Implementing ERP For New Product Design Development: Autoliv's Essay.

About Autoliv Company and Their Business Activities

The paper aims to understand the positionality of the Autoliv Company in implementing a new shared, centralized corporate ERP system to find out the benefits of the system in new product design development and the challenge of implementing the ERP in the system.

Background of the case: 

Autoliv is a leading developer of automotive safety technology situated in Delaware, U.S. and headquartered in Stockholm, Sweden. The company has been listed on the New York stock exchange and Nasdaq Stockholm. The company is focused on developing innovative new products, manufacturing and marketing airbags, steering wheels and seatbelts being sold to the leading manufacturers and enterprises that produce cars (Autoliv in Brief, 2022). Traffic accidents are getting common and regular worldwide, and the company aims to provide essential milliseconds for the customers proving to be useful and saving lives of a wide range of pedestrians, drivers, and passengers. The company is standardized with Fortune 500 and was formed by merging a Swedish organization, Autoliv, with U.S. organization Morton ASP (Autoliv Home, 2022). The organization aims to utilize The ERP system with a shared database to drive benefits to the company by utilizing the business functionalities and supporting interdepartmental collaboration. Further, the key challenges to implementing the new ERP system in the organization will be analyzed to determine how they can be mitigated to aim for the benefits.  

Autoliv is a manufacturing organization that collaborates with large-scale enterprises to be at the forefront of automotive safety technologies. The company develops, builds, manufacturers and markets seatbelts, steering wheels and airbags. The business activities are the functionalities that are related to the purpose of making a significant profit. The business is divided among the operational activities, financial activities, and other important requirements for directly impacting the company's performance. The company must focus on benefiting the various business areas for system investments. The areas can be termed operation and Logistics, research and development, sales and marketing, human resource management and procurements. The list of critical success factors of the Autoliv that had been discovered focuses on the customers from innovating the product, manufacturing it and delivering it to the consumers (L?rincz 2022). The new product needs differentiation to produce value among the competitors by innovating the quality services or products. The data needs to be streamlined to reduce costs and the number of issues or errors to increase the stability. (How ERP Systems Reduce Costs & Improve Profits for SMEs, 2022). The business activities related to the new product development allow the organization to understand the consumers' perception to find appropriate steps to successfully launch a new product. The steps of product design by the Autoliv starts with:

1. Getting the 3-d car models from the collaborating business partner from the large organization can be informed or received as per the requirements
2. The safety products' design starts according to the type and size of the car’s interior. The design for the test case is made.
3. The product prototype is sent to the partner for approval
4. The car prototype is taken from the business partner, which requires the product to be implemented (Ecwid.com 2022)
5. The prototype is manufactured after collecting the resources from the current suppliers
6. The materials are outsourced from the suppliers
7. Aligning the product prototype with the car prototype
8. The product prototype is installed in the prototype of the car
9. The prototype is then tested according to the given test case
10. All the prototypes are tested by repeating steps 8 and step 9
11. The prototype works as intended; the robust design is selected as the final design (The Three Phases Of Product Prototyping - Inertia, 2022). If the prototype cannot be considered, the individual needs to go back to the step 2
12. The final design is then sent back to the Business partner enterprise.

The automotive company can utilize the Enterprise Resource Planning system during the new product design development lifecycle. Autoliv should implement a high-end technological solution to manage all the business functionalities that the company aims to do in the whole design process. The ERP helps derive a suite of technologies for the design development processes and activities by streamlining and integrating the new methods throughout the lifecycle to improve operations, workflow, information gathering, analysis and communication and synchronizing the use of the organizational resources effectively (Beskese, Corum and Anolay 2019). The major benefit that the automobile technology manufacturing company faces during new product design development using the ERP system is the ability to organize and transform the existing processes into a custom design process catering to the business requirements. The ERP system is integrated into the organization to mitigate the chances of improper collaboration, time-consuming tasks, and lack of communication of the requirements, inefficient management of resources and data redundancies. The ERP can be utilized in Autoliv for understanding the perception and the relation among the business and the consumers, high-priority inventory management for high-quality delivery of data, marketing, on-time deliveries and inefficiency in human labour-management (Samre 2019). The ERP system thus aims to restructure the existing activities to help the company achieve its goals for better production, innovation and development. The ERP system adds value to its customers to optimize operations, reduce overall costs, and maximize project profitability. The ERP helps the supply chain of the company increase to facilitate improving customer relationship management and maintenance of warehouse, real-time information access for better enterprise visibilities reducing errors and making smart decisions.

Importance of New Product Development for Autoliv

The ERP in Autoliv provides real-time data and automation of processes for the employees helping to develop versatile and robust capabilities for the design process. The ERP helps make a centralized shared database to retrieve reliable and accurate data needed. A repetitive, manual database utilizes resources in storing tasks that would be automated, freeing the employees' schedule and time management so they can prioritize the task they need to work on. The high interdepartmental collaboration allows the ERP to tackle the workflow during the design operations. The information collected from the interdepartmental collaboration helps interact and collaborate all around the organization, strengthening communications (Mulyadi et al. 2019). The data files are updated from the various departments in the organization in real-time management to be viewed by other departments. This collaboration helps reduce the communicational gap within the department, benefiting the efficiency of the day-to-day organizational operations for the design completion.

The business gets information from the customers and resources from its suppliers. The ERP with the shared centralized database can be accessed remotely for the design development process allowing everyone to communicate. The customers' perception must be understood to identify improvement factors and meet future demands. The potential demands are communicated to the suppliers to understand the need and the requirements. The communication flows between the suppliers, customers and the organization to improve the visibility of the new product design. The entire supply chain gains help from the integration of the ERP (Ekman et al. 2020). The ERP allows a common database for managing the customers and the suppliers. The ERP aims to continuously improve Autoliv’s relationships and collaborations, helping outsource quality suppliers, customers, and supply chain partners to streamline the business process of developing new product designs.

The social collaboration software integrated alongside the corporate ERP in Autoliv would help connect people by tracking conversations and processes and documenting them to support and enhance customer engagement. The collaborative social software helps understand the business partners and customers to build a shared knowledge base. Social collaboration software integration would allow communication with the customers more actively to influence changes through collaborations and to develop best practices to increase innovation and productivity during new design development (Mathar and Gaur 2020). The integration would aim to utilize social web tools for assisting their customers, vendors, partners and employees to motivate each other to work with faster and easier communication. Thus, the enhanced social ERP can support employees to solve the problems faster by collaborating among the departments and even outside the department. The implementation of cloud-based social software in ERP technologies helps make social interactions and collaborations possible at any time, at any remote location. The improved collaboration using the software helps remain aligned and aware of the customer's changing requirements and needs, leading to better control over the design development processes (Huang and Huang 2019). The customers and the employees can interact with notifications and messages, saving data permanently as a knowledge base, and later disseminating information to required channels. Social collaboration positively reflects on improving supply chain communication that helps financially estimate factors to make informed decisions.

Implementing ERP to Streamline New Product Design Development

Thriving companies are already implementing contemporary technology to streamline business operations as it is considered inevitable to compete in the global market (Gaur 2020). Likewise, through ERP implementation in Autoliv, a significant level of customer as well as supplier collaboration can be gained. Primarily, streamlining back-end business process of Autoliv will help to deliver the services faster alongside improving the quality can be highlighted s a crucial element to improve collaboration. Apart from that, strong supplier relationship, effective shipping operation and manual process automation that eventually speeds up the overall integration method can be achieved with the help of ERP implementation in Autoliv. Furthermore, matching supply and demand along with improvement of user experience parameter can be achieved for operational development.

Implementation of ERP by project management: 

The Two methodologies needed to be analysed for ERP implementation in the Autoliv organization are the INFOR methodology and the ASAP methodology by SAP.

The Accelerated SAP approaches the implementation process with a framework for providing rapid and consistent results. The ASAP methodology facilitates project management to design the ERP implementation, effectively optimizing human resources, time, cost and quality.

Infor methodology is used for ERP implementation to define the perfect requirements, well-defined business activities, and perfect strategic directions detected before the process implementation. The Infor methodology is needed to be defined before starting the implementation analysing why the ERP is needed and for what functions and their future objectives pinpointing their strengths, weaknesses and the core capabilities.

Selected Methodology: Infor Methodology

The methodology selected for discussion is the Infor Deployment Method which allows a unified singular implementation approach for all Infor project implementations. The technology utilizes the Infor solutions helping to represent the vast amount of accumulated knowledge for previous, more than five thousand implementations conducted for research and development. The Infor Deploy method is ideal for manufacturing projects helping to deploy efficient ERPs that are user-friendly (Infor Deployment 2022).

The Autoliv product manufacturers would benefit from the Infor deployment process, which is widely used for ERP implementation worldwide. The Infor utilizes problem-solving being a solution-based methodology. The deployment method is strictly aligned with the PMI’s PMBOK, allowing it to be globally recognized for its best practices towards project management, reducing the risk of implementing and increasing the probability of succeeding (INFOR IMPLEMENTATION, 2022). The project phases are milestone-driven, vertically industry-specific, facilitating process modelling and “Action Labs,” incremental prototyping, and early value realization.

The deployment method consists of two vital components:

The project management process helps appoint the best practices for the perfect execution. The Project management processes can be divided into three stages:

Stage 1: Initiation and project planning: The project is decided by making a project charter that contains all the information on the objectives and requirements of the ERP, the deliverables and approval from the higher management. An integrated plan is made, gathering and outlining the details of the project aspects.

Stage 2: execution monitoring and control: The project execution monitoring and control phases of the Infor Methodology consist of managing and completing the project and meeting and aligning with the project objectives. The phase also makes sure that the project's performance is readily monitored and appropriate adjustments are continuously made as requirements of the project stakeholders.

Benefits of Implementing ERP in Autoliv

Stage 3: Project closure: The project closing stage consists of a group of activities performed to conclude the project. It is the final step to formally close the project.

ERP implementation can be a complex procedure since it impacts the different processes in the whole Infor deployment life cycle. The Infor deployment life cycle depends on project management and implementation management. However, focusing on the implementation phases can be divided into inception, elaboration, construction, transition, and optimization. The 5 stages of implementation are:

Stage 1- Inception: The project inception gaining clear strategic direction, provisioning software, kicking off the project, confirming high-level requirements, reviewing key business data structures and defining the objective lifecycle milestones.

The key challenge faced with project inception are lacking understanding of the requirements and responsibilities needed. The implementation procedure needs to identify and define the business environment. The lack of understanding of the perception of the customers and stakeholders is a great barrier to the inception stage.

The project management must be structured to influence Autoliv to be socially responsible about their behaviour in terms of employee rights, civil rights, human rights and environmental protection and the relationship with the customers and the suppliers. There should be proper project planning and communication done by the top management and higher management with shared knowledge about the implementation for understanding the requirements. The project needs to involve partnerships among the local community to create a relationship of mutual benefit, respect and goodwill (Kiselev and Langenegger 2021). Thus, project management must understand what is needed by the customers and the local communities by regularly contacting and sharing dialogues as communication and shared values are an integral part of the organization.

Stage 2- Elaboration: The project elaboration properly defined business process and strategy, training the project team members, reviewing the business processes flow, developing and validating the prototype, publishing the business blueprints and defining the lifecycle architecture milestones.   

The key challenges faced during the elaboration phase were defining a correct project strategy, which becomes difficult with inadequate skills in the project team gathered by the top management and higher management and lack of project communication and defining the critical success factors of implementation.

The top management and higher management should define the project strategy with the latest trends in mind, prioritizing key tasks and regulating the moderate tasks to help build a strategic direction. The project staff and international vendor support staff help the organization empower by controlling project costs, reducing risks, and producing quality service delivery. The project staff and vendor support staff are selected with a careful understanding of the project's requirement, with efficient contracts to be centralized in the ERP, enhancing performance (Malik and Khan 2021). The relationships between the vendors and the project staff are improved with proper communication.

Stage 3- Construction: The project construction phase consists of configuring the application, rehearsing the data conversions, testing the system and defining the initial operational capabilities milestone.

The key challenges faced during the construction phase are the design, implementation, and configuration of the correct application, which becomes a barrier due to its complex nature, lack of understanding of the requirements, outdated ideas, need for change and inadequate risk management (Invoicera.com 2022).

Challenges of Implementing ERP in Autoliv

The implementation and configuration ideas should be subdivided to the layman’s terms by the system configuring architect and developer, and the responsibilities of the employees should be divided to align with the implementation (ERP Implementation Challenges & How to overcome them?| Force Intellect, 2022). Further, the project manager must take care of the local or regional culture, linguistics, and legal requirements for smooth operations throughout the project, positively reflecting on the project's performance. The project members must try to build the corporate culture to have shared values, beliefs and attitudes toward organizational success (Ekren et al. 2018). The local requirements must understand the cultural issues for effectively managing any communication conflict. The project manager must understand the legal issues and regulations of the local communities.

Stage 4- Transition: The transition stage comprises end user testing, complete data conversions and defining the system production milestones.

In the transition phase, the biggest challenges come from end-user testing, where there might be a lack of visibility of the users about the product made, making them unaware of what is needed to be tested.  

The regional manager should define appropriate measures to keep the local users in the loop with the project advancements to help them understand while end-user testing.

The different legacy system has various data, including e-commerce reports, Customer relationship management, supplier relationship management, mobile applications, and trading platforms. The other issue is completing the data conversion and transformation from the legacy systems while consolidating the inconsistent data.

The company must aim to aggregate the data from multiple sources to real-time store the reports and documents (Gaur 2020). The data consolidation allows auditing and security measures to analyze security alerts and readiness for audits. The interoperability and streamlining of the tasks become easier, displacing data bottlenecks, reducing complexity and breaking down isolated data silos.

Stage 5- Optimization: The optimization stage comprises monitoring and evaluating the system performances, planning for future changes, Application training, transitions to support and signing off the milestones.  

The optimization stage is the last phase, can come as a barrier if there is a lack of budget, time and resources for successfully carrying out optimization after concentrating on other key phases that come before it.

There should be appropriate resource allocation and understanding of the project requirements by the top management and higher management to mitigate the issues that come with it.

Another issue that might occur during the optimization stage would be understanding the measures and media to reach a global audience for facilitating training on the newly implemented ERP.

Global training helps to develop global understanding and shred knowledge among the employees worldwide understanding the business and benefits of the ERP implementation. Global training should be a vital step in project optimization management, setting content and topic delivered to all the employees and users in the different regions (Arasanmi and Ojo 2019). The project manager needs to set content on multiple topics delivering to all the users and employees in various locations.

Conclusion: 

The paper concludes with how Autoliv utilizes its business processes in implementing a new product design by taking help from the new corporate ERP. The system's benefits during the new product design development are understood along with the key challenges of implementing the new system to drive organizational success.

References: 

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