ERP CASE STUDY
B.E.(IT 4th YEAR)
This company founded and established in the year 1907 is
known to be one of the leading steel giants in the country
offering multiple products and successfully running many
The company is dedicated to providing laudable services
to the stakeholders improve on the quality and as thrive for
innovations and improvements constantly.
Jamshedpur plant has a capacity of 4 million tons per
year,Tata Steel has set up an ambitious target of 15 million ton
capacity per year by 2010.
It made investments in NatSteel Singapore, which will
expand its footprint in six countries in the Asia Pacific region
The company has introduced brands like
Tata Steelium (the world's first branded Cold Rolled Steel),
Tata Shaktee (Galvanized Corrugated Sheets),
Tata Tiscon (re-bars),Pipes, Bearings, Tata Wiron (galvanized
WHY ERP IN TISCO
TISCO faced two major problems from the systems that
Firstly they were not customer friendly.
The whole system was tuned to the process and very little
attention was paid to the customer demands.
Secondly the systems were outdates and the modalities of
operation were too complex and not error free.
In order to rectify these issues which would otherwise prove to
be major setbacks to the company the organization resolved to
take up ERP. This was instigated by the concerned departments.
To overcome these problems ERP is in TISCO.
WHAT SHOULD THEY DO?
Let’s say you’re the CEO of a large multi-national steel
company, and you’re running a global operation with plants on
four continents. You need to make good business decisions, and
you rely on your IT systems to provide the data to make those
But your IT systems are not well integrated. There are too many
different systems, and too many gaps between them, a legacy of
the company’s history of mergers, acquisitions, and improvement
initiatives. You need a common information backbone. You’ve
heard that ERP systems can do that, but you’ve also heard about
ERP project failures from years ago.
Can ERP handle the challenges of a steel company today? And
will that lead to business benefits for the company?
Answer are yes, and yes.
WHAT IS ERP?
It integrates business activities across an enterprise—
from product planning, parts purchasing, inventory
control, and product distribution, to order tracking.
ERP may also include application modules for the
finance, accounting and human resources aspects of a
business. SAP and Oracle are the two ERP leading
From a business perspective, ERP today has expanded
from simply coordinating manufacturing processes to
being the integrator of enterprise-wide backend
Integrated supply chain: from network planning through
scheduling and Manufacturing Execution Systems (MES).
Easier integration of business processes with business partners
Shared services and outsourcing of support functions.
Increased information transparency to enable better decisions
Agility in acquisitions and “carve-outs” or divestments
Increased regulatory compliance.
Robust and future-proofed backbone systems
Reduced ERP implementation costs due to a common template
Reduced application maintenance costs
Lower integration cost due to standard interfaces
Lower infrastructure costs
IT SIDE BENEFITS
ACHIEVING BUSINESS AGILITY THROUGH SAP
Web enabling of SAP R/3 is on the cards. On the surface, it
means it would allow anyone to access our SAP R/3 over the
Phase I - To Extend SAP in Works with FI, CO, MM, PP &
Phase II - To implement SAP modules such as Asset
Management & Budget management sub-modules of FICO,
Plant maintenance, Human Resources, Production Optimizer
(such as SAPAPO)
Phase III - SEM (Strategic Enterprise Management)
Major IT initiatives and implementations at Tata Steel
SAP R/3 in Sales, Procurement, Finance and Accounting,
Production Planning Systems for Steel plants using the APO
module of SAP
Data Warehousing and Data Mining for manufacturing
E-procurement, e-auction, and other e-enablement initiatives
Knowledge Management and Intranet
Videoconferencing, live video streaming for improved
communication across geographies .VoIP, Wi-Fi, integration
with cell phones and PDAs to support mobile computing
MAJOR IT INITIATIVES AND
IMPLEMENTATIONS AT TATA STEEL
SAP ERP solutions produced a remarkable result to the company
in terms of financial technical and managerial parameters.
Tisco has spent close to Rs 40 crore on its implementation and
has saved Rs 33 crore within a few months with the help of ERP
The manpower cost has reduced from over $200 per ton two
years ago, to about $140 per ton in 2000.
The inventory carrying cost has drastically deflated from Rs 190
per ton to Rs 155 per ton.
With SAP's solution Tata Steel can now update their customers
on a daily basis and also used for efficient decision-making.
TISCO is not determined to stop ERP or attain a saturation
They are working on to improve and increase the scopes of
enterprise resource planning software in the organization so that it
benefits the stakeholders in all possible manners.
ERP is a key backbone application for companies in a fast
changing industry like steel.
ERP implementation are usually outweighed by the benefits.
It is fundamental to enhancing the competitive position of a
company in the dynamic environment of the steel industry