Vandelay Industries is a major producer of industrial process equipment used in the
production of rubber. Vandelays offerings are known for their design quality and innovative engineering. The company began to experience difficult times in the mid 1980s as a result of severe competitive pressures. Strong foreign competitors emerged, offering less expensive alternatives in many of Vandelays product lines. As a result, the American companys traditional emphasis on features and customization became a liability. Vandelay was forced to search for cost reduction opportunities. Internal investigations showed that actual manufacturing times accounted for less than 5% of total lead times experienced. Large parts of the remaining time were devoted to information processing. This was because the computer systems in use across the firm to guide order fulfillment and production activities were poorly integrated, and in some cases completely incompatible. Problems were particularly acute in the following areas: - Scheduling: One of Vandelays American plants made a variety of machined and stamped metal parts which were used by the other North American assembly sites. The plant used an outdated MRP system which required all data to be entered manually. Requirements from all downstream users were keyed in at the beginning of each week, a task that often required almost a full day. No other inputs were allowed during the week, and the plant was deluged with complaints about its responsiveness. - Order Management: Customer orders were taken manually by an inside sales organization in each region (North America, Europe, and Asia), then routed via fax to the appropriate production plant where they were keyed in to that sites order entry system. Faxes were sometimes lost. - Accounting: The manufacturing software was not integrated with the sites financial package, so information such as labor hours charged, materials purchased and orders shipped had to be entered into both systems. This introduced potential for error, and necessitated periodic reconciliations. Vandelays operational practices were as varied as their information systems. There was no uniformly recognized bestway of performing business activities. To alleviate these problems, Vandelay has decided to implement an Enterprise Resource Planning (ERP) package. The company has chosen for the R/3 system from SAP AG.] You have been hired as a consultant in this ERP project. Vandelays project team management has expressed interest in the following questions: Required What implementation method would be recommended in this situation and for what reasons?