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................................................................................................................................................... 8 Case Study: Jindal Stainless Ltd............................................................................................. 3 About SAP .................... 17 References ....................................................................................................... 18 .......................................................................................................... ................................................................................................ 4 Critical Success Factors .......................................................................................................................................................................................................................................................................................................... 15 Conclusion ....................................................................................... 4 ASAP Methodology.................. 8 Case Study: Tata Steel ...................................................................................................................................................................................Contents Introduction ...... 3 Literature Review ........................................... 5 Analyzing SAP ERP's success in Steel Industry .................
. and HP to name a few. etc. IBM. Microsoft. new and changed business requirements are rapidly implemented and tested in the system. HP. 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. Production planning. With hundreds of companies implementing the ERP systems to make their business more efficient only few are very successful in implementing them.).000 customers / 91. PeopleSoft. Peoplesoft. cover virtually every aspect of business management. Accounting. These ERP systems are customized using the table-driven customization method. 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. Baan. JD Edwards. users).. and implementation strategy. SAP provides standard business application software which reduces the amount of time and money spent on developing and testing all the programs. Also. According to a survey done by Gartner only 60% of companies implementing ERP system claim they got expected benefits. Baan.com. etc. About SAP SAP AG founded in 1972 is the world’s largest Enterprise Resource Planning (ERP) software with 82. was created. Delloite. Wipro. JD Edwards. Microsoft. Accenture. technical side. In any ERP implementation lots of variables are involved like personnel (business 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. Sales and Distribution. Oracle. implementation partner (for e.com.). Salesforce.). independent consultants. 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.500 installations / 12 million users in 120 countries. as SAP would like to call them. called Enterprise Resource Planning (ERP). Cap Gemini. which provide a common set of data source to the whole organization. There are various ERP products available today for example from SAP. 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. Materials Management. Oracle. These systems provide a single source of data with designed integration between different functional modules (for example. QAD. Salesforce. software and hardware vendor (SAP. etc. etc. a new breed of software systems.g.Introduction In order to eliminate the problems associated with legacy systems. support side. Due to table settings instead of oldfashioned hard-coded program logic.
detailed task plans. tools. and project team organization. A Business Blueprint comprises the following structure elements in a hierarchy: Organizational Units. Therefore. The two methodologies used to implement SAP ERP are Conventional and ASAP. Business processes. Master data. Business scenario. The Business Blueprint is created by detailed documentation of the results gathered during these requirements workshops. The ASAP methodology consists of a roadmap that defines the five phases of SAP implementation process and supports these with a comprehensive project plan.In this phase the scope of the implementation are documented and defined and the Business Blueprint is created. In recent past years SAP Procedure Model has been overshadowed by the ASAP methodology as implementations with later methodology are fast and provide flexibility. project scope. Most of the companies implementing SAP ERP system use ASAP methodology with the exception of very large companies with revenues in billion dollars. and Process steps. 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. a common understanding of how the company intends to run their business within the R/3 System is achieved. In this phase the initiation of the SAP ERP project. and processes is formally announced to the company Phase 2: Business Blueprint . ASAP Roadmap Phase 1: Project Preparation . ASAP provides content. In 1996. .This phase provides initial planning and preparation for the implementation which includes project plan. On this basis. The Business Blueprint is a detailed documentation of the company’s requirements. the Business Blueprint serves to document the business process requirements of the company.Literature Review Literature review is divided into two sections: ASAP Methodology. This methodology provides an excellent tool for small and midsize companies to rapidly implement SAP and take advantage of its integrated business processes. 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. Conventional methodology also known as SAP Procedure Model was widely used initially. by carrying out requirements-gathering workshops. and expertise based on thousands of successful implementations by SAP and its partners. which includes the overall goals. SAP AG introduced the ASAP (Accelerated SAP) methodology. Furthermore. in this project ASAP is used as the reference methodology.
Baseline and Final configuration. and Project phase review and sign-off from customer. Senior management must ensure project scope . Validation of system setup. Upon successful completion of this phase. the continuous improvement sub phase begins during which the production support team provides on-going support and assistance for post go-live. System configuration is done step by step in two work packages. or changes in the user community. all issues and problems are resolved. The project team updates the work instructions (business process procedures. the software is used productively in day-to-day operations. 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. System testing. Based on the research paper reviewed following CSFs were found and is explained in detail below based on organizational and technological perspective. transition to the production support team is finalized. preproduction environment to successful and live production operation.In this phase. all the business and process requirements gathered in the Business Blueprint are implemented. you will be ready to run your business in your live SAP ERP System. for example) and performs unit and integration tests. Data migration (if applicable). The going-live and support phase consists of two distinct sub phases. and the project is signed off. 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. An organization goes through a major transformation during ERP implementation.In this phase. The consultants validate and update the configuration and demonstrate processes. Subsequently. technology changes. Definition of training and cutover plan. Phase 5: Go Live and Support – This phase achieves the transition from a project-oriented. The major milestones of Realization phase are: Software installation and customization based on the business blueprint. the Final Preparation phase serves to resolve all critical open issues. the project is completed with a formal project closing. testing and end user training is completed with system management and cutover activities to finalize the readiness to go live. Furthermore. During this time. 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. It covers solutions for those activities which are standard in a productive environment: business changes. knowledge transfer is completed. First.Phase 3: Realization . and the management of this change must be carefully planned (from a strategic viewpoint) and meticulously implemented. Phase 4: Final Preparation . There is a plethora of research and data available for critical success factors contributing to a successful ERP implementation.
some independent consultants. and SAP consultants. and testing team. There is the need to understand how the organization intends to run its business within the SAP system and the changes in the organization. g) Trust between partners During SAP ERP implementation different parties involved are the client or the company implementing the SAP ERP system. . c) Effective organizational change management and business process engineering Any organization implementing SAP software must consider the organizational. h) Strong communication inwards and outwards One of the reasons behind ERP implementation failure is poor communication between the team members.g. lead and control the project on the run in its several tasks. Project team composition is more relevant in the first phase because it is when the project team is established. policies. technical team. and continuing to advise the organization of the progress and importance of the ERP implementation to the company. and procedures. delays in the schedule or requests for additional money. although it can be re-structured along the implementation phases and according to the implementation needs. Deloitte. in some cases. but is not limited to. They participate in the defining of business requirements. Testing can be done by end users or by a quality assurance team depending on the setup at the company. SAP etc. Accenture.) and..changes are managed and documented in a formal manner. human resource and business process issues associated with an implementation. i) Formalized plan and schedule Good planning and scheduling is the key to a successful SAP ERP implementation. help in the analysis of the SAP configuration and in conversion of data and the testing of the system. Project Leads. A good project plan will ensure better monitoring and coordination of activities during the whole implementation phase. 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. 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. f) Project champion role It is the role of project sponsor and/or project manager. the project manager is required to plan. d) Project team composition A typical SAP implementation team consists of Project Manager. and the implementation partner which brings the SAP ERP implementation knowledge (e. Cap Gemini. The project sponsor is devoted to promoting the ERP project and has the ownership and responsibility to obtain the project resources. This includes. It is very important that trust is maintained between them throughout the implementation. IBM.
Tracking and fixing problems before they go into production can save lot of time and money. not the technology team. This group of people may be senior level project members from within the company or from the implementation partner. The software configuration should follow the business requirements defined in the previous phase. Customization should always be taken into account when managers are making decisions. most companies expect that their provider will proactively suggest best practices based on what they've learned from projects with other clients. In real world situations. . b) Adequate ERP version As the new version comes out. These products are tested working solutions which are industry specific. c) Adequate software configuration Software configuration should be geared towards creating a seamless and integrated value chain. k) Preventive troubleshooting Although not a very exciting part of implementation it is important. Customization or any changes to the customized product is not supported by SAP AG. 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. This prevents costly mistakes from occurring which could have been avoided otherwise.j) Adequate training program Business users (end-users) training is necessary to make sure business ownership is within business units. SAP AG stops supporting the older version after certain period of time. 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. 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. m) Empowered decision makers Include a group of people with business and technical knowledge at an expert level. 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. n) Adequate ERP implementation strategy A good implementation strategy is required for a successful implementation.
ERP can play an essential role in: Driving accurate and fast decisions (product profitability. 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 . especially in its mature implementations today. 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. However it proved to be different from the others by choosing ERP in the right time and implementing it in a proper manner. In order to rectify these issues which would otherwise prove to be major setbacks to the company the organization resolved to take up ERP. Being a large entity does not stop things from being subject to scrutiny and internal audit. reduced finished-goods inventory from 29 to 23 days of sales.Analyzing SAP ERP's success in Steel Industry Case Study: Tata Steel Company Profile This company was founded and established in the year 1907. Why ERP in Tata Steel Tata Steel faced two major problems from the systems that existed for a long time. 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. Secondly the systems were outdates and the modalities of operation were too complex and not error free. They are regularly implemented with the help of committees who report to the selected members from the senior management. The whole system was tuned to the process and very little attention was paid to the customer demands. and reduced breakdowns in the Hot Strip Mill by 768 hours. Leading consultants were hired and the business structure was studied and suitable plans were drafted accordingly. one need information systems which quickly provide them the data they need. This was instigated by the concerned departments. costing. and plant maintenance. Firstly they were not customer friendly. The company is dedicated to providing laudable services to the stakeholders improve on the quality and as thrive for innovations and improvements constantly. lowered MRO inventory by 24%. 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. Tata Steel started implementing an SAP ERP system with the primary goal of improving its financial accounting. is the crucial component for a company’s IT data backbone. In 2001. We believe that ERP. SAP implementation at Tata Steel was a success with increased online order confirmations from 55% to over 90%. It is known to be one of the leading steel giants in the world offering multiple products and successfully running many subsidiary corporations. Information Systems for a Quickly Changing Steel Industry In a quickly changing industry like steel. procurement. The net results of their ERP software have been described to be path breaking and a trendsetting one. The primary objective was better revenue management through improved gross margins.
the risks in an ERP implementation are usually outweighed by the benefits. Typically the flat or strip products are make-to-order. 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. Decrease of work-in progress and days-of-sale-outstanding.stock. 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. A successful ERP project will start by analyzing these challenges in detail across all of the company’s integrated processes. However. The most immediate ERP benefits include Improved visibility of procurement spend and savings from improved sourcing policies. This analysis will result in the basic decisions that will be the foundation of the ERP project. especially when different ERP implementations are being harmonized. the most important business benefits will often be delivered after the ERP backbone is established. better procurement operations and more efficient planning. and should not be viewed as a standalone initiative with the requirement to pay back its implementation cost. Challenge 1: More than one planning strategy Steel makers often use a combination of production planning strategies. 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. whereas the long products are make to. The ERP discussion on investment return is one of mindset more than one of standalone business cases. Improved productivity through better sales order handling. Six ERP Design Challenges for Steel Companies A steel company presents six industry-specific design challenges for implementing ERP. as described below. Depending on .
preparation and shipment planning. and so on. This requires continuous re-assignment of products to processes and orders dependent on the Characteristics described above. This means that the later in the process you define a product. tight integration with business partners on forecasts. that is. Challenge 4: Specific Customer Service Requirements To cope with high-demanding customer segments such as automotive and construction. internet etc. entry of multiple order units such as pieces. This burdens the early discussions during the design phase of an ERP implementation. Challenge 5: Complex production scheduling combining both continuous and batch production The batches need to be selected based on characteristics during production.the existence of a “de-couple point”. A steel product tends to explode towards the end of production processing. including supply chain processes as well as the financial/cost control processes. 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.) are typically needed. with unstable production processes and unplanned outputs. Cost control in make-to-stock tends to go for standard price approaches. in other words. This means that the planning process needs to be able to derive batches with characteristics inheritance and history tracing. tons. finish-to-order could be a relevant planning strategy as well. 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. bottlenecks . electronic customer orders (EDI. the bill of material “stands on its head” or is “v-shaped”. dimensions. Configuration in the make-to-order entries is typically done while entering the order. on the “material master”. shipping and purchasing processes across the supply chain Challenge 3: Flexible planning Planning for steel making often needs to happen on short notice. making the product difficult to configure when entering it in the ERP system. ERP solutions today can readily handle the complexities this of the V-shaped bill of material. Characteristics then drive production. They allow “characteristics based product configuration” with automatic deduction of characteristics. but in a make-to-order environment costing happens on an individual order cost collection and forecast basis. the higher the number of products to be defined becomes. whereas for the make-to-stock entries. characteristic value inheritance from sales order header to item level. ERP systems today support electronic integration with partners. Finally. ERP systems today can handle this kind of complexity. Challenge 2: Complex product variations A steel product is made up of a large number of characteristics. ERP systems today allow re-assigning flexibly to handle these situations. the scheduling part of the planning system needs to be able to work with multiple and dynamic bottlenecks – that is. configuration is done in the product definition. Such a combination of planning strategies affects the design of most ERP processes.
it is also essential to differentiate between “strategic materials” (cokes and ore. Production completion then posts an updated status of the orders into the ERP system. Ni and Cr for stainless) and the other cost elements that may be easier to control. sequencing and combining pieces from various orders throughout the mill into lots for optimization. Challenge 6: Detailed margin analysis In today’s steel industry when prices are high and capacity short. The ERP system will also need to work closely with the company’s Business Information Systems (BIS) to optimize the business benefits. for example.” The result is planning blocks of similar products which are then handed over to production planning. the ERP and BIS systems can. A typical flow would be: The Supply Chain Management (SCM) application provides the rough-cut planning in “Demand Planning. Right before production starts. coils etc. via the ERP system. are transferred into the MES layer. including stock receipts of finished products. Working together.which can change based on incidents such as production problems in certain process steps. When orders are being entered. It is at that time when quantities are being translated into pieces (slabs. and feed results back into the SCM application in order to optimize the load balancing. . ERP systems today can handle all of these situations.). and so forth. The mill optimizer then typically would re-shuffle orders in between the blocks. margin analysis becomes the essential method to tell what money is being made on which customer/product segments. Detailed scheduling then takes place. improve inventory allocation to late orders. planned orders from the SCM application are converted into production orders and. 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. 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). ERP systems provide the tools to support these decisions. On top of segment analysis.
. there’s much more to it than these few general principles. Clearly. integrated and cost efficient.Figure above is also important because it lets you identify gaps among a company’s different IT systems. Implementation Approaches for ERP The key element for ERP success is to know how to implement an ERP project. and that these custom-built applications usually differ from mill to mill. this risks creating sub-optimal processes and leaves the company open to all the problems of maintaining custom-built. Implementing ERP is complex and takes a team of knowledgeable and experienced ERP professionals to successfully implement an ERP project. they need to be robust. Past experiences recommends best practices such as: Rapid/realistic project timelines due to external pressures (acquisition synergies. legacy applications. 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. A recent IBM survey indicates that steel clients process control and MES systems are custom-built applications 66% of the time. where the “system” is actually combination of custom-built applications and manual spreadsheets. “Bridging this gap” properly is essential for realizing the business benefits of the IT investments. A typical gap occurs between the ERP and MES (process control and machine control) systems. If the applications in Figure 3 are to provide true value.
The business process was divided into two main segments. These ideas also contributed to the success. A plan of action on the proposed ERP's impact was drafted depicting their relation to one another and to the business process. This was done by educating everyone on the need and desirability of change. The company took all efforts to ensure that the change did not produce any sort of resentment in the organization. Little (Strategy Consultants) and IBM Global Services (BPR Consultants) redesigned the two core business processes: Order Generation & Fulfillment and the Marketing Development processes. Besides. Design In 1998-99 a small cross-functional in-house team along with consultants from Arthur D. with a study on cost competitiveness and a formal business plan. and reduction of stocks.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. They had to choose top ERP software in order to ensure that it meets the demands of a big firm like Tata Steel. They went ahead with associating and implanting Tata Steel to all the stakeholders so that they become compatible. 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 existing technology was a simple replication of the manual system. An Early Response Response to changing customer needs started as early as 1991. The period set for implementation seemed to be another major challenge. 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. followed by ISO 9002 certification and benchmarking initiatives. The company adopted ERP technology to take a lead in the competitive steel industry and through constant learning. The core functions were denoted to be major ones. In addition all apprehensions relating to change were discussed and clarifications made to the fullest satisfaction. Tata Steel decided to go for a new robust solution. Also there was no built-in integrity check for various data sources. The employees and management at Tata Steel faced a cumbersome task exchanging and retrieving information from the system. This was done to improve customer focus. They were also shrewd enough in adopting the modern and most recent technology available in the market. several times the information against certain items was found missing. has transited seamlessly from a production-driven company to a customer-driven one. Not only did it operate as individual islands of information but the technology had outlived its lifetime and was completely obsolete. innovation and refinement of its business operations. . the reliability of information obtained was questionable because of inconsistency and duplication of data from different departments. Further. The time granted for the process was 8 months. facilitating better credit control. Realizing the need to further support the re-engineered core processes and quickly align the business processes to radical changes in the market place.
The Real Challenge B Muthuraman. as per the set deadline. 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. This would enable Tata Steel to achieve a world-class status for its products and services and strengthen its leadership position in the industry. were identified as a HUB while the smaller branches along with the consignment agents were defined as SPOKES which were attached to these branches. operability. said.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. SAP topped the list of contenders. 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. time. 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. Tata Steel planned a big-bang approach of going live with all the modules at the same time. All the branches. . the pace of implementation was fast with all activities backed by a lot of thought process and meticulous planning. successful organization. The implementation of SAP software was associated with certain strategic goals in mind. In January 99 the team from Tata Steel was decided and christened 'TEAM ASSET' an acronym for Achieve Success through SAP Enabled Transformation. Tata Steel also wanted the software to result in quick decision-making.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. After an in-depth study of functionality. The TEAM ASSET had two simple axioms: Go-Live date . "Implementing any ERP system is a challenge for an organization because of the declining success rate of ERP implementations world-wide. With this implementation.SAP. They all looked forward to knowledge-based. compatibility. which had huge numbers of transactions and complexity. in just a span of eight months. Also another parallel activity called 'Change Management' was initiated within the company. 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. On 1st November 1999 Tata Steel pulled off a big bang implementation of all SAP modules at one go across 46 countrywide locations. esteem. Tata Steel wanted to bring forth a culture of continuous learning and change. MD (Designate). Driven against the speed of time.” The challenge is compounded if the ERP provider is a world leader . cost. support and future organizational requirements was done. transparency and credibility of data and improve responsiveness to customers across all areas. Besides this. Mapping Technology to Business Processes The path was set to achieve success through SAP.
The inventory carrying cost has drastically deflated from Rs 190 per ton to Rs 155 per ton. in Kalinga Nagar. With control over 35% of domestic market share. Location – Hisar. Company Profile Name – Jindal Stainless Ltd. The effective handling and speed delivery resulted in greater sales. The availability of online information has facilitated quicker and reliable trend analysis for efficient decisionmaking. where it also has India’s only composite stainless steel plant which apart from producing Hot and Cold rolled coils. India Industry – Process – Mining and Metals Products & Services – Stainless steel Revenue – INR 6. Haryana. Finance. also manufactures precision strips. Established in 1970. Vice President. Nadrajog.000 crores Employees – 5. This was followed by a massive change in terms of accountability administration and control. Distt.033 million by June 2000. 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. To add to this. Similarly there was a drastic fall in the amount owned to creditors.THE OUTCOME SAP ERP solutions produced a remarkable result to the company in terms of financial technical and managerial parameters. The overdue outstanding has been brought down from Rs 5. Jajpur. blade steel and coin blanks. there have been significant costs savings through management of resources with the implementation of SAP. Tata Steel has spent close to Rs 40 crore on its implementation and has saved Rs 33 crore within a few months. to about $140 per ton in 2000. A great deal of effort was put on extensive and comprehensive training as well as proper communication on process changes throughout the organization. "Post the introduction of the ERP solution. It has a Ferro Alloy plant at Vizag. The systems were made more user friendly without any complexities and procedural lacunas.170 million in 1999 to Rs 4. with a single Plant in Hissar. Apart from having a Stainless Steel . 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. "The manpower cost has reduced from over $200 per ton two years ago. 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. This improved the quality of work and lessened the time taken for work and thereby increased the productivity. Case Study: Jindal Stainless Ltd. Orissa. it is also one of the four global specialty steel manufacturers. the results have been terrific.000 Jindal Stainless is India’s largest integrated stainless steel manufacturer." said Ramesh C.
this deployment enabled the process information to be transferred to a SCADA server. 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). 2007 and Go-Live took place in May. Chief Information Officer. The SAP MII implementation kicked off in March. Jindal Stainless has grown from an indigenous single unit steel plant in Hisar. “A sound technological platform is one of the basic requirements for running a business well. was the need of the moment”. suppliers and dealers just added to information chaos. says. “A dedicated team of 15 people deployed the solution. multinational and multi product steel conglomerate. 2008. Change management was an issue. He further explains. Ajay K. Multiple products across multiple locations in addition to dealing with multiple partners. seamlessly. basic home-grown IT solutions stringed together incapable of matching the organization’s growth. 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.Cold Rolling plant in Indonesia. into a multibillion. but since the directive to employ the . A fourteen-month implementation period saw SAP MII getting deployed in the Cold Rolling Plant in Hisar. In addition. 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. Haryana. The rate at which our organization is growing. In a little over 30 years. or our growth would have been affected”. which further connected to a technical database and then fed into the Integrator. The lack of visibility of real time information across locations was proving costly as we lacked a holistic view of our operations. establishing plant-wide network by connecting all Electrical Control Rooms by Fibre Optics. seamless integration of Historian data with business information at ERP through MII and analysis of plant data and business data at MII and SAP. manufacture of specialty products such as precision strips and coin blanks requires extra effort and skills. information about sensors and devices used to be carried through PLCs and enabled local visualization. The deployment included steps such as installing Ethernet communication hardware modules in Plant PLCs in Cold Rolling Division Plant. Integration of plant level application servers with Historian. The need to migrate to a stronger IT foundation was palpable. outstripped whatever home-grown IT solutions we had stringed together. “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. Before the SAP MII deployment. But there was disconnect between Process and Business Information. Challenges Jindal had restricted access to crucial information in silos. This enabled the process information being integrated with the business data to give a wholesome view of operations. A robust database coupled with streamlined processes working across locations. There was no point delaying this decision. However. With Schneider Electric as the implementation partner. SAP. 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. Dhir. lack of comprehensive view of multiple operations.
is modeled after the customer’s needs and takes around three weeks to be manufactured. The introduction of a solid technological platform has consolidated the organization’s fragmented processes. Saving time and having access to authentic information. Be it monitoring and control of process deviations. the deployment has enabled Jindal to address their business growth in a 360 degree manner. used to be a challenge. “The beauty that we found in SAP is not just the robustness of the solution. the whole organization adapted to the change eventually” says Ajay. SAP has provided them a contemporary. one can find out the exact stocks that we have in our Plants. They will streamline and align the supply chain and explore the possibility of introducing SAP in other areas. he adds. the risks . quality and efficiency analysis results in reduction of costs. but the add-ons. giving a clear holistic view of the overall growth. The tracking of coils in storage. there was no way to distinguish new coils from the old. for instance. tracking the source of a defect or analysis of customer complaints. Given an awareness of the best practices and a good understanding of the project complexities. With the new technology that involves bar coded system being read using hand-held scanners. CSFs for Jindal Stainless Ltd. quantity. eliminating inefficiencies and reducing costs.best of technology had come from the top management. SCM and SRM are targeted as the next strategic levers. flexibility and a customer-centric approach. Jindal now plans to enhance its use vertically. In the absence of a proper database. Each coil. Their organization has adopted SAP as the only application on which we shall transact and conduct business. and can decide how many they need without jeopardizing costs. State-of-the-art technology has enabled global expansion and real time integration with their manufacturing systems. worth several lacs. All these factors ultimately help the company achieve a level of Plant intelligence and offer a significant competitive advantage. and this makes the deployment very unique”. coils are automatically scanned and one can keep tab on the type. resulting in older coils lying in disuse. integrated platform to conduct our business with speed. 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. They have accurate records of how many coils they have of what kind. they lacked an accurate overview of their stock. The way forward Having used SAP across the organization horizontally. and quality and separate the old from the new. Sitting anywhere in the world. Benefits Transparent manufacturing processes with real time information available across locations. Secondly. improved monitoring and control.
The ERP discussion is often one of mindset more than one of standalone business cases. Network Magazine. Jacques Verville and Christine Bernadas and Alannah Halingten. it is fundamental to enhancing the competitive position of a company in the dynamic environment of the steel industry today. Business Process Management Journal.shtml SAP ERP customer references.pdf Critical success factors for implementing enterprise portals: comparison with ERP implementations.com/200210/case5. Olivier Francoise. companies need to choose an option that will not only suffice for the time being. 6. Choosing an option that works for now. 2009 . but which will have the potential to accommodate the various growth paths the company has as it evolves.networkmagazineindia. 8. 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. 13 No. Frederic Adam and David Sammon. Journal of Enterprise Information Management Vol. Retrieved August 02. It will set the standards and epitomize the best business practices. (2002) An ERP and a steely resolution. become the pillar of company’s operations. 4. 2006 from http://www.shtml SAP ERP customer successes Jindal Stainless Ltd. Mario Bourgault and Robert Pellerin. B. Retrieved (2009.com/usa/solutions/businesssuite/erp/customers/ Tanmay Roy. a company will end up paying more for this temporary solution than for a system that can grow. 2005 Successful enterprise resource planning implementation: taxonomy of critical factors. 2007 ERP implementation through critical success factors’ management. Retrieved (2012.expresscomputeronline. Fergal Carton. Vol. While implementing ERP can be challenging and demands sustained commitment from top executive levels. International Journal of Managing Projects in Business Vol. 1 No. 18 No. March 09) from http://www. 2008 So you’re thinking of buying an ERP? Ten critical factors for successful acquisitions. IT interventions in the Steel Industry. Shahin Dezdar and Ainin Sulaiman. 15 No.in an ERP implementation are usually outweighed by the benefits.sap. 2009 Project management: a case study of a successful ERP implementation. In this project a successful implementation has been identified as the one which was completed within time and budget and gave a predetermined ROI. Retrieved August 14. 3.com/india/about/company/successes/pdfs/Jindal_Steel. March 15) from http://www. 109 No.sap. Ulrich Remus. Express Computer. 1.com/20100802/casestudy01. Business Process Management Journal. with time. A well chosen system will. In order for this is to happen. References Sood. Industrial Management & Data Systems Vol. 2010 from http://www. Vol. Implementation is only the beginning of the adventure with a new ERP system. but when one factor in the amount company will eventually spend to extend the system and make changes to functionality. but does not allow for growth may seem cheaper.
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