ERP at Tata Motors 2003

8/4/2019 ERP at Tata Motors 2003

1/37

ERP IMPLEMENTATION

IN TATA

Motors

ASHISH DAgA(07BS0835)


2/37

TATA MOTORS Established in 1945, Indias largest automobile company Key growth business for the Tata stable, and currently

contributes $4.6 billion or about 20% to the group's totalrevenue

Employs 30000+ employees

Information Technology background Tata Motor IT solutions ,business and services are provided

by Tata Technologies, a fully owned subsidiary of Tata Motors Basic IT strategies and details are finalized in an IT balanced

scorecard in which the various projects are defined for thenext 12 months and listed in order of priority


3/37

Reasons For Implementation 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 R&D centers are located in South Korea, Spain and UK 1,400 in-house engineers and scientists Spare part dealer network consists of 1200 touch

points


4/37

Reasons for the implementation of ERP

given its sheer size and distributed units there was no online real timedata available which led to production loss

sales, finance and production planning systems were independent of each other hence information flow across the organization was verycumbersome

a need for collaboration between vehicle manufacturers and dealerswas felt

with legacy-based systems, the environment produced inconsistent

data, making interpretations difficult and resulting in inefficientplanning for capacity and spare parts and 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


5/37

WHY SAP: Tata motors perspective

SAP is the world leader in ERP systems for manufacturingcompanies Ready made processes for auto manufacturers level of

customization required is less

The success of SAP SCM module hinged on the success of theTata Motors implementation


6/37

SAP forAutomotive

Solutions

Siebel CRMSolution

DigitalProduct Life

CycleManagement

TATA MOTORS A Digital Enterprise


7/37

Goals mySAP implementation

Improved Sales Revenue Cost Reduction

Reduced Inventory Improved Production Scheduling Improved Productivity

Enhanced organization-widecommunication


8/37

Functional and Technical Consulting forimplementation of mySAP portfolio of products

SAP R/3 Implementations including Industry SpecificSolutions

BIW, CRM, SRM, APO, SCM, Enterprise Portals Change Management SAP Implmentation Audit Identification of Risk Factors

Risk mitigation Planning Solution / System Optimization System Operations Plan

SAP Product Implementation


9/37

Phase 1 Pilot implementation covering:

four locations for selected product categories and

four vendors each for direct and indirect materials Was primed by SAP Consulting

Phase 2

Rollout of mySAP for Direct and Indirect Materials for balanceProduct Categories and Vendors covering all locations. Also implement Invoice entry and Approval Modules. Was primed by Tata Technologies Limited

Project Scope - mySAP


10/37


11/37

Phase 2

Production bottleneck is reduced as scheduling is very good andVendor end system has been integrated with VCM ( the legacysystem) 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


12/37

Rechristened as Project VECTOR: ValueEnhancement by Collaboration throughTechnology and Operational Restructuring

Project VECTOR Mission: Revolutionize the supply chain by uncoveringthe hidden value through technology drivenSourcing and collaborative Purchasing

mySAP SRM 40 Implementation @TataMotors


13/37


14/37

The ultimate goal of project VECTORis stated in bullet points below: 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

Project VECTORGoals


15/37

VECTORProject Schedule


16/37

Organization Chart for implementation


17/37

SAP Commitment

SAP SCM modulesuccess hinges ona robust

implementationin TATA Motors. TataMotors

Expertise

TopManagement

LeadManagement


18/37

Logical Structure


19/37

Physical Structure


20/37

e-ProcurementSupplier Relationship

Management


21/37

SRM

Tata Motors has used the following features Self Service procurement. Catalog and Content Management. Strategic Purchasing Scenario: Spend Analysis, Contract Monitoring.

Sourcing Scenario: Rfq, Rfx. Supplier Self Registration Module. Live Auction Cockpit Order Collaboration Scenario with full support for Goods

Movement.

Contract Re-Negotiation Scenario for Retrospective PriceAmendments. Usage of SAP Netweaver: People Integration, Process Integration

and Information Integration


22/37

Purchase Process Flow

Tender Floatation Evaluation of tender

Selection of Vendor

Material transport & Documents Exchange

Material Acquisition


23/37

Evaluation of tenderParameters

Quality aspectsCompetitive price rates among consignor

Freight ratesPrice conditions ( transit insurance,

packaging )

Tax structure to be applied on consignorLocation basis


24/37

Business Process Supply Strategy Development

Supply Strategy Development is initiated by

assessing the organizations supply needs.Products and/or product groups are combinedinto sourcing categories. Categories arepositioned according to their business impact.

Market information, technology and industrytrends are collected along with informationabout the supply base.

Based on the analysis of this combinedinformation a supply strategy is derived foreach of the souring categories.

DEFINITION

SRM COMPONENTSA company opens a new facility in East Asia,and defines the sourcing strategy for thatregion.Analysis of hidden procurement costs kicksoff a supplier de -proliferation initiative.

EXAMPLESSAP Enterprise Buyer (Prof. Ed.)

SAP Decision SupportSAP Business Information WarehouseSAP Collaborative RoomSAP Supplier Collaboration Services

Datacollection

www..

Strategic

analysis

Strategycollaboration


25/37

Supply strategy developmentSUPPLY STRATEGY DEVELOPMENT

Business impactassessment

Supply needassessment

SAP Business Information WarehouseSAP Decision Support

SAP Collaborative RoomSAP Supplier Collaboration ServicesProduct key mapping & synchronizationcross multiple backend systemsHub-based analytics architectureCross-organization purchasing visibilityCollaborative demand aggregationusing documents in C-ROOM

SAP Enterprise Buyer ProSAP Business Information WarehouseSAP Decision Support

Vendor key mapping & synchronizationcross multiple backend systemsCross-organization supplybase analysisContract & Spend analysis

SAP Business Information WarehouseSAP Decision Support

Import and analysis ofDun & Bradstreet data

SAP Collaborative RoomSAP Supplier Collaboration Services

Collaborative document mgmt with C-ROOMSharing of spend reports & research documentsin a commodity teamStructured discussions about documentsTrigger RFQ process via C-ROOM

Strategycollaboration

Supply marketassessment


26/37

Business Process Supplier Selection (commodity goods)

Strategic Sourcing is the process of sourcing a

strategic contact for a material group wheredesign collaboration is less important.

A request for proposal is submitted to qualifiedsuppliers and responses are evaluated. Acontract negotiation phase usually follows.

DEFINITION

SRM COMPONENTSConsulting company reduces supplier base,by aggregating airline tickets to one airline.Bank aggregates paper demand to improveMRO pricing.

EXAMPLESSAP Enterprise Buyer Professional

SAP Business Information WarehouseSAP Decision SupportSAP Dynamic Bidding

StrategicContract

BidAnalysis

RFQ / Reverse Auction

Bidding scenario


27/37

Supplier Selection (commodity goods)

Commodity Sourcing Create andsubmit bid

InitiateRFQ/Auction

Bid analysisand evaluation

Determine Winner

PublishRFQ/Auction

SAP Dynamic Bidding RFQ/Reverse auctioncapabilities in DBInitiate RFQ from C-ROOM

SAP Dynamic Bidding RFQ/Reverse auctioncapabilities in DBBid invitation via e-mail

SAP Dynamic Bidding Online bidding in DB

Attach document to bids

SAP Enterprise Buyer ProSAP Dynamic Bidding

Contract Management in EBPIntegration of DB and EBP

SAP Dynamic Bidding SAP Business Information WarehouseSAP Decision Support

Export of RFQ/Bid to BW Multi-parameter bid analysis

1

S li C ll b ti


28/37

Supplier Collaboration

Supplier RegistrationSupplier self-registrationSupplier qualification

Design CollaborationNew product designCollaborative projectmanagement

Order CollaborationAccount informationBidding eventnotificationOrder managementInvoice processing Dispute resolution

Supplier ConnectivityIntegration brokerSupplier network

CollaborativeReplenishment

Stock requirement visibilitySupplier managed inventoryAdvance shipping notification

Reduce administrative overhead forsupplier communication

Extend process control to your suppliers

S li S lf R i t ti


29/37

Supplier Self-Registration

O d C ll b ti


30/37

Order CollaborationFunctions & Benefits

Documents supported:Purchase OrderRelease scheduleOrder ResponseConfirmation/ASNInvoice/ERS Invoice

e-mail notification for new/changedorders/release schedules

Overview of all orders/releaseschedules

Print & download functionality

Service Agent for Service Entry

Confimation/Service entry creationin easy to use Web UI for EBP-SUSscenarioASN creation in easy to use Web UIfor MM-SUS scenario

Easy invoice creation* based onConfirmation/ASN or orders

BUYER SUPPLIER

Invoice*

Invoice

Sales Order

Invoice

Confirmation/ ASN

Purchase Order

Confirmation/ ASN

Order/Change order

Order responseOrder response

Receip**t

Receipt**

ERS Invoice

Confirmation/ASN

Note that EBP-SUS scenario is only fully supportedin local deployment mode.

* Order Response and Invoice creation is not supported for Release schedule

** Receipt message is only supported for EBP-SUS scenario


31/37

Supplier Self ServiceSUPPLIER SELF SERVICE

Receiveorders

ContentCreation

SAP Supplier Self Service

Supplier content ManagementSuppliers can modify their catalog data orcan manually create new catalog data

SAP Supplier Self ServiceReceive order via xml documentsOrders can be viewedAbility to download orders

SAP Supplier Self ServiceSupplier manages ordersProcess order acknowlegementChanging status of orderChanging of delivery times,quantities etc.Changes are distributed to procur-ement system via xml documents

SAP Supplier Self ServiceEntering the information aboutservices performed and Material neededData distribution to procurementsystem via xml document Web reports accessible to suppliers

Data CaptureRespond toOrders Invoice

SAP Supplier Self ServiceCreate Invoice based onorder or without referenceto orderData is distributed toprocurement system viaxml document


32/37

Business Process Self Service ProcurementDEFINITION

SRM COMPONENTSCatalog buying of office materials, ITequipment and more by employees.Employee requesting some special materialsor service not found in catalogs or framecontracts.

EXAMPLESSAP Enterprise Buyer Professional

Requisite BugsEye

Self Service Procurement is the process of

purchasing non-strategic goods, i.e. goods notdirectly linked to the value chain (often calledMRO maintenance, repair and operationsitems). Demand is generated mostly ad hoc by humans.Users are all employees in an enterprise, not justprofessional buyers. Example commodities:office material, work clothes, IT equipment.

Catalog

requisitioning Purchase Order

Approval


33/37

SAP Enterprise Buyer ProStandalone or backend-integratedprocurement dependent onproduct category

Self Service ProcurementSELF SERVICE PROCUREMENT

SAP Enterprise Buyer ProRequisite Bugs Eye

Catalog buying from any OCI-certified catalog.Off-line access via mobile devices

SAP Enterprise Buyer ProInvoice verification against purchase orderand goods delivery note

SAP Enterprise Buyer ProCentralized procurement using EBPOrder tracking functionality

Requisition Approval Ordering Goods

ReceivedInvoice

Handling Payment Accounting

SAP Enterprise Buyer Pro Workflow for order approval

** Selected customers only

mySAP Enterprise Buyer ProDownload toAccountsPayable/GeneralLedger systems


34/37

SRM Supplier Collaboration

for Closed Loop Procurement Process

Provides suppliers with a streamlined order management system, along with a friendly interface andcomprehensive search options make the job easy

Efficient Goods Movement Tracking Reduce efforts in short listing vendors for sourcing a part. Easy capturing of new vendors capability. Easy accessibility for all buyers

SRM Operational Procurement

for Cost Reduction, Better Spend Control & Contract Compliance C ompress cycle time Reduce transaction cost E ase of procurement Reduce inventories

SRM Strategic Sourcing

for Improved Supplier Selection, Reduced Cycle Time

C ategory based Sourcing Cockpit gives more control and ease of use for buyers. Data Integration between Requirement, Sourcing and Fulfillment Process avoids manual data

entry and increases efficiency. Online Bid Submission Reduces Cycle Time and reduces cost for suppliers.


35/37


36/37

Overall Benefits 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


37/37