T2 S2 BEML E-Governing Growth Bala

8/2/2019 T2 S2 BEML E-Governing Growth Bala

1/46

Improving Operational Efficiencywith ERP at BEML :

E-Governing the growth of a PSU

N. BalasubramanianChief Information Officer

BEML Limited


2/46

Agenda

About BEMLLimited

E-Governance

E-Governance initiatives

EnterpriseResource Planning

KeyChallenges

SAPERPImplementation at BEML

ERPmodulesimplemented

StrategiesAdopted

Operational Benefits

Functional AreaWise Benefits

Supplier Network CollaborationBenefitsof Collaboration


E-Procurement through SRM

Key Challenges

Solution: E-Procurement System

E-Procurement at BEML

Why SAPSRM?

Implementation of Best Practices

SAPSRM Implementation at BEML

StrategiesAdopted

Financial and StrategicBenefits


Conclusion


3/46

About BEML LIMITED

BEML Ltd., leading multi-technology and multi-location,Miniratna-Category-1 companyunder the Ministry of Defence.

BEML supplies high-quality products for diverse sectors ofeconomy such as Defense, Metro & Railways, Mining,Construction, Aviation, Coal, Steel, Cement, Power, Irrigation and

RoadBuilding.BEML emerged as the fore runner of heavy engineering industrywith a track record of growth and revenues for over fourdecades.

Three Major Business verticals viz., Mining & Construction,

Defense and Rail & Metro along with Aerospace, Technology,Tradingand International BusinessDivision.

Nine manufacturing units located at Bangalore, Kolar Gold Fields(KGF), Mysore, Palakkad and Subsidiary-Vignyan Industries Ltd, inChikmagalur District.


4/46

E-Governance


5/46

E-Governance

E-Governance the process of carrying out theBusiness, Operationsand Activitiesmore efficientlyand effectively through the application of ICTso as

to ensure highest quality and standard of servicesand making the life easy for all the stakeholdersinvolved like the Customers, Vendors, Employees,Auditors, Government Agencies, Investors,

Management and the Citizensof the society.


6/46

E-Governance initiatives

Year Major ICT initiat ive

2007 Integration, Harmonization and Standardization of all businessprocesses through SAP ERP implementation

2008 Integrating the Supply Chain through Supplier NetworkCollaboration (Inventory Collaboration Hub)

2009 Automation of procurement process

e-Procurement through SAP Supplier RelationshipManagement

2010 Analytics, Optimization and Forecasting of Spare Parts Inventory

2011 Management of Product Life Cycle Management (PLM) Implementation in progress


7/46

Enterprise ResourcePlanning (ERP)


8/46

Enterprise Resource Planning

Enterprise Resource Planning (ERP) integratesinternal and external management informationacross the entire organization, embracingfinance/accounting, management, sales andservice, etc. through an integrated application. Itfacilitates the flow of information between allbusiness functions inside the boundaries of theorganization and manages the connections to

outside stakeholders.


9/46

Different units following different processes andfunctioningassilos.

Non-standard business practices across the variousdivisions/ units.

Significant paperwork and manual administrativework.

Duplication/Redundancyof operations/data.

Timeand effort spent on thenon valueadded activity.

Higher level of Inventory.

Delay in compilation / submission of MISinformation.

Key Challenges


10/46

Broad Objective:

Integration, Harmonization and Standardization of allbusinessprocessesthrough ERPacrossthe company.

To bringactivitiesonline, real time data processing.

Quick and accurate analysis of MIS data to achievereduction in Manufacturing lead time, Reduction ofInventory, Optimization of Resources, and drivepaperlessconcept.

Project Started: November 2006

Gone Live: October 2007.

SAP ERP implementation at BEML


11/46

Production Planning Module

Material Management Module

Sales and Distribution Module

Quality Management Module

Plant Maintenance Module

Financial Accounting Module

Cost Controlling ModuleHR and Payroll Module

ERP Modules implemented


12/46

Implementation of an integrated ERP system acrosstheentire organization.

Big Bang approach covering all the locations, units andofficesin one go.

Study of the all the business processes andmodification of thesameasper needs.

Adoption of global best practicesfor optimization.

Harmonisation of the all business processes across

variousmanufacturing locations.

Standardisation of proceduresand reports.

Strategies Adopted


13/46

Strongsupport from senior management.Formation of core-team from in-house domainexpertise.Best Implementation partner SISLASAPMethodologyCreation of a detailed blueprint based on discussionswith all relevant stakeholders and analysis of theprocesses.Use of Standardized processes based on industry bestpractices.Extensive training.Change Management.

Strategies Adopted


14/46

9 Manufacturing units and all marketing divisions areconnected through SAP.

Enhanced management decision making due to Real-time information from single data source.

Redundant data is eliminated by unifying masterrecordsfrom all divisions.

Manual intervention in processingdata iseliminated.

Tight control on authorization to ensure data integrityat all levels.

Control on closing procedure in FI and MM to meetreport deadline.



15/46

Improvement in quality of work life of employees.Enhanced productivity of work force.

Improved Efficiency of work force and processes redundancy eliminated.

Considerable reduction in paperwork due toautomation.

Instant availability of complex reports.

Instant processing of transactions without any time lag.

Better Inventory Management.Meeting of the customers demands on time.

Settlement of vendors payments on time.

Meeting employees requirements on time.



16/46

Production Planning

Material Management

Sales and Distribution

Quality Management

Plant Maintenance

Financial Accounting

Cost Controlling

HR and Payroll

Functional Area Wise Benefits


17/46

Supply Chain Management(SCM) Supplier

Collaboration Network (SNC)


18/46

Supplier Network Collaboration

Supplier Network Collaboration (SNC) is anInternet-based solution connecting businesspartners (suppliers / customer) on a shared

(inventory information / real time data), easy-to-use platform. It is designed to enhance visibility,collaborate more effectively with suppliers andincrease the overall speed, accuracy, andadaptivenessof supply network.


19/46

Benefits of Collaboration

For the Manufacturer / Customer:

Complete transparency on thestock situation.

Alerts on Stock out situation, Triggering replenishment

Process. Simplifyinginternal processes.

Reducing safety stock.

Reducingdelivery times.

Increased salesturnover.

Lower administrativecosts.


20/46

Benefits of Collaboration

For theSupplier:

Reduced stock.

Reduced delivery times.

Reduced supply risks. Reduced down time and overtime.

Reduced transportation costs through possible

transport consolidation.

Improved order fulfillment rate.

Lower administrativecosts.

Improved service.


21/46

Purchase orders seen online immediately afterapproval.

Acceptanceof purchase orders done online.

Online challan creation and no hardcopy to be

attached.

Report of dispatches seen by suppliers/ customers.

Report of late dispatchescan be enabled.

In bound processes made easy.Overall cycle time reduced significantly.

Totally SCM enablesa paperlessoffice.



22/46

E-Procurement throughSupplier RelationshipManagement (SRM)


23/46

E-Procurement

E-procurement (electronic procurement,known as supplier exchange) is the B2B orB2C or B2G purchase and sale of supplies,Work and services through the Internet aswell as other information and networkingsystems, such asEDI and ERP.


24/46

Supplier Relationship Management

SRM is a Web based application involvingprocesses like e-procurement, reverseauction, supplier registration etc. This is Pre-POprocess involvingactivitieslike sending of

bid invitation (RFQ) to prospective supplierselectronically, processing of bids submittedonline, generating comparative statementand creation of P.O. in backend SAP R/3

system (ERP).


25/46


26/46

Solution: E-Procurement System

e-Procurement application at BEML Website (www.bemlindia.com)

facilitate the transformation process and enable BEML to sustain benefits.


27/46

E-Procurement at BEML

Pre P.O. Process Post P.O. Process

SUPPLIER

NETWORKCOLLABORATION(SCM-SNC)

SAP R/3(BACKEND SYSTEM)

SUPPLIER

RELATIONSHIPMANAGEMENT(SRM)

VENDOR


28/46

Why SAP SRM?

Ease of integrating the SAP Supplier RelationshipManagement application with the existing SAP ERPapplication.

Satisfactory servicesfrom SAPduring ERPimplementation.

Continuous product upgrades and support given tocustomers.

Potential of product to address the tendering processesBEMLfollowed.


29/46

Implementation of Best Practices

Project driven and monitored by top management.

Involvement of core team that implementedERP.

Creation of detailed blueprints after discussion with all relevant

stakeholdersand analysisof processes.

Standardizedprocessesbased on industry best practices.

Performed extensive trainingand change management.

Concentration on the most important, most-often-usedprocessesto achieve rapid implementation.


30/46

SAP SRM Implementation at BEML

Theimplementationwork started in themonth of Nov 2008.

Successfully achieved the Go-Live target of 30.03.2009.

All the business processes are mapped in the e-Procurementsystem.

Core-team members of BEML visited major Public Sector Unitsand gained significant inputs.

During the last two years of implementation of e-Procurementmodule in BEML, about 8000 e-Bidding Tenders and about 250

Reverse Auctionswere processed.Around 850vendorssubmitted bidsin the e-Procurement systemwith their Digital Signatures.


31/46

Strategies Adopted

Customizations were carried out in the e-Procurement moduleby BEMLto suit organizational needs.

Tight Integration wasensured with theERPsystem.

e-Bidding to get bidsonline from thebiddersbefore thespecifieddue-date.

Supports multi-stage bidding coupled with government laidprocedures.

Reverse Auctions are conducted for certain items wherecompetitivepricescan beobtained.


32/46

Strategies Adopted

Integration of Digital Signature with the system to comply with ITAct 2000.

Generation of Comparative Statement with Tax Calculations forarrivingat Purchase Decisions.

Approvals process made available in the e-Procurement system,which reducestheprocurement time considerably.

To achieve the goal of paperless office, BEML enabledincorporation of notes/ text by the users in the e-Procurementsystem.


33/46

Financial and Strategic Benefits

Automated and simplified theprocurement process.

Significantly reduced procurement cycle due to ease ofpublishingtenderswith attachments.

Reduced administrative work with immediate accessibility of

documents.Enabled vendorsto access the documents/drawingsand view thestatusof submission online.

Improved transparency in the bidding process through liveauction.

Increased competition leading to better pricesin reverse auction.Savings on charges otherwise paid to reverse auction serviceproviders.


34/46


Increased Buyers reach.

Increase in Vendor Satisfaction.

Reduction in procurement cycle timeby 65%to 80%.

EmployeeProductivity increased by 20%.

Direct cost reduction - due to elimination of hidden inefficienciesinherited in generic tendering/negotiation process.

Buyer able to undertake more professional, value addedactivitiesbeyond traditional negotiations.

Considerable reduction in material cost due to competitivereverse auctioningprocess.

Ability to meet material requirement for increased business.


35/46

Conclusion

Implementation of E-Governancehas automated and simplified thewhole business processes whileachieving improved operationalefficiency, increased productivityand total transparency.

- V RSNatarajan,

Chairman & Managing Director,BEMLLtd.


36/46

Thank you

N. Balasubramanian

[email protected]


37/46

CMR consolidated material request for group of orders.CGI consolidated material issue request for group of orders.

Job cards order wise, split ting of job cards.

Incentives based on job cards.

Customized engineering change management.DMRdaily movement reports.

Special subcontract processes for in-process operation.

Detailed reword & rejection procedures.

Shortage list for equipments (multi level).

Tool movements between plants, tool t racking.

Production Planning


38/46

Stock Consolidation can be viewed across all division,regions & district offices.

Procurement based on MRP.

Centralized corporate purchase reducing the procurementcost and material cost.

Online inventory valuation.

Physical Inventory processing and differences made easy.

Posting of differential valuation to stock at the time ofinvoice verification.

Control on material return to vendor through notificationsand credit memo.

Complete monitoring of sub contracts processes withexcise challans.

Material Management


39/46

Extensive Subcontracting handling through system.Inbound delivery t racking and tag printing.

Development of material gate pass / vehicle /vendor entrypass.

Development of dispatch advices.

Weighment cards.

Vendor freight calculation based on tonnage anddestination.

Mass conversion of PRs to RFQ.

Picking list for GIs.Tender enquiry summary.

Customized invoice verification for imports.

Material Management


40/46

Determination of accurate delivery date to customers (throughATP).

Shorter sales cycles and reliable forecast.

Spare parts requirements will flow directly to manufacturing.

Spare parts shorter lead times.

Warranty requirements identified and tracked for prioritydelivery.

Sales turnover division and region wise.

Alternate parts incorporated.

Warranty for all major aggregates.Spares and warranty ordering process.

Customized reports and printouts.

Customized pricing.

Sales and Distribution


41/46

Increased Quality improvements due to better visibility ofbusiness process.

Standardization of quality inspection process across theplants.

Increased visibility across logistics supply chain by closely

integrating MM, PP, FI & PM.Online status of inspection lots pending.

Unification of defect codes has helped for better analysis ofdefects.

Control of payment to the vendors based on theacceptance of inspection lot has been brought in.

In process quality for Critical to Quality (CTQ) parameters isbeing done through SAP.

Quality Management


42/46

Preventive / Breakdown / Corrective maintenance.

Notifications.

Spare Parts (Tools) Planning.

Plant Maintenance


43/46

Monthly Business Reporting.Division wise account balances.

Balance Sheet & Profit and Loss statement at companycode and division level.

Real t ime reconciliation of inter division accounts.

Automatic vendor payments can be processed centrally orat division level.

Online updation of customer payments and real timeavailability customer balances.

Real time integration of general ledger with inventory, payroll and sub ledgers.

Automatic bank accounts reconciliation and availability ofbank balance.



44/46

Planning and budgeting of capital expenditure at divisionlevel and company code level.

Approval of capital expenditure proposals throughworkflow.

Availability of real time reports for analysis of actual capitalexpenditure Vs plan and budget.

Complete management of assets under construction.

Automatic periodic depreciation calculation and posting.

Repots for depreciation simulation for the coming years.

Fully integrated with investment management module forthe capital work orders.



45/46

Online availability of product cost and contribution for allequipments and aggregates.

Production variance can be analyzed against standardsfacilitating decision making.

Work in progress can be obtained online.

Controlling and monitoring of expenses based on Planning& Budgeting for Cost / Profile centers.

Automatic Allocation of overhead cost periodically.

Online Profitability analysis for profit center or businesssegment or product or customer.

Cost Controlling


46/46

Pay roll processing is centralized.

Centralized control of master data.

Integration of time data for pay roll processing.

Access to all statutory reports.

Transparency of resource.

HR and Payroll

T2 S2 BEML E-Governing Growth Bala

Documents