ERP Implementation at Tata Motors

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Tata Motors Limited is India’s largest car company. with gross of Rs. 1. 88. 818 crores in 2012-13. It was established in 1945 and is present across the length and comprehensiveness of the state. Today. it is world’s 2nd largest maker of commercial vehicles. 4th largest truck maker and 2nd largest coach maker. It has over 60. 000 employees guided by the company’s mission “to be passionate in expecting and supplying the best vehicles and experiences that excite the clients globally. ” It has its fabrication bases in Jamshedpur ( Jharkhand ) . Pune ( Maharashtra ) . Lucknow ( Uttar Pradesh ) . Pantnagar ( Uttarakhand ) . Sanand ( Gujarat ) and Dharwad ( Karnataka ) .

The company’s franchise. gross revenues. services and trim parts web consists of over 3. 500 touch points. It besides has Centres for research and development in Pune. Jamshedpur. Lucknow. Dharwad in India. and South Korea. Spain and UK. It is a dual-listed company traded on both the Bombay Stock exchange and the New York Stock Exchange ( September 2004 ) . It has emerged as an international car company. Tata Motors has its operations in UK. South Korea. Thailand. Spain. South Africa and Indonesia through its subordinates and associate companies.

Milestones
It launched the first indigenously developed Light Commercial Vehicle in 1986. It besides introduced India’s first Sports Utility Vehicle in 1991 and the Tata Indica. India’s foremost wholly autochthonal rider auto in 1998. Tata Indica received immediate success. since it was cheap and relatively easy to construct and keep. It was besides exported to Europe and Italy.

Second coevals of Indica. V2 was even more successful. Its immense success gave Tata Motors the fiscal power to take over Daewoo Motors in 2004. which in bend gave Tata Motor’s trade name an international exposure. In 2005. Tata Motors created a new section of mini-trucks by establishing Tata Ace. In January 2008. it launched its People’s Car. the Tata Nano which was later launched. as per the programs. in 2011 in Nepal and Sri Lanka. In 2009. it launched its globally benchmarked Prima scope of trucks and the Ultra scope of international criterion light commercial vehicles in 2012.

Some of its other major acquisitions include Jaguar Land Rover in 2008. 21 % interest in Hispano Carrocera. a celebrated Spanish coach and manager maker in 2007. and later the staying interest in 2009. Some of its confederations include a 51:49 joint venture with the Brazil-based. Marcopolo. planetary leader in edifice of organic structure for coachs and managers. Thonburi Automotive Assembly Plant Company of Thailand in 2006 and a joint venture with Tata Africa Holding ( Pty ) Ltd. set up in 2011. Tata Motors is committed to better the quality of life of the communities in which it operates by concentrating on four push countries – wellness. instruction. employability and environment.

The company’s support in field of instruction and employability is focused on young person and adult females. which ranges from schools to proficient instruction institutes to facilitation of income coevals. In wellness. the company has intercessions in healing and preventative wellness attention. Tree plantation. H2O preservation. creative activity of new H2O organic structures and debut of environment-friendly engineerings in alternate fuels. fabrication procedures and emanations is undertaken for the end of environment protection. It has besides developed electric and intercrossed vehicles both for personal and public transit to farther lend to this cause.

Background

Tata Motors Ltd. is a portion of the concern pudding stone. Tata Group. and was once known as Tata Engineering and Locomotive Company. TELCO. It has its central offices in Mumbai. India and is a transnational corporation commanding 70 % cumulative market portion in the domestic commercial vehicle section.

Tata Group is extremely respected for its concern art. assorted societal and educational undertakings that have contributed vastly to India’s development. The charitable trusts have a 65 % interest in its keeping company. Tata Sons. The “Tata” trade name is synonymous with “trust” – and is considered dependable and considered as supplying value for one’s money. All companies within the
group wage Tata Sons a fee for utilizing the Tata name.

Tata Motors is a cardinal growing concern for the Tata group of companies. It ab initio manufactured merely heavy and light commercial vehicles. Its raid into rider autos was sharply driven by Ratan Tata. former Chairman of Tata Sons. Tata trucks dominate the Indian commercial vehicle market. However. for rider vehicles. the Numberss are non really much impressive due to jobs encountered in some of its theoretical accounts and stiff competition in the Indian rider auto market. Tata Motors besides offers the Tata Safari SUV and Tata Sumo MUV. along with a presence in the mid-size auto section with a version called Indigo.

Ratan Tata believes in aiming “the underside of the pyramid” . a term used by Prof. C. K. Prahalad. This means that he believes in tapping the market chance offered by the huge and unvoiced multitudes of India. Thus. the mark market for Tata Motors is the lower middle-class to middle category Indian. who is looking to alter from a two-wheeler to a auto. With India’s increasing in-between category population of more than 300 million people. the auto has a big market. Its clients are more in the smaller towns and small towns of India when compared to metropolitan and other large metropoliss. Background of Information Technology

IT Strategy

At Tata. IT is considered to be a planetary map. and this is incorporated into the direction services division of the organisation. Each country within the organisation is provided with needed IT resources and tools by the CIO. who so takes critical determinations refering the execution of new engineerings and IT solutions. A three twelvemonth program is besides drawn by him in coordination with direction and Tata Technologies. to the full owned subordinate of Tata Motors. which provides concern and IT services to Tata Motors. This program determines the basic IT scheme.

The IT scheme in bend delivers strategic plans and services which supports its concern growing and fight. The inside informations are so finalized in an IT balanced scorecard in which the assorted undertakings are defined for the following 12 months
and listed in order of their precedence. Responsibility for executing of these programs is charged to the joint squads from IT and concern. In general. a differentiation is drawn between undertaking work and care activities. Tata Technologies. nevertheless is responsible for both. If needed. external advice is sought from the advisers in the relevant country. CIO besides acts as an arbiter. settling any differences of sentiment sing the long term positions of specific demands after discoursing with the concern squad.

Recent IT initiatives

Benchmark CRM ( Customer Relationship Management ) solutions which is used by more than 3. 200 channel spouses and 37. 000 users to manage client demands reflects its committedness towards its clients. Tata Motors is besides spread outing use of information through analytics across the organisation. It is now involved in even greater use of eCommerce with providers through SAP Supplier Relationship Management ( SRM ) Solutions. It besides strengthened the use of IT in fabrication. supply concatenation. quality and work force direction deployed benchmark ITIL ( Information Technology Infrastructure Library ) processes to better the effectivity of its services.

Reasons for execution of ERP

Before looking at the grounds for ERP execution. we will see the largeness of Tata Motors worldwide. It is world’s eighteenth-largest motor vehicle fabricating company. fourth-largest truck maker and second-largest coach maker by volume bring forthing $ 33B dollar in gross with presence in most of states crossing across all the continents. Tata Motors has vehicle assembly operations in India. UK. South Korea. South Africa. Thailand and Spain. There are programs to set up workss in Indonesia. Turkey and Eastern Europe. Most of the natural stuffs are sourced from low cost states and so. distributed to their R & A ; D centres in South Korea. Spain and UK. and above mentioned assembly units. Spare parts trader web comprises of 1200 touch points. Concluding goods produced in the fabrication units are distributed to the warehouses across Earth as per the demand.

Before the execution of ERP. the company was utilizing internal bequest system. Manual trader direction system was used where every trader managed inside informations. Use of bequest system resulted I deficiency of consistent informations. doing handiness of existent clip informations hard for prediction of trim parts and natural stuffs. which later resulted in loss of production and finally aching the grosss. Pull offing the logistics across the geographicss was another large concern. The state of affairs was exacerbated by the deficiency of coordination among different verticals like gross revenues. finance and operations. With turning competition around the universe. there was demand to incorporate and optimise the complete procedure.

Execution of ERP will ensue in better sharing of information across the organisation giving existent clip entree to the information. better prediction of demands cut downing pile of stock lists. less duplicate and clip blowing across the board. Besides. ERP is a modular package system ; it is possible to implement either a few faculties ( or ) assorted faculties based on the demands of an organisation. The assorted faculties will convey in better concern patterns across the verticals like finance. histories HR. operations. and project direction and will enable the company to estimate client satisfaction.

The drawn-out benefit can be done by incorporating other systems ( like bar-code reader ) to the ERP system through an API ( Application Programing Interface ) . This will assist to maintain path of the logistics across geographicss. All-in-all. procurance of natural stuffs. calculating the demand. heightening employee productiveness. optimising concern procedures and keeping high networking within the company. are the major grounds for the execution of ERP. Choice of SAP as the ERP bundle

Choice for SAP was done sing the big size of the company. Tata believe in put ining the best of services and SAP is doubtless the first name for ERP. Success path with SAP package was faultless. Service degree understandings ( SLAs ) were signed between the direction for the declaration of the issues. Besides. SAP has separate automotive solutions that help companies performs the undermentioned activities:

Optimizing fabrication and procurance This enables the company to calculate in more efficient mode to maintain production in conformity with overall concern demands and future demands of the clients. This will assist company to accomplish Just-in-time environment which will control the job of stock lists. It will besides enable efficient usage of the resources that will assist the organisation to accomplish thin and six sigma methodological analysiss.

This besides enables the users to put customize orders and closely align theoretical account mix with market demands. Integrated solutions for planning. charge & A ; pricing. handiness checking. constellation. order processing. production. fulfillment give companies a consistent position of the gross revenues order of the merchandises. programs for industry. and survey of the company’s net income. SAP } for automotive enables to incorporate the activities of trader. seller and makers for assortment of activities like procurance of natural stuffs. merchandising of finished goods. tracking the natural stuffs and trim parts. It besides helps the trader to track the vehicles for their clients. Suppliers in all grades can utilize this for packaging. labeling. and transportation of the finished goods. It helps in bring forthing advance-shipping presentments to maximise operational efficiency and effectivity.

Managing of Warranty claims
A batch of trade happens with OEMs. traders and providers. This consequence in batch of paper work sing the guarantee attached to the spare parts and finished goods. Pull offing this guarantee claims is a immense job for the company and spouses sing such a magnitude of the concern. SAP package helps in segregating warranty information attached to each of the merchandises. The study and information is available on the chink. The company can analyse the inside informations of the parts-failure and returned form and engagement degrees for a given callback run.

Cross squad coaction among sellers. interior decorators and users
SAP solutions provide collaborative merchandises like Advanced Product Quality Planning ( APQP ) procedure and ISO/TS 16949 that increase the coaction between the applied scientists. interior decorators. sellers. traders and users. These are the globally accepted quality-management system that links client satisfaction with the measuring and betterment of procedures. A comprehensive tool embracing selling and gross revenues integrated with vehicle and merchandise informations ensures client satisfaction and addition coaction through knowledge-driven interactions. SAP Dealer Business Management solution – portion of the SAP for Automotive portfolio enables manage everything from procurance of service parts and accoutrements to gross revenues of new and used vehicle. every bit good as finance and selling. It provides tool company demand to pull off undertakings. control plans and manage resources within budget and timelines. It enables independent sellers and OEM traders to pull off their full concern when working with multiple trade names and locations.

Conformity with authorities ordinances SAP ensures that it addresses the full scope of coverage demands in conformity to the Sarbanes-Oxley Act ( SOX ) . SOX is a United States federal jurisprudence that set new or enhanced criterions for planetary trade and imposts regulations. environment. wellness. and safety ordinances.

Tata Motors Financials

India. being a developing state lacks fiscal resources. peculiarly in footings of handiness of the fiscal sector to clients. Therefore. there occurred a demand for fiscal organisations providing to specific industries. The car industry all over the Earth faces the job of happening the right sum and beginning of support for its clients. These factors clubbed together with the cyclical nature of demand in the car industry forced car companies to see confined funding weaponries of the parent companies to entirely fund the parent merchandises and besides act as a accelerator for advancing their merchandises. Tata Motor Finance ( TMF ) . the car funding arm for Tata Motors. was established in June 2003. This was formed jointly by the plus funding arm of Tata Finance and BHPC ( Bureau for Hire Purchase and Credit ) of Tata Motors. This company was a practical entity. both divisions of which maintained their separate legal individuality. and existed in the market for entirely financing Tata Motors vehicles. Subsequently. Tata Finance merged with Tata Motors and in April 2005 and therefore. TMF became a division of Tata Motors.

Critical Success Factors

Some of the factors that Tata Motors considered while implementing mySAP and finally turned out to be critical for its success were: Improvement in gross revenues gross or the net gross revenues
Decrease in cost. that chiefly resulted from more efficient usage of hardware resources that in bend eliminated the demand for extra resources Reduction in stock list
Improvement in the productiveness by agencies of sweetening of overall concern efficiency Enhancement organization-wide communicating that would enable direction to take determination and respond more rapidly to concern demands Improvement in degree of satisfaction of concern users due to faster server response clip No negative impact on other ongoing critical ascent and execution undertakings

SAP Execution: Methodology and Procedure

SAP Version 3. 4 execution was successfully carried out during the beginning of SAP execution in TATA Motors in the twelvemonth 1997. Six old ages subsequently i. e. . in 2003. it is upgraded to SAP Version 4. 6 where Human Resource services and Production Planning faculties were wholly set to be functionally integrated. A sum of 3000 employees were planned to utilize this system. In entire about 20 faculties were implemented. The undermentioned benefits were instantly realized:

Production scheduling improved and a few constrictions in production were taken away VCM which is the bequest ERP at the vendor terminal was integrated during the upgrade Significant decrease in Inventory costs.

The execution methodological analysis followed was SAP’s Phased ERP execution methodological analysis. This undertaking implemented by SAP is the largest ( in magnitude ) in India. Five waiters are functionally integrated to execute as one functional waiter. The inside informations are covered in ulterior subdivisions of this undertaking. The undermentioned diagram indicates Tata Motors’ motivation behind this ERP implementation1

mySAP SRM 40 ERP execution at Tata Motors was named Project VECTOR which is aimed at increasing negociating power with providers. increasing the easiness for the providers to incorporate utilizing catalogue direction. rating of new providers and bringing agendas of current providers. use of unrecorded auctions for competitory pricing. The ERP execution besides helped in streamlining the procedure of procurance and mechanization of the same. The ERP is centralized across the 4 locations Lucknow. Mumbai. Jamshedpur and Pune. The providers collaborated and this reduced the procurance attempts in following up of orders. The coaction therefore is possible through cyberspace and automated updates on the position of procurance.

SAP’s ERP execution in TATA Motors included Change Management as a portion of the contract. It is noted that due to the immense figure of employees to be trained ( about 3000 ) and due to the greathearted size of the client’s organisation. SAP chose to phased methodological analysis of ERP execution at TATA Motors. During the initial stages SAP advisers were actively involved with strategic direction of both Tata Engineering and Tata Technologies which are constitutional houses of Tata Motors. The maneuvering commission included senior Tata employees from Chairman’s office. Corporate Affairs office. Jemshedpur works. Pune. Mumbai and Lucknow divisions. Undertaking directors were appointed from Tata Technologies. The undertaking is presented to the employees in such a manner that the ERP engineering would assist the employees ( and company ) to bring out the fresh value hidden in collaborative buying and supply concatenation care.

Peoples from the four of import locations of TATA Motors i. vitamin E Mumbai. Pune. Jemshedpur and Lucknow are shown successful execution of pilot undertaking in stage 1 where 4 seller are chosen and 4 different merchandises are chosen for ERP execution. SAP anticipated long term concern relationship with TATA Motors and this was apparent from the friendly nature of SAP Consultants working with TATA employees. Due to such amicable environment created during the critical phases of ERP execution. TATA employees believed in the true value of ERP implemented to break their supply concatenation direction schemes and worked actively for the successful execution of the same. Benefits Accrued due to execution of SAP ERP at Tata Motors

TATA Motors successfully implemented ERP in a phased methodological analysis and the followers are a few important benefits accrued by the organisation. The SAP ERP services experts delivered mensurable betterments across Tata Motors’ extensive IT landscape within merely 12 months. By optimising disk direction. for illustration. Tata Motors now has 2. 3 TBs more storage infinite available. and CPU use has been reduced by 20 % . Response clip of production waiters is 20 % faster. and the squad was able to optimise many of the company’s customized plans up to the 50 % degree.

Disk-space optimisation activities were carried out by IBM with timely support from the company’s informations centre. Significantly. the company achieved all of these betterments while the system load really increased by 20 % . Company executives besides point to tangible concern benefits that go beyond the public presentation Numberss. Faster response clip. for illustration. has boosted user satisfaction while salvaging the company some 1. 600 labour hours each month. And more efficient usage of bing resources has saved the company an estimated Rs 45 million ( US $ 1 million ) by extinguishing the demand for extra hardware. In add-on to optimisation at the proficient forepart. the SAP ERP services helped Tata Motors to do certain a successful execution of guarantee direction package that was world-class.

The integrating of the company’s SAP ERP application with the trader client relationship direction functionality is another accomplishment of the new system. This has made the company capable to supervise all unfastened. new and processed guarantee claims in an automatic mode. SAP ERP supported both strategic and operational aims at Tata Motors. For illustration. the undertaking helped in the creative activity of a stronger synergic relationship between the company’s concern and IT divisions. It besides extended SAP’s function from package seller to trusted spouse and the senior functionaries were eyeing towards more value add services in the hereafter.

Strategic and Financial benefits

Saved Rs 45 million ( US $ 1 million ) due to more efficient usage of bing hardware resources that eliminated the demand for extra resources The direction was enabled by the usage of SAP to respond in a more efficient and speedy mode to the concern needs Increase in the efficiency of the overall concern procedure

Helped guarantee success of undertakings related to critical ascent and execution Improved satisfaction of concern users as a consequence of faster waiter response clip Business minutess velocity was enormously accelerated

Operational Benefits

Cardinal Performance Indicator for the Operational Benefits
Impact
CPU use
-20 %
Production waiter response clip
20 %
Optimization degree of customized plans
Up to 50 %
Labor hours saved
1. 600 per month
Available disc infinite
23 %










Current Status of ERP in TATA Motors

At present SAP MaxAttention faculty is implemented to their ERP system. This is a move through which TATA Motors can straight name in SAP Experts on demand and prosecute them on-call responsibility to back up ERP issues at critical times which include but non limited to an extra package ascent. a future package go-live event. public presentation optimisation proving. volume proving. This MaxAttention is presently being implemented in concurrence with SAP Enterprise Support Service for which licence is renewed yearly.

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