Case Study of the Owens Corning Company

Case Study

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This is a case study of the Owens Corning Company. Before its shift to an ERP – or enterprise resource planning – system the Owens Corning company was a mass of internal organizational contradictions. The company had grown syncretically over a number of years with the result that each different division of the company was to some extent acting independently and in an uncoordinated fashion.

Before its shift to an ERP – or enterprise resource planning – system the Owens Corning company was a mass of internal organizational contradictions. The company had grown syncretically over a number of years with the result that each different division of the company was to some extent acting independently and in an uncoordinated fashion. The result was not disastrous because the company had a number of highly skilled people working for it who could make the cumbersome system work; moreover, while the system was flawed it was one that the workers were used to and this familiarity made them comfortable and to a large measure productive.

However, while there were some benefits to the company’s former structure, the costs were substantially greater and the company chose to shift to an integrated system of sharing information – and everything that accompanies shared information from paper trails to inventory.

Each unit operated as a distinct entity with its own set of information systems. (The company had more than 200 archaic, inflexible, and isolated systems.) Each plant had its own product lines, pricing schedules, and trucking carriers. Owens Corning customers had to place separate telephone calls for each product ordered—one each for siding, roofing, and insulation. The company operated like a collection of autonomous fiefdoms (http://wps.prenhall.com/bp_laudon_essmis_5/0,,155349-,00.html).

There was a lack of communication among departments under the pre-ERP system – but there was also little reason for the departments to communicate with each other since they had their own supply, production and distribution procedures. This was primarily a management problem because the focus of the company was too dispersed, which was preventing the company from expanding.

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