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New Strategy Brings Order to Globalization Chaos

A new trend spreading among multinational manufacturers is showing early success in taming production inefficiencies and reducing the data inaccuracies that can result from globalization.

Known as a single global-instance strategy, the approach consolidates into a common enterprisewide framework the disparate and often outdated enterprise resource planning (ERP), manufacturing, sales, and financial systems that large corporations may be running at their divisions throughout the world.

The result is consistent data available to employees worldwide and better control over governance, risk, and compliance (GRC) efforts, according to early adopters. The strategy can also increase operational productivity, with some multinationals like Eaton Corp. reporting significant inventory reductions.

“Thanks to the greater visibility we have with our global framework, we’re able to adjust production scheduling and inventory levels on a daily basis at each of our 26 plants, depending on what level of demand we’re seeing from our customers,” says John Gercak, director of IT for Eaton Truck Group, a division of Eaton Corp.

He adds that the subsidiary’s global inventories now average five days less while payment delays for accounts receivables have shrunk.

Multinationals are also finding it easier to close their financial books within days after the end of each reporting period, rather than the weeks or months sometimes needed to consolidate results from far-flung operations.

“Companies can’t wait three months to close their books from last quarter. They want to know in real time when markets start to shift,” says Stephen Slade, senior director of applications and industries marketing for Oracle, which itself runs a global framework to support its worldwide workforce. “With a single global instance you have better visibility across your entire value chain.”

Components of a single global-instance implementation include an application framework that runs one common operating system, a central database and ERP suite, a middleware layer that “glues” applications together, and service-oriented architecture (SOA) for efficiently exchanging data among the various enterprise systems.

For its part, Eaton Truck Group expects long-term benefits from consolidating its plants on a common Oracle ERP platform. “The application gives us the scalability we need to run our global supply chain and provide a single platform for managing orders, scheduling, production, and shipping operations,” Gercak says.

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