UNIVERSITY INSTITUTE OF INFORMATION

TECHNOLOGY
HIMACHAL PRADESH UNIVERSITY

Project Report
ON
ERP Implementation In Organization

B.TECH ( COMPUTER SCIENCE ENGG.)

Submitted By:
Nikhil Sharma 61730 (132)
Nisha Sharma 62402
B.Tech (CSE) 3rd Year

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 CERTIFICATE

This is to certify that the project work “ENTERPRISE

INFORMATION PORTAL MANAGEMENT IN L&T(
PT&D DIVISION) ” is a bona fide record of work done by
Nikhil Sharma, roll no. 61730 and Nisha Sharma, roll no. 62402
under the guidance of Er. Balveer Singh Thakur in fulfillment
of the requirements for the project.

Signature of the guide

Er. Balveer Singh Thakur
Asst. Prof.

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 Declaration

I hereby declare that the project report entitled “ERP

IMPLEMENTATION IN ORAGANIZATION” is an original
report, submitted by me in fulfillment of requirement for the
award of the marks of Industrial/Vocational training of
“Bachelor of Technology” For the Vth Semester. It has not been
submitted elsewhere for the award of marks in any degree or
diploma.

Nikhil Sharma (61730)

B.Tech CSE ( Vth Semester)

Nisha Sharma (62402)

B.Tech CSE (Vth Semester)

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 ACKNOWLEDGEMENTS

We are indebted to all those who, helped us in this project. Firstly, We are thankful
to Prof. Manu Sood, Director UIIT, to guide and encourage us to accomplish this
project and to give his valuable time, suggestions and blessings that gave us the
motivation to work on this project. We are also thankful to our project guide Er.
Balveer Singh, who allow us to carry out this project . We would like to thank him
for having faith in us. He helped us in understanding the requirements and technical
specifications of the project. We thank him for being such a great support.

We also thank Mr. Saurabh Kumar our Project Coordinator for having
permitted us and his guidance in the L&T (PT&D) Department to carry out this
project work.

Nisha Sharma
(B.Tech CSE 3rd Year)

Nikhil Sharma
(B.tech CSE 3rd Year)

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 TABLE OF CONTENTS

1) Introduction to ERP………………………………….………..Pg. 6
i) Advantages of ERP……………………………………Pg.11
ii) Disadvantages of ERP………………………................Pg. 12
2) An overview of ISD in L&T………………………………….Pg.14
3) EIP (Enterprise Information Portal)…………………………..Pg.24
4) CRM (Customer Relationship Model) module……………….Pg.32
5) Project Management Module…………………………………Pg.39
i) Scope Register…………………………………….......Pg.40
ii) Cost Estimation………………………………………..Pg.42
iii) Material Procurement plan……………………………Pg.45
iv)Sub-Contractor plan…………………………………...Pg.48
6) SCM (Supply Chain Management) module…………………..Pg.51
7) WOM (Work Order Management) module…………………..Pg.56
8) AMS (Asset Management System) module………………….Pg.61
9) FMS (Finance Management System) module………………..Pg.65
10) ERP Implementation Plan…………………………………..Pg.69
11) Conclusion…………………………………………………..Pg.70

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 INTRODUCTION

Introduction to ERP

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The initials ERP originated as an extension of MRP (material requirements
planning; later manufacturing resource planning) and CIM (Computer Integrated
Manufacturing). It was introduced by research and analysis firm Gartner in 1990.
ERP systems now attempt to cover all core functions of an enterprise, regardless of
the organization's business or charter. These systems can now be found in non-
manufacturing businesses, non-profit organizations and governments.

To be considered an ERP system, a software package must provide the function of

at least two systems. For example, a software package that provides both payroll
and accounting functions could technically be considered an ERP software
package

Examples of modules in an ERP which formerly would have been stand-alone

applications include: Product lifecycle management, Supply chain management
(e.g. Purchasing, Manufacturing and Distribution), Warehouse Management,
Customer Relationship Management (CRM), Sales Order Processing, Online Sales,
Financials, Human Resources, and Decision Support System.

Some organizations — typically those with sufficient in-house IT skills to integrate

multiple software products — choose to implement only portions of an ERP
system and develop an external interface to other ERP or stand-alone systems for
their other application needs. For example, one may choose to use human resource
management system from one vendor, and perform the integration between the
systems themselves.

This is common to retailers, where even a mid-sized retailer will have a discrete
Point-of-Sale (POS) product and financials application, then a series of specialized
applications to handle business requirements such as warehouse management, staff
rostering, merchandising and logistics.
Ideally, ERP delivers a single database that contains all data for the software
modules, which would include:

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  Manufacturing Engineering, bills of material, scheduling, capacity,
workflow management, quality control, cost management, manufacturing
process, manufacturing projects, manufacturing flow

 Supply chain management Order to cash, inventory, order entry,

purchasing, product configurator, supply chain planning, supplier
scheduling, inspection of goods, claim processing, commission calculation

 Financials General ledger, cash management, accounts payable, accounts

receivable, fixed assets

 Project management Costing, billing, time and expense, performance units,

activity management

 Human resources Human resources, payroll, training, time and attendance,

rostering, benefits

 Customer relationship management - Sales and marketing, commissions,

service, customer contact and call center support

 Data warehouse - and various self-service interfaces for customers,

suppliers, and employees

 Access control - user privilege as per authority levels for process execution

 Customization - to meet the extension, addition, change in process flow

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Enterprise resource planning is a term originally derived from manufacturing
resource planning (MRP II) that followed material requirements planning (MRP).
MRP evolved into ERP when "routings" became a major part of the software
architecture and a company's capacity planning activity also became a part of the
standard software activity. ERP systems typically handle the manufacturing,
logistics, distribution, inventory, shipping, invoicing, and accounting for a
company. ERP software can aid in the control of many business activities,
including sales, marketing, delivery, billing, production, inventory management,
quality management and human resource management.

ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K
problem in their legacy systems. Many companies took this opportunity to replace
their legacy information systems with ERP systems. This rapid growth in sales was
followed by a slump in 1999, at which time most companies had already
implemented their Y2K solution.

ERPs are often incorrectly called back office systems indicating that customers and
the general public are not directly involved. This is contrasted with front office
systems like customer relationship management (CRM) systems that deal directly
with the customers, or the eBusiness systems such as eCommerce, eGovernment,
eTelecom, and eFinance, or supplier relationship management (SRM) systems.

ERPs are cross-functional and enterprise wide. All functional departments that are
involved in operations or production are integrated in one system. In addition to
manufacturing, warehousing, logistics, and information technology, this would
include accounting, human resources, marketing and strategic management.
ERP II, a term coined in the early 2000's, is often used to describe what would be
the next generation of ERP software. This new generation of software is web-
based, and allowed both internal employees, and external resources such as
suppliers and customers real-time access to the data stored within the system. ERP
II is also different in that the software can be made to fit the business, instead of
the business being made to fit the ERP software. As of 2009, many ERP solution
providers have incorporated these features into their current offerings.

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EAS — Enterprise Application Suite is a new name for formerly developed ERP
systems which include (almost) all segments of business, using ordinary Internet
browsers as thin clients.

Best practices are incorporated into most ERP vendor's software packages. When
implementing an ERP system, organizations can choose between customizing the
software or modifying their business processes to the "best practice" function
delivered in the "out-of-the-box" version of the software.

Prior to ERP, software was developed to fit the processes of an individual business.
Due to the complexities of most ERP systems and the negative consequences of a
failed ERP implementation, most vendors have included "Best Practices" into their
software. These "Best Practices" are what the Vendor deems as the most efficient
way to carry out a particular business process in an Integrated Enterprise-Wide
system.

A study conducted by Lugwigshafen University of Applied Science surveyed 192

companies and concluded that companies which implemented industry best
practices decreased mission-critical project tasks such as configuration,
documentation, testing and training. In addition, the use of best practices reduced
over risk by 71% when compared to other software implementations.

The use of best practices can make complying with requirements such as IFRS,
Sarbanes-Oxley or Basel II easier. They can also help where the process is a
commodity such as electronic funds transfer. This is because the procedure of
capturing and reporting legislative or commodity content can be readily codified
within the ERP software, and then replicated with confidence across multiple
businesses who have the same business requirement.

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Advantages of ERP

In the absence of an ERP system, a large manufacturer may find itself with many
software applications that cannot communicate or interface effectively with one
another. Tasks that need to interface with one another may involve:

 Integration among different functional areas to ensure proper

communication, productivity and efficiency

 Design engineering (how to best make the product)

 Order tracking, from acceptance through fulfillment

 The revenue cycle, from invoice through cash receipt

 Managing inter-dependencies of complex processes bill of materials.

 Tracking the three-way match between purchase orders (what was ordered),
inventory receipts (what arrived), and costing (what the vendor invoiced)

 The accounting for all of these tasks: tracking the revenue, cost and profit at
a granular level.

ERP Systems centralize the data in one place. Benefits of this include:

 Eliminates the problem of synchronizing changes between multiple systems

 Permits control of business processes that cross functional boundaries

 Provides top-down view of the enterprise (no "islands of information")

 Reduces the risk of loss of sensitive data by consolidating multiple

permissions and security models into a single structure.

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Some security features are included within an ERP system to protect against both
outsider crime, such as industrial espionage, and insider crime, such as
embezzlement. A data-tampering scenario, for example, might involve a
disgruntled employee intentionally modifying prices to below-the-breakeven point
in order to attempt to interfere with the company's profit or other sabotage.
ERP systems typically provide functionality for implementing internal controls to
prevent actions of this kind. ERP vendors are also moving toward better integration
with other kinds of information security tools.

Disadvantages of ERP

Problems with ERP systems are mainly due to inadequate investment in ongoing
training for the involved IT personnel - including those implementing and testing
changes - as well as a lack of corporate policy protecting the integrity of the data in
the ERP systems and the ways in which it is used.

Disadvantages

 Customization of the ERP software is limited.

 Re-engineering of business processes to fit the "industry standard"

prescribed by the ERP system may lead to a loss of competitive advantage.

 ERP systems can be very expensive (This has led to a new category of "ERP
light" {Expand section} solutions)

 ERPs are often seen as too rigid and too difficult to adapt to the specific
workflow and business process of some companies—this is cited as one of
the main causes of their failure.

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  Many of the integrated links need high accuracy in other applications to
work effectively. A company can achieve minimum standards, then over
time "dirty data" will reduce the reliability of some applications.

 Once a system is established, switching costs are very high for any one of
the partners (reducing flexibility and strategic control at the corporate level).

 The blurring of company boundaries can cause problems in accountability,

lines of responsibility, and employee morale.

 Resistance in sharing sensitive internal information between departments

can reduce the effectiveness of the software.

 Some large organizations may have multiple departments with separate,

independent resources, missions, chains-of-command etc. and consolidation
into a single enterprise may yield limited benefits.
 The system may be too complex measured against the actual needs of the
customers.

 ERP Systems centralize the data in one place. This can increase the risk of
loss of sensitive information in the event of a security breach.

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An Overview of the ISD (Information
Systems Department) of the L&T
(Larsen & Toubro)

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Information Systems Department (ISD)

Introduction
The Information Systems Department has been established with the mission to
Understand and rationalize the management of Information Technology within the
Organization to attain its goals.

The key functions are

• To identify and implement business process automation initiatives

• To manage the design, development, operation and maintenance of enterprise

Applications.

• To implement software applications and to provide technical support.

• To plan and manage the organization's IT infrastructure.

• To manage the Enterprise Database, optimize performance and ensure

Confidentiality, integrity and availability

• To define IT Security Policies and enterprise architecture.

• Disaster Recovery and Business Continuity Plan.

• Knowledge management and IT training

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The ISD Organization

The ISD organization can be broadly categorized into Head Quarters (HQ),
Regional Office and Project Sites.

The team at HQ focuses on,

• Software Development

• Centralized IT Infrastructure Management

• Disaster Recovery Planning.

• Central IT Support for Software Applications.

• Support and Guidance to Regions

The Team at Regional Office focuses on,

• Implementation of Software Applications at Regions

• Regional IT Infrastructure Management

• Operational support to business users.

• Coordination among HQ, Region and Project Sites.

The Team at Project Sites focuses on,

• Implementation of Software Applications at Project Sites.

• Managing site IT Infrastructure.

• Supporting the Data Transfer activities across systems.

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A brief Organization structure of ISD is as below.

Software Development

L&T (PT&D) Division has always been using the best of Information Technology
for its business needs and has developed many In-house packages over the years
and this has led to the evolution of flagship In-house Enterprise Applications viz.,

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• EIP (Enterprise Information Portal)

• CeMa (Construction Enterprise Management).

• PDSS (Production Decision Support System)

EIP is the online central enterprise portal with key OLTP (Online Transaction
Processing) and OLAP (Online Analytical Processing) applications. It also
functions as the Central Repository of Data Warehouse with consolidated
information from various systems.

CeMa is the stand-alone version of the key EIP modules with a focus on
construction management at project sites where permanent connectivity is not
feasible. It is tightly integrated with EIP to provide appropriate information to the
management.

PDSS is another key enterprise application catering to the needs of Factory

Operations. It is also well integrated with EIP.

The key modules developed are,

• Supply Chain Management (SCM)

• Customer Relationship Management (CRM)
• Performance Measurement System (PMS)
• Work Order Management (WOM)
• Financial Accounting System (FAS)
• Asset Management System (AMS)
• Project Management and Planning
• Budgeting System

Apart from the above, modules like CSTI, HSE, Risk MIS etc., are developed on
specific requirements from business units / departments.

Latest technologies from Microsoft have been employed to develop these modules.
Programming languages like Visual FoxPro, VB ASP, ASP.Net, VB.Net, C# etc
has been used to develop the front end with Microsoft SQL 2005 / Oracle 10g as
Enterprise Database engines.

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IT Infrastructure
IT Infrastructure plays a key role in delivering an agile and flexible end-to-end
business solution. Hence our organization has invested significantly on the best IT
infrastructures which host various software and IT Applications.

The infrastructure components are spread across various domestic and overseas
locations with HQ hosting the Data Center and key communication infrastructure
components.

The key infrastructure components at the Data Center are,

• Highly redundant Enterprise Storage and Backup

• Enterprise Database Server with 64 bit technology
• Email Server with automatic failover clustering.
• Web Server hosted with 24/7 support.
• Reporting Server

The HQ is well connected with all regions and factories through WAN and also
hosts the Gateway to the Internet. Critical Data transactions take place through
secured WAN connectivity. Projects sites are connected through Internet.

The key Networking and Communication infrastructure are

• MPLS Connectivity to all regions / factories
• High speed Internet connection
• Ku Band VSAT Connectivity to remote project sites.

With a need to match the speed of technological innovation, ISD is regularly

upgrading the underlying infrastructure which is the back-bone of its IT operations.

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Software Implementation & Operational Support

The implementation of various IT Applications at project sites is handled by the

Regional ISD and adequately supported. Project sites with more than 100 Cr
contract value has been provided with ISD Staffs at the project site itself.
Regions are also responsible for providing necessary infrastructure support for the
implementation of various software applications.

The infrastructure support services at regions are,

• Desktop Management and System Support

• Printer & Other Hardware Accessories Support
• Video and Audio Conferencing Services.
• WAN/LAN Support Services.

Knowledge Management
Knowledge Management (KM) plays a key role in mapping, recording, evaluating,
stewarding, marketing and growing intellectual capital and knowledge assets of an
Organization. Hence adequate focus has been given to KM for managing
knowledge by supporting creation, capture, storage and dissemination of expertise
in the form of information.

The key focus areas are,

• Managing the proliferation of data and information in complex business

environments and allowing employees rapidly to access useful and relevant
knowledge resources and best practice guidelines.

• Leverage the expertise of people across the organization and transformation of

Information into Knowledge.
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• Technology enhancement and knowledge sharing & growth.

• Document Management.

• Engineering Drawing Management.

Research & Development and Quality Assurance

Choosing the right technology is one of the key factors in succeeding the
implementation of IT in business operations. Hence we have a dedicated R&D and
Quality Team which ensures the adoption of appropriate technology and Quality
Assurance.

The key focus areas are,

• Identifying and evaluating new technologies

• Defining Coding Standards and Software Development Life Cycle.

• Instructional Support to Software Developers.

Security & Access Control

With a concern over Information Security, we have access control systems in order
to provide the right information to right people.
One must need Security Credentials (username & password) to get into the desired
IT systems & applications. Access for EIP, Email, KM Portal, and Reporting
Server can be obtained based on request with the approval of the concerned
business unit heads.

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IT Help Desk

With the mission to provide continuous improvement over customer satisfaction

and quality support, we have Helpdesk IT Support which is the single point of
contact for handling issues related to software and IT applications

The key responsibilities are

• Resolving issues posted through Helpdesk Portal.

• Coordination with development team for fixing of software bugs & issues.

• Devising Software testing strategies to ensure that the software applications are
adhering to the standards of quality and the end user needs.

• Organizing training on CeMa / EIP and other IT applications and software to

enhance the awareness and application usage

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Work of ISD (Information Systems Department)

 To resolve the issues occurring during the entry of the data in the
modules.
 The HQ handles the servers & provides rights to access the
database for different users.
 ISD must have the whole knowledge about the information flow of
the every module through which they can resolves the problem.

DIFFERENT WORKS OF ISD

 To resolve the entry issues of the module
 To resolve the networking problem
 To resolve hardware related problems

ISD of PT&D only resolves the FRONTEND issues.

If there is any issue regarding the BACKEND (database) , then HQ is
responsible to resolve those problems.

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EIP (ENTERPRISE INFORMATION PORTAL)

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What is EIP( Enterprise Information Portal)

To run the Business we need a software which will serve the our purpose and
which will be –
• User friendly
• Cover all the areas of Project Operation
• Record day to day transactions of depts
• Easily Customizable

Systems available in the market

ERP : Enterprise Resource Planning.

PRIMAVERA : Project Management Software.
SAP : Customer Relationship Management.
Business Communications Management.

This systems generally have -

• High Cost
• High configured Systems are required
• Experienced qualified manpower required

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SO THE L&T PREFERED :
EIP ( Enterprise Information Portal)

A Web-Enabled Project Management System covering all of our business

Engineering
Procurement
Construction

TECHNOLOGY AND TOOLS USED

 Windows Server 2008 R2

 Microsoft SQL Server 2008 R2
TECHNOLOGY  Microsoft .NET Framework 4.0
USED  Microsoft Silverlight 4.0
 SQL Server Reporting Services

DEVELOPMENT TOOLS

Operating System Windows Server 2008 R2

Database TOND ™ Data Modeler

Designing Tools
Database MICROSOFT SQL Server 2008 R2

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 Page Design Tools
Microsoft VISIO 2010
.NET Framework MICROSOFT .NET 4.0

WEB
Development MICROSOFT Visual studio 2010
tools
Testing Tools HP Quick test Professional

Document MICROSOFT Sharepoint Server 2010

Management

EIP is a Gateway for Information Exchange Between

 ECC HQ/ROs/SITES & FACTORIES

 ECC & SUPPLIERS/SUB-CONTRACTORS
 ECC & CLIENTS
 ECC & JV PARTNERS / CONSULTANTS
 ECC & OTHER L&T GROUPS

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Who can Access the portal ?

• Project sites
• Regional/Cluster Office
• Headquarters
• Other L&T groups
• Consultants
• Clients
• Collaborators & JV partners
• Vendors
THROUGH THE INTERNET

OTHER FUNCTIONALITY IN THE PORTAL:

• Drawing management.
• Tendering & Project management.
• Offer & Material management.
• Information about the co. (KM).
• E-Mail.
• Asset Management.
• Budgeting.

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 • Finance.
• Employee Corner.
• Travel Management.

DEPARTMENTS AND MODULES IN EIP

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30
L&T EIP INTERACTION WEBSITE FRONT
PORTAL

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 COUSTMER RELATIONSHIP MANAGEMENT
MODULE

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What Is Customer Relationship Management ?

Customer Relationship Management (or CRM) is a phrase that

describes how your business interacts with your customers. Most
people think of CRM as a system to capture information about
your customers. However, that is only part of the picture. CRM is
also about what you do with that information to better meet the
needs of your existing customers and identify new customers,
resulting in higher profits for you.

Who is your “Customer”?

The “C” in CRM can have a narrow definition or a wide one. For
instance, customers can include not only those who buy from
you, but also your suppliers, your partners, your employees and
your investors. Each of these “customer groups” will have
different needs that have to be managed. For the purpose of this
booklet, we will focus on the “customer” as someone who buys
your products or services. This can be either a business customer
or an individual.

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Implementing CRM in The Business

Options for CRM

There is a continuum of CRM from the most simple (a
spreadsheet or database containing information about your
customers – referred to as a contact management system) to the
most complex (online applications automatically linked with your
back-end systems).

An integrated CRM system can include the following:

Characteristic Benefits
• A central database that is • Improved customer service,
accessible by all employees to loyalty and retention.
view and update customer
data.
• Analysis of customer data • Customized marketing or
including customer sales campaigns.
segmentation and
• Improved campaign
segmentation of potential
targeting.
customers.
• Customer self-service where • Reduced order entry cost
the customers can self-order and customer service cost.
and help themselves using
web-based password access.
• Identifying and tracking • Wider customer base.
potential customers. • More focused prospect
tracking.

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• Reports generated with up- • Better and more timely
to-date information, including decision making.
revenue forecasting and trend
analysis.

CRM Options
Pros Cons
Description
On-premise CRM • Can be tailored to • More expensive in the
There are many CRM your business short run (costs can
systems that are vary from several
• Can be integrated
available for purchase
with your other systems thousand to several
off-the-shelf. These can million dollars)
then be tailored to your • Most companies offer
flexible packages that • Can take a long time
needs. Companies such
are suitable for small (months or even years)
as Siebel, Oracle, SAP,
and Chordiant are well and medium businesses to implement fully
known in this area.

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CUSTOMER RELATIONSHIP MANAGEMENT PROCESS:

SEQUENCE:
1: JOB ORDER CREATION

2: INVOICE/ SUB-TOTAL GROUP

3: CONTRACT TERMS RECOVERIES/ ADVANCE ENTRY

4: BOQ (Bill Of Quantity) ENTRY OR IMPORT

5: BOQ (Bill Of Quantity) AUTHORIZATION

6: OCV (Original Contract Value) CONFIRMATION

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37
38
 PROJECT MANAGEMENT
Project management is the discipline of initiating, planning,
executing, controlling, and closing the work of a team to achieve
specific goals and meet specific success criteria.
The primary challenge of project management is to achieve all of
the project goals and constraints — challenge is
to optimize the allocation of necessary inputs and integrate them
to meet pre-defined objectives.

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SCOPE REGISTER
Scope register management term which is used in the Project
Management.
The scope register is helpful in the project management as it is
the first step in project management.
In this management the cost packages is linked to the AQE. Here
the AQE is Accepted Quantity Estimate.

The BOQ (Bill Of Quantity) is uploaded with the help of portal.

A bill of quantities (BOQ) is a document used in tendering in
the construction industry in which materials, parts, and labor
(and their costs) are itemized. It also (ideally) details the terms
and conditions of the construction or repair contract and itemizes
all work to enable a contractor to price the work for which he or
she is bidding.
In scope register below are the given process that the user can
do:

 Upload BOQ (Bill Of Quantity)

 Insert BOQ items

 Modify BOQ items

 Quantity Estimate

 Cost packages

 Linking of BOQ cost packages

 Insertion of cost packages quantity

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41
COST ESTIMATION :

The another term which is widely used in the project

management is cost estimation. This process is done after the
scope register. After the uploading of the Bill Of Quantity and
linking the cost packages, the estimation of the cost is done
according to some criteria. There are some criteria which is used
in the cost estimation which is like Labour, Material, Plant,
Conveyance etc.

Cost is divided into two types:

1. DIRECT COST
In this estimation the cost is directly related to project is
calculated based on three factors (LMP):
I. Labour
In this, the estimation is done based on number on man
power used in the project.

II. Material
The estimation is done on the basis of total material reqired
for the completion of a project.
III. Plant
The estimation is based on the machinery used for the
completion of the project.

2. INDIRECT COST

Indirect cost are those cost which is used in the process of

different work done by the employees.
Like staff salary, staff welfare, office rent, stationary etc.
42
The main process which are performed is given below:
 Setting of job code

 Selection of library details

 Access at job level access module

 Direct cost provision (ESTIMATION)

 ESTIMATION FOR LMP (Labour, Material, Plant)

 Commom enabling cost

Allocating common enabling cost

 Direct cost distribution

 Preparation of Job Cost Report (JCR)

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 INDIRECT COST PROVISION

MATERIAL PROCUREMENT PLAN

44
 MATERIAL PROCUREMENT PLAN

OBJECTIVE

Optimization of raw materials procurement at corporate level

for different plants from different sources is a complex one.
There can be number of sources with varying qualities as well
as costs and transport logistics. Supply from all of these
sources may be possible to all the plants. There are various
constraints that need to be addressed before finalization of any
procurement plan e.g. limited supply from the source, the coal
quality variation, logistics of supply and quantity required at
each unit to meet its production target.

This plan is used to select the material quantification and the

work packages. The entry is made in this planning whenever a
new item is entered in it. We generate the item code in this
process.
The user have to be very strict for these item codes. Every item
which have to be used in the project completion has to be
entered in a predefined item codes. The material wise budget is
also given in this process.
Examples of item codes used by L&T (Larsen & Toubro) :

MATERIAL ITEM NAMES

CODES
0 Capital Items
1 Heavy Tools
2 Small Tools
3 Consumable Items
4 NOT SPECIFIED
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 5 Electrical Items
6 Bulk Materials
7 Project Space
8 NOT SPECIFIED
9 Spare Parts

The administrator has to provide these types of codes in the

material procurement plan. The item will not be acceptable if the
material codes is other than these given.
The administrator also provide the budget provision to the
materials. The budget is provided here which is came from after
the cost estimation.
The administrator can also put the new entry to add material
codes. The material code and quantity and the rate of the new
items is given in this plan.

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47
SUB-CONTRACTING PLAN

1. Identify the sub-contractors for the job from the vendor

master. As an additional facility, link these sub-contractors to the
related cost packages
2. Import cost package wise budgets
 Until ACE-approval, these budgets flow from ACE

 After ACE-approval, they flow from the last approved RCE

3. For each cost package, define appropriate Work Groups &

set up the quantity ceiling (if applicable) & the amount
ceiling for each of them. The sum of the amount ceilings
gets validated with the budget for the cost package
 For ease of review, it is recommended that the quantity
for one or more of the work groups be rolled up for 

 deriving the Equivalent Cost Package Quantity

 The above roll up factors are also useful for determining

the indicative executed scope for each month.

4. Under these work groups, on an ongoing basis, create as

many Sub-contract Items as required & allocate the same to the
different sub-contractors

*It is recommended that unit rates for sub-contract items be

assessed using the in-built Rate Analysis tool

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5. Assess & re-allocate the sub-contract items & their quantities
to sub-contractors at regular intervals

6. Work Order Management (WOM) is integrated with Sub-

contracting Plan & the further steps viz., preparation of work
orders/amendments & sub-contractors’ bills happen through
WOM, as in practice now
 Sub-contracting Plan is mandatory for Regular Work Orders
alone

 Service Work Orders are to be generated directly thro’ WOM,

as in practice now

MAIN STEPS IN PROCESS OF SUB-CONTRATING PLAN:

 Configure the job code

 Import of cost package amount

 Linking of sub-contractor /create item code

 Define item ceiling for vendor (APPROVAL)

 Submission of basic information for the work order

creation

 Creation of work order by going into the work order

management

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 SUPPLY CHAIN MANAGEMENT

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WHAT IS SUPPLY CHAIN MANAGEMENT

Supply chain management (SCM) is the management of the flow

of goods and services. It includes the movement and storage of
raw materials, work-in-process inventory, and finished goods
from point of origin to point of consumption. Interconnected or
interlinked networks, channels and node businesses are involved
in the provision of products and services required by end
customers in a supply chain.

Supply chain management has been defined as the "design,

planning, execution, control, and monitoring of supply chain
activities with the objective of creating net value, building a
competitive infrastructure, leveraging worldwide logistics,
synchronizing supply with demand and measuring performance
globally."

FUNCTION

Supply chain management is a cross-functional approach that

includes managing the movement of raw materials into an
organization, certain aspects of the internal processing of
materials into finished goods, and the movement of finished
goods out of the organization and toward the end consumer. As
organizations strive to focus on core competencies and become
more flexible, they reduce their ownership of raw materials
sources and distribution channels. These functions are

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increasingly being outsourced to other firms that can perform the
activities better or more cost effectively.

The effect is to increase the number of organizations involved in

satisfying customer demand, while reducing managerial control of
daily logistics operations. Less control and more supply chain
partners lead to the creation of the concept of supply chain
management. The purpose of supply chain management is to
improve trust and collaboration among supply chain partners,
thus improving inventory visibility and the velocity of inventory
movement.

OVERVIEW OF PROCESS IN ORGANISATION

 All document creation/ approval are defined through Access

Control Module.
 Purchase order approvals through predefined auto workflow.
 Purchase through forward and reverse auction.
 Vendors participation in offer management.
 Business intelligent report.
 MR (Material Request ) analysis, Overall Office Comparison ,
PO analysis
 ABC analysis , MR status.
 Vendor performance analysis
 Bulk material reconciliation.
 Stock/lead time analysis.
 Non / Slow / Fast moving stock details.

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MAIN STEPS IN THE PROCESS OF SUPPLY CHAIN MANAGEMENT
1) Material budgeting
2) Material Request (MR) creation.
3) MR authorization (by project head)
4) Offer creation by buyer
5) Counter offer by vendor
6) Offer comparison & PO creation
7) Purchase Order authorization
8) PO acceptance by vendor
9) GIN (Goods Inwards Note) creation
10) GIN Inspection
11) Indent request and authorization
12) DC against MR
13) Inter Stock Transfer Note (ISTN) (Account Transfer)

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 WORK ORDER MANAGEMENT

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What is Work Order ?

A work order or job order (sometimes job ticket or work ticket, as

it often has some type of ticket attached) is an order received by
an organization from a customer or client, or an order created
internally within the organization. A work order may be for
products or services.
In a manufacturing environment, a work order is converted from
a sales order to show that work is about to begin on the
manufacture, building or engineering of the products requested
by the customer. In a service environment, a work order can be
equivalent to a service order where the WO records the location,
date and time the service is carried out and the nature of work
that is done. The type of personnel (e.g. job position) may also
be listed on the WO. A rate (e.g. $/hr, $/week) and also the total
amount of hours worked and total value is also shown on the
work order.
A work order may be a maintenance or repair request from
students, faculty or staff in a university.
Orders received from outside an organization are
often dispatched (reviewed and scheduled) before
being executed.Work orders may be for preventive maintenance
Contractors may use a single job work order and invoice form
that contains the customer information, describes the work
performed, lists charges for material and labor, and can be given
to the customer as an invoice.
A job order is an internal document extensively used by projects-
based, manufacturing, building and fabrication businesses. A job
order may be for products and/or services. In a manufacturing
environment, a job order is used to signal the start of a
manufacturing process and will most probably be linked to a bill
of material. Hence, the job order will probably state:
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 1. the quantity of the product to be manufactured, built or
fabricated
2. the amount of raw material to be used, its price and amount
3. the types of labour required, rate (per hour or per unit) and
amount
4. the machine utilisation for each machine during the routing
process, its rate and amount

In a service environment, a job order can be the equivalent to a

work or service order where the job order records the location,
date and time the service is carried out and the nature of service
that was carried out. The type of personnel (e.g. job position)
may also be listed on the job order. A rate (e.g. $/hr, $/week)
and also the total amount of hours worked and total value is also
shown.

MAJOR STEPS IN THE PROCESS OF WOM:

 Item code generation
 Unit rate analyzer
 Work order request creation
 Work – Technical approval
 Work – Commercial approval from accounts
 Measurement by PI & measurement approval
 Deduction by accounts line
 Bill approval by project head
 Invoice registration by sub-contractor
 Bill scrutiny by finance
 s/c (sub-contracting) journal
 checking of disbursement

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60
 EIP: ASSET MANAGEMENT SYSTEM
MODULE

61
Asset management system is a part in the Enterprise Information
Portal. This module is important as through this module a
company can manage its assets by updating this module.

The asset management system keeps all the data about the
machinery used by the company in a project.
Daily entry log sheets is also entered in this module, if there is
any repair that needs to be done in the machine then that is done
through this module.
The asset registry and the history is entered in the module. The
cost allocation for the minor asset is also done in this
management.
This type of management is very much needed in the bigger
companies as they have to allocate there asset in every field and
if any asset is not in the use, then it may lead to loss in the
company turnover.
In this module the company can also provide the asset to the
different location, for this thing the another project site need to
enter the need for that machinery with prior notice, and the
company can transfer the machinery on the basis of the need by
the project sites.

The main steps in the process of asset management

 Asset receipt
 Asset commissioning & meter reading updation
 Asset classification
1) MAJOR ASSET – daily monitoring required
2) MINOR ASSET – daily monitoring not required

 Asset repair registry and history

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  Daily log sheets for major assets
 Cost allocation for minor assets

LOG SHEET ENTRY

Log sheet is the base document of asset to calculate the plant
performance during the month. Log sheets of all major asset in
the site are to be entered in the module on daily basis. Log sheet
will not be allowed for previous month. If any asset is received
during the month , log sheet entry will be allowed only for the
date >= receipt date and if any asset is released from the site
during the month and then the log sheet entry will not be allowed
for the date > released date.

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64
 FINANCE MANAGEMENT SYSTEM

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WHAT IS FINANCE MANAGEMENT ?

A financial management system is the methodology and software

that an organization uses to oversee and govern its income,
expenses, and assets with the objectives of maximizing profits
and ensuring sustainability.
An effective financial management system improves short- and
long-term business performance by streamlining invoicing and bill
collection, eliminating accounting errors, minimizing record-
keeping redundancy, ensuring compliance with tax and
accounting regulations, helping personnel to quantify budget
planning, and offering flexibility and expandability to
accommodate change and growth.

Other significant features of a good financial management system

include:

 Keeping all payments and receivables transparent.

 Amortizing prepaid expenses.
 Depreciating assets according to accepted schedules.
 Keeping track of liabilities.
 Coordinating income statements, expense statements, and
balance sheets.
 Balancing multiple bank accounts.
 Ensuring data integrity and security.
 Keeping all records up to date.
 Maintaining a complete and accurate audit trail.
 Minimizing overall paperwork.

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MAIN STEPS IN THE PROCESS OF FINANCE MANAGEMENT:

 Set job code.

 Payment Request By Accounts-II-Line.

 Payment disbursement By Cashier.

 Work Order / PO Commercial approval (By Site accountant).

 Accounts Updation.

 WO Bill Deduction (After basic measurement approval by

Project Head).

 Invoice Scrutiny (supplier / sub-contractor)(After vendor bill

registration).

 Invoice registration.

 S/C bill payment.

 SJV (Sub-contractor journal voucher).

 PJV (Purchase journal voucher).

 Report.

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68
ERP Implementation Plan

69
Conclusion
An ERP implementation is a huge commitment from the
organization, causing millions of rupees and can take up to
several years to complete. However, when it is integrated
successfully, the benefits can be enormous. A well-designed and
properly integrated ERP system allows the most updated
information to be shared among various business functions,
thereby resulting in tremendous cost savings and increased
efficiency. When making the implementation decision,
management must considered fundamental issues such as the
organization’s readiness for a dramatic change, the degree of
integration, key business processes to be implemented, e-
business applications to be included, and whether or not new
hardware need to be acquired.

In order to increase the chance of user acceptance, employees

must be consulted and be involved in all stages of the
implementation process. Providing proper education and
appropriate training are also two important strategies to increase
the end user acceptance rate. The organization is also going
through a drastic change, with changes in the way businesses are
conducted, the organization being restructured, and job
responsibilities being redefined.
To facilitate the change process, managers are encouraged to
utilize the eight-level organizational change process. Managers
can implement their ERP systems in several ways, which include
the whole integration, the franchise approach, and the single-
module approach. Finally, the paper concludes with a flow chart,
depicting many of the activities that managers must perform to
ensure a proper ERP implementation.

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