Bombardier ERP Implementation

Key Problem
Bombardier Aerospace is the third largest designer and manufacturing aircraft company in the world. Bombardier is using a legacy system since the early 1990s known as the Bombardier Manufacturing Systems (BMS).  BMS is based on a MACPAC platform, which is displaying its malfunctions an insufficient solution. Bombardier has made several acquisitions throughout the years and the MACPAC platform is making it difficult for the future development. The key problem is Bombardier Aerospace needs to significantly improve their low visibility of inventory and lack of integration within the company.

ERP I - Implementation
Bombardier Aerospace tried to make a significant technological improvement with an Enterprise Resource Planning (ERP) system. An ERP application provides one platform for inventory, purchasing, procurement, customer service and finance. The first attempt for the implementation of ERP system project was not successful.  The ERP project was discontinued in 2000 and spent a considerable amount of $130 million in defeated costs.
 Reasons the ERP implementation was a failure:

1.       Inappropriate businesses process

2.       Outdated company vision

3.       A weak sponsorship

4.       Insufficient involvement of employees.

In my opinion, Bombardier didn’t have best practices for the ERP implementation as there was no structure, loyalty and organization. The Bombardier Aerospace ERP best practices should have been developing the inventory management, integration, formal employee training and price consistency.

ERP II -Implementation
The second ERP implementation was started in 2001 by a group of senior managers from Bombardier Aerospace’s Irish facilities. The senior managers developed the Bombardier Manufacturing Information System (BMIS). BMIS was a motivated realistic proposed plan to achieve project goals. The BMIS project was to have a wider ERP strategy and focus on the processes that support manufacturing, inventory, procurement, finance and engineer data. The main reason the ERP implementation failed the first time was not having a detailed management planning solution. The ERP system would eliminate paper as most of the material would be automated.  Employees could focus on more analytical tasks rather than administrative tasks. The SAP enterprise system was chosen as the ERP system for Bombardier Aerospace.
There was value for deciding to use the Mirabel plant as it is manufacturing plane site. The CRJ700 model plane is manufactured at this location and the jet plane is Bombardier Aerospace’s potential growth in the future.  The one site procedure is a more conservative approach which is needed for a large scale ERP implementation.

 The way implementation was structured using the Mirabel site as pilot with integrating testing, training and Go-Live. Once SAP implementation was fully completed, the cost savings was extremely favorable within the year. There was a significant reduction in $1.2 billion in inventories within the first year of Go-Live.    

ERP III – Implementation

I will identify the ERP SAP best practices and bring the necessary world class standard for the implementation project. The second ERP implementation was a success but I want to ensure the third implementation will be flawless. There are several action steps during the second ERP implementation that I would continue to support for the third ERP implementation: BMIS, One-Company (Integration) and less Consultants.  BMIS functional strategy is one of this company’s strongest assets to the development of the ERP implementation. I would continue to utilize the BMIS philosophy as it provides the right focus on the Bombardier’s functional processes. BMIS focuses on the functional processes, such as: inventory management, manufacturing, earning and finance. BMIS shows a detailed analysis and structure to implement thoroughly and effectively. It is necessary to have all checks under the Bombardier name and have an integrated system.  Employees can get frustrated with too many consultants explaining the processes and can be challenged with a new ERP implementation. There will be a better working environment with fewer consultants.

I would recommend 4 areas to make improvements, training, eliminating legacy systems, processing purchase orders and Finance. At this point, I wouldn’t recommend training from a third-party consultant as the Mirabel plant is your training material. The BMIS team and the Mirabel plant users can provide a formal cross training program during the new ERP implementation. The Mirabel employees can provide feedback to the new users that the ERP system has saved them a significant amount of time. There were users after the Go-Live from the Mirabel plant that were using the current legacy systems. The VP of Operations and Project Sponsor’s should send out an email to the managers and not give permission for users to use the legacy systems. I would encourage managers to send out a problem list to the BMIS project team so they can problem solve for any new issues in SAP.  I encourage revamping the purchase order process as vendors are either receiving too many faxes or not receiving purchases orders.  SAP was automatically sending fax purchase orders to vendors, causing problems within the MRP engine. Suppliers were receiving too many faxes every time the MRP engine was being updated. ERP SAP has the capabilities to email purchase orders rather than faxing a PO to your vendor. It was unacceptable that the BMIS team was printing, stapling and mailing purchase orders to vendors for three weeks.
Once the third implementation of ERP SAP is installed, utilizing KPIs on a monthly basis. ERP systems can provide an excess of KPIs and you can choose what KPIs are most important to your department.  There is a significant amount of opportunity to improve your trade working capital .

 Conclusion

ERP implementation can be successful with the proper vision and dedication to the system. Management needs to be confident in their product and users should be encouraged there is a benefit to their daily workload. Bombardier Aerospace must emphasize that ERP systems give you an upgrade and an opportunity to grow the business. In my opinion, it’s time to eliminate the outdated legacy systems and look to the ERP system as a stability of future growth.  ERP systems provide the following services better than legacy systems in the following: organization, inventory visibility, purchasing, customer service, finance, employee morale and function control. The Mirabel ERP implementation contributed to a $1.2 billion cost saving reduction which is flawless! This will give Bombardier additional cash flow, improve Bombardier’s balance sheet and make potential company acquisitions.  I would eliminate the legacy systems completely and replace them with the ERP SAP.
The ERP SAP system would be just as efficient as the design of your aircrafts. The ERP SAP system will bring a fast and powerful solution and provide an effective solution with integration, inventory, purchasing, sales and finance.