Tata Steel is India's largest integrated private sector steel company. It implemented SAP ERP across its 46 locations in 8 months, becoming one of the largest SAP implementations in India. The implementation improved customer focus, credit control, inventory management, and responsiveness. It resulted in significant cost savings, increased productivity, and improved data quality and decision making. Tata Steel saw reductions in manpower costs, inventory carrying costs, and overdue outstanding amounts.

2. ERP Implementation At
Tata Steel

3. ERP Implementation
at TATA Steel

4. 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.

5. 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

6. 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

7. Process Flow in a TATA Steel

8. 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.

9. 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

10. 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

11. 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

12. 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.

13. 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

14. 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. ARCHITECTURE AT TATA STEEL

16. 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

17. • 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

18. 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

19. 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.