BUILDING INTEGRATED PROCESSES FOR EFFICIENT MANUFACTURING

Case Study at National Aluminium Company Limited

BP Naik, Project Manager , ERP S Mohanty, AGM(Systems)

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

AGENDA
About NALCO Business Challenges : Environment , Technology SAP Landscape Processes IBM System x enabled through SAP Project & Change Management Highlights Key Business Benefits Value Additions in ERP Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

CONTENTS
IBM System xNALCO About

Business Challenges : Environment , Technology SAP Landscape Processes enabled through SAP Change & Project Management Highlights Key Business Benefits Value Additions in ERP Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

NATIONAL ALUMINIUM COMPANY LTD

ABOUT NALCO
INCORPORATED IN 1981. A NAVARATNA PSU. A PREMIER TRADING HOUSE. LARGEST INTEGRATED ALUMINA-ALUMINIUM COMPLEX IN ASIA. ONE AMONG THE LOWEST COST PRODUCERS. EXPORT TO OVER 30 COUNTRIES . IBM System x ISO 9002 & ISO 14001 CERTIFIED UNITS. ALL THE PRODUCTION UNITS AND CORPORATE OFFICE SA 8000 CERTIFIED. 1ST COMPANY IN THE COUNTRY REGISTRATION SINCE 1989. WITH LONDON METAL EXCHANGE

PROFIT MAKING PSU SINCE INCEPTION TURNOVER OF INR 6370 CRORE, PAT OF INR 1069 CRORE DURING 2011 HUMAN RESOURCE 7400 STRONG

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LOCATIONS

Faridabad Jaipur

Baddi, HP

New Delhi

Kolkata Angul Bhubaneswar Damanjodi Bhiwandi Registered Office Regional Offices Production Centres Ports Bauxite Mines Stockyards Bangalore Chennai Visakhapatnam

Silvasa Mumbai

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MARKET REACH

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MANUFACTURING PLANTS

Bauxite Mine
8TH LARGEST BAUXITE DEPOSIT IN THE WORLD. LOW ENERGY CONSUMPTION. 48 LAKH TPY CAPACITY- BEING EXPANDED TO 63 LAKH TPY. MECHANIZED MINES WITH HIGH PRODUCTIVITY. TRANSPORT THROUGH SINGLE LINE MULTI-CURVE CABLE BELT (14.6 KM). 100% CAPACITY UTILIZATION.

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MANUFACTURING PLANTS

Alumina Refinery

15.75 LAKH TPY CAPACITY- BEING EXPANDED TO 21 LAKH TPY. AMONG THE LOWEST COST PRODUCERS. SPL. HYDRATES, SPL. ALUMINA AND ZEOLITE ADDED. CO-GENERATION POWER OF 55.5 MW FROM PROCESS STEAM BEING EXPANDED TO 74 MW. 100% CAPACITY UTILIZATION. UP-GRADATION OF 4TH STREAM TO INCREASE CAPACITY TO 22.75 LAKH TPY.

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MANUFACTURING PLANTS

Aluminium Smelter
MODERN TECHNOLOGY FROM AP, FRANCE. CAPACITY EXPANDED FROM 3.45 LAKH TPY TO 4.6 LAKH TPY INTEGRATED ANODE MAKING, ALUMINIUM CASTING AND ROLLING. INGOTS, BILLETS, WIRE RODS, SOWS & STRIP COILS. 50,000 MT CAPACITY ROLLED PRODUCTS UNIT. TEE INGOT CASTING FACILITY OF 60,000 MTPY HYPER DENSE PHASE SYSTEM(HDPS) FOR ALUMINA FEEDING.

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MANUFACTURING PLANTS

Thermal Power Plant

CAPACITY EXPANDED FROM 960 MW TO 1200 MW LOW COST OPERATION. HIGH PLANT LOAD FACTOR. ADVANCED ELECTROSTATIC PRECIPITATOR (99.9% EFFICIENCY) TO CONTROL POLLUTION. ZERO DISCHARGE OF EFFLUENTS. HICH CONCENTRATE SLURRY DISPOSAL(HCSD) SYSTEM FOR ASH DISPOSAL.

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PORT FACILITY

Port Facility
VIZAG : CAPACITY TO HANDLE SHIPS UPTO 35,000 DWT. MECHANIZED MOBILE SHIP LOADER. MECHANIZED STORAGE FACILITIY. EXPORT OF ALUMINA AND IMPORT OF CAUSTIC SODA.

OTHERS : EXPORT OF ALUMINIUM THROUGH KOLKATA & PARADIP PORTS.

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PRODUCTS

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CONTENTS
About NALCO IBM System x Challenges : Environment , Technology Business SAP Landscape Processes enabled through SAP Change & Project Management Highlights Key Business Benefits Value Additions in ERP Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

BUSINESS CHALLENGES -

ENVIRONMENT

SOME MARKET CHALLENGES

COMPETITION FROM MULTINATIONAL COMPANIES IN DOMESTIC MKT HEAVY LOAD ON RAILWAYS/PORT DUE TO HIGH INDUSTRIALISATION IN REGION INCREASE IN PRICE OF PRINCIPAL INPUTS MARKETS CONSTRAINED TO REGIONS CLOSE TO INDIA TRANSPORTATION COSTS

IBM System x

SOME PROCESS CHALLENGES

LACK OF INTEGRATION BETWEEN PROCESSES LACK OF UNIFORMITY ACROSS UNITS PERSON-CENTRIC PROCESSES LACK OF PROCESS METRICS LIMITED CONTROLS PROCESS INEFFICIENCY DUE TO NON-VALUE-ADDED COMPONENTS

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BUSINESS CHALLENGES - TECHNOLOGY

HIGHLY CUSTOMISED PACKAGES NON-UNIFORM PLATFORMS : SYBASE ,APT, POWERBUILDER,FOX,CRYSTAL REPORT DISPARATE SYSTEMS UNDER DISTRIBUTED CONTROL NO VERSION CONTROL IBM System x LIMITED SOFTWARE ENGINEERING / MANAGEMENT CONCEPTS HIGHER APPLICATION MAINTENANCE EFFORT THREAT OF OBSOLESCENCE /IRRELEVANCE SYBASE, POWERBUILDER NON-STANDARD IT HARDWARE/INFRASTRUCTURE

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CONTENTS
About NALCO Business Challenges : Environment , Technology SAP Landscape IBM System x Processes enabled through SAP Change & Project Management Highlights Key Business Benefits Value Additions in ERP Future Directions

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

SAP LANDSCAPE
500 USERS
IBM P510 Series

APPLICATION SERVER

ECC 6 PROD
IBM P550 Series IBM P550 Series

SRM 5

IBM System x

BI
IBM P550 Series
IBM System STORAGE
DS4700

SCM-APO
IBM P550 Series

EP
IBM P550 Series
IBM BLADE JS21

DEVELOPMENT, QUALITY, SOLMAN

IDES
IBM System X 3650

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

CONTENTS
About NALCO Business Challenges : Environment , Technology SAP Landscape Processes IBM System x enabled through SAP Change & Project Management Highlights Key Business Benefits Value Additions in ERP Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

PROCESSES ENABLED THROUGH SAP Materials Management

RECEIVE, STORE AND ISSUE GOODS

RAISE AND APPROVE INDENT PROCURE MATERIAL INVENTORY

IBM System x
PORT CLEARING AND DESPATCH

MANAGEMENT

INDIRECT TAXES
OSRD CLAIMS & INSURANCE

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PROCESSES ENABLED THROUGH SAP Sales & Distribution

DESPATCH

HANDLE SALE ORDER HANDLE CUSTOMER COMPLAINTS

IBM System x

DEVELOP MOU

MAINTENANCE

CUSTOMER MASTER

PRICING

MEASURE CSI

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PROCESSES ENABLED THROUGH SAP Finance & Controlling

Costing

Fixed Assets

Cash & Bank Payment

IBM System Payables x

Management

GL, Journals And Consolidation

Inter-Unit Reconciliation

EMD Monitoring

Receivables Management

BG / LC Monitoring

Tax Compliance

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PROCESSES ENABLED THROUGH SAP Production Planning & Quality Management

PRODUCTION EXECUTION

IBM System

PRODUCTION REVIEW xMONTHLY ON BASIS

MONTHLY PRODUCTION PLAN

PRODUCTION REPORTING

QUALITY MANAGEMENT

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PROCESSES ENABLED THROUGH SAP HCM

RECRUITMENT

IBM

PERSONNEL System x ADMINISTRATION

EMPLOYEE MASTER MAINTENANCE

TRAINING AND DEVELOPMENT

PROMOTION AND TRANSFER

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CONTENTS
About NALCO Business Challenges : Environment , Technology SAP Landscape Processes enabled through SAP IBM System x & Project Management Highlights Change Key Business Benefits Value Additions in ERP Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

ERP PROJECT HIGHLIGHTS

Comprehensive implementation ERP, Hardware & DC Implementation in 27 months (ASAP Methodology) Phased implementation MM-FI-CO, PP-SD, HR Simultaneously at Corporate Office, Plants, Regional Offices IBM System x PWC as End-To-End consultant Wipro as Implementing Agency 500 licensed users

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PROJECT MANAGEMENT HIGHLIGHTS

Steering committee headed by CMD Combination of full-time and part-time core team 16 FT , 10 PT Phased roll-out - MM - FI CO in Feb 2010 , PP-SD in Oct 2010 with 3 period closures in between IBM System x Golive Critical and GoLive Non-Critical developments Phasing of Golive non-critical developments parked till stabilisation. Parallel run for Feb and Mar 2010 (Legacy & ERP) but all account figures from ERP Support of internal IT team in development of reports Optimisation of AS IS study and Integration Testing

Actual Period Closure

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

PROJECT MANAGEMENT HIGHLIGHTS

Period Closure chasing actual month ends. Initial lag of 3 month. Reduced to zero wef Oct 2010.
Cutover Stock was matched as on 31/1/2010 and MM rolled out on 23/02/2010 Cutover FI trial balance as on 31/1/2010 taken in phased manner Bank Balances/ FA/Vendor Bal/ Customer Bal/ Expenses GL till 31/3/10

IBM System x and confirmation done on monthly basis till Sep 2010 Production plan
Sales data uploaded to SAP at product level thru BDC till Sep 2010 Cutover finished products with Lab analysis at Bundle/Coil level loaded as on 30/9/2010. Daily confirmation of production with Lab analysis started from 1-10-2010. Minimal disruption of despatch for 4-5 days. SD golive on 9/10/2010

Actual Period Closure

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CHANGE MANAGEMENT HIGHLIGHTS

C O M M U N I C A T I O N T O V A R I O U S L E V E L S

1.

Level 1 Training to Core Team

PROJECT PREPARATION

BUSINESS BLUEPRINT

1.

2. 3. 4. 5.

End User Needs Assessment Level 2 Training to Core Team End User Training and Documentation Strategy Analysis Business Process Familiarisation Workshops Top management stakeholder analysis

I N V O L V E M E N T O F

1.

REALISATION Level 3 Training to Core Team 2. Development of End User Training and Documentation Content 3. Involvement of key users during Integration Testing

FINAL PREPARATION 1. Key User training (100) 2. Onsite End User Training (600) 3. Business Process Validation Workshops ( Senior & Top Management)

3 1. Launch by Senior Management 2. Hand-holding Support 3. Buy in of Auditors

S T A K E H O L D E R S

GOLIVE AND SUPPORT

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CONTENTS
About NALCO Business Challenges : Environment , Technology SAP Landscape Processes enabled through SAP Change & Project Management Highlights Key Business Benefits IBM System x Value Additions in ERP Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

ERP BENEFITS IN SALES AND DISTRIBUTION

Centralised customer master with strict control over customer definition Complete transparency across units wrt all customer transactions and complaints IBM System x Real time consolidated view of customer account across units Automatic MOU rating and discount processing

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ERP BENEFITS IN PROCUREMENT

Streamlined and standardised processes across units Enhanced transparency enabling better coordination among units Centralised vendor master with strict control over definition, IBM System x minimising possibilities of incomplete or duplicate vendor definition Automatic check on procurement of non-moving items

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ERP BENEFITS IN INVENTORY MANAGEMENT

Centralised item and vendor master with strict control over item definition minimising possibilities of duplicate item/vendor codes Visibility of stock across units thereby reducing need for IBM System x emergency procurement of common items On-line accounting for all material transactions Better tracking of Procure-to-pay cycle

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ERP BENEFITS IN FINANCE & CONTROLLING

Streamlined and standardised processes across all units with single Chart of Accounts Real time visibility of transaction/account balances across all units Reduction in process cycle time for bank reconciliation, consolidation of unit accounts Elimination of quarterly inter-unit advise reconciliation at IBM System x Office Corporate Online availability of vendor account at individual unit level as well as company level Unit wise and company wise fixed asset register System generated cost sheet with variance analysis System generated export documentation, export license tracking, excise register maintenance and statutory reporting

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

ERP BENEFITS IN PRODUCTION PLANNING

Scientific planning and production reporting Parameterised Quality recording and reporting Tight integration with Controlling IBM System x Disciplined raw material consumption reporting

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ERP BENEFITS IN INFORMATION TECHNOLOGY

Next practice ready Host of available technologies built around ERP Ready availability of knowledge, skills, user groups Single technology platform IBM System x of Development / Quality / Production Segregation Enhanced security with Roles & Authorisation controls Tier III Data Centre with Centralised BMS, EMS, Backup

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CONTENTS
About NALCO Business Challenges : Environment , Technology SAP Landscape Processes enabled through SAP Change & Project Management Highlights Key Business Benefits IBM SystemAdditions in ERP Value x Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

VALUE ADDITION IN ERP Some Examples

MOU SYSTEM FOR MARKETING :
AGREEMENT BY NALCO TO PROVIDE AND CUSTOMER TO BUY PRIORITY IN DISPATCH ADDITIONAL DISPATCH TATKAL (OVERRIDING ) DISPATCH UPTO 10% OF MONTHLY MOU CUSTOMER REWARD SCHEME : MONTHLY / QUARTERLY / ANNUAL

CUSTOMER SATISFACTION MANAGEMENT

COLLECTION OF FEEDBACK FROM VALID CUSTOMERS FEEDBACK CAPTURE ANALYSIS OF RESPONSE

ANALYSIS REPORTS IN MATERIALS MANAGEMENT

PRICED STORES LEDGER PO STATUS MATERIAL PIPELINE PURCHASE ORDER LEAD TIME

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Customer MOU Management

Annual Activity. Maintained on Type of MoU. Source of all activity related to MoU

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Customer MOU Management

Report for each type of MoU Scheme Annual, 1Qtr, 2Qtr & 3Qtr. Report for Each scheme has Qtr-Wise Report and Full-period Report. Each Report has data break-up by MoU Qty, Monthly Eligibility, Quarterly Eligibility, Monthly Lifting & MoU Discount Eligibility Status. Report scheduled for update 1:00AM every day.

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Customer MOU Management

Legacy
Multiple Database Smelter, Corporate, Stockyards Batch Process (data transfer to Corp) at end of month confirmation from Finance and Despatch. Re-conciliation of Transferred data MoU processing & Report generation Checking of Report Transfer Discounts to Respective Regional Offices for making Accounting entries relevant to their region. Generation of Voucher, Posting & Transfer to FAS. Credit Note Disbursement and mails Time Line: Appx. 5-6 days. Time Line: 1 day. Max 2 days. Unified Database Real-Time activity ends on close of working day. Real-Time activity ends on close of working day. MoU processing, Report generation, Credit Note, Account Posting is completed in one instance. Regional Offices print and generate mail when printing the credit notes for disbursement to customer.

ERP

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Customer Satisfaction Index System

Can be run at each Regional Office at end of period. Feedback can be entered at each Regional Office. Analyses can be generated across the company.
Selection of Customer based on defined Criteria

Sales Table

Mail Communication along with Feedback form to Customer

ZSDCSIWEGT (weight-age table)

ZSDCSICF (Customer feedback)

Capturing Feedback from Customer

ZSDCSIVAL (CSI Value)

Customer-wise Product-wise CSI report

Sales Districtwise Analysis

Product-wise Analysis

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Customer Satisfaction Index System

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ANALYSIS REPORTS IN MATERIALS MANAGEMENT

PART-A

Priced Stores Ledger

PART-B

PART-C

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ANALYSIS REPORTS IN MATERIALS MANAGEMENT

PO STATUS

PART-A

PART-B

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ANALYSIS REPORTS IN MATERIALS MANAGEMENT

Material Pipeline Details

PART-A

PART-B

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ANALYSIS REPORTS IN MATERIALS MANAGEMENT

Purchase Order Lead Time

As compared to June-Dec 2010, there has been an improvement in PO Lead Time from 80 days to 47 days during Jan-June 2011
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CONTENTS
About NALCO Business Challenges : Environment , Technology SAP Landscape Processes enabled through SAP Change & Project Management Highlights Key Business Benefits Value Additions in ERP IBM System x Way Forward

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011

WAY FORWARD
IMPLEMENTATION OF SRM 7 IMPLEMENTATION OF DISASTER RECOVERY SITE
IBM System x

IMPLEMENTATION OF DMS SHOP FLOOR INTEGRATION IMPLEMENTATION OF PLANT MAINTENANCE

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THANK YOU

SAP WORLD TOUR 2011, NEW DELHI, 26TH AUGUST 2011