Description
It gives the business benefits of ERP implementation and What are the different KPIs to track.
ERP Implementation Proposal
For Steel Authority of India Ltd.
Global Outlook
In FY10, Total global demand for steel went down from 1036MT to 866MT 16% drop in total world demand for steel & related products
China saw a big increase in demand for steel by 29% in 2010. Global acquisitions in steel sector makes efficiency a concern for every steel producer
Sectoral Outlook
Lower Net Profit Margin Than Tata Steel Need to cut costs and drive up efficiency
Proposed Expansions
Organizational Structure
Integrated Steel Plants
Bhilai Steel Plant (BSP) in Chhattisgarh
Durgapur Steel Plant (DSP) in West Bengal
Rourkela Steel Plant (RSP) in Orissa
Bokaro Steel Plant (BSL) in Jharkhand
IISCO Steel Plant (ISP) in West Bengal
JVs
Special Steel Plants
SAIL-Bansal Service Center Ltd.
Bhilai JP Cement Ltd
Bokaro JP Cement Ltd
Alloy Steels Plants (ASP) in West Bengal
Salem Steel Plant (SSP) in Tamil Nadu
VisvesvarayaIron and Steel Plant (VISL) in Karnataka
Key drivers to ERP attractiveness
• Falling Demand • Decrease in margins
– Lower PAT/Sales ratio – need to focus on efficiency – Margins have shrunk with onset of downturn
• Organizational Structure
– – – – Integrated and dispersed plants Wide marketing and sales distribution channel JVs and special plants All need to share information to gain synergies of scale
• All major competitors already on ERP
– Tata Steel on SAP – JSW on Oracle
Key drivers to ERP attractiveness
• Highly integrated plants
– Centralize/Optimize procurement initiatives through information sharing
• Large number of JVs – need to share information realtime for synergies • Wide spread
– Own Central Marketing Organisation (CMO) – 37 Branch Sales Offices spread across 4 regions – 25 Departmental Warehouses, 42 Consignment Agents and 27 Customer Contact Offices – Wide network of rural dealers - over 2000
ERP Business Benefits
(1) Improved visibility of procurement spend and savings from improved sourcing policies (2) Decrease of work-in progress and days-of-sale-outstanding (3) Improved productivity through better sales order handling, better procurement operations and more efficient planning • • Integrated supply chain: from network planning through scheduling and Manufacturing Execution Systems Easier integration of business processes with business partners (Collaboration in supply chain) Shared services and synergies across functions Increased information transparency to enable better decisions Robust and future-proofed backbone systems
• • •
ERP Benefits
Decision Support System • Driving accurate and fast decisions (product profitability, procurement spend) with consistently defined data • Running broadly known and supported applications • Harmonizing and optimizing back-office processes across the enterprise
• Enabling best-practice demand planning for supply-chain processes
• Future-proofing global applications that support global enterprises
KPIs to Track
• Process Perspective • Growth Perspective • Human Resource Perspective
Employee Perspective
• % drop in accidents
– This is a quantitative way of knowing the extent to which the efforts have paid in providing the work-force a safer place to work at
• Number of training sessions held
– This parameter will go into making the employees aware of safe procedures to handle the equipments and situations. This can be calculated on yearly basis
• Number of Health Check-ups • Labor Turnover due to Safety Problems
Growth Perspective Ratio
• Volume Enhancement Ratio
– This KPI is an indicator of the way things are operating in the manufacturing process, on an yearly basis
• % contribution to nation's total steel production
– This parameter gives the position held at the national level
• % rise in the operating revenues • % increase in bottomline
Process Perspective
• Reduction in Process Costs
• By-products usage Index
Thank You
doc_830761040.pptx
It gives the business benefits of ERP implementation and What are the different KPIs to track.
ERP Implementation Proposal
For Steel Authority of India Ltd.
Global Outlook
In FY10, Total global demand for steel went down from 1036MT to 866MT 16% drop in total world demand for steel & related products
China saw a big increase in demand for steel by 29% in 2010. Global acquisitions in steel sector makes efficiency a concern for every steel producer
Sectoral Outlook
Lower Net Profit Margin Than Tata Steel Need to cut costs and drive up efficiency
Proposed Expansions
Organizational Structure
Integrated Steel Plants
Bhilai Steel Plant (BSP) in Chhattisgarh
Durgapur Steel Plant (DSP) in West Bengal
Rourkela Steel Plant (RSP) in Orissa
Bokaro Steel Plant (BSL) in Jharkhand
IISCO Steel Plant (ISP) in West Bengal
JVs
Special Steel Plants
SAIL-Bansal Service Center Ltd.
Bhilai JP Cement Ltd
Bokaro JP Cement Ltd
Alloy Steels Plants (ASP) in West Bengal
Salem Steel Plant (SSP) in Tamil Nadu
VisvesvarayaIron and Steel Plant (VISL) in Karnataka
Key drivers to ERP attractiveness
• Falling Demand • Decrease in margins
– Lower PAT/Sales ratio – need to focus on efficiency – Margins have shrunk with onset of downturn
• Organizational Structure
– – – – Integrated and dispersed plants Wide marketing and sales distribution channel JVs and special plants All need to share information to gain synergies of scale
• All major competitors already on ERP
– Tata Steel on SAP – JSW on Oracle
Key drivers to ERP attractiveness
• Highly integrated plants
– Centralize/Optimize procurement initiatives through information sharing
• Large number of JVs – need to share information realtime for synergies • Wide spread
– Own Central Marketing Organisation (CMO) – 37 Branch Sales Offices spread across 4 regions – 25 Departmental Warehouses, 42 Consignment Agents and 27 Customer Contact Offices – Wide network of rural dealers - over 2000
ERP Business Benefits
(1) Improved visibility of procurement spend and savings from improved sourcing policies (2) Decrease of work-in progress and days-of-sale-outstanding (3) Improved productivity through better sales order handling, better procurement operations and more efficient planning • • Integrated supply chain: from network planning through scheduling and Manufacturing Execution Systems Easier integration of business processes with business partners (Collaboration in supply chain) Shared services and synergies across functions Increased information transparency to enable better decisions Robust and future-proofed backbone systems
• • •
ERP Benefits
Decision Support System • Driving accurate and fast decisions (product profitability, procurement spend) with consistently defined data • Running broadly known and supported applications • Harmonizing and optimizing back-office processes across the enterprise
• Enabling best-practice demand planning for supply-chain processes
• Future-proofing global applications that support global enterprises
KPIs to Track
• Process Perspective • Growth Perspective • Human Resource Perspective
Employee Perspective
• % drop in accidents
– This is a quantitative way of knowing the extent to which the efforts have paid in providing the work-force a safer place to work at
• Number of training sessions held
– This parameter will go into making the employees aware of safe procedures to handle the equipments and situations. This can be calculated on yearly basis
• Number of Health Check-ups • Labor Turnover due to Safety Problems
Growth Perspective Ratio
• Volume Enhancement Ratio
– This KPI is an indicator of the way things are operating in the manufacturing process, on an yearly basis
• % contribution to nation's total steel production
– This parameter gives the position held at the national level
• % rise in the operating revenues • % increase in bottomline
Process Perspective
• Reduction in Process Costs
• By-products usage Index
Thank You
doc_830761040.pptx