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TEAM:
1. Aayush Modani
2. Andrews Joseph
3. Arkaprava Goswami
4. Deepak Pandey
5. Kishore K
6. Mugdha Kirloskar
7. Prasanth Srinivasan
8. Sanjay Sharma
9. Soumya Patra
10.Sumeet Pandey
Company Profile
• Industry Type: Iron and steel.
• Ownership: TATA group.
• Geographical Presence: Headquarters in
Mumbai, global presence in more than 50
countries.
• Product Lines: Soft iron, Iron, Cast Iron, Alloy.
• 10th largest steel producing company in the world
and 2nd largest in India with 25.11 million tons of
output every year.
Historical Overview
• Established by Jamshedji
Tata on 26th August 1907 in
Jamshedpur.
• In 1990 the company
established its subsidiary in
New York named Tata Inc.
• Changed its name from
TISCO to Tata steel in 2005.
• Known for its value based
production practices.
INFORMATION INTENSITY MATRIX
high
Information
intensity of
the product
RAILWAY
CEMENT
TICKET,GOLD
Information
content of the
low product
low high
1997-98 Steel prices at all time low
EASY
SUSTAINABILITY
QUICK WIN
RISK
Ability to
execute
IMPLEMENTATION
DUMB IDEA
RISK
Size of
opportunity
HARD
low high
ERP
PHASE 2:
PHASE 1: • Procurement
• Financial accounting
• Order generation and • Material management
fulfilment process and costing
• Asset accounting and
plant maintenance
modules
PRODUCTION CUSTOMER
DRIVEN
DRIVEN
Customer satisfaction
• ERP implementation was
proposed to solve two major Transparency
problems
• Integrate new and old Quick decision making
systems.
• To make the complete Credibility of data
systems customer friendly.
Responsiveness to customers
WHY SAP ?
• There was no standard ERP package available for the Steel
industry.
• Company found large gaps in existing functionalities
required and packages available.
• Considering factors such as Cost, Time, Available
functionality, Inter Operability, Service Support and Future
Organizational requirements, - SAP was selected.
TWO PHASE IMPLEMENTATION
• Phase 1 - Project OG & F:
• Improvement of Order Generation and Fulfilment as a pilot
implementation.
• Phase 2 – Project Rupantar: (Transformation)
• Better revenue management through improved gross margins.
• Implementation of Procurement, Financial Accounting, Costing,
Asset Accounting modules of SAP R/3.
SAP R/3 ARCHITECTURE
• SAP R/3 R - Real Time Data
Processing.
• SAP R/3 3 – 3 Tier
Architecture.
• Database
• Application Server
• Client (SAP GUI)
PHASE 1 - OBJECTIVES
• Identify the value of finished goods.
• Online credit check for better receivables management.
• Credit policy to reduce overall customer debt.
• Enable profitability analysis for net realization of value.
• Integrate online sales process with financial accounting systems.
MC FARLAND’S STRATEGIC GRID
high
FACTORY STRATEGIC
Impact on
business
operations
TURN
SUPPORT
AROUND Impact on
strategy
low
low high
PHASE 1 IMPLEMENTATION
• Started in February 1999.
• Accelerated SAP ( ASAP).
• 5 steps
• Project Preparation
• Business Blueprint
• Realization
• Final Preparation
• Go Live and Support.
• Went Live on November 1, 1999.
RESULTS OF PHASE 1
• Improved information visibility.
• Better customer service.
• Strong credit policy.
PHASE 2 – REASONS
• There was no set process for consolidation of accounts and
subsidiaries across the company.
• Product wise costs were not easy to measure and inventory across
the plant ( Maintenance, Repair & Operational) were of high priority.
• These were the areas where major cost cutting was possible.
• Cost savings could be achieved in the procurement area.
• Process maintenance could be improved.
PHASE 2 – IMPLEMENTATION
• Started in November, 2010.
• 5 Steps
• Project Preparation
• Design
• Build
• Transition
• Go Live and Support
• Went Live on December, 2001.
RESULTS OF PHASE 2
• Reduction in lead time for sending approvals from 60 days to 20 days.
• Improved availability of production assets due to improved
maintenance.
• Reduced effort for complying with statutory requirements.
• Cost conscious decision making was possible with respect to materials
and contract services.
CHANGE MANAGEMENT
• Top Down Approach was followed.
• All major change initiatives were identified at earlier stages itself and
shared with key members of management and stakeholders.
• Necessary information about implementation of phase 1 and its
success was communicated to the employees.
TRAINING AND KNOWLEDGE TRANSFER
• SAP Knowledge to Core Team.
• Specialization Competency – ( ABAP & BW).
• End User Training.
• Hand Holding.
CHALLENGES FACED AFTER IMPLEMENTATION:
• New system had made the transactions more disciplined and there
was a loss of flexibility.
• Users had to enter more data, else transaction was not be carried out.
• More than 2000 users were affected and everyone faced the same
problem.
• There were lot of changes in roles and responsibilities of individuals.
• Work force became redundant in some areas of the organization.
• Core team received a lot of complaints and suggestions.
HOW THE CHALLENGES COULD BE
ADDRESSED?
• Site Champions could have been created. They will serve as local
helpdesks in their department and area of work.
• Training for new roles and sufficient information about the
responsibilities of the individuals could have been clearly explained
and communicated.
• Management could re-deploy those employees whose work were
automated into other divisions.
• Change Control Board, which can be headed by some senior person
could have been set up to address the complaints and suggestions.
How to measure success
• Decrease in Inventory carrying costs.
• Turnover growth rate.
• Manpower costs came down.
• Better credit management.
• Customer response.
• Legal Compliance.
• E-presence.
• Ease in Internal Auditing.
STRATEGIC ALTERNATIVES MATRIX
high
GLOBAL TRANSNATIONAL
STRATEGY STRATEGY
Degree of
global
integration
HOME
MULTIDOMESTIC
REPLICATION
STRATEGY
STRATEGY
Degree of local
responsiveness
low
low high
LEARNINGS
• To implement a project – employee training is must.
• More risk more profit.
• Big bang approach can be an option for a large scale project.
• Centralised implementations reap more benefit than individual
implementation.