solution

Systems and Processes, Application
Western Digital Implements New ERP System

Western Digital, a developer of storage devices and solutions, has grown dramatically since it was established in 1970. Based in San Jose, California, they employ more than 61,000 with locations around the world. Much of their growth has occurred through mergers and acquisitions. Managing operations and generating timely information in a multi-billion dollar, global organization can be difficult, but what happens when you combine three such companies? How can systems be integrated and processes refined, so that the business can stay competitive? Steve Phillpott, CIO of Western Digital, explains that each of the three organizations had their own ERP. Some tough decisions would need to be made to integrate all three companies. Because each company had been using their own ERP, when they merged, these systems were no longer enterprise-level. Data was isolated, processes were disjointed, and efforts were duplicated. The team could choose one of the three ERPs, and the other two-thirds of the company’s employees would need to change over to the selected system, or they could start from scratch and implement a new ERP across all divisions of the new, larger Western Digital. They chose to start from scratch and implement a new ERP and related processes across all three companies. The first phase was rolled out in 2017, and the implementation is currently ongoing.

The decision to choose a new ERP was a great opportunity to update technologies and transform processes at Western Digital. They took this opportunity to redesign processes and build applications that were more likely to scale as they grew to be a $20+ billion company. Communication and collaboration are essential to integration efforts, so the team focused on setting up those standards and integrated tools first. These new tools and processes not only helped the ERP project succeed, but they removed barriers to communication across all areas and locations of Western Digital, putting them in a better position for possible mergers or acquisitions in the future.

Change management plays a huge role in implementing Western Digital ERP. As the processes and technologies are integrated, the people that use the systems must adjust. By ensuring that users are ready when the system integration is complete, Western Digital is able to attain much larger benefit from the system, more quickly. Phillpott stresses the importance of these underlying structures of communications and change management to the successful implementation and use of an ERP and the resulting competitive advantages.

ERP implementations usually have long timelines, especially in such large organizations. Phillpott says that they are “two years into a four-year (plus or minus) journey.” They are phasing the implementation as outlined below:

Phillpott and his team realized that they could not wait until the ERP was fully implemented to receive the benefits of the reports the system would eventually produce. So, to derive the most benefit as soon as possible, they implemented an interim reporting capability. They reviewed the business objectives and decided on the reporting priorities to deploy a predictive analytics platform early in the process. According to Phillpott, this platform “supports manufacturing and operation capabilities, trying to look at how we improve yields and the performance of our manufacturing operations.” He also states that not only do these interim reports help improve performance, but they act as a testing ground or prototype for the reporting system that will be rolled out in later phases. As the ERP matures, they will implement various technologies for data analysis, from less to more complex, starting with predesigned reports and a dashboard, moving on to custom reports, predictive analytics, and business intelligence powered by artificial intelligence. They will be able to answer such questions as the following:

How can we improve our time to market?

How do accelerate innovation in manufacturing?

How can we reduce the costs in our product development lifecycle?

Using their analysis and incorporating integrated cloud technologies, they have been able to reduce the time it takes to conduct manufacturing simulations from 30 days down to nine hours or less.

Many of the benefits of an ERP can be realized through the implementation and change process. How can updating and integrating processes and activities, as part of an ERP implementation, provide benefits to the organization? Provide specific examples.