ERP IMPLEMENTATION IN

TATA Motors
ASHISH DAgA (07BS0835)

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 total revenue 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 the next 12 months and listed in order of priority

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

Reasons for the implementation of ERP

given its sheer size and distributed units there was no online real time data available which led to production loss sales, finance and production planning systems were independent of each other hence information flow across the organization was very cumbersome a need for collaboration between vehicle manufacturers and dealers was felt with legacy-based systems, the environment produced inconsistent data, making interpretations difficult and resulting in inefficient planning 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

WHY SAP: Tata motors perspective

SAP is the world leader in ERP systems for manufacturing companies Ready made processes for auto manufacturers level of customization required is less The success of SAP SCM module hinged on the success of the Tata Motors implementation

TATA MOTORS A Digital Enterprise

SAP for Automotive Solutions

Siebel CRM Solution

Digital Product Life Cycle Management

Goals mySAP implementation

Improved Sales Revenue Cost Reduction Reduced Inventory Improved Production Scheduling Improved Productivity Enhanced organization-wide communication

SAP Product Implementation

Functional and Technical Consulting for implementation of mySAP portfolio of products
SAP R/3 Implementations including Industry Specific Solutions 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

Project Scope - mySAP

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 balance Product Categories and Vendors covering all locations. Also implement Invoice entry and Approval Modules. Was primed by Tata Technologies Limited

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

mySAP SRM 40 Implementation @Tata Motors

Rechristened as Project VECTOR: Value Enhancement by Collaboration through Technology and Operational Restructuring Project VECTOR Mission: Revolutionize the supply chain by uncovering the hidden value through technology driven Sourcing and collaborative Purchasing

Project VECTOR Goals

The ultimate goal of project VECTOR is 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

VECTOR Project Schedule

Organization Chart for implementation

SAP Commitment
SAP SCM module success hinges on a robust implementation in TATA Motors.
Lead Management
Expertise

Tata Motors
Top Management

Logical Structure

Physical Structure

e-Procurement Supplier Relationship Management

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 Price Amendments. Usage of SAP Netweaver: People Integration, Process Integration and Information Integration

Purchase Process Flow

Tender Floatation Evaluation of tender

Selection of Vendor

Material transport & Documents Exchange

Material Acquisition

Evaluation of tender
Parameters Quality aspects Competitive price rates among consignor Freight rates Price conditions ( transit insurance, packaging ) Tax structure to be applied on consignor Location basis

Business Process Supply Strategy Development

DEFINITION
Supply Strategy Development is initiated by assessing the organizations supply needs. Products and/or product groups are combined into sourcing categories. Categories are positioned according to their business impact. Market information, technology and industry trends are collected along with information about the supply base. Based on the analysis of this combined information a supply strategy is derived for each of the souring categories.
www..

Data collection

Strategy collaboration

Strategic analysis

EXAMPLES
A company opens a new facility in East Asia, and defines the sourcing strategy for that region. Analysis of hidden procurement costs kicks off a supplier de-proliferation initiative.

SRM COMPONENTS
SAP Enterprise Buyer (Prof. Ed.) SAP Decision Support SAP Business Information Warehouse SAP Collaborative Room SAP Supplier Collaboration Services

Supply strategy development

SUPPLY STRATEGY DEVELOPMENT
Supply need assessment Business impact assessment Supply market assessment Strategy collaboration

SAP Business Information Warehouse SAP Decision Support SAP Collaborative Room SAP Supplier Collaboration Services
Product key mapping & synchronization cross multiple backend systems Hub-based analytics architecture Cross-organization purchasing visibility Collaborative demand aggregation using documents in C-ROOM

SAP Business Information Warehouse SAP Decision Support

Import and analysis of Dun & Bradstreet data

SAP Enterprise Buyer Pro SAP Business Information Warehouse SAP Decision Support
Vendor key mapping & synchronization cross multiple backend systems Cross-organization supply base analysis Contract & Spend analysis

SAP Collaborative Room SAP Supplier Collaboration Services

Collaborative document mgmt with C-ROOM
Sharing of spend reports & research documents in a commodity team Structured discussions about documents

Trigger RFQ process via C-ROOM

Business Process Supplier Selection (commodity goods)

DEFINITION
Strategic Sourcing is the process of sourcing a strategic contact for a material group where design collaboration is less important. A request for proposal is submitted to qualified suppliers and responses are evaluated. A contract negotiation phase usually follows. RFQ / Reverse Auction Bid Analysis Strategic Contract Bidding scenario

EXAMPLES
Consulting company reduces supplier base, by aggregating airline tickets to one airline. Bank aggregates paper demand to improve MRO pricing.

SRM COMPONENTS
SAP Enterprise Buyer Professional SAP Business Information Warehouse SAP Decision Support SAP Dynamic Bidding

Supplier Selection (commodity goods)

Commodity Sourcing
Initiate RFQ/Auction Publish RFQ/Auction Create and submit bid Bid analysis and evaluation Determine Winner

SAP Dynamic Bidding

RFQ/Reverse auction capabilities in DB Initiate RFQ from C-ROOM

SAP Enterprise Buyer Pro SAP Dynamic Bidding

Contract Management in EBP Integration of DB and EBP

SAP Dynamic Bidding

Online bidding in DB Attach document to bids

SAP Dynamic Bidding

RFQ/Reverse auction capabilities in DB Bid invitation via e-mail
1

SAP Dynamic Bidding SAP Business Information Warehouse SAP Decision Support
Export of RFQ/Bid to BW Multi-parameter bid analysis

Supplier Collaboration
Extend process control to your suppliers
Design Collaboration
New product design Collaborative project management

Order Collaboration
Account information Bidding event notification Order management Invoice processing Dispute resolution

Collaborative Replenishment
Stock requirement visibility Supplier managed inventory Advance shipping notification

Reduce administrative overhead for supplier communication Supplier Registration

Supplier selfregistration Supplier qualification

Supplier Connectivity
Integration broker Supplier network

Supplier Self-Registration

Order Collaboration
Functions & Benefits BUYER
Order/Change order

SUPPLIER

Documents supported:
Purchase Order Release schedule Order Response Confirmation/ASN Invoice/ERS Invoice

Purchase Order Order response

Confirmation/ASN

Sales Order Order response Confirmation/ ASN

e-mail notification for new/changed orders/release schedules Overview of all orders/release schedules Print & download functionality Service Agent for Service Entry Confimation/Service entry creation in easy to use Web UI for EBP-SUS scenario ASN creation in easy to use Web UI for MM-SUS scenario

Confirmation/ ASN

Receipt** Invoice*

Invoice

Receip**t ERS Invoice

Invoice

Note that EBP-SUS scenario is only fully supported in local deployment mode.
* Order Response and Invoice creation is not supported for Release schedule ** Receipt message is only supported for EBP-SUS scenario

Easy invoice creation* based on Confirmation/ASN or orders

Supplier Self Service

SUPPLIER SELF SERVICE
Content Creation Receive orders Respond to Orders Data Capture Invoice

SAP Supplier Self Service

Supplier content Management
Suppliers can modify their catalog data or can manually create new catalog data

SAP Supplier Self Service

Supplier manages orders Process order acknowlegement Changing status of order Changing of delivery times, quantities etc. Changes are distributed to procurement system via xml documents

SAP Supplier Self Service

Create Invoice based on order or without reference to order Data is distributed to procurement system via xml document

SAP Supplier Self Service

SAP Supplier Self Service
Receive order via xml documents Orders can be viewed Ability to download orders Entering the information about services performed and Material needed Data distribution to procurement system via xml document Web reports accessible to suppliers

Business Process Self Service Procurement

DEFINITION
Self Service Procurement is the process of purchasing non-strategic goods, i.e. goods not directly linked to the value chain (often called MRO maintenance, repair and operations items). Demand is generated mostly ad hoc by humans. Users are all employees in an enterprise, not just professional buyers. Example commodities: office material, work clothes, IT equipment. Catalog requisitioning Purchase Order

Approval

EXAMPLES
Catalog buying of office materials, IT equipment and more by employees. Employee requesting some special materials or service not found in catalogs or frame contracts.

SRM COMPONENTS
SAP Enterprise Buyer Professional Requisite BugsEye

Self Service Procurement

SELF SERVICE PROCUREMENT
Requisition Approval Ordering Goods Received Invoice Handling Payment Accounting

SAP Enterprise Buyer Pro Requisite Bugs Eye

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

SAP Enterprise Buyer Pro

Centralized procurement using EBP Order tracking functionality

mySAP Enterprise Buyer Pro

Download toAccounts Payable/General Ledger systems

SAP Enterprise Buyer Pro

Workflow for order approval

SAP Enterprise Buyer Pro

Invoice verification against purchase order and goods delivery note

SAP Enterprise Buyer Pro

Standalone or backend-integrated procurement dependent on product category

** Selected customers only

SRM Supplier Collaboration for Closed Loop Procurement Process

Provides suppliers with a streamlined order management system, along with a friendly interface and comprehensive 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 Compress cycle time Reduce transaction cost Ease of procurement Reduce inventories

SRM Strategic Sourcing

for Improved Supplier Selection, Reduced Cycle Time

Category 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.

SRM Live Auction Cockpit for Better Savings and ROI through Supplier Competition
Process that Streamlines the process flow through seamless top-to-bottom integration with multiple SRM components and backend systems. Electronic Workflow Approval Process that increases efficiency

SAP Netweaver Central Platform for Electronic Commerce

Easy Navigation to all systems thus enabling Seamless Integration to different Applications and Processes. Rolebased and provides unified, secure access to supplier related information, transactions and services based on authorizations associated with a particular roleE-learning which is quite convenient and faster Knowledge sharing Centralized Process Integration Model. Can be used in future for Non-SAP Integration and for B2B Communication

SRM Analytics Proactive Monitoring and Control

Operation support Decision support Strategy development support

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