IBM—华为PDM项目BR07.Costing0205.doc

Business Re-engineering Project PlanBR07. CostingInformation Technology Strategy and Plan ConsultancyPhase 3 ReportFebruary 1999BR07. CostingScope and ObjectiveThis project is concerned with reviewing the overall approach to costing within Huawei to determine the most appropriate costing methods and then devising and implementing the preferred costing approach throughout all affected areas. This project does not cover project costing. Project costing is covered in a separate initiative namely, “Project Investment Management”.The project focuses on understanding the need for costing and more specifically how cost information will be used. Additionally, the project will determine the most appropriate costing method and the points within the business where cost information should be captured (including the operational level). The project recommends use of the Oracle Cost Management module as it provides benefits of integration with other Oracle modules already installed. Finally, the project outlines the change actions required.While this project has the potential to influence all parts of the business those areas likely to be directly impacted include: Manufacturing, to agree the cost basis, book costs at appropriate stages in the process, investigate and determine causes of variances. Customer Services, to agree the cost basis, book costs at appropriate stages in the process, investigate and determine causes of variances. Purchasing, to agree the cost basis, book costs at appropriate stages in the process, investigate and determine causes of variances. Finance, to create and agree costs with operational departments, update costs on an agreed cycle, complete variance analysis and variance reporting.Specific topics within the scope of this project are as follows: Availability of cost data. Level of detail required to meet costing objectives. Standard cost versus weighted average cost versus activity based costs. Direct costs versus indirect costs. Treatment of departmental overheads. Treatment of general overheads.The project objectives are to: Deliver an agreed and appropriate costing mechanism for operational management. Deliver an agreed and appropriate product and service costing mechanism.When completed this project will deliver a number of outcomes recommended in the IT Strategy and Plan Consultancy Phase 1 report and will provide critical support for other key improvement initiatives. The following capabilities will be created: The ability to measure “true” product costs down to product level and thus profitability associated with each product and service. The ability to track operating costs and measure performance against agreed standards as required to ensure effectiveness of the Supply Chain process. The ability to support the IPD initiative by providing accurate manufacturing costs and standards to be used in determining targets for new product costs and thus aid in adopting a “Design to Cost” concept in product development. The ability to capture and report accurate manufacturing costs and cost breakdowns to support Cost Engineers in estimating new product costs and evaluating ways to reduce costs during product development as required in the IPD initiative. The ability to capture detailed cost information to assist in managing Customer Services as a business. The ability to capture and measure accurate cost by service activities, offerings, types and categories and in so doing provide cost information that will be required for the effective launch of the re-engineered “Provide Post Sales Customer Support” process.Note: This project has specifically excluded any reference to Year 2000 capability including Year 2000 contingency planning and compliance issues. As such the IBM consultant team has not provided any advice nor does it make any recommendations in respect of ensuring Year 2000 compliance for any existing or proposed systems. In all cases where technology solutions are referenced the technology supplier should be contacted to determine Year 2000 compliance status.Business BenefitsIssues being resolvedThis project will have a positive impact on overcoming the following specific issues: Lack of comprehensive specification for cost. Lack of good manufacturing and overhead standards. Material variances not being used to measure purchasing performance. M&S, R&D and administration expense not identified being with specific product and product lines. Financial expense not being identified with specific product and product lines. The need to ensure a sound accounting system for the company, financial management and cost control.Intangible benefitsThis project will provide Huawei with integrated cost capture, allocation and reporting mechanisms across its businesses and equip its management team with the accurate, reliable and timely financial information essential in managing a cost competitive operation.Tangible benefitsThis project will provide the following tangible benefits: Increase % of products that have product costs measurement. Increase % of services that have cost measurement.ApproachAs costing cuts across all aspects of the business, any projects that will redesign the way processes are performed will need to include additional activities to capture and record product and service related costs. In recognition of this, the Costing project has been partitioned into three major streams: Costing Support Stream for MRPII Enhancements-This stream will interface directly with the “MRPII Enhancement” project. It will obtain details of current MRPII operations and the costing approaches employed. It will define: the costing methods to be used in each redesigned MRPII process; the points at which cost data must be collected; the nature of the data to be collected; and how the data is to be recorded and held in the Oracle Cost Management module. Design of Standard Costing Process-This stream will define the cost approaches to be used across Huawei; the process involved in establishing and revising costs on a regular basis; and the way the Oracle Cost Management module will be used across the company. This stream is independent of other projects. Note: This project will review the opportunities of continuing to use standard costing throughout Huawei however for descriptive purposes “standard costing” is used throughout this document to describe the general approach to costing. Costing Support Stream for Post Sales Customer Services Improvements-This stream will interface directly with the “Post Sales Customer Services” project. It will obtain details of the current “Provide Post Sales Customer Support” process and the costing approaches employed. It will define: the costing methods to be used in the redesigned “Provide Post Sales Customer Support” process; the points at which cost data must be collected; the nature of the data to be collected; and how the data is to be recorded and held in the Oracle Cost Management module.This project will be undertaken in three phases namely Focus, Invent and Launch as set out below. Each of the streams described above follow slightly different timing within these phases to ensure coordination with other related projects.FocusThe focus phase defines the costing objectives to be achieved by this project and aligns these with Huaweis overall objectives as they relate to costing. Specific outcomes not being achieved by the current costing processes and /or approaches will be identified and agreed, and weaknesses in the way the processes operate will be targeted for improvement. During this phase there is strong coordination with the Focus phase in the MRP II Enhancement project. The MRP II team will be responsible for completing process overview maps and this project will use those maps to overlay cost collection activities. A similar degree of coordination exists with the “Post Sales Customer Services” project.Invent During this Invent phase attention will focus on finding the most appropriate way to undertake costing in the future to meet required outcomes and overcome the weaknesses identified in the Focus phase. Specifically, costing decisions will be made in respect of issues such as the level of detail required for collection of labour, material and overhead costs the costing approach to be adopted and treatment of cost variances how the costing approach is to apply across entities allocation of overheads and capacity volumes or other basis to be used in applying overheads how products are to be defined for costing purposes the technology support that is most appropriate to achieve the costing outcomes requiredAs with the Focus phase the activities to be performed in this project will be closely coordinated with “MRP II Enhancement” and “Post Sales Customer Services” projects. Conceptual design will be done in conjunction with related projects and conceptual design for the standard setting process will be completed independently. The costing team will provide specialist input to other projects and support other project teams in presenting the impact of the costing activities on other process designs. The costing team will coordinate activities across other projects to ensure that a consistent approach to costing and cost collection is incorporated in those projects.In addition to coordinating the costing and cost collection approaches in the “MRP II Enhancement” and “Post Sales Customer Services” projects, this project will devise the approach to setting cost standards and develop the process to enable regular review and update of such standards. Further, this phase will involve designing the use of Oracles Cost Management module to support the preferred costing approach across Huawei.Decisions in respect of the elements of the costing environment and the key outcomes required will be translated into a set of redefined costing processes that will show each of the steps involved to capture the relevant cost data and maintain appropriate costing records.Finally, the Invent phase will define the skills required to introduce and maintain a new costing environment within Huawei.LaunchThis phase will ensure that the costing processes are properly introduced, that the costing systems chosen to support the processes are appropriately configured / developed, tested and rolled out and that all staffs involved in the new processes are trained and capable of performing their new responsibilities.Details of activities and tasks to be undertaken are set out in the appendix to this document.Resources and TimingSkills and Experience RequiredThis project requires a combination of resources that bring skills and experience in product and service costing, process re-engineering and system configuration to the project. Specifically, the project requires access to resources that have an in-depth knowledge of current Huawei product and service costing practices and procedures. The skills required by the project are listed below. Note: It is important that the scope of these skills be covered by the entire project team. It should not be expected that a single individual possess all the required skills in the categories under which they are listed. Huawei Skills: Knowledge of current product and service costing practices within Huawei. Knowledge of current systems being used in Huwaei for product and service costing. Oracle Skills: Specific knowledge of the capabilities and configuration options of the Oracle Cost Management module. System capacity planning and definition of infrastructure requirements. Oracle application Database Administration. Consultancy Skills: Subject matter expertise in product and service costing including: Costing techniques such as appropriate use of standard cost versus weighted average cost versus activity based costs Appropriate treatment of direct costs versus indirect costs Allocation of departmental and general overheads Packaged based business transformation including process assessment, system assessment, organisation assessment, process improvement design, solution design, and implementation strategy and planning.Resources RequiredThis project requires a coordinated team of Huawei and consulting resources as set out below:Huawei Project Core Team Project Executive Sponsor part time role to review and approve recommendations made by the project team. In addition the Project Executive Sponsor will be required to support the project team by removing obstacles to the projects success should they arise. It is expected that the head of the Finance department will undertake this role.Project Manager - full time responsibility (in conjunction with the Consulting Project Manager) for overall project delivery. Specifically the Project Manager will be responsible for liaison with other Project Managers to ensure consistency across the overall Program, liaison with the Consulting Project Manager to ensure project effectiveness, consultation with the Huawei Project Executive Sponsor and Huawei management to ensure understanding and acceptability of designs and solutions.Subject Matter Experts full time role to provide advice on current product and service costing processes and work with the consulting team to develop the new process designs.Huawei Business Department staff Subject matter experts in the area of product and service costing policies and practices to support the project on an “as required” basis. ConsultantsProject Executive part time quality review for subject matter rigour and consistency within the overall Program initiative.Project Manager full time responsibility (in conjunction with the Huawei Project Manager) for overall project delivery. Specifically the Project Manager will be responsible for liaison with other Project Managers to ensure consistency across the overall Program, liaison with the Huawei Project Manager to ensure project effectiveness, consultation with the Huawei Project Executive Sponsor and Huawei management to ensure understanding and acceptability of designs and solutions.Lead Consultants full time responsibility for day to day direction of the project team. Specifically, the Lead Consultant will be responsible for project planning; provision of subject matter expertise and leadership in thinking and issue resolution; directing the new process design; coordinating the re-engineering effort with other projects i.e. “MRPII Enhancement” and “Post Sales Customer Services” and managing application specialist consultants to ensure cohesion between the process and systems.Re-engineering Consultants full time role undertaking re-engineering activities at the direction of the Lead Consultant. The Consultant will have responsibility for assisting the Lead Consultant with the assessment of current operations and design of the new process.Oracle Consultant part time role with responsibility for: providing specialist package advice on the use of the Oracle Cost Management module; assisting the re-engineering consultants to develop new process designs around the capabilities of the package; and specifying configuration requirements.Oracle Technical Consultant - part time role to: establish project environments for Oracle software; load relevant software; assist with the identification of conceptual design implications for IT systems; and define the future IT infrastructure.Number of Consulting Resources by RoleThe resourcing and team structure requirements for this project are defined below. RoleProject OverallCosting Support Steam for MRPII Enhance-mentsDesign of Standard Costing ProcessCosting Support Steam for Post Sales Customer ServicesTotalProject Executive11Project Manager11Lead Consultant5117Consultant11Associate Consultant11Oracle Module Specialist1(Cost Management module)1Oracle Technical Consultant11Timing and InterdependenciesThis project should be completed within an elapsed time of 7 to 9 months however the timing may vary according to progress on the “MRPII Enhancements” and “Post Sales Customer Services” initiatives.This project is not dependent on any other initiative however it is important that costing decisions made throughout the project are consistent and meet the needs of each of these projects. Similarly, it is vital that the Oracle Cost Management application is designed and implemented to support each area. It should be noted that the co-ordination of activities in this project with related activities in the “MRPII Enhancement” and “Post Sales Customer Services” projects is critical to the success of each of these projects. It is planned that this project will begin approximately 6 weeks after the “MRPII Enhancement” project and that activities related to “Post Sales Customer Services” project will begin approximately 10 weeks later in accordance with the initiation of the “Post Sales Customer Services” project.This project will have an impact on the three core improvement initiatives namely “IPD”, “MRPII Enhancements” and “Post Sales Customer Services”. Specific impacts are as follows:Integrated Product Development The “Design to Cost” concept to be introduced in product development demands that the cost of manufacture and the relationships between costs is known so that production costs can be accurately estimated as part of the product development process. This project will ensure that appropriate costing processes and practices are introduced to meet this require