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' Online integration of our dealer mgmt info has enhanced the response time'

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CIOL Bureau
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There are rumors that TVS Motors might soon

outsource manufacture of motorcycles. Where does IT files in?



TVS Motors might be outsourcing the

entire two-wheeler manufacturing operations to Indonesia sometimes in 2005,

though the plans are yet to be finalized. However, IT would play a crucial role

in setting up design and quality standards for the manufacturing process and

this would be handled out of India only. The planning and design would involve

implementation of a Product Lifecycle Management (PLM) application. Currently,

we have short-listed three PLM packages from e-Matrix, Windchill and SAP and

once the final choice is made the actual implementation would be done next

fiscal.

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Apart from PLM, the other arm of IT support

behind our overseas manufacturing foray is going to be CRM. Plans are afoot to

have a SAP CRM solution in place by 2005 which when initiated would give us

direct access to end user information as well as standardize all the dealers.

However, standardization on a CRM is possible only after a Dealer Management

System (DMS) is in place. From February 15 onwards, we are having a month's

pilot with 35 dealers for the DMS solution, with implementation being done by

Mindtree Consulting. Subsequently, we would have a rollout in May with plans to

cover 450 dealers by December. TVS has a planned budgetary outlay of Rs 12 crore

in 2004 only for these PLM and DMS projects.

TVS might now have big plans on PLM and DMS/CRM

solutions as part of their overall future strategy. But when you started on the

IT route with SAP, what was the role of technology implementation to the

company's overall strategy?



Our real foray into IT started in

mid-2000 with the Project Integrate aimed at not only replacing legacy IT

systems but also integrating applications extended across the enterprise, both

internal and external, suppliers and dealers. Our primary objective was to align

the physical improvements with a sound information systems engine. We decided

that the best and fastest way to put a robust information engine for business

transactions and operations was to go in for a proven ERP package and SAP was

chosen after internal evaluations. TVS was perhaps the first company to

straightaway license the mySAP.com solution and to implement it from scratch.

The idea was to combine routine application implementation and collaboration

with suppliers and customers from the beginning rather than starting with a mere

legacy transformation.

SAP implementation has worked differently

across different enterprises. How did the implementation pan out in TVS Motors?



After choosing L&T Information Technology as an implementation partner

for SAP, we went in for the Big Bang approach-implementing all critical

modules in one shot across the entire company, irrespective of location. Through

the big bang approach, SAP's basic modules were implemented across all

locations - two manufacturing plants at Hosur and Mysore and 27 area and

branch offices across the country. The documentation of the "as-is"

process of what was being practiced was done meticulously before starting the

SAP training. This helped in reducing possible omissions in the mapping

processes for SAP coming to light too late after the implementation. Over 1,200

processes were identified before even looking into SAP. As part of the

"to-be" process, we considered the inputs of both suppliers and

dealers. Representatives of dealers and suppliers were involved early in the

project to share their inputs to shape the system. We also adopted KANBAN -a

two-bin signal through e-transmission and Web posting to manage our supplies and

inventory.

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Many cross-functional teams were put in place for

short durations to address specific issues that concerned departments across the

company. This created better ownership for the processes and data. Intensive

user programs, covering over 700 end-users and 450 dealers and 150 suppliers,

were managed over two-three months. The project went live on August 23, 2001, on

all locations, as legacy went into wrappers in one shot. In Phase 1 of SAP

implementation, we invested Rs.14 crore, while in subsequent phases, we have

invested 1-1.5% of our company's turnover.

Has the SAP implementation delivered the

required returns?



Our integration of all dealers and suppliers into the SAP information base

through the Internet, order-booking, claiming warranty, billing, delivery, and

credit status have gone online. This has motivated dealers to use the system as

the response time has been enhanced. Moreover, the monthly supplier schedules

have been made weekly and the company can track the parts with sub-contractors

and plan the production schedule depending on the orders. This is helping the

company in terms of time compression in communication of business data, thus

enhancing the ability to proactively plan for market needs. It will also help in

enhancing transparency in exceptional situations, knowledge base and performance

deviations to react faster.

Every vehicle that rolls out of the factory is

bar-coded. This has helped the company to track the vehicles, serial

number-wise, and it has been able to generate operational results at the

beginning of the first day of the month. The bar-coding has helped the company

to even track and get in direct touch with the customers. Though it is difficult

to quantify RoI, the SAP investment was recovered within 18 months. Through

KANBAN, we have been able to reduce inventory levels to an extent of some 20%,

since suppliers can now plan their schedules depending on the inventory.

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