58 | December 31, 2013 www.dqindia.com A CyberMedia Publication |

ENTERPRISE | REAL CASEEd Nairednair@cybermedia.co.in

Ashok Leyland Looks at Analytics to Manage Warranty CostsInformation related to product performance and reliability has a bearing on warranty costs, which is an important indicator of profitability

In the competitive market for commercial vehicles, there are two key success factors: higher product quality and performance at reduced price and improved customer experience. Profits can be improved by reducing warranty costs that depend on product quality and performance of current products and the need for technical services for older ones. This is especially important because the organization has a huge base of vehicles in use. The company is looking at using analytics across various applications to manage warranty costs.

DEFINING THE CULTUREAshok Leyland began its IT transformation journey about four years ago with the enterprise platform based on SAP. Already, the organization had a large base of engineering IT systems and the SAP-based enterprise application platform was meant to complement it to create an enterprise-wide IT architecture. The company also went in for extended solutions like supplier relationship management, CRM, and distribution management to complete the information framework. But business applications alone didn’t cut it; the company believed in fostering a collaborative culture. Platforms like SAP collaboration, Lync, Sharepoint are all part of the collaboration infrastructure at Ashok Leyland. Functionally, IT operated in the shared services model because there were subsidiaries and joint ventures that needed to be included in the IT-led transformation. The

Ashok Leyland is a `13,360 crore automobile com-pany that is India’s second largest manufacturer of commercial vehicles like buses and trucks, emer-

gency vehicles, and defence transport vehicles. The com-pany owes much of its success and leadership in its mar-ket segment to the appropriate use of technology through various generations.

While Ashok Leyland has been traditionally strong at product engineering, there is still lot of scope for improving the performance of IT and extract value by better alignment with business. Operating six plants, Ashok Leyland also makes spare parts and engines for industrial, genset and marine applications. It sells about 70,000 vehicles and about 7,000 engines annually. The company claims to carry over 60 mn passengers a day, more people than the entire Indian rail network.

o Ashok Leyland is engaged in doing a proof-of-concept using SAP HANA, where it serves as a platform for both analytic processing as well as transaction processing

TAKEAWAYS

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company also relied on partners like HP, Capgemini, and TCS as partners in managing various aspects of IT. Says Venkatesh Natrajan, CIO and IT Head, Ashok Leyland, “Our partners like Capgemini really helped us transform IT and define the required culture to leverage technology.”

Ashok Leyland now identifies three distinct yet cohesive cultures at work. A process-oriented culture that was rooted in re-engineered processes aimed at efficiency and flexibility, an information culture that stressed on using information as an asset and tool to make decisions, and a collaboration culture that interlinked shared communication and working between various functions within the organization and also with the stakeholders of the extended enterprise which included suppliers and partners. Says Venkatesh Natrajan, CIO and IT Head, Ashok Leyland, “These cultures have been fully enabled by IT and it has pushed up the organization in terms of IT maturity. We are in the process of changing from an IT-enabled organization to an IT-led organization and seeing IT neither as a cost center or a profit center, but as a value center.”

DATA EVERYWHEREThe challenge still is that data and information from various systems have to be compiled into one view. Ashok Leyland uses business intelligence and analytics platform from Microstrategy, Cognos, and SAP Business Objects. There are lots of dashboards related to KPIs and multiple performance measures., predictive analytics, and slicing-and-dicing of information. Data is pulled in from multiple systems like ERP, DMS, PLM, CRM, telematics, testbed, and such. A classic big data case!

Says Venkatesh Natrajan, CIO and IT Head, Ashok Leyland, “This is also the case to push the envelope of information culture at Ashok Leyland by building the competence to analyze and look at patterns within data

THE COMPANY IS LOOKING AT USING ANALYTICS ACROSS VARIOUS APPLICATIONS TO MANAGE

WARRANTY COSTS

ENTERPRISE | REAL CASE

and make decisions on that basis. Getting all the data on to one page and deriving the right context of the data is a challenge.” Specifically, data related to product performance and reliability has a bearing on warranty costs, which as mentioned before is an important indicator of profitability.

ANALYZE THIS!How can big data and analytics be used to lower warranty costs? This was the challenge put up by the Ashok Leyland at the Capgemini Supertechies Show Season 2. The specific metrics to be achieved in the challenge were:

� Reduce warranty cost by 10% � Reduce defects per vehicle by 10% � Reduce cycle time in defect capturing to

implementation of design modification � Improve customer satisfaction by reducing the repair

timeThe best solution presented pointed towards a good

roadmap on how to create an analytics framework by bringing together the various analytics platforms and data sources. Details aside, the solution identified key analytic possibilities such as to detect fraudulent warranty claims, cull out early warnings on product failures, forecast and predict warranty claims, maximize recovery from suppliers- all of which has a direct bearing on warranty costs.

Ashok Leyland is engaged in doing a proof-of-concept using SAP HANA, where it serves as a platform for both analytic processing as well as transaction processing. In the future, analytics has to be part of transaction processing and should be done with speed. Venkatesh Natrajan, CIO and IT Head, Ashok Leyland, sums up “All data should be at one place, there should be only one version of the truth. Analytics in future should not have OLAP at all, we should be able to query right at OLTP and get the results with speed.”