ERP Case Study on: TATA MOTORS

402:Vinayak Ambole 409 :Nilkanth Bansode 426 :Sanket Deshmukh 453: Prasad Mantri

 Name : Tata Motors Limited Industry : Automotive Product &Services : Commercial vehicles and passenger vehicles Employees : 24,000 Name of package: mySAP SRM 40 Vendor: Tata Consultancy Services Approximate cost:t $16.8 million

Reasons for implementaion of ERP:

Corporate office of Tata Motors is located in Mumbai 4 major plants located in different parts of India 42 Regional and Sales offices 27 spare parts warehouses Produces almost all major aggregates, components, forgings and castings 1,400 in-house engineers and scientists there was no online real time data available which led to production loss

Contd.. sales, finance and production planning systems were independent of each other hence information flow across the organization was very cumbersome
Tata motors wanted to scale production and increase its capacity, hence a need for backward integration of the processes was required Tata Motors saw implementation of ERP as a way of achieving these goals

Technique Used for implementation

mySAP SRM 40 Implementation at Tata Motors has been christened as Project VECTOR:Value Enhancement by Collaboration through Technology and Operational Restructuring

The ultimate goal of project VECTOR is stated in below points: Automate procurement process Enhance Supplier capability through catalogue content management Streamline procurement process across locations Quick sourcing through live auctions Clear visibility of supplies and payments status to suppliers through portal. Bring global Spend visibility to maximize negotiation power Parts rationalization through spend analysis Competitive price through live auctions Harness state of the art technology Netweaver, Web enabled collaboration

How much research for implementing

Phase 1 Pilot implementation covering: four locations for selected product categories and four vendors each for direct and indirect materials. Phase 2 Rollout of mySAP for Direct and Indirect Materials for balance Product Categories and Vendors covering all locations. Also implement Service Procurement, Confirmation, Invoice entry and Approval Modules. Phase 1 of mySAP implementation was primed by SAP Consulting.

Phase 2
1997 : SAP version 3.4 was implemented Constrained by the WAN architecture in the country their first implementation was a decentralized one. They had four servers: 3 for their manufacturing plants at Jamshedpur, Lucknow and Pune. 1 for their sales and corporate services at Mumbai. 2003 : upgraded to version 4.6 migrated to single server architecture Triggered by need to consolidate operations at Daewoo, Korea and the Pune operations. 3000 users, and the company implemented over twenty modules of SAP.

Phase 2
Production bottleneck is reduced as scheduling is very good and Vendor end system has been integrated with VCM ( the legacy system) which is yet to be incorporated within SAP The range of SAP functionality used is perhaps one of the largest and successful in the automobile industry worldwide Disaster Recovery infrastructure to blend with ERP System Seamless integration with Enterprise Applications like PLM and CRM Customizations: Enhanced automatic Invoice Verification: 12000 invoices a day Automated payment and recoveries for transporters: 4,50,000 vehicles annually Participants: Suppliers, Dealers, Sales & Service Centers and even Bankers

Cost of Maintenance:
This includes the annual charge paid to the vendor and the license cost of future upgrades. Maintenance is paid in advance. The cost of maintenance is directly related to the cost of software license.

Training and training cost:

Training process takes along with the process of implementation. The TCS trains the employees to implement and later run the system. Employee become self sufficient to implement the software after the vendor and consultant have left. End user training: The employee who is going to use the system are identified and trained.

Module
Controlling: The subsystems of controlling are: a) Overhead Cost Controlling b) Cost Centre Accounting c) Overhead Orders d) Activity- Based Costing e) Product Cost Controlling f) Cost Object Controlling g) Profitability Analysis

Advantages
Overall Integration of the departments Finance, Sales, Production etc. On Demand Decision making data Backward Demand Integration Reduction in inventory cost as real time info is available Reduction in production bottleneck with better scheduling Seamless integration across the Supply Chain Standardization of processes across plants at various locations Reduction in manual efforts of Invoice Capture Reduction in Transaction Cost & Compress Cycle time

Difference after implementation

Although the effects of the implementation were noticeable, they were not far reaching Improvements - such as a more efficient way to access information or a more precisely defined workflow - could not be felt at the transaction level. Because of the required process volume, Tata Motors had to make a number of changes to the systems to meet performance requirements. After SAP R/3 4.6C was implemented in 2003 and enterprise resource planning was founded on a single server for the enterprise, the company profited from significant advantages, particularly for financials,logistics, and sales.