Michelin and Microsoft Dynamics 365 Business Central ERP

Cosmo Consult France supports the MICHELIN Group in its international digital transformation, more specifically the commercial agencies distributing its products and services in high growth countries.

Philippe GIRARDIN, Manager of the OPE Program (Optimization of Process and Experience) and his team shared their feedback on this very cosmopolitan collaboration.

The interview focuses on the Whys and Hows:  

• Why this ambitious program of deploying internationally an ERP system in agencies?
• Why choosing the ERP Microsoft Dynamics 365 Business Central?
• Why retaining COSMO CONSULT France as system integrator and editor at the international level?
• How is the implementation of this ERP managed?

Our OPE Program has been considered from 2010 to meet the need for standardization of all IT systems:

• To facilitate and accelerate reporting through greater traceability and transparency.
• To reduce the maintenance costs of Business softwares

Our industrial company has been built at different speeds, according to its markets, to its manufacturing needs, to its acquisitions and expanding from France in Europe, in the United-States, in North and South America, in Asia…

We have been given priority to the factories, our great pride, which sell their products via local commercial agencies.

However, the competitive pressure on our markets, especially in North America and in Europe which represent 70% of the Group’s turnover brought us to rethink our digital organization, finding that:

• North American and European information systems were 30 years old.
• 35 different ERP systems were more or less well coexisting throughout the world.
• Our agencies needed modern tools to run their operations (supply chain, inventory, orders management), their local systems being partially maintained and complaint with the Group Core model.
• We could gain market shares in Brazil and business growth areas - Asia, China, Thailand, India – as long as we manage our local resources with efficiency.

Before reaching the mature version of the OPE program as we know it today, we asked ourselves many questions:

• Should we implement one unique ERP system all around the world? In a caricatural way, we imagined that our Group Finance Department might, in one clic, have an accurate view of the earnings, cost prices, margins, monthly, quarterly, half-yearly, and annual results and consolidate the figures with greater ease.
• Should we not better equip only North America and Europe where the turnover changes have the greatest impact on the Group?
• Should the ERP systembe the same for these two markets, both huge and both very different (due to the local organization of the distributor networks, and the European influence of a multitude of languages and administrative systems, …)?
• Why do we not first experiment in the business growth areas where we already have a common functionality (Purchase-to-pay) on a shared ERP (Oracle)?

As a first step, we did addition to Oracle of the Order-to-Cash functionality in the business growth areas where our factories are located.

These new functions allowed us to manage the inventory of the manufacturing part from the upstream process to the customers.

Then we implemented Oracle in Europe and North America with a common data base for the reporting and invoicing (the physical flows have been verticalized).

With this strategy, we had set aside the commercial agencies. We were still considering them as satellites.

But we have changed this mindset and therefore we have decided to:

• Enable them to embrace the Group ambitions, being connected to it.
• Help them in their difficulties, enhance automation so that they can focus on business development (especially in business growth areas) or on their defence strategy in the market under attack.
• Help them to attract and retain new talents, by endowing them with a modern image at least equivalent to those of the competitors.

In April 2018 – in a steering committee with the MICHELIN CFO, the supply chain experts and all the operational business unit managers – we concluded that we needed to equip the commercial agencies with another system than Oracle:

• Best suited for their SME size (50 to 100 employees), their turnover (50 to 100 M€) and for their flexible operation.
• Quick and easy to use, with a strong change management to deal with digitalization versus old tools and manual processes.

It was the experience of the agency in Peru where Microsoft Dynamics 365 Business Central was quickly and successfully deployed that guided us towards a Microsoft ERP solution.

However, the choice was not obvious for us as we were struggling to understand the differences between Business Central and Oracle. But these solutions cannot be compared

We have realized that Microsoft Dynamics Business Central ERP brings:

• Faster response to the problems of the agencies‘ customers.
• Simplest end-to-end functional coverage.

We have therefore opted to deploy this solution in 15 countries. To keep costs down, we asked for respecting the standard of Business Central, without any customization and with as few interfaces as possible.

We have added a lot of functionalities to the initial solution. Our requirements have evolved and so has the project. But throughout the Group, we are very happy with this solution. The agencies are also very satisfied. It is a very intuitive tool, easy to use, which speeds up and facilitates day-to-day operations.

Do we want to keep the exclusivity of what has been developed for MICHELIN and has enhanced Microsoft BC solution? The answer is no. It does not make sense for MICHELIN, as a societal responsible company.

For its human centric mindset and its international and cosmopolitan dimension. We had to trust the consultants. Our choice has been driven by the affects: there have been commitment and a sincere act of faith at COSMO CONSULT.

On these criteria, COSMO CONSULT which already knew Michelin well with its specific corporate culture (COSMO CONSULT FRANCE was our integrator ERP in Peru) was the best. Even, its CEO Uwe Bergmann took the time to talk to us.

Our requirement level continues to grow, and COSMO CONSULT France is dealing with it. We want the most knowledgeable consultants, with experience in the countries where we deploy, and the required humility regarding local customs and habits. Feelings matter and are considered. We want consultants with a good mindset and a good attitude as well. We want them to feel comfortable with MICHELIN’s No.2, as well as with local end users, and be able to represent the Group with us, and to be part of a commando team that goes out into the field.

At MICHELIN, those we indeed name “junior consultants” are qualified consultants, but we have to coach them on how to integrate culturally one of our projects, while so-called senior consultants have already been coached. We train them to change management, they bring us their technical expertise as Microsoft Business Central integrator and, in doing so, they know how to tell a story around the solution, with passion. In the field, MICHELIN operates only driven by the Why and the How to present its business with its own specific language, refraining to use the one of the Microsoft solution.

Thus, we are real partners. We think it is the duty of a large company to make the smaller ones grow and to support them. This way, we keep the best resources.

The deployment process of the ERP solution is moving at the right speed, whether in Vietnam, Korea, Chile…

We think it is better to have a less strong team but an homogeneous one, where everyone is integrated and successful. Better than star-leaders doing everything, with followers who don’t feel being a part of success. All over the world, in our company, we play the team, not the ball, we bet on people’s strengths, not on their weaknesses and we accept the coach’s decisions. We know that our people will forget when and how long it took to launch Go Live but will remember what they build together.

Now, the most important is that everyone feels comfortable in his job, his role and responsibilities and has the right tool and support on time. This is crucial for us. Our operational staff is curious, resourceful, and communicative... We simply must create the right conditions by first selecting the right people, then finding the right place for them. We must tell what we expect of them, why they are or are not playing this game to build the winning team of the day. Once the consultants leave, we give them the means to deal with specific situation, to know who to call. In short, we want them to be independent, to experience the project with all their humanity, with their qualities and imperfections. This is what we call “Change”. And today, I see people smile.

This does not mean we are slow. We voluntarily carried out our first two deployments of the ERP solution quickly, to show within the Group that the choices we made were the right ones for the commercial agencies. Slowness does not guarantee efficiency. Sometimes it contributes to diluting energy.

Finally, it is important to communicate at the right time. In a complex Group like ours, it is not good to communicate too early, when nothing is ready to start. Otherwise it can be very costly.

Moreover, we drive the project by the Why and not by the ERP technology. We would like to highlight it because it is unusual in IT deployment projects. We are lucky to be supported by COSMO CONSULT who understood very early on that to be best in the digital transformation, it was necessary to decompartmentalize the technique from the functional, with the most holistic view possible.

In Vietnam, it is now recognized, that thanks to the Why, people understand what they are doing and are not just users.

Putting the Why into perspective, giving meaning, is done through training, but not only. That would be too reductive. The role of the manager is also to be challenged. This challenge can even be greater in countries used to a hierarchical system. But we want to empower the user. The one who does is the one who knows. The role of the manager is to give the means to succeed, to be a facilitator. To listen, to help. To enable users to find by themselves the solutions they need.

At the result:

• People are more motivated, more proactive and in a good mood.
• Agencies are so proud that they tell others how they are growing. Experiences are shared from one country to another, by agency directors and not by the Group. A special bond is built up between these directors, who know each other without knowing each other, who didn't really know each other. They make market hypotheses together, describe where they are now...

“You are coming to Chile to explain to your peer how you have transformed Colombia”

• More widely, a whole network is being set up to value people - whatever their status, whether they are operators or business units managers. The key values at MICHELIN (and COSMO CONSULT) : to lead by example, to be curious, to take decisions together, to share and try… With the OPE program, we break down barriers.
• We give meaning, we help everyone to understand the organizations that have been set up in the countries (why here an importer, why there an agency) by improving transparency between services and people.

We need a strong sponsor to run our OPE program locally. We therefore must find which agencies have one. The agencies directors who have proved themselves on this mission will have a good chance of one day being integrated into the Group's board.

Interviewed conducted on January 29, 2020 in the Paris offices of COSMO CONSULT France and edited by Virginie Poujol. You can also watch a complementary video interview of Philippe GIRARDIN, made by our partner Microsoft.