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Final erp ppt


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ERP Project on Tata Steel

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Final erp ppt

  1. 1. ERP Implementation At Tata Steel
  2. 2. ERP Implementation at TATA Steel
  3. 3. TISCO BACKGROUND • India’s largest integrated private sector steel company • Established in the year 1907 • Tata Steel runs state-of-the-art Cold Rolling Mill complex at Jamshedpur, Eastern India • Products include hot and cold rolled coils and sheets, galvanized sheets, tubes, wire rods, construction re- bars, rings and bearings • Introduced brands like Tata Steelium (the world's first branded Cold Rolled Steel), Tata Shaktee ,Tata Tiscon, Tata Pipes, Tata Bearings, Tata Agrico and Tata Wiron.
  4. 4. What is ERP? • IT software that integrates business activities across an enterprise • From product planning, parts purchasing, inventory control, and product distribution, to order tracking • Application modules for the finance, accounting and human resources aspects of a business • SAP and Oracle are the two ERP leading vendors • Evolved technologically from a monolithic legacy implementation into flexible, tiered, client-server architecture
  5. 5. ERP Design Challenges for Steel Companies • More than one planning strategy • Complex product variations • Flexible planning • Specific Customer Service Requirements • Complex production scheduling combining both continuous and batch production • Detailed margin analysis
  6. 6. Process Flow in a TATA Steel
  7. 7. Integrated IT Model for Steel • The Supply Chain Management (SCM) application provides the rough-cut planning • When orders are being entered, availability checks assign the order to a block and feeds back a promise date • The mill optimizer then typically would re-shuffle orders in between the blocks, and feed results back into the SCM application in order to optimize the load balancing • Right before production starts, planned orders from the SCM application are converted into production orders and, via the ERP system • Detailed scheduling then takes place, sequencing and combining pieces from various orders throughout the mill into lots for optimization • Production completion then posts an updated status of the orders into the ERP system, including stock receipts of finished products, and so forth. faced a cumbersome task exchanging and retrieving information from the system.faced a cumbersome task exchanging and retrieving information from the system.
  8. 8. Implementation Process At Tata Steel • Had a tough time especially to implement the software in one stroke • Meets the demands of a big firm like TISCO • Associating and implanting TISCO to all the stakeholders • time granted for the process was 8 months • Business process was divided into two main segments:  Core functions  Supporting functions • The company took all efforts to ensure that the change did not produce any sort of resentment in the organization • transited seamlessly from a production-driven company to a customer-driven one • faced a cumbersome task exchanging and retrieving information from the system. • Reliability of information
  9. 9. Design • Arthur D. Little (Strategy Consultants) and IBM Global Services (BPR Consultants) redesigned the two core business processes: • Order Generation & • Fulfillment and the Marketing Development processes. • To improve customer focus, facilitating better credit control, and reduction of stocks. • Adopted the latest production and business practices to offer innovative processes
  10. 10. The Real Challenge • B Muthuraman, MD (Designate), said, "Implementing any ERP system is a challenge for an organization because of the declining success rate of ERP implementations world-wide.” • Successfully implementing SAP to 46-odd geographic locations across the country under a big bang approach in just eight months • Building a conducive environment where SAP will be embedded in the hearts and minds of the people and the customers of Tata steel
  11. 11. Choosing The Platform And Technology • SAP software was associated with certain strategic goals • TISCO wanted to bring forth a culture of continuous learning and change • Enable TISCO to achieve a world-class status for its products and services and strengthen its leadership position in the industry • wanted the software to result in quick decision- making, transparency and credibility of data and improve responsiveness to customers across all areas.
  12. 12. Mapping Technology To Business Processes • Huge numbers of transactions and complexity, were identified as a HUB • Smaller branches were defined as SPOKES • 'Change Management' - to reach out to people involved non-directly in the project to apprise them of the developments taking place • Tata Steel planned a big-bang approach of going live • Pulled off a big bang implementation of all SAP modules at one go across 46 countrywide locations
  13. 13. Achieving Business Agility Through SAP • Web enabling of SAP R/3 is on the cards • Plans to adopt the my SAP Customer Relationship Management solution to enhance its customer relationships in the near term
  15. 15. THE OUTCOME • Remarkable result in terms of financial technical and managerial parameters • The effective handling and speed delivery resulted in greater sales . • Drastic fall in the amount owned to creditors. • The systems were made more user friendly. • This improved the quality of work thereby increased the productivity. • Massive change in terms of accountability administration and control
  16. 16. • Spent close to Rs 40 crore on its implementation and • Has saved Rs 33 crore within a few months," said Ramesh C. Nadrajog, Vice President, Finance. • "The manpower cost has reduced from over $200 per ton two years ago, to about $140 per ton in 2000. • The overdue outstanding has been brought down from Rs 5,170 million in 1999 to Rs 4,033 million by June 2000. • The inventory carrying cost has drastically deflated from Rs 190 per ton to Rs 155 per ton. • Significant costs savings through management of resources with the implementation of SAP. • With SAP's solution improving customer management. • The availability of online information has facilitated quicker and reliable trend analysis
  17. 17. Future Moves • Motivating factor for both companies and ERP vendors. • TISCO is not determined to stop ERP or attain a saturation point now. • Improve and increase the scopes of ERP software • A model guide • Critical success factors for ERP implementation in order to enjoy ERP success
  18. 18. Conclusion • ERP is a key backbone application for companies in a fast changing industry like steel. • The risks in an ERP implementation are usually outweighed by the benefits. • The ERP discussion is often one of mindset more than one of standalone business cases. • Implementing ERP can be challenging and demands sustained commitment from top executive levels, • It is fundamental to enhancing the competitive position of a company in the dynamic environment of the steel industry today.