Change was a necessary part of growth for Rayovac Corp.
In 1996, the Madison, Wisc.-based company was purchased by an investment banking group and given a new management team who quickly developed an aggressive business strategy that would see the corporation double its size in five years.
The obstacle to their goal, however, was a lack of accurate and timely information necessary for decision making. The result was an IS strategy that mandated the replacement of the current legacy mainframe systems with an ERP solution. The goal: to shut down all legacy systems simultaneously and transfer all open transactions to the new Y2K compliant system.
“We had a strategy that it would be a client/server (system) and that we would not be leading edge technology but we would be a close follower and that’s what lead to the selection of SAP to be the preferred business to implement our solution,” said John Ridlehoover, vice-president and chief information officer at Rayovac.
Initially, Rayovac grappled with the idea of a big bang implementation vs. a phased implementation, Ridlehoover said. But it was clear that given the time frame they were committed to, “we needed to do the big bang implementation.”
That said, “we were very much afraid of putting our entire business at risk with one implementation,” he added.
The team looked at the facts. A mainframe system supported U.S. operations and an AS/400 ran the Canadian operation, which was only a small subset of the total North American business.
“From a risk analysis standpoint it became very clear to us that if we would concentrate on implementing SAP for our Canadian operation we could have more resources focused on it. We didn’t have any manufacturing there so it was less complicated from a total big bang impact and we could get some success under our belt,” Ridlehoover explained.
The project, which would see a complete SAP implementation, including SAP Financials, SAP Materials Management, SAP Production Planning and SAP Sales and Distribution, in under 14 months, began with extensive planning in February 1998.
As part of the AcceleratedSAP (ASAP) methodology, a project team of 30-plus individuals began doing blueprints, configurations, and integration testing for all of North America, which included eight Rayovac sites in the U.S. and one in Canada. Once that was complete, they were ready for the Canadian implementation.
Mary Uhen, consulting manager for Chicago-based SAP America Inc. and then project manager for the Rayovac implementation, said the testing had to take into account certain Canadian nuances, such as taxes and both English and French languages.
Though originally scheduled for December 1, 1998, the launch was pushed back to March 1,1999, allowing more time for the configuration phase, said Moira Menninga, sales operations manager for Rayovac Canada Inc. in Mississauga, Ont.
After 12 months of planning, one go-live occurred in Canada on March 1, 1999, eliminating the AS/400, with another in the U.S. only two months later on May 3. The team monitored the Canadian production closely, working through a closing cycle and auditing for the first month “basically trying to track every transaction through to be sure it was properly posted,” Ridlehoover said.
“We had to gain confidence in the system with the Canadian operation.”
And they did. According to Ridlehoover, no major issues arose during the implementation, only small issues that revolved around master data and not having billing material exactly correct.
Fortunately, many potential problems were resolved during the three-month integration testing phase, Ridlehoover said. One of the benefits of the ASAP methodology, he said, is that it “forces you to accept the integrations of the software and forces all of the disciplines to work together.”
The most difficult aspect of the methodology, he said, were the Business Process Procedures (BPPs), or the documentation of all the processes that will be used. With many business people on board who were slightly scared of the technical side of things, and hundreds of processes that needed to be written to define activities, it was difficult getting started, he said. “It seemed like we would always get started late and then have to catch up in the end.”
However, the team learned two important things along the way, Ridlehoover said. One was that “you cannot implement a project of this magnitude with part-time people. We understood that up front but from a business standpoint it’s very difficult to commit full-time people, especially when you’re taking some of your best people out of the business functions on a project for 14 months.”
The other was to bring the team together in one common work area, giving them immediate access to each other, he said.
Since the implementation, Menninga said the company has seen major improvements in the visibility to orders and inventory.
“It’s not a perfect world though, the basis of SAP is it asks for so much information so it can provide you with so much information…people’s roles have increased as far as time and what it takes to put data in.”
And for Ridlehoover, the challenge has just begun.
“I consider my task to be more difficult now going forward than it was 14 months ago prior to the implementation,” he said.
“Now I’ve got the responsibility of delivering to the corporation the value that can be obtained from that $14 million system. Just implementing SAP does very little as far as improving the processes.”
Leading the group to be “process oriented” is culture change to the next level, Ridlehoover said, “and it will be the toughest part to the whole project.”
Now that the company has much better information, “we’ve got to figure out how to use that. We are experiencing very significant cultural difficulties because the users have been getting high-level management reports out of the legacy systems for years that do not exist out of SAP.”
Unlike the paper-based information they were used to, Rayovac staff must get used to the real-time, on-line information of SAP.
And as Ridlehoover said, “it’s not a fun thing to deal with because the people are very frustrated. They say they can’t get the information that they used to get to do what they used to do.
“The story I’ve got to tell them is forget it. You don’t need that,” he said. This is a new way of doing things.”