ERP Selection, indicating identification and comparison of several ERP systems
CASE STUDY Product SAP S/4HANA 1809 Global Bike Level Beginner Focus Company Background Authors Simha Magal Stefan Weidner Jeff Word Version 3.3 Last Update May 2019 MOTIVATION A general understanding of Global Bike (the enterprise) prior to embarking on hands-on exercises and case studies in the SAP ERP client is critical for success. This narrative provides a historical background for how Global Bike began and an overview of its operations and strategy. This information will be used extensively throughout the curriculum material. NOTES The Global Bike data set has exclusively been created for SAP UA global curricula. © SAP UCC Magdeburg Global Bike Group Background and overview of Global Bike strategy and operations. CASE STUDY © SAP SE / SAP UCC Magdeburg Page 2 Company History Task Get to know the company’s history. Short Description Read the below narrative to learn about the company’s history. Time 15 min The Global Bike Group has a pragmatic design philosophy that comes from its deep roots in both the off-road trail racing and long-distance road racing sports. Nearly 20 years ago, its founders designed their first bikes out of necessity—they had races to win and the bikes that were available at the time did not perform to their extremely high standards. So, they took matters into their own hands and built legendary bikes that would outlast and outperform the competition. From these humble origins, Global Bike Incorporated was born and continues to deliver innovative high-performance bicycles to the world’s most demanding riders. This heritage of entrepreneurial spirit and quest for design perfection is still the cornerstone of Global Bike’s corporate philosophy. Global Bike produces bikes for the most demanding competitors—whether the competition is on pavement or dirt, for money, fame or just bragging rights. John Davis earned his racing scars in the mountain racing circuit in America, where he won numerous downhill and cross-country championships. Early on, John realized that the mass-produced bicycles available were inadequate in many ways for the type of racing he was doing. So, John stripped four of his old bikes down to the bare metal and rebuilt them into a single “Frankenstein” bike that he rode to win the national championship. Once news of his Frankenstein bike got out, John’s friends and even his competitors began asking him to build them a Frankenstein bike too. While recovering from an injury in 1990, John started producing the first series of Frankenstein bikes in his garage—each one custom-built from cannibalized parts from other bikes. As more and more orders came in, John successfully expanded Frankenstein Bikes from his garage operations into a full-blown manufacturing facility in Dallas and began producing custom trail bikes which he sold through a network of specialized bike dealers throughout the country. At nearly the same time, halfway around the world in Heidelberg, Germany, Peter Schwarz was studying engineering and competing in regional touring races on weekends. In between his races and studies, Peter worked at a bike shop in Heidelberg, fixing student bikes and tuning the touring bikes that he and his friends rode for competitions. As Peter’s reputation as a fierce competitor and mechanical wizard grew, he also began to design and build road bikes based on an ultra-light composite frame that he had created for one of his engineering courses. Peter’s innovative use of carbon composite materials allowed him to build a frame that was significantly stronger and one tenth the weight of competing frames. As a student, Peter did not have a great deal of financial resources, so he partnered with a local company that manufactured his frame designs as a contract manufacturer. Soon, Peter’s frames were being used by racers all over Europe and he started Heidelberg Notes © SAP SE / SAP UCC Magdeburg Page 3 Composites to market and design frames which would be fabricated by a contract manufacturer on a larger scale. Heidelberg Composites sold its frames to specialized bike stores throughout Europe and directly to racing teams, eventually becoming the leader in lightweight touring frames in Europe. Through a twist of fate, Peter and John met each other in 2000 and immediately recognized their mutual passion for performance and complimentary business models. Each had been looking for a partner in another racing field and each had been looking for a partner in a different market. They quickly realized that a merger between their two companies would be extremely synergistic and that the combination of their product lines and regional distribution channels would generate a great deal of efficiencies. So, in 2001, Heidelberg Composites and Frankenstein Bikes merged to form Global Bike. Today, John and Peter share the responsibilities for managing Global Bike’s growing organization as co-CEO’s. John is responsible for sales, marketing, service & support, IT, finance and human resources groups and Peter is responsible for research, design, procurement and manufacturing groups from an organizational reporting perspective. Figure 1: Board of Organizational Structure Directors John (Co-CEO) Peter (Co-CEO) Chief Chief Financial VP Human VP Research VP Marketing Information Officer Resources and VP Operations Officer Development However, Global Bike is a process-centric organization, so John and Peter prefer to think of the processes that they are responsible for, rather than the functional areas of the company that report to them. From this perspective, Peter is responsible for Idea-to-Market and Build-to-Stock and John is responsible for Order-to-Cash and Service & Support, as well as the supporting services for all four key processes. The simple way to look at their responsibilities would be to say that Peter spends money and builds products and John sells products and brings in money. © SAP SE / SAP UCC Magdeburg Page 4 Figure 2: Enterprise Process Map © SAP SE / SAP UCC Magdeburg Page 5 Corporate Overview Task Develop an organizational chart for Global Bike’s enterprise structure. Short Description Read the below narrative to gather all relevant information for sketching Global Bike’s current company structure. Time 15 min Due to several tax and export issues, Global Bike Groups’s headquarters is located in Dallas and Global Bike Inc. is registered as a US company, following US GAAP accounting standards. Global Bike Group operates a subsidiary company, Global Bike Germany GmbH, which is based in Heidelberg and is subject to IFRS accounting standards and German tax regulations. Material planning, finance, administration, HR and IT functions are consolidated at the Dallas headquarters. The Dallas facility manufactures products for the US and export markets and its warehouse manages product distribution for the central US and internet retailers. Global Bike Inc. also has warehouses for shipping and export in both San Diego and Miami. San Diego handles West Coast distribution and exports for Asia, while Miami handles East Coast distribution and Latin America exports. Global Bike Germany GmbH has its headquarters in Heidelberg Germany. The majority of research and development is housed in the Heidelberg offices. Heidelberg is also the main manufacturing facility for Global Bike in Europe. The Heidelberg warehouse handles all shipping for southern Europe. The Hamburg warehouse handles all shipping for the UK, Ireland, Middle East and Africa. Global Bike sells its bikes throughout the world and employs approximately 100 people, 2/3rds of the employees are in the US and the remaining 1/3 in Europe. Notes Organizational Chart © SAP SE / SAP UCC Magdeburg Page 6 Product Strategy Task Get familiar with Global Bike’s product strategy. Short Description Read the below narrative about Global Bike’s product strategy. Time 15 min Global Bike is a world class bicycle company serving the professional and “prosumer” cyclists for touring and off-road racing. Global Bike’s riders demand the highest level of quality, toughness and performance from their bikes and accessories. Product development is the most critical element of Global Bike’s past and future growth. Global Bike has invested heavily in this area, focusing on innovation, quality, safety and speed to market. Global Bike has an extensive innovation network to source ideas from riders, dealers and professionals to continuously improve the performance, reliability and quality of its bicycles. In the touring bike category, Global Bike’s handcrafted bicycles have won numerous design awards and are sold in over 10 countries. Global Bike’s signature composite frames are world-renowned for their strength, low weight and easy maintenance. Global Bike bikes are consistently ridden in the Tour de France and other major international road races. Global Bike produces two models of their signature road bikes, a deluxe and professional model. The key difference between the two models is the type of wheels used, aluminum for the basic model and carbon composite for the professional model. Global Bike’s off-road are also recognized as incredibly tough and easy to maintain. Global Bike trail bikes are the preferred choice of world champion off-road racers and have become synonymous with performance and strength in one of the most grueling sports in the world. Global Bike produces two types of off-road bike, a men’s and women’s model. The basic difference between the two models is the smaller size and ergonomic shaping of the women’s frame. Notes Figure 3 Global Bike Finished Products Global Bike also sells an accessories product line comprised of helmets,