Final erp ppt
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Transcript of Final erp ppt
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ERP Implementation At Tata Steel
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ERP Implementation at TATA Steel
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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.
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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
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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
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Process Flow in a TATA Steel
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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.
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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
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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
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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
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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.
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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
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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
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ARCHITECTURE AT TATA STEEL
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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
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• 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
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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
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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.