ERP System IMPLEMENTATION IN CHINA John Zhang Total

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ERP System IMPLEMENTATION IN CHINA John Zhang Total Solution & Technology 2010. 9. 26

ERP System IMPLEMENTATION IN CHINA John Zhang Total Solution & Technology 2010. 9. 26 www. tsnt. com czhang@tsnt. com

AGENDA Opportunities in China Understand Chinese Specifics Critical Success Factors in China Right Approach

AGENDA Opportunities in China Understand Chinese Specifics Critical Success Factors in China Right Approach to Implement ERP Case Study Appendix - TSn. T Introduction 2/26/2021 Total Solution & Technology 2

Opportunities – China Markets Continuous Open-door policies towards a free market business environment Double-digit

Opportunities – China Markets Continuous Open-door policies towards a free market business environment Double-digit GDP growth for the past 30. Exceeded Japan to be the world 2 nd largest economy ($4, 920 Bn in 2009) Projected to be the world largest economy in 2025 Leading country recovered from the global recession Double-digit growth of automotive market for over 10 years Annual volume reached 13, 640 K units in 2009 Overpassed US market to be the largest automotive market in the world 2011 forecast volume is over 15, 000 K units Projected to reach 25, 000 K units in 2020 2/26/2021 Total Solution & Technology 3

China Automotive Market Growth Source: China Automotive Industry Association 2/26/2021 Total Solution & Technology

China Automotive Market Growth Source: China Automotive Industry Association 2/26/2021 Total Solution & Technology 4

Growth in U. S. Exports to Top 15 Markets, 2000 -09 Since 2000, China

Growth in U. S. Exports to Top 15 Markets, 2000 -09 Since 2000, China has been by far the fastest growing market for U. S. exports, growing 341 percent and according to the latest U. S. Treasury Department data, China exports have helped to support almost 300, 000 American manufacturing jobs. 2/26/2021 Total Solution & Technology 5

Top U. S. State Exports to China Accessing the growing Chinese domestic market is

Top U. S. State Exports to China Accessing the growing Chinese domestic market is the primary strategy of 60 percent of American companies with operations in China according to Am. Cham Shanghai’s most recent China Business Report. Sales, marketing, design, support services and a significant percentage of manufacturing for U. S. companies with operations in China, are very often provided by their U. S. facilities. 2/26/2021 Total Solution & Technology 6

Profitability of China Operations 2/26/2021 Total Solution & Technology 7

Profitability of China Operations 2/26/2021 Total Solution & Technology 7

Estimated Increase in Investment in China for 2010 2/26/2021 Total Solution & Technology 8

Estimated Increase in Investment in China for 2010 2/26/2021 Total Solution & Technology 8

Estimated Increase in Investment in China for 2010 2/26/2021 Total Solution & Technology 9

Estimated Increase in Investment in China for 2010 2/26/2021 Total Solution & Technology 9

Chinese Specifics in Business Management “Planning Economy” may not plan well “Yes” does not

Chinese Specifics in Business Management “Planning Economy” may not plan well “Yes” does not necessarily mean Yes Language is still a barrier – Information losses in translation Processes are not well defined in some companies Managers like to use phone, instead of emails, to communicate Dinners and drinks are important in some areas of China “Guanxi”/Friends – Relationship is extremely important Trust vs. Knowing each other Most Chinese are working hard. Over time is not problem, in general “Mian-zi” – Save faces Modest vs Straight forward Individual vs. Team work 2/26/2021 Total Solution & Technology 10

Chinese Specifics in ERP System Implementation Get Knowing ERP, but May not know what

Chinese Specifics in ERP System Implementation Get Knowing ERP, but May not know what exact it means Scope are not defined well. Changes occur often, and sometimes even not rational Processes are not Well Documented in some companies Project cost is normally capped Some Mid-age Managers are not good at computers. Qualified staff is still an issue Technology vs Management “Data Management is a low level job” “It is not my job. ” Time conflicts Government Regulations VAT – Golden Tax System Financial reporting 2/26/2021 Total Solution & Technology 11

National differences and multinational ERP implementation practices 2/26/2021 Total Solution & Technology 12

National differences and multinational ERP implementation practices 2/26/2021 Total Solution & Technology 12

Critical Success Factors in ERP Implementation in China Indeed, the ERP implementations are socially

Critical Success Factors in ERP Implementation in China Indeed, the ERP implementations are socially complex activities Organizational culture is deeply embedded in the national culture. the following critical success factors will be discussed, which are seen most reflecting the distinctness of Chinese context. ERP Teamwork and composition Top management support and Management style Understanding of ERP system and Having clear business plan and vision Business process re-engineering (BPR) and Software modification Personnel resources Sufficient education and training 2/26/2021 Total Solution & Technology 13

A Framework for Successful ERP Implementation Management Factors Technology Factors Operational Factors HR Factors

A Framework for Successful ERP Implementation Management Factors Technology Factors Operational Factors HR Factors Attitudinal Factors Communication Factors Top Management Supports Project Management Continuous Involvement Provide User Training Interdepartmental Cooperation Interdepartmental Communication User Involvement User Training on Software Clear Project Plan Experienced Project Manager Building the Right Team Interaction between Stakeholders Project Champion Overcoming Technical obstacles Partnership with Vendors Project Team Competence Trust Between Partners Information Source Clear Goals & Objectives Selection of Implementation Approach Minimum Scope Change Dedicated Project Team/Resource Making Smart Decision Use of Steering Committee Track Progress Monitoring Feedback & Control Assigning Roles & Responsibilities Learning from Previous Experience Post-Mortem Analysis Business Process Reengineering Minimal Customization User of External Consultant Willingness to Learn Change Management Architecture Choices Absence of Bureaucracy Education on Business Process 2/26/2021 Total Solution & Technology 14

ERP Implementation Methodology - Objectives Satisfy business requirements System corresponds to regulatory requirements Manageable

ERP Implementation Methodology - Objectives Satisfy business requirements System corresponds to regulatory requirements Manageable and controllable project phases and the full system life cycle Secure, reliable, validated in use and maintenance System can be handled by users and operators System can be upgraded System is transparent in its structure Adequately documented Project and system knowledge can be transferred to similar projects or systems 2/26/2021 Total Solution & Technology 15

ERP Implementation Methodology - Contents All system implementation methodologies have: Phases and modules Tasks

ERP Implementation Methodology - Contents All system implementation methodologies have: Phases and modules Tasks and activities Defined roles and responsibilities Documented / non-documented deliverables Link to tools Flexibility for adaptation to specific project Key successful factors But, except for those…. 2/26/2021 Total Solution & Technology 16

Key Successful Factors for System Implementation in China Pull executives’ attention and get their

Key Successful Factors for System Implementation in China Pull executives’ attention and get their involvement, especially in key decision makings Clearly defined scope. Lead, not just satisfy, your clients’ requirements Change management is critical Social and communication among business organization and team members Schedule activities everyday, then Chase, instead of waiting Patience – one time training never be enough Data preparation from the start of the project Hold their hands – longer period of after launch support More efforts on project management – time and budget 2/26/2021 Total Solution & Technology 17

Project Management Tools Scope Effort estimation Resource and their tasks Budget Managing project issue

Project Management Tools Scope Effort estimation Resource and their tasks Budget Managing project issue and risk 2/26/2021 Total Solution & Technology 18

Key Elements for Project Plan - Scope Clear project scope is a key success

Key Elements for Project Plan - Scope Clear project scope is a key success factor for project Scope should be defined by different dimensions, such as business process, functionality, IT infrastructure, organization elements Once scope is agreed, a Scope Change Process should be followed to minimize the impacts on the project due to the changes of scope Project planned effort is estimated based on the project scope 2/26/2021 Total Solution & Technology 19

Key Elements for PM Tool – Effort estimate Estimate project effort (per process group,

Key Elements for PM Tool – Effort estimate Estimate project effort (per process group, or per deliverable groups) Consolidate the effort estimates from team Adapt teams organization to this workload Fix and communicate final implementation phase, project organization 2/26/2021 Total Solution & Technology 20

Key Elements for PM Tool – Resources and Tasks Maintain a collective project calendar

Key Elements for PM Tool – Resources and Tasks Maintain a collective project calendar for time management and cost budgeting purpose Project team list all project deliverables Project team plan their activities in detail Cross check the integration activities with the other team planning’s and make sure they result in a reliable critical path 2/26/2021 Total Solution & Technology 21

Key Elements for PM Tool – Budget Calculate a full cost rate for external

Key Elements for PM Tool – Budget Calculate a full cost rate for external and internal project participants. Analyze and communicate planned project total cost. Take appropriate resources, scope and timing measures if necessary. Planned budget is reviewed vs. actual budget periodically Changes of project scope, resource or schedule can influence project cost. 2/26/2021 Total Solution & Technology 22

Always Keep Risks in Mind 2/26/2021 Total Solution & Technology 23

Always Keep Risks in Mind 2/26/2021 Total Solution & Technology 23

Case Study A Large Tier One Supplier Sites in China >10 Type Joint Venture

Case Study A Large Tier One Supplier Sites in China >10 Type Joint Venture 50+% (Beijing Auto & Johnson Control) Server Located Local Revenue ~100 M USD each site Implementation Period 2. 5 - 6 Months Major Product Auto Seating, Interior Trims Functionalities Covered Release Management, Repetitive, Material Requirement, Finance(GL, AP, AR), Inventory Control, Physical Inventory 2/26/2021 Management Team Involvements Standard Corporate Process Corporate Team Support Localized Finance Module(Chinese AccountingGold Tax Integration) Dedicated Key Users, local team. TTT-Training Approach Total Solution & Technology 24

Case Study A Large Gear Box Manufacturer Sites 1 Type Joint Venture Server Located

Case Study A Large Gear Box Manufacturer Sites 1 Type Joint Venture Server Located Local Revenue 500 M USD Implementation Period 8 Months Major Product Transmission, PTO Functionalities Covered Sales, Planning, Finance, Inventory, Production, Customer service, Purchasing, Barcoding 2/26/2021 General Manager’s Involvements Lead by Finance Departments Localized Finance Module(Chinese AccountingGold Tax Integration) Strong & Authorized local team. 3 -Month Post Launch Supports Total Solution & Technology 25

Case Study A Mid-Size Body System Manufacturer Sites 1 Type Joint Venture 50 -50

Case Study A Mid-Size Body System Manufacturer Sites 1 Type Joint Venture 50 -50 with local partner Server Located Local Revenue 50 M USD Implementation Period 3 Months Major Product Sun roof Functionalities Covered Sales, Planning, Finance, Inventory, Production, Purchasing, Barcoding 2/26/2021 Strong Supports from Local Management Team Lead by Finance Departments Localized Finance Module(Chinese AccountingGold Tax Integration) Fast implementation methodology Total Solution & Technology TTT-Training Approach (Train The Trainer) 26

Case Study A Small Brake System Manufacturer Sites 1 Type Solely owner by foreigner

Case Study A Small Brake System Manufacturer Sites 1 Type Solely owner by foreigner Server Located Hosting (Centralized in US) Revenue 20 M USD Implementation Period 3 Months Major Product Car Brake Systems Functionalities Covered Sales, Planning, Finance, Inventory, Production, Purchasing, 2/26/2021 Lead by Finance Departments Replace Legacy Finance System Localized Finance Module(Chinese AccountingGold Tax Integration) Pre-defined Strong Supports from Software Local Vendors Total Solution & Technology 27

TSn. T Fact Sheet q 11 Years In The Market Since 1999 q Experienced

TSn. T Fact Sheet q 11 Years In The Market Since 1999 q Experienced More Than 100 Successful Customer Service Programs q Focused on Manufacturing Industries, especially automotive q Solutions, Consulting Service Provider q Unique Fast Implementation and Project Management Methodology – TSn. T Smart: 4 -6 Months Implementation Period q China Market Oriented ü Established in 2000, Beijing, Shanghai, Tianjin, Hefei Office ü 60 Industrial Experienced Consultants and Technical Supports p QAD, INFOR, Oracle and Microsoft Alliance Consulting Partner in China 2/26/2021 28 Total Solution & Technology 28

Branch Office and Services Demo, training and implementation services Customer technical support Sales Demo,

Branch Office and Services Demo, training and implementation services Customer technical support Sales Demo, training and implementation services Customer technical support System installation for Infor Ln 6, MFG/PRO, e. B 2, Intouch, EDI Solution, Oracle Demo, training and implementation services Customer technical support Call Center – 800 hotline, 7 x 24 customer support services System installations for Infor Ln 6, MFG/PRO e. B 2, EDI Solution, Oracle Industry competence center Internet remote support Knowledgebase 2/26/2021 Beijing Tianjin Hefei Shanghai Demo, training and implementation services Customer technical support Sales 29 Total Solution & Technology 29

TSn. T Services Line Strategy & Management IT Strategy Planning Consulting Business Management Consulting

TSn. T Services Line Strategy & Management IT Strategy Planning Consulting Business Management Consulting Enterprise Application Industry Solutions Implementation Service Technical Solution Development IT Outsourcing Service IT Strategy & Planning Consulting Management Consulting & Process Modeling Enterprise Resource Planning (ERP) Product Data Management (PDM) Manufacturing Executive System (MES) Dealer Management System (DMS) Quality Control System (QCS) Supplier Validation System (SVS) IT System Maintenance Helpdesk Service ERP System Customization Barcode System Technical Development Service 30

Support and Coverage TSn. T Provides Post Launch Supports to Its Customers q Two

Support and Coverage TSn. T Provides Post Launch Supports to Its Customers q Two entries free 1 st line support -- Call Center Services -- Responsible Consultant Assigned for Specific Customers -- Free remote email Support Our support staff can be reached 7 x 24 to provide our customer fast, efficient technical supports. All online remote supports are totally free for our valuable customers. q On-site Support Response within 24 Hours -- Chargeable, Guaranteed Issue Solving and Customer Satisfaction q Customization and Add-on Development q Continuous Improvement and Training q Upgrade 2/26/2021 31 Total Solution & Technology 31

Partial Customers 汽车行业: (整车)Automotive Vehicles 汽车行业: (零部件)Automtive Components 江铃汽车 Ford JMC 陆风汽车 Landwind 江淮商务车

Partial Customers 汽车行业: (整车)Automotive Vehicles 汽车行业: (零部件)Automtive Components 江铃汽车 Ford JMC 陆风汽车 Landwind 江淮商务车 JAC Refine 江淮重卡 JAC Heavy Duty 无锡新雅途 NAC Seat 南京名爵汽车 MG Nanjing MG UK 中兴汽车 ZX Auto 一汽海马汽车 Haima Auto 广汽集团乘用车有限公司 GMAC 北汽控股乘用车分公司 BAIC 奇瑞汽车 Chery Plastech Holding Company 2/26/2021 韩国世元/裕罗尔特线束 Sewon, Korea 伟士通零部件 Visteon Shanghai 富奥内饰件 Fawer Interior Trims 沈阳金杯内饰件 Jinbei Seating 德尔福(中国)Delphi 西安法士特变速箱 Fast Gears 钜全活塞 JCC Pistons 北京江森Johnson Controls, Beiing 韩国大起株式会社 Deaki Korea 韩国江森内饰件 Johnson Controls Trims, Kr. 上海阿文美驰 Arvin Meritor Shanghai 上海凯茨汽车部件 GITS Engineering, SH 重庆佳速 Drivesol 台州玉环 Yuhuan 东风有限零部件集团 DFL Components Group 东风传动轴 DFL Powertrain 东风拜洱热系统 Berr Thermo Systems 东风德纳车桥 Dana Axles 东风康明斯 Commins Engines 江淮发动机 JAC Engines 上海沪 集团 Shanghai Hugong Electrics Total Solution & Technology 32

Partial Customers 电子行业:Electronics 其他行业:Other Industries 得彩涂料(上海)DPI Painting 天津科雅美术材料 Col. Art Tianjin 联合利华(中国)有限公司 Unilever 阿迪达斯(中国)有限公司

Partial Customers 电子行业:Electronics 其他行业:Other Industries 得彩涂料(上海)DPI Painting 天津科雅美术材料 Col. Art Tianjin 联合利华(中国)有限公司 Unilever 阿迪达斯(中国)有限公司 Adidas 中国航天二院 China Aero-space R&D Inst. 三一重 Sany Heavy Duty Equipement 南京竣业过程设备 Junye Chemical Process Equipment 上海意达纺织机械 Yida Shanghai 安徽罗宝节能建材 Anhui Roba Construction Materials 上海凯泉泵业 Kaiquan Pump 乐机设备(浙江)ELGI 劳斯莱斯船舶(上海)Rolls-Royce, Shanghai 北京佳讯飞鸿电气有限公司Beijing Jiaxun 上海施伦贝谢 Shlumberger, Shanghai 北大方正电脑 Founder’s Computer 元典科技 INIT Tech 迈瑞医疗电子 Mindray Medical Instruments 英思沃电子 Indserv Electronics 贝克特电子 BAP, Beijing 富甲电子 Skyrocks Electronics 33

Partial Customers in China 法士特齿轮 2/26/2021 34 Total Solution & Technology 34

Partial Customers in China 法士特齿轮 2/26/2021 34 Total Solution & Technology 34

Thanks for your Attention! 2/26/2021 Total Solution & Technology 35 35

Thanks for your Attention! 2/26/2021 Total Solution & Technology 35 35