To secure global competitiveness in the extremely challenging marine-engine market, Doosan Engine wanted to develop strategic partnerships with offshore ship owners and shipyards, and to significantly increase its presence in the emerging markets of Brazil and Russia. It also wanted to diversify its business portfolio by undertaking new projects.

“To respond successfully to changes in the marine-engine market and ensure company growth, we needed a comprehensive management system to track our confirmed and unconfirmed projects,” said Park Seok-won, managing director, strategic innovation division, Doosan Engine. “We wanted to monitor the accuracy of customer order and sales processes for each potential project being supervised by the sales department, assess the attractiveness of the company as a supplier, and manage the manufacturing risks of contract changes to confirmed projects.”

Doosan Engine wanted to achieve its corporate vision for world-class competitiveness in quality, price, and on-time delivery. To do this, the company had to strengthen its cost competitiveness by establishing business strategies based on prices requested by clients, market prices, and manufacturing costs. It also wanted to record and analyze information on its clients, competitors, and the marine-engine sector, so it could better assess market fluctuations, maintain its current client base, and attract new customers.

In addition, to meet delivery schedules and achieve its target profit ratio for each engine manufacturing project, Doosan Engine needed to record basic information about its production activities and staff, monitor the project’s progress, and establish project cash flow plans.

“We wanted to generate data about raw costs so we could set our profit and loss targets, establish new investment plans, support the executive decision-making process for new projects, and identify any risks arising from the company’s financial situation in advance,” said Park.

Using integrated modules from Oracle E-Business Suite Release 12 and Siebel CRM to develop its DOOPIA ERP system, Doosan Engine combined processes and systems from eight operational areas, including business management, customer orders and sales, procurement and materials, manufacturing, technology, raw costs, quality control, and finance.

The company has increased the visibility of its entire sales and manufacturing workflow—from bidding for customer orders and sales, purchasing raw materials, manufacturing diesel engines, and delivering the completed product to the customer. Its staff can now more easily identify the required steps and status of each sales and manufacturing task, and what they need to do next.

DOOPIA has also enhanced its marketing abilities, as staff can now decide which marketing activities will be most beneficial, based on the status of each identified sales and manufacturing task.

“The integrated Oracle E-Business Suite and Siebel CRM system has provided us with a market intelligence framework that will enable us to respond to changes in the diesel-engine market in real time and maximize the value of our business by improving interaction with our customers,” said Park.

The Oracle-based DOOPIA system has increased the efficiency of Doosan Engine’s accounting tasks by enabling it to automatically generate financial statements and supporting documents, such as sales and deposit statements (which enable staff to see the date, purpose, and use of each financial entry).

The accounting team now expects to complete these statement verification tasks two days after a completed delivery.

The team can also use the ERP system to aggregate project expenses one day after a sale and calculate sales revenue, sales cost, and final individual settlements two days after a delivery, rather than taking five days. This enhances probability management of account settlement tasks, enabling managers to calculate amounts for expected payables and receivables, and improving their understanding of the company’s financial situation.

In addition, the Oracle-based DOOPIA system enables senior managers to check budget-management information in real time, such as manufacturing costs for a new ship building materials. This helps the company to make more accurate decisions by determining if the new project is making a profit, or if it needs to be further modified to prevent losses.

The system also prevents mixing up various accounting tasks by accurately identifying items that should be treated as assets or expenditures.

The Oracle-based DOOPIA ERP system has increased the accuracy of the company’s sales, customer order, and manufacturing processes. The company has improved the visibility of potential diesel-engine production projects supervised by the sales department, and can now assess its attractiveness as a supplier. It can also manage the risks of contract changes to confirmed projects.

“We have established a systematic, order-management framework that divides each project into six phases, depending on the features of each phase,” said Park. “This allows us to objectively evaluate internal and external factors affecting the probability of winning a particular order, and determine the profit the company will achieve if we win it.”

The company can also more easily share important changes to its customer contracts—such as changes to the delivery date or contract cancellations—with senior managers and relevant manufacturing and production departments. This helps managers respond quickly and efficiently to delays or errors that may hinder the process of receiving, fulfilling, and delivering orders.

In August 2009, Doosan Engine began standardizing information about approximately 480,000 engine parts to ensure its manufacturing bills of materials (BOM) were accurate, enterprisewide.

Using the Oracle-based DOOPIA system, the company now maintains a one-code-per-item policy. This ensures the unit price and raw costs of each part are consistent across departments by removing redundant items in similar categories.

“Staff in each department, including departments that handle quotations and production planning, purchase orders, production runs, deliveries, and profitability analyses can now share item information, based on uniform standards,” said Park. “Our BOM system also uses computer-aided design data to create new BOMs automatically from the engine blueprints. Staff can modify designs, and therefore new blueprints and BOMs, using engineering change request and engineering change-order functions.

“By sharing engine design, blueprints, and BOM data, enterprisewide, we have enhanced data compatibility, eliminated errors, increased accuracy, and unified design and production tasks,” he said.

The DOOPIA system has also enabled Doosan Engine to generate two separate operational BOMs: E-BOM for product design and P-BOM for production, purchasing, and cost management. This has increased compatibility between the two BOMs’ disparate structures; enabled staff to generate accurate E-BOMs, based on international standards, available materials, and components required for each project; and ensured costs standards, structure, and process information is properly managed.

Doosan Engine used Oracle Inventory Management and Oracle Purchasing to establish a purchasing framework and support system that simplifies purchasing tasks.

“The framework has simplified some of our key, engine-production-purchasing processes, including purchasing request acceptances (which enable staff to decide which engine best meets a customer’s needs), annual blanket purchase agreement registrations (contract process, where customers determine the quantity and price of engines), ordering, warehousing, issuance, and associated account payables issuing tasks,” said Park.

“We also now provide onsite production staff with access to online product catalogs to encourage them to choose materials they need personally and send the order directly to the purchasing team.”

Doosan Engine has improved the transparency of its purchasing processes by using the Oracle-based DOOPIA system to analyze quotes and bids from various raw material suppliers, rather than completing them manually.

Purchase orders are also now automatically issued and sent to suppliers, and this has further simplified purchasing tasks and enabled Doosan Engine to receive orders and record the items in its warehouse and inventory lists on the same day it requests them.

In addition, Doosan Engine has standardized its purchasing costs by setting standard costs, budgeted costs, and forecasted costs across the company.

“We have standardized the management of our unit purchase price information, which is used to calculate material costs when issuing purchase orders,” said Park. “We can now better budget costs and forecast profit and loss, and respond appropriately to changes in the market or fluctuations of raw material costs. We have also reduced the amount of manual work for purchasing staff and lowered the risk of human error.”

In the midst of a global recession that caused a rapid decline in the shipbuilding market and extremely high competition between engine manufacturers, Doosan Engine had to ensure it maintained its existing customers and attracted new ones.

The company is using Siebel CRM to systematically register, manage, and analyze historical information about its customers, competitors, and the market.

The new system also allows its staff to screen appropriate and useful business information, such as the profitability of new ship building materials, and analyzes the collected data to formulate corporate strategies and to attract new clients.

Siebel Quality Management is used to link e-mail accounts with the ERP system, which automatically saves all claim-related e-mails in the ERP system the moment they are sent or received, such as a customer requesting a replacement item. The claims-handling process can be checked at a glance even when supervisors are absent, allowing the company to quickly and accurately assess the claim and respond to the customer in a timely manner. This has increased customer satisfaction.