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......Contents Introduction ................................................................................................................. 5 Analyzing SAP ERP's success in Steel Industry ........................................................................... ................................................................................................................................................................................................................................................................................................................................................................................ 4 Critical Success Factors .................................................................................................................................................................................... 18 .......................................... 17 References ........................................................................................................... 15 Conclusion .................................................... 4 ASAP Methodology..................... 8 Case Study: Jindal Stainless Ltd.................................................... 3 Literature Review ....................................................................................... 3 About SAP ......................................................................... 8 Case Study: Tata Steel .....................................
Wipro. QAD. Materials Management. Accounting. Microsoft. Production planning. The SAP system comprises of a number of fully integrated modules: Financials Human Resources Customer Relationship Management Supplier Relationship Management Product Lifecycle Management Supply Chain Management Business Intelligence These modules or solutions. new and changed business requirements are rapidly implemented and tested in the system. called Enterprise Resource Planning (ERP). Baan. and HP to name a few. SAP provides standard business application software which reduces the amount of time and money spent on developing and testing all the programs. Baan. This project is a study in depth of SAP ERP implementations at Tata Steel to determine critical success factors and what needs to be done and what mistakes to avoid for a successful implementation.). Accenture. which provide a common set of data source to the whole organization. JD Edwards. it is important to understand that delivering an ERP system on time and budget doesn’t make sense if no one in the company uses it. These ERP systems are customized using the table-driven customization method. independent consultants. According to a survey done by Gartner only 60% of companies implementing ERP system claim they got expected benefits. etc.500 installations / 12 million users in 120 countries. Oracle. Peoplesoft.000 customers / 91. was created. and implementation strategy. HP. Cap Gemini. With hundreds of companies implementing the ERP systems to make their business more efficient only few are very successful in implementing them. JD Edwards. . Microsoft.com. as SAP would like to call them.g.com. etc. Sales and Distribution.). Salesforce. Oracle. implementation partner (for e. With so many things coming together in a matter of few months to a year or so for implementation it is important to know the critical factors for success and failures of an implementation. There are various ERP products available today for example from SAP. PeopleSoft. These systems provide a single source of data with designed integration between different functional modules (for example.Introduction In order to eliminate the problems associated with legacy systems.). technical side. etc. Baan. Due to table settings instead of oldfashioned hard-coded program logic. About SAP SAP AG founded in 1972 is the world’s largest Enterprise Resource Planning (ERP) software with 82.. support side. In general an implementation is considered successful if it is done within budget and time with meeting all the preset implementation goals as measured by ROI. software and hardware vendor (SAP. Also. Delloite. etc. IBM. Salesforce. cover virtually every aspect of business management. In any ERP implementation lots of variables are involved like personnel (business side. a new breed of software systems. users).
project scope. A Business Blueprint comprises the following structure elements in a hierarchy: Organizational Units. Business processes. The two methodologies used to implement SAP ERP are Conventional and ASAP. Master data. Application consultants and the Business Process Teams achieve a common understanding of how the enterprise intends to run its business within the SAP ERP System. and processes is formally announced to the company Phase 2: Business Blueprint . Furthermore. and project team organization. On this basis. which includes the overall goals. Business scenario. by carrying out requirements-gathering workshops.This phase provides initial planning and preparation for the implementation which includes project plan. The ASAP methodology consists of a roadmap that defines the five phases of SAP implementation process and supports these with a comprehensive project plan. Conventional methodology also known as SAP Procedure Model was widely used initially.Literature Review Literature review is divided into two sections: ASAP Methodology. ASAP Roadmap Phase 1: Project Preparation . and expertise based on thousands of successful implementations by SAP and its partners. This methodology provides an excellent tool for small and midsize companies to rapidly implement SAP and take advantage of its integrated business processes. . The Business Blueprint is created by detailed documentation of the results gathered during these requirements workshops. a common understanding of how the company intends to run their business within the R/3 System is achieved. the Business Blueprint serves to document the business process requirements of the company. In recent past years SAP Procedure Model has been overshadowed by the ASAP methodology as implementations with later methodology are fast and provide flexibility. Most of the companies implementing SAP ERP system use ASAP methodology with the exception of very large companies with revenues in billion dollars. Critical Success Factors ASAP Methodology SAP ERP implementation is the group of processes that defines a complete method to implement SAP software in an organization. SAP AG introduced the ASAP (Accelerated SAP) methodology. In this phase the initiation of the SAP ERP project. In 1996.In this phase the scope of the implementation are documented and defined and the Business Blueprint is created. tools. in this project ASAP is used as the reference methodology. ASAP provides content. Therefore. and Process steps. detailed task plans. The Business Blueprint is a detailed documentation of the company’s requirements.
Definition of training and cutover plan. and Project phase review and sign-off from customer. The major milestones of Realization phase are: Software installation and customization based on the business blueprint. During this time.In this phase. all the business and process requirements gathered in the Business Blueprint are implemented. the project is completed with a formal project closing. b) Good project scope management Poorly defined specifications and a lack of change control procedures are one of the prime causes of ERP project failure.In this phase. System testing. Upon successful completion of this phase. Furthermore. preproduction environment to successful and live production operation. Validation of system setup. and the management of this change must be carefully planned (from a strategic viewpoint) and meticulously implemented. transition to the production support team is finalized. Senior management must ensure project scope . System configuration is done step by step in two work packages. or changes in the user community. Organizational Perspective a) Sustained management support Various studies on ERP implementations have shown that for any ERP implementation to succeed sustained support from top management is critical. There is a plethora of research and data available for critical success factors contributing to a successful ERP implementation. Phase 5: Go Live and Support – This phase achieves the transition from a project-oriented. An organization goes through a major transformation during ERP implementation. The consultants validate and update the configuration and demonstrate processes. It covers solutions for those activities which are standard in a productive environment: business changes. the continuous improvement sub phase begins during which the production support team provides on-going support and assistance for post go-live. knowledge transfer is completed. Baseline and Final configuration. Phase 4: Final Preparation .Phase 3: Realization . technology changes. the Final Preparation phase serves to resolve all critical open issues. testing and end user training is completed with system management and cutover activities to finalize the readiness to go live. The project team updates the work instructions (business process procedures. The major milestone of Go Live and Support phase is full production implementation of SAP ERP software Critical Success Factors Critical Success Factors are the limited number of areas in which results will ensure successful competitive performance. Subsequently. and the project is signed off. you will be ready to run your business in your live SAP ERP System. all issues and problems are resolved. The going-live and support phase consists of two distinct sub phases. for example) and performs unit and integration tests. Based on the research paper reviewed following CSFs were found and is explained in detail below based on organizational and technological perspective. First. the software is used productively in day-to-day operations. Data migration (if applicable).
i) Formalized plan and schedule Good planning and scheduling is the key to a successful SAP ERP implementation. Cap Gemini. e) User involvement and testing It is one of the most important CSF in SAP ERP implementation User involvement is relevant in the phases where their know-how is important to achieve a good customization of the system to organizational needs. Project team composition is more relevant in the first phase because it is when the project team is established. A good project plan will ensure better monitoring and coordination of activities during the whole implementation phase. c) Effective organizational change management and business process engineering Any organization implementing SAP software must consider the organizational. Project Leads. h) Strong communication inwards and outwards One of the reasons behind ERP implementation failure is poor communication between the team members. There is the need to understand how the organization intends to run its business within the SAP system and the changes in the organization. f) Project champion role It is the role of project sponsor and/or project manager. Deloitte. help in the analysis of the SAP configuration and in conversion of data and the testing of the system. Poor communication may include failure to announce the reason for the up and coming effort. Poor communications prevent different parts of the organization from assessing how they will be impacted by changes in processes. technical team.changes are managed and documented in a formal manner. policies. Accenture. and procedures. and testing team. . and the implementation partner which brings the SAP ERP implementation knowledge (e.) and. some independent consultants. in some cases. g) Trust between partners During SAP ERP implementation different parties involved are the client or the company implementing the SAP ERP system. lead and control the project on the run in its several tasks. delays in the schedule or requests for additional money. They participate in the defining of business requirements. The project sponsor is devoted to promoting the ERP project and has the ownership and responsibility to obtain the project resources. but is not limited to. This includes. SAP etc. and continuing to advise the organization of the progress and importance of the ERP implementation to the company. d) Project team composition A typical SAP implementation team consists of Project Manager..g. Testing can be done by end users or by a quality assurance team depending on the setup at the company. although it can be re-structured along the implementation phases and according to the implementation needs. human resource and business process issues associated with an implementation. It is very important that trust is maintained between them throughout the implementation. IBM. and SAP consultants. the project manager is required to plan.
d) Adequate legacy systems knowledge The need of knowledge of legacy systems is more relevant in order to minimize the effort of configuration and help in conversion of data and the creation of interfaces. This prevents costly mistakes from occurring which could have been avoided otherwise. most companies expect that their provider will proactively suggest best practices based on what they've learned from projects with other clients. c) Adequate software configuration Software configuration should be geared towards creating a seamless and integrated value chain. A poor implementation strategy will not only result in higher implementation cost but may lead to a product that can break the company processes Technological Perspective a) Avoid customization SAP AG provides products that are industry specific and this eliminates the need for costly customization most of the time. Customization or any changes to the customized product is not supported by SAP AG. . These products are tested working solutions which are industry specific. l) Usage of appropriate consultants It is important since the consultants should be well versed in the SAP modules being implemented and have knowledge / work experience in the industry in which company operates. k) Preventive troubleshooting Although not a very exciting part of implementation it is important. Tracking and fixing problems before they go into production can save lot of time and money. This group of people may be senior level project members from within the company or from the implementation partner. In real world situations. m) Empowered decision makers Include a group of people with business and technical knowledge at an expert level. SAP AG stops supporting the older version after certain period of time. b) Adequate ERP version As the new version comes out. not the technology team. The software configuration should follow the business requirements defined in the previous phase. Selection of SAP software version is very critical as a company may not want to select an older version which won’t be supported by SAP AG or jump into a latest version which has not been tested in the market thoroughly. n) Adequate ERP implementation strategy A good implementation strategy is required for a successful implementation. Customization should always be taken into account when managers are making decisions.j) Adequate training program Business users (end-users) training is necessary to make sure business ownership is within business units.
and reduced breakdowns in the Hot Strip Mill by 768 hours. It is known to be one of the leading steel giants in the world offering multiple products and successfully running many subsidiary corporations. ERP can play an essential role in: Driving accurate and fast decisions (product profitability. The primary objective was better revenue management through improved gross margins. Being a large entity does not stop things from being subject to scrutiny and internal audit. The net results of their ERP software have been described to be path breaking and a trendsetting one. one need information systems which quickly provide them the data they need. Secondly the systems were outdates and the modalities of operation were too complex and not error free. In 2001. Leading consultants were hired and the business structure was studied and suitable plans were drafted accordingly.Analyzing SAP ERP's success in Steel Industry Case Study: Tata Steel Company Profile This company was founded and established in the year 1907. This being the case it is natural to expect a large company (in terms of Size and volume of operations) like Tata Steel to discourage the idea of Enterprise resource planning. This was instigated by the concerned departments. reduced finished-goods inventory from 29 to 23 days of sales. The company is dedicated to providing laudable services to the stakeholders improve on the quality and as thrive for innovations and improvements constantly. SAP implementation at Tata Steel was a success with increased online order confirmations from 55% to over 90%. costing. and plant maintenance. especially in its mature implementations today. procurement spend) with consistently defined data Running broadly known and supported applications Harmonizing and optimizing back-office processes across the enterprise that comply with finance requirements such as SOX and IFRS . Information Systems for a Quickly Changing Steel Industry In a quickly changing industry like steel. Firstly they were not customer friendly. It is the first integrated steel company in Asia and is now the world`s second most geographically diversified steel producer and a Fortune 500 Company. They are regularly implemented with the help of committees who report to the selected members from the senior management. We believe that ERP. Tata Steel started implementing an SAP ERP system with the primary goal of improving its financial accounting. ERP Implementation Tata Steel deserves lot of credit for implementing ERP because of the fact that many organizations in the global level have given up the very idea of ERP due to the fact that there are lots of failures associated with it even in the implementation stage. The whole system was tuned to the process and very little attention was paid to the customer demands. However it proved to be different from the others by choosing ERP in the right time and implementing it in a proper manner. lowered MRO inventory by 24%. procurement. is the crucial component for a company’s IT data backbone. Why ERP in Tata Steel Tata Steel faced two major problems from the systems that existed for a long time. 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 analysis will result in the basic decisions that will be the foundation of the ERP project. Depending on . as described below. the most important business benefits will often be delivered after the ERP backbone is established. Six ERP Design Challenges for Steel Companies A steel company presents six industry-specific design challenges for implementing ERP. Challenge 1: More than one planning strategy Steel makers often use a combination of production planning strategies. especially when different ERP implementations are being harmonized. and should not be viewed as a standalone initiative with the requirement to pay back its implementation cost. often around 10-15%. These IT savings include: Reduced ERP implementation costs due to a common template Reduced application maintenance costs Lower integration cost due to standard interfaces Lower infrastructure costs With an awareness of the best practices and a good understanding of ERP project complexities. However. Improved productivity through better sales order handling. better procurement operations and more efficient planning. The most immediate ERP benefits include Improved visibility of procurement spend and savings from improved sourcing policies. A successful ERP project will start by analyzing these challenges in detail across all of the company’s integrated processes. Typically the flat or strip products are make-to-order. The ERP discussion on investment return is one of mindset more than one of standalone business cases. Decrease of work-in progress and days-of-sale-outstanding. whereas the long products are make to. by other initiatives that use the ERP backbone: 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 There are cost savings on the IT side. Enabling best-practice demand planning for supply-chain processes Future-proofing global applications that support global enterprises ERP Business Benefits ERP is an enabler of business benefits. the risks in an ERP implementation are usually outweighed by the benefits.stock.
Challenge 4: Specific Customer Service Requirements To cope with high-demanding customer segments such as automotive and construction. finish-to-order could be a relevant planning strategy as well. and so on. with unstable production processes and unplanned outputs. Challenge 2: Complex product variations A steel product is made up of a large number of characteristics. bottlenecks . whereas for the make-to-stock entries.the existence of a “de-couple point”. ERP systems today can handle this kind of complexity. characteristic value inheritance from sales order header to item level. making the product difficult to configure when entering it in the ERP system. ERP systems today allow re-assigning flexibly to handle these situations. internet etc. on the “material master”. or the other end of the spectrum is to define all possible/feasible characteristic combinations which can possibly explode into an extremely large number of finished product definitions. This means that the later in the process you define a product. shipping and purchasing processes across the supply chain Challenge 3: Flexible planning Planning for steel making often needs to happen on short notice. the bill of material “stands on its head” or is “v-shaped”. A steel product tends to explode towards the end of production processing. entry of multiple order units such as pieces. the scheduling part of the planning system needs to be able to work with multiple and dynamic bottlenecks – that is. including supply chain processes as well as the financial/cost control processes. Characteristics then drive production. that is. the higher the number of products to be defined becomes. preparation and shipment planning. This means that the planning process needs to be able to derive batches with characteristics inheritance and history tracing. dimensions. tight integration with business partners on forecasts. electronic customer orders (EDI. Configuration in the make-to-order entries is typically done while entering the order. ERP systems today support electronic integration with partners. Cost control in make-to-stock tends to go for standard price approaches. Challenge 5: Complex production scheduling combining both continuous and batch production The batches need to be selected based on characteristics during production. in other words.) are typically needed. This requires continuous re-assignment of products to processes and orders dependent on the Characteristics described above. Fundamental decisions need to be made very early in the project about how many (finished product) materials should be defined: one extreme is to define by material group which needs to be configured completely in the order. ERP solutions today can readily handle the complexities this of the V-shaped bill of material. They allow “characteristics based product configuration” with automatic deduction of characteristics. Finally. tons. Such a combination of planning strategies affects the design of most ERP processes. but in a make-to-order environment costing happens on an individual order cost collection and forecast basis. This burdens the early discussions during the design phase of an ERP implementation. configuration is done in the product definition.
availability checks assign the order to a block (unless inventory already exists that meets the order) and feeds back a promise date (at the end of the block to allow for the flexibility of possibly moving to an earlier date). improve inventory allocation to late orders. The ERP system will also need to work closely with the company’s Business Information Systems (BIS) to optimize the business benefits. margin analysis becomes the essential method to tell what money is being made on which customer/product segments. are transferred into the MES layer. Challenge 6: Detailed margin analysis In today’s steel industry when prices are high and capacity short. via the ERP system. ERP systems provide the tools to support these decisions. Working together. Integrated IT Model for Steel An integrated IT model as in the figure below is important because it lets you see the systems involved in planning and production. sequencing and combining pieces from various orders throughout the mill into lots for optimization. it is also essential to differentiate between “strategic materials” (cokes and ore. On top of segment analysis. . including stock receipts of finished products. for example. ERP systems today can handle all of these situations. Right before production starts. coils etc. The mill optimizer then typically would re-shuffle orders in between the blocks.” The result is planning blocks of similar products which are then handed over to production planning. Production completion then posts an updated status of the orders into the ERP system. A typical flow would be: The Supply Chain Management (SCM) application provides the rough-cut planning in “Demand Planning. It is at that time when quantities are being translated into pieces (slabs.). the ERP and BIS systems can. planned orders from the SCM application are converted into production orders and. and feed results back into the SCM application in order to optimize the load balancing. When orders are being entered.which can change based on incidents such as production problems in certain process steps. Ni and Cr for stainless) and the other cost elements that may be easier to control. Detailed scheduling then takes place. and so forth.
A recent IBM survey indicates that steel clients process control and MES systems are custom-built applications 66% of the time. Clearly. and that these custom-built applications usually differ from mill to mill. legal reorganization) Command-and-control approaches from a central project management office A global business process owner who has the authority and credibility to approve process designs and business model/ organization changes However. “Bridging this gap” properly is essential for realizing the business benefits of the IT investments. Implementation Approaches for ERP The key element for ERP success is to know how to implement an ERP project. . integrated and cost efficient. legacy applications.Figure above is also important because it lets you identify gaps among a company’s different IT systems. A typical gap occurs between the ERP and MES (process control and machine control) systems. Past experiences recommends best practices such as: Rapid/realistic project timelines due to external pressures (acquisition synergies. they need to be robust. Implementing ERP is complex and takes a team of knowledgeable and experienced ERP professionals to successfully implement an ERP project. where the “system” is actually combination of custom-built applications and manual spreadsheets. this risks creating sub-optimal processes and leaves the company open to all the problems of maintaining custom-built. there’s much more to it than these few general principles. If the applications in Figure 3 are to provide true value.
and reduction of stocks. Little (Strategy Consultants) and IBM Global Services (BPR Consultants) redesigned the two core business processes: Order Generation & Fulfillment and the Marketing Development processes. innovation and refinement of its business operations. These ideas also contributed to the success. The period set for implementation seemed to be another major challenge. The time granted for the process was 8 months. followed by ISO 9002 certification and benchmarking initiatives. In addition all apprehensions relating to change were discussed and clarifications made to the fullest satisfaction. This was done by educating everyone on the need and desirability of change. The company adopted ERP technology to take a lead in the competitive steel industry and through constant learning. They went ahead with associating and implanting Tata Steel to all the stakeholders so that they become compatible. This was done to improve customer focus. Further. The core functions were denoted to be major ones. A plan of action on the proposed ERP's impact was drafted depicting their relation to one another and to the business process. In keeping with this commitment it adopted the latest production and business practices to offer innovative processes that meet the changing demands of its global and local customers. the reliability of information obtained was questionable because of inconsistency and duplication of data from different departments. The company took all efforts to ensure that the change did not produce any sort of resentment in the organization. Besides. facilitating better credit control. several times the information against certain items was found missing. An Early Response Response to changing customer needs started as early as 1991. Also there was no built-in integrity check for various data sources. Realizing the need to further support the re-engineered core processes and quickly align the business processes to radical changes in the market place. Not only did it operate as individual islands of information but the technology had outlived its lifetime and was completely obsolete. They had to choose top ERP software in order to ensure that it meets the demands of a big firm like Tata Steel. The existing technology was a simple replication of the manual system. . Tata Steel decided to go for a new robust solution.Implementation Process at Tata Steel The company knew well that they had a tough time especially to implement the software in one stroke. Similarly the supporting functions were named minor ones. has transited seamlessly from a production-driven company to a customer-driven one. They were also shrewd enough in adopting the modern and most recent technology available in the market. All of them were made to bear in mind the fact that ERP's implementation was imperative and that the deadlines were not very comfortable. with a study on cost competitiveness and a formal business plan. The employees and management at Tata Steel faced a cumbersome task exchanging and retrieving information from the system. The business process was divided into two main segments. Design In 1998-99 a small cross-functional in-house team along with consultants from Arthur D.
On 1st November 1999 Tata Steel pulled off a big bang implementation of all SAP modules at one go across 46 countrywide locations. MD (Designate). Mapping Technology to Business Processes The path was set to achieve success through SAP. All the branches. The implementation of SAP software was associated with certain strategic goals in mind. cost.Choosing the Platform and Technology The management at Tata Steel wanted the software to seamlessly integrate with its existing information system and further provide compatibility with its future implementations. as per the set deadline. The Real Challenge B Muthuraman. transparency and credibility of data and improve responsiveness to customers across all areas. Besides this. Tata Steel planned a big-bang approach of going live with all the modules at the same time. were identified as a HUB while the smaller branches along with the consignment agents were defined as SPOKES which were attached to these branches. The prime objective of 'Change Management' was to reach out to people involved non-directly in the project to apprise them of the developments taking place. After an in-depth study of functionality. in just a span of eight months. operability. Driven against the speed of time. Tata Steel wanted to bring forth a culture of continuous learning and change. It is inspiring to know that our TEAM ASSET with support from Price Waterhouse Coopers and SAP successfully lived up to our axiom and truly demonstrated leadership skills by going live across 46 locations within a record time frame of eight months. esteem. the pace of implementation was fast with all activities backed by a lot of thought process and meticulous planning. This would enable Tata Steel to achieve a world-class status for its products and services and strengthen its leadership position in the industry. In January 99 the team from Tata Steel was decided and christened 'TEAM ASSET' an acronym for Achieve Success through SAP Enabled Transformation.” The challenge is compounded if the ERP provider is a world leader . At Tata Steel however the real challenge for us did not lie in successfully implementing SAP or in rolling it out to our 46odd geographic locations across the country under a big bang approach in just eight months. Also another parallel activity called 'Change Management' was initiated within the company. . They all looked forward to knowledge-based. Tata Steel also wanted the software to result in quick decision-making.SAP. which had huge numbers of transactions and complexity. time. The real challenge lay ahead in building an environment where SAP will be embedded in the hearts and minds of the people and the customers of Tata steel.1st November 1999 There are only 24 hours a day Preparatory task forces activities were conducted and core business processes were mapped to SAP modules. said. successful organization. The TEAM ASSET had two simple axioms: Go-Live date . With this implementation. SAP topped the list of contenders. "Implementing any ERP system is a challenge for an organization because of the declining success rate of ERP implementations world-wide. support and future organizational requirements was done. compatibility.
000 crores Employees – 5. Finance. The inventory carrying cost has drastically deflated from Rs 190 per ton to Rs 155 per ton. Haryana. the results have been terrific. Nadrajog. there have been significant costs savings through management of resources with the implementation of SAP.170 million in 1999 to Rs 4. A great deal of effort was put on extensive and comprehensive training as well as proper communication on process changes throughout the organization. With SAP's solution Tata Steel can now update their customers on a daily basis and provide seamless services across the country improving customer management. it is also one of the four global specialty steel manufacturers. It has a Ferro Alloy plant at Vizag. Case Study: Jindal Stainless Ltd.THE OUTCOME SAP ERP solutions produced a remarkable result to the company in terms of financial technical and managerial parameters. blade steel and coin blanks. This improved the quality of work and lessened the time taken for work and thereby increased the productivity. with a single Plant in Hissar. "The manpower cost has reduced from over $200 per ton two years ago. Besides the streamlined business process reduces the levels of legacy system and also provides consistent business practices across locations and excellent audit trail of all transactions. also manufactures precision strips. Apart from having a Stainless Steel . India Industry – Process – Mining and Metals Products & Services – Stainless steel Revenue – INR 6. Jajpur." said Ramesh C. to about $140 per ton in 2000. Andhra Pradesh and is now constructing the largest Greenfield Integrated Stainless Steel Complex in the world. CSFs for Tata Steel Critical success factors in Tata Steel’s implementation were that the SAP implementation was backed up by appropriate change initiative measures and organizational realignment with support from top management.033 million by June 2000. Location – Hisar. The systems were made more user friendly without any complexities and procedural lacunas. "Post the introduction of the ERP solution. Orissa. The availability of online information has facilitated quicker and reliable trend analysis for efficient decisionmaking. With control over 35% of domestic market share. The effective handling and speed delivery resulted in greater sales. The overdue outstanding has been brought down from Rs 5. Tata Steel has spent close to Rs 40 crore on its implementation and has saved Rs 33 crore within a few months. Company Profile Name – Jindal Stainless Ltd. in Kalinga Nagar. Distt. To add to this. Vice President. where it also has India’s only composite stainless steel plant which apart from producing Hot and Cold rolled coils. Established in 1970.000 Jindal Stainless is India’s largest integrated stainless steel manufacturer. This was followed by a massive change in terms of accountability administration and control. Similarly there was a drastic fall in the amount owned to creditors.
“Our production portfolio consists of varied products and we need the flexibility to produce all grades of stainless steel to be able to service a larger market. This enabled the process information being integrated with the business data to give a wholesome view of operations. Jindal Stainless has grown from an indigenous single unit steel plant in Hisar. the ISO: 9001 and ISO: 14001 company has global presence in over 30 countries ERP Implementation Jindal Stainless opted for the best in class ERP system. The rate at which our organization is growing. Chief Information Officer. basic home-grown IT solutions stringed together incapable of matching the organization’s growth. which further connected to a technical database and then fed into the Integrator. or our growth would have been affected”. Change management was an issue. There was no point delaying this decision. “A dedicated team of 15 people deployed the solution. the project scope consisted of integration of process parameters (Line PLCs) with production and quality information (SAP) along with historical process data storage in technical database (Historian). The need to migrate to a stronger IT foundation was palpable. 2007 and Go-Live took place in May. But there was disconnect between Process and Business Information. SAP. outstripped whatever home-grown IT solutions we had stringed together. information about sensors and devices used to be carried through PLCs and enabled local visualization. One of the core beliefs of the organization has been to implement the best-inclass technology – be it for manufacturing processes or for organizational management. Dhir. The deployment included steps such as installing Ethernet communication hardware modules in Plant PLCs in Cold Rolling Division Plant. However. but since the directive to employ the . Before the SAP MII deployment. He further explains. seamless integration of Historian data with business information at ERP through MII and analysis of plant data and business data at MII and SAP. in 2002 to integrate its processes and get a proper hold over its operations across all locations which in turn have enabled the organization to make smarter strategic decisions. Multiple products across multiple locations in addition to dealing with multiple partners. multinational and multi product steel conglomerate. A robust database coupled with streamlined processes working across locations. The SAP MII implementation kicked off in March. this deployment enabled the process information to be transferred to a SCADA server. seamlessly. establishing plant-wide network by connecting all Electrical Control Rooms by Fibre Optics. was the need of the moment”. suppliers and dealers just added to information chaos.Cold Rolling plant in Indonesia. “A sound technological platform is one of the basic requirements for running a business well. In a little over 30 years. In addition. With Schneider Electric as the implementation partner. manufacture of specialty products such as precision strips and coin blanks requires extra effort and skills. into a multibillion. says. Haryana. Integration of plant level application servers with Historian. Ajay K. The lack of visibility of real time information across locations was proving costly as we lacked a holistic view of our operations. A fourteen-month implementation period saw SAP MII getting deployed in the Cold Rolling Plant in Hisar. 2008. lack of comprehensive view of multiple operations. Challenges Jindal had restricted access to crucial information in silos.
the whole organization adapted to the change eventually” says Ajay. flexibility and a customer-centric approach. All these factors ultimately help the company achieve a level of Plant intelligence and offer a significant competitive advantage. Benefits Transparent manufacturing processes with real time information available across locations. quality and efficiency analysis results in reduction of costs. The tracking of coils in storage. They will streamline and align the supply chain and explore the possibility of introducing SAP in other areas. improved monitoring and control. CSFs for Jindal Stainless Ltd. “The beauty that we found in SAP is not just the robustness of the solution. but the add-ons. and quality and separate the old from the new. Each coil. and this makes the deployment very unique”. tracking the source of a defect or analysis of customer complaints. In the absence of a proper database.best of technology had come from the top management. Jindal now plans to enhance its use vertically. SAP has provided them a contemporary. is modeled after the customer’s needs and takes around three weeks to be manufactured. integrated platform to conduct our business with speed. giving a clear holistic view of the overall growth. quantity. The way forward Having used SAP across the organization horizontally. for instance. They have accurate records of how many coils they have of what kind. Saving time and having access to authentic information. and can decide how many they need without jeopardizing costs. eliminating inefficiencies and reducing costs. Given an awareness of the best practices and a good understanding of the project complexities. he adds. Secondly. Their organization has adopted SAP as the only application on which we shall transact and conduct business. SCM and SRM are targeted as the next strategic levers. there was no way to distinguish new coils from the old. worth several lacs. coils are automatically scanned and one can keep tab on the type. The introduction of a solid technological platform has consolidated the organization’s fragmented processes. the deployment has enabled Jindal to address their business growth in a 360 degree manner. Trust between partners Sustained management support Adequate training program User involvement and testing Conclusion ERP is a key backbone application for companies in a fast changing industry like steel. one can find out the exact stocks that we have in our Plants. Sitting anywhere in the world. they lacked an accurate overview of their stock. resulting in older coils lying in disuse. used to be a challenge. With the new technology that involves bar coded system being read using hand-held scanners. the risks . Be it monitoring and control of process deviations. State-of-the-art technology has enabled global expansion and real time integration with their manufacturing systems.
In order for this is to happen. 2008 So you’re thinking of buying an ERP? Ten critical factors for successful acquisitions. Implementation is only the beginning of the adventure with a new ERP system. Retrieved (2009. It is a real challenge for a company to plan and execute a long term implementation strategy as both the internal business scenario and the software from the vendors are evolving continuously. companies need to choose an option that will not only suffice for the time being. Fergal Carton. A well chosen system will. 2005 Successful enterprise resource planning implementation: taxonomy of critical factors. IT interventions in the Steel Industry. Ulrich Remus.shtml SAP ERP customer references. While implementing ERP can be challenging and demands sustained commitment from top executive levels. 18 No. a company will end up paying more for this temporary solution than for a system that can grow.shtml SAP ERP customer successes Jindal Stainless Ltd.com/20100802/casestudy01. become the pillar of company’s operations. 2009 .in an ERP implementation are usually outweighed by the benefits. Industrial Management & Data Systems Vol. Express Computer. Vol. In this project a successful implementation has been identified as the one which was completed within time and budget and gave a predetermined ROI. 1. Network Magazine. 13 No. 15 No. Journal of Enterprise Information Management Vol. with time. Retrieved August 02.com/india/about/company/successes/pdfs/Jindal_Steel.sap. but which will have the potential to accommodate the various growth paths the company has as it evolves. it is fundamental to enhancing the competitive position of a company in the dynamic environment of the steel industry today. but does not allow for growth may seem cheaper.pdf Critical success factors for implementing enterprise portals: comparison with ERP implementations. Retrieved August 14. The ERP discussion is often one of mindset more than one of standalone business cases. Choosing an option that works for now. (2002) An ERP and a steely resolution. B.networkmagazineindia. 2007 ERP implementation through critical success factors’ management. Frederic Adam and David Sammon.sap. March 15) from http://www. Olivier Francoise. Mario Bourgault and Robert Pellerin. Shahin Dezdar and Ainin Sulaiman. References Sood. March 09) from http://www. Vol. but when one factor in the amount company will eventually spend to extend the system and make changes to functionality. Jacques Verville and Christine Bernadas and Alannah Halingten. 8.com/usa/solutions/businesssuite/erp/customers/ Tanmay Roy. 2010 from http://www. International Journal of Managing Projects in Business Vol. Retrieved (2012. 6. Business Process Management Journal. 4. 109 No. It will set the standards and epitomize the best business practices. 1 No.expresscomputeronline. Business Process Management Journal. 2006 from http://www. 3.com/200210/case5. 2009 Project management: a case study of a successful ERP implementation.