SAP_NALCO

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

BP Naik, Project Manager , ERPS Mohanty, AGM(Systems)

BUILDING INTEGRATED PROCESSES FOR EFFICIENT MANUFACTURING

Case Study at National Aluminium Company Limited

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IBM System x

AGENDA

About NALCO

Business Challenges : Environment , Technology

SAP Landscape Processes enabled through SAP

Project & Change Management Highlights

Key Business Benefits

Value Additions in ERP

Way Forward


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IBM System x

CONTENTS

About NALCO



Change & Project Management Highlights



Way Forward


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IBM System x

NATIONAL ALUMINIUM COMPANY LTD


I N C O R P O R A T E D I N 1 9 8 1 .

A N A V A R A T N A P S U .

A P R E M I E R T R A D I N G H O U S E .

L A R G E S T I N T E G R A T E D A L U M I N A - A L U M I N I U M C O M P L E X I N A S I A .

O N E A M O N G T H E L O W E S T C O S T P R O D U C E R S .

E X P O R T T O O V E R 3 0 C O U N T R I E S .

I S O 9 0 0 2 & I S O 1 4 0 0 1 C E R T I F I E D U N I T S .

A L L T H E P R O D U C T I O N U N I T S A N D C O R P O R A T E O F F I C E S A 8 0 0 0 C E R T I F I E D .

1 S T C O M P A N Y I N T H E C O U N T R Y W I T H L O N D O N M E T A L E X C H A N G E

R E G I S T R A T I O N S I N C E 1 9 8 9 . P R O F I T M A K I N G P S U S I N C E I N C E P T I O N

T U R N O V E R O F I N R 6 3 7 0 C R O R E , P A T O F I N R 1 0 6 9 C R O R E D U R I N G 2 0 1 1

H U M A N R E S O U R C E 7 4 0 0 S T R O N G

ABOUT NALCO

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LOCATIONS


New DelhiJaipur

Silvasa

Mumbai

Bhiwandi

Bangalore Chennai

Visakhapatnam

Damanjodi

Bhubaneswar

Angul

Kolkata

Registered Office

Regional Offices

Production Centres

Ports

Bauxite Mines

Stockyards

FaridabadBaddi, HP

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MARKET REACH


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MANUFACTURING PLANTS


8 T H L A R G E S T B A U X I T E D E P O S I T I N T H E W O R L D .

L O W E N E R G Y C O N S U M P T I O N .

4 8 L A K H T P Y C A P A C I T Y - B E I N G E X P A N D E D T O 6 3 L A K H T P Y .

M E C H A N I Z E D M I N E S W I T H H I G H P R O D U C T I V I T Y .

T R A N S P O R T T H R O U G H S I N G L E L I N E M U L T I - C U R V E C A B L E B E L T ( 1 4 . 6 K M ) .

1 0 0 % C A P A C I T Y U T I L I Z A T I O N .

Bauxite Mine

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1 5 . 7 5 L A K H T P Y C A P A C I T Y - B E I N G E X P A N D E D T O 2 1 L A K H T P Y .

A M O N G T H E L O W E S T C O S T P R O D U C E R S .

S P L . H Y D R A T E S , S P L . A L U M I N A A N D Z E O L I T E A D D E D .

C O - G E N E R A T I O N P O W E R O F 5 5 . 5 M W F R O M P R O C E S S S T E A M B E I N G E X P A N D E D T O 7 4 M W . 1 0 0 % C A P A C I T Y U T I L I Z A T I O N .

U P - G R A D A T I O N O F 4 T H S T R E A M T O I N C R E A S E C A P A C I T Y T O 2 2 . 7 5 L A K H T P Y .

Alumina Refinery

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M O D E R N T E C H N O L O G Y F R O M A P , F R A N C E .

C A P A C I T Y E X P A N D E D F R O M 3 . 4 5 L A K H T P Y T O 4 . 6 L A K H T P Y

I N T E G R A T E D A N O D E M A K I N G , A L U M I N I U M C A S T I N G A N D R O L L I N G .

I N G O T S , B I L L E T S , W I R E R O D S , S O W S & S T R I P C O I L S .

5 0 , 0 0 0 M T C A P A C I T Y R O L L E D P R O D U C T S U N I T .

T E E I N G O T C A S T I N G F A C I L I T Y O F 6 0 , 0 0 0 M T P Y

H Y P E R D E N S E P H A S E S Y S T E M ( H D P S ) F O R A L U M I N A F E E D I N G .


Aluminium Smelter

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C A P A C I T Y E X P A N D E D F R O M 9 6 0 M W T O 1 2 0 0 M W

L O W C O S T O P E R A T I O N .

H I G H P L A N T L O A D F A C T O R .

A D V A N C E D E L E C T R O S T A T I C P R E C I P I T A T O R ( 9 9 . 9 % E F F I C I E N C Y ) T O C O N T R O L P O L L U T I O N .

Z E R O D I S C H A R G E O F E F F L U E N T S .

H I C H C O N C E N T R A T E S L U R R Y D I S P O S A L ( H C S D ) S Y S T E M F O R A S H D I S P O S A L .


Thermal Power Plant

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V I Z A G :

C A P A C I T Y T O H A N D L E S H I P S U P T O 3 5 , 0 0 0 D W T .

M E C H A N I Z E D M O B I L E S H I P L O A D E R . M E C H A N I Z E D S T O R A G E F A C I L I T I Y .

E X P O R T O F A L U M I N A A N D I M P O R T O F C A U S T I C S O D A .

O T H E R S :

E X P O R T O F A L U M I N I U M T H R O U G H K O L K A T A & P A R A D I P P O R T S .

Port Facility

PORT FACILITY

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PRODUCTS

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IBM System x

CONTENTS

About NALCO






Way Forward


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IBM System x

BUSINESS CHALLENGES - ENVIRONMENT


COMPETITION FROM MULTINATIONAL COMPANIES IN DOMESTIC MKTHEAVY LOAD ON RAILWAYS/PORT DUE TO HIGH INDUSTRIALISATION IN REGIONINCREASE IN PRICE OF PRINCIPAL INPUTSMARKETS CONSTRAINED TO REGIONS CLOSE TO INDIA TRANSPORTATION COSTS

LACK OF INTEGRATION BETWEEN PROCESSESLACK OF UNIFORMITY ACROSS UNITSPERSON-CENTRIC PROCESSESLACK OF PROCESS METRICSLIMITED CONTROLS PROCESS INEFFICIENCY DUE TO NON-VALUE-ADDED COMPONENTS

SOME MARKET CHALLENGES

SOME PROCESS CHALLENGES

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IBM System x

BUSINESS CHALLENGES -TECHNOLOGY


HIGHLY CUSTOMISED PACKAGESNON-UNIFORM PLATFORMS : SYBASE ,APT, POWERBUILDER,FOX,CRYSTALREPORTDISPARATE SYSTEMS UNDER DISTRIBUTED CONTROLNO VERSION CONTROL

LIMITED SOFTWARE ENGINEERING / MANAGEMENT CONCEPTSHIGHER APPLICATION MAINTENANCE EFFORTTHREAT OF OBSOLESCENCE /IRRELEVANCE SYBASE, POWERBUILDERNON-STANDARD IT HARDWARE/INFRASTRUCTURE

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IBM System x

CONTENTS

About NALCO






Future Directions


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IBM System x

SAP LANDSCAPE


IBM P550 Series

IBM SystemSTORAGE

DS4700

SRM 5

SCM-APO

DEVELOPMENT,QUALITY,SOLMAN

ECC 6 PROD

BI

EP

IBM System X 3650

IBM BLADE JS21

IDES

IBM P550 Series

IBM P550 Series IBM P550 Series

IBM P550 Series

IBM P510 Series

APPLICATIONSERVER

500USERS

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IBM System x

CONTENTS

About NALCO






Way Forward


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IBM System x


INVENTORY

MANAGEMENT

RECEIVE,STORE AND

ISSUE

GOODS

PORTCLEARING

ANDDESPATCH

OSRDCLAIMS &

INSURANCE

PROCUREMATERIAL

RAISEAND

APPROVEINDENT

INDIRECTTAXES

PROCESSES ENABLED THROUGH SAP

Materials Management

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IBM System x


CUSTOMERMASTER

MAINTENANCE

PRICINGMEASURE

CSI

HANDLESALE

ORDERDESPATCH

HANDLECUSTOMER

COMPLAINTS

DEVELOPMOU


Sales & Distribution

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IBM System x


GL, JournalsAnd

Consolidation

Inter-UnitReconciliation

PayablesManagement

Receivables

Management

BG / LC

Monitoring

CostingFixed

Assets

EMDMonitoring

Tax

Compliance

Cash & BankPayment


Finance & Controlling

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IBM System x


MONTHLYPRODUCTION

PLAN

QUALITYMANAGEMENT

PRODUCTIONREPORTING

PRODUCTIONEXECUTION

PRODUCTIONREVIEW ON

MONTHLY BASIS


Production Planning & Quality Management

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IBM System x


PROMOTIONAND

TRANSFER

PERSONNELADMINISTRATION

RECRUITMENT

TRAININGAND

DEVELOPMENT


HCM

EMPLOYEEMASTER

MAINTENANCE

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IBM System x

CONTENTS

About NALCO






Way Forward


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IBM System x

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

PWC as End-To-End consultant Wipro as Implementing Agency

500 licensed users


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IBM System x

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 with3 period closures in between

Phasing of Golive Critical and GoLive Non-Critical developments

Golive non-critical developments parked till stabilisation.

Parallel run for Feb and Mar 2010 (Legacy & ERP) but all accountfigures from ERP

Support of internal IT team in development of reports

Optimisation of AS IS study and Integration Testing


PROJECT MANAGEMENT HIGHLIGHTS

Actual Period Closure

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IBM System x

Period Closure chasing actual month ends. Initial lag of 3 month. Reduced to zero wef Oct2010. 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

Production plan and confirmation done on monthly basis till Sep 2010 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


PROJECT MANAGEMENT HIGHLIGHTS

Actual Period Closure

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CHANGE MANAGEMENT HIGHLIGHTS

1. Level 1 Training to Core Team

1. End User Needs Assessment2. Level 2 Training to Core Team3. End User Training and Documentation Strategy Analysis4. Business Process Familiarisation Workshops5. Top management stakeholder analysis

1. Level 3 Training to Core Team2. Development of End User Training and Documentation Content3. Involvement of key users during Integration Testing

1. Key User training (100)

2. Onsite End User Training (600)3. Business Process Validation Workshops ( Senior & Top Management)

31. Launch by Senior Management2. Hand-holding Support3. Buy in of Auditors

CO

MMUNIC

ATION

TO

VARIOUS

LE

VELS

IN

VOL

VEMENT

OF

ST

AKEHOL

DERS

PROJECT PREPARATION

BUSINESS BLUEPRINT

REALISATION

FINAL PREPARATION

GOLIVE AND SUPPORT

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IBM System x

CONTENTS

About NALCO






Way Forward


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IBM System x

Centralised customer master with strict control overcustomer definition

Complete transparency across units wrt all customertransactions and complaints

Real time consolidated view of customer account acrossunits

Automatic MOU rating and discount processing


ERP BENEFITS IN SALES AND DISTRIBUTION

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IBM System x

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,

minimising possibilities of incomplete or duplicate vendor definition Automatic check on procurement of non-moving items


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IBM System x

Centralised item and vendor master with strict controlover item definition minimising possibilities of duplicateitem/vendor codes

Visibility of stock across units thereby reducing need foremergency procurement of common items

On-line accounting for all material transactions

Better tracking of Procure-to-pay cycle


ERP BENEFITS IN INVENTORY MANAGEMENT

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IBM System x

Streamlined and standardised processes across all unitswith single Chart of Accounts

Real time visibility of transaction/account balances across allunits

Reduction in process cycle time for bank reconciliation,

consolidation of unit accounts Elimination of quarterly inter-unit advise reconciliation at

Corporate Office 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


ERP BENEFITS IN FINANCE & CONTROLLING

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IBM System x

Scientific planning and production reporting

Parameterised Quality recording and reporting

Tight integration with Controlling Disciplined raw material consumption reporting


ERP BENEFITS IN PRODUCTION PLANNING

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IBM System x

Next practice ready

Host of available technologies built around ERP

Ready availability of knowledge, skills, user groups

Single technology platform Segregation of Development / Quality / Production

Enhanced security with Roles & Authorisation controls

Tier III Data Centre with Centralised BMS, EMS, Backup


ERP BENEFITS IN INFORMATION TECHNOLOGY

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IBM System x

CONTENTS

About NALCO






Way Forward


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VALUE ADDITION IN ERP

Some Examples


MOU SYSTEM FOR MARKETING :AGREEMENT BY NALCO TO PROVIDE AND CUSTOMER TO BUYPRIORITY IN DISPATCHADDITIONAL DISPATCHTATKAL (OVERRIDING ) DISPATCH UPTO 10% OF MONTHLY MOUCUSTOMER REWARD SCHEME : MONTHLY / QUARTERLY / ANNUAL

CUSTOMER SATISFACTION MANAGEMENTCOLLECTION OF FEEDBACK FROM VALID CUSTOMERS

FEEDBACK CAPTUREANALYSIS OF RESPONSE

ANALYSIS REPORTS IN MATERIALS MANAGEMENT

PRICED STORES LEDGERPO STATUSMATERIAL PIPELINEPURCHASE ORDER LEAD TIME

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Annual Activity.

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

Customer MOU Management


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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, QuarterlyEligibility, Monthly Lifting & MoU Discount Eligibility Status.Report scheduled for update 1:00AM every day.


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Legacy ERPMultiple Database Smelter, Corporate,Stockyards

Unified Database

Batch Process (data transfer to Corp) at end ofmonth confirmation from Finance and Despatch.

Real-Time activity ends on close ofworking day.

Re-conciliation of Transferred data Real-Time activity ends on close of working day.

MoU processing & Report generation MoU processing, Report generation, CreditNote, Account Posting is completed in oneinstance.

Regional Offices print and generate mailwhen printing the credit notes fordisbursement to customer.

Checking of Report

Transfer Discounts to Respective Regional Officesfor making Accounting entries relevant to theirregion.

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.



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Customer Satisfaction Index System

Selection of Customerbased on defined

Criteria

Mail Communication

along with Feedbackform to Customer

Capturing Feedbackfrom Customer

Customer-wiseProduct-wise

CSI report

Sales District-wise Analysi s

Product-wiseAnalysis

Sales Table

ZSDCSIWEGT(weight-age

table)

ZSDCSICF(Customerfeedback)

ZSDCSIVAL(CSI Value)

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.


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Customer Satisfaction Index System


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Priced Stores Ledger


PART-A

PART-B

PART-C


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PO STATUS


PART-A

PART-B


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Material Pipeline Details


PART-A

PART-B


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Purchase Order Lead Time


As compared to June-Dec 2010, there has been an improvement in PO Lead Timefrom 80 days to 47 days during Jan-June 2011


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IBM System x

CONTENTS

About NALCO






Way Forward


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IBM System x

WAY FORWARD


IMPLEMENTATION OF SRM 7

IMPLEMENTATION OF DISASTER RECOVERY SITE

IMPLEMENTATION OF DMS

SHOP FLOOR INTEGRATION

IMPLEMENTATION OF PLANT MAINTENANCE

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THANK YOU

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