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GBI Background

 

Global Bike is a world class bicycle company serving the professional and "prosumer" cyclists for touring and off-road racing. 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. 

Global Bike operates two production facilities (Dallas and Heidelberg) and has outsourced the production of both off-road and touring frames and the carbon composite wheels to trusted partners who have specialty facilities to fabricate the complex materials used. Global Bike maintains very collaborative research and design relationships with these specialty partners to ensure that innovations in both material and structural capabilities are incorporated into the frames. Global Bike has established an extensive partner operation to ensure process continuity between Global Bike and its partners to deliver best-in-class products for its customers. Special attention has been paid to nurturing strong relationships with suppliers and Global Bike is generally the largest customer of its main suppliers.  

Given the highly specialized nature of Global Bike's bicycles and the personalized needs of riders, Global Bike sells its bikes exclusively through well-known and respected Independent Bicycle Dealers (IBDs). These dealers employ staff members who are experts in off-road and tour racing to help consumers choose the right bike and accessories for their individual needs.  


GBI Problems 

GBI divisions were running multiple, independent application environments. This was inefficient, inaccurate, and expensive, and information was not available in real-time. In fact, many of GBI's processes were obsolete and there was a need to dismantle existing processes into individual activities and put them back together in a new set of business flows. In addition to this, GBI ran into trouble with its reporting to the IFRS in 2017 because some significant financial transactions could not be accounted for?  


The ERP Project 

In 2019, Global Bike integrated a shared services model for all IT functions, located in the Dallas office. Along with this move to centralized IT, Global Bike also implemented SAP ERP (version 6.0). Ten different modules were implemented, first starting with the Sales and Distribution, Procurement, and Accounting modules. Next the Warehouse Management, Production, were included, and finally, the Project Systems, and Quality Management modules were incorporated. 


The Outcome 

In the end, all ERP functions are centralized with the primary objectives to reduce costs and deliver best-in-class technology to all divisions globally. This centralized approach offers Global Bike an advanced business platform under a highly controlled environment, which enables consistency of operations and process integrity across the globe.  Given the requirement for multiple accounting standards across the US and German companies, GBI maintains one leading accounting ledger for both companies, but also one accounting book for the US company and another for the German company.   

Global Bike Inc. has several vendors across the US and Germany. Identification and selection of vendors, including negotiation of general conditions of purchase and contracts, for the US facilities are organised centrally from the US head office. Similarly, Identification and selection of vendors for the US facilities are organised centrally from the German head office in Heidelberg.  

Global Bike Inc. has several customers across the US and Germany. All credit for the US customers are managed by the US head office. Similarly, all credit for the German customers are managed by the German head office in Heidelberg.  

GBI has multiple assets and also tracks the financial consequences associated with the entire lifecycle of an asset, from acquisition to disposal (retirement). All financial transactions related to the processes and costs related to all of these processes are used for the internal management of the firm in terms of cost and revenue.  


Question 1: how did ERP help improve business operations at GBI?

Question 2: what advice would you give GBI if it decided to choose a different ERP software solution?

Question 3: how could extended ERP components help improve business operations at GBI?

Question 4: how can integrating SCM, CRM and ERP help improve business operations at GBI?

Question 5: What problems necessitated the implementation of ERP systems?

Question 6: What was deloitte's role in the implementation process, and why was their role important?

Question 7: What role did the executive leadership of GBI play in the ERP implementation process?

Question 8: What benefits did GBI derive from SAP? What benefits did GBI derive from sap?

Question 9: What issues necessitated the acquisition of an ERP system?

Question 10: What benefits did GBI derive from their ERP system?

Question 11: Why was it important for every employee to have the same access authorization?

Question 12: What other information system will you recommend to GBI and why?

Question 13: Discuss two reasons for ERP implementation at GBI. 

Question 14: Discuss two factors that led to the failure of the ERP implementation project at GBI. 

Question 15: Discuss the implementation methodology at GBI. Was this an appropriate methodology? 

Question 16: Identify two things that might have been done differently to ensure a successful implementation. 

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Subject: Business
GBI Background Global Bike is a world class bicycle company serving the professional and 'prosumer' cyclists for touring and off-road racing. Due to...
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