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ERP IMPLEMENTATION
IN TATA
Motors
ASHISH DAgA(07BS0835)
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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
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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
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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
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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
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SAP forAutomotive
Solutions
Siebel CRMSolution
DigitalProduct Life
CycleManagement
TATA MOTORS A Digital Enterprise
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Goals mySAP implementation
Improved Sales Revenue Cost Reduction
Reduced Inventory Improved Production Scheduling Improved Productivity
Enhanced organization-widecommunication
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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
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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
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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
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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
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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
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VECTORProject Schedule
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Organization Chart for implementation
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SAP Commitment
SAP SCM modulesuccess hinges ona robust
implementationin TATA Motors. TataMotors
Expertise
TopManagement
LeadManagement
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Logical Structure
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Physical Structure
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e-ProcurementSupplier Relationship
Management
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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
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Purchase Process Flow
Tender Floatation Evaluation of tender
Selection of Vendor
Material transport & Documents Exchange
Material Acquisition
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Evaluation of tenderParameters
Quality aspectsCompetitive price rates among consignor
Freight ratesPrice conditions ( transit insurance,
packaging )
Tax structure to be applied on consignorLocation basis
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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
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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
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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
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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
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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
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Supplier Self-Registration
O d C ll b ti
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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
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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
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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
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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
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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.
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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
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