be automated and optimized.
After studying and evaluating the different ERP business software packages on the market GIS selected Oracle 11i because of it’s E-Business Suite Online. A competition bid among the ‘Big Five’ consulting groups awarded the Oracle applications implementation project jointly to Capgemini and the hardware solution to Hewlett Packard (HP).
Solution
An international, 20+ person Capgemini “United Nations” project team was comprised of six nationalities: Mexican, Chilean, Peruvian, Venezuelan, Yugoslavian and American. They teamed up with 60 professionals from GIS divisions. Together they formed the core team working on-site in a dedicated project office building at GIS company headquarters in Saltillo, MX.
The organisational scope of the “OPTTIMA” project involved a Solution Design of Oracle 11i Applications for the entire corporation, beginning with a pilot implementation in one selected division. The multi-site / multi-organizational structure (four companies and three distribution centers with different geographic locations) included:
- 11 legal entities
- 11 operational units
- 5 inventory organisations with over 20 sub-inventories.
A key success factor on OPTTIMA was the Project Goverance.Structure. 60% of the key users were assigned to the project 100% of the time. The project included the planning and training of a 100 person, high-performance team at GIS. Much attention was given to ‘Change Management’ with 3 consultants assigned exclusively to this stream.
The Oracle solution was built, tested and implemented in nine months. Four production plants went ‘live’ simultaneously with modules
Finance:
- GL (General Ledger)
- AP (Accounts Payables) AR (Accounts Receivables)
- FA (Fixed Assets)
- CM (Cash Management) OFA (Oracle Financial Analyser)
- Material Management:
- INV (Inventory)
- PO (Purchasing Order) QUA (Quality)
Sales:
- OM (Order Management)
- BILL (Billing)
- PRI (Pricing including Advanced pricing)
- SE (Shipping Execution)
Manufacturing:
- WIP (Work in Process)
- BOM (Bills of Material)
- ENG (Engineering)
- MDS (Master Demand Scheduling)
- MPS (Master Production Scheduling)
- MRP (Master Requirement Planning)
CST (Costing).
This project is an eBusiness Suite implementation, including integration of all the ERP modules within the Oracle Ebusiness suite Footprint.
This is the first time in Mexico that Capgemini project methodology was used for Risk Management and Partner Quality Assurance with a client.
Project team staffing presented a challenge because the local Oracle practice was very small. Project management demonstrated leadership, managing a multi-cultural organisation in a different country and staffed with local Capgemini Mexico resources and Venezuelan subcontractors.
OPTTIMA is the first project in Mexico to combine Capgemini Delivery Excellence and Fusion methodologies. Project Management used Governance Best Practices and Risk Management Guidance (RMG).
GIS Competence Center/ Knowledge Base
Along with the Oracle 11i implementation, GIS faced the challenge to ensure a proper strategy and build strong internal business and IT competence focused on Oracle post-implementation operations.
Capgemini project management designed for GIS a Competence Center, as a new organisational entity. The in-house resources structure functions as a systematic e-knowledge base primarily oriented on achieving excellence in implementing Oracle applications for GIS’ complex multi-organizational business environment.
Implementation of Oracle 11i during OPTTIMA was documented using Director in the form of an e-knowledge base with over 220 certified ‘hard copy’ deliverables in categories:
Project Management, BCI, Planning, Progress Review & Reporting, Risk Management, PIQ, Training, Actual Processes Documentation, Future Processes Design, Testing Strategy, Set-up by Module, End-User Manual by Module, CRP I and II and Stress Test Kit, Cut Over Plan and Guide Kit.
Top management and decision-makers from HP, Oracle and Capgemini demonstrated a high level of commitment to project success. Principal sponsors ‘checked in’ on the project every 2 weeks to review status, strategy and policy.
And GIS invested its best people on the project. Every division at GIS assigned one manager as a project leader. Total buy-in from management was evident in monthly meetings with the steering committee. (e.g. client leadership, Board Members, CEO, COO, CFO, CIO). Also invited to the review committee were external, non-GIS CEOs who shared previous experience implementing ERP packages.
A special event was organised to showcase the ERP launch when GIS invited the local community, business leaders, top officials and GIS stock holders of Coahuila, Mexico to a ‘Macro Event’ to announce the ‘Go Live’.
Benefits
By decreasing working capital and improving customer service GIS justifies a return on investment (ROI) estimated at 30% in two years on this systems enhancement and business processes project.
Logistics, Financials, Manufacturing, and Sales processes were standardised at GIS. Inventory costs and Administration costs were reduced. Plant stoppage due to lack of material has been minimised. Forecasting and planning processes are more transparent.
GIS has created a leaner organization; administrative processes are simplified. Working capital has decreased. GIS now has better control over its operations benefiting from more accurate and timely information in decision making. Customer relationships have improved.
GIS has developed its own consultants, resources, knowledge and experience internally to manage future technology projects, and has prepared the “e-base” for e-business. The Oracle platform in place enables GIS to think of ‘next steps’. The final goal is a scope of enterprise applications where ERP will be the base.
The GIS culture has changed thanks to the OPTTIMA project. It fostered teamwork between different departments. that are now ‘talking’ amongst themselves.
The OPTTIMA project for GIS is considered the biggest ‘functional Oracle footprint’ implemented in Latin America This was the first Oracle APS suite implementation in Mexico which includes “Manufacturing Scheduling and Advanced Supply Chain Planning”.
Capgemini project management proactively presented multi-discipline, solutions to GIS with a strong emphasis given to new services (e.g. e-Commerce, CRM, Supply Chain, Adaptive IT) as part of the proposed solution mix for GIS when appropriate. Client’s expectations and issues were maintained at proper levels, along with project’s scope and budget.
Thanks to Project Management’s experience in Oracle and in Latin America, GIS benefits from Capgemini’s demonstrated deep knowledge of the Manufacturing Industry.
The GIS OPTTIMA project has been nominated for an award as ‘Best Project’ completed in record time at Capgemini.
Written in co-operation with Grupo Industrial Saltillo
“GIS, the GIS logo and the Grupo Industrial Saltillo name are trademarks or registered trademarks of Grupo Industrial Saltillo, S. A. de C. V.”
