Eicher seeks to become a learning organisation

One of India's industrial pioneers, the Eicher Group has been harnessing the power of IT for over 15 years now for managing its business more efficiently. And now, the IT-savvy group is in the process of implementing knowledge management solutions aimed at helping it make the transition from a mere manufacturing organisation to a learning organisation. Dheeraj Kapoor reports

Think tractors and one of the first names that comes to your mind is Eicher. The Rs 1050 crore Group, manufactures and markets tractors, commercial vehicles, automotive gears, motorcycles, hand tools, aggregates and components not only in the country but also abroad. Though the company had been using IT for over 15 years; with this growing product line, it felt the need to chalk out a new IT strategy that would help it manage its business better and position itself more solidly in the new economic order.

Says Sanjay Govil, director-IT & chief information officer, Eicher Group, “Though the Group had been using IT as a back office tool for many years, a focussed approach to leverage IT for integrating the organisation started in the year 1996 as we felt that it was a key business enabler.”

The early IT infrastructure of the group centred around the development of various solutions by the in-house IT team designed to take care of different business needs. These included standalone solutions built for payroll, accounting and material accounting. The organisation used Org and DDE prior to the year 1996, which were connected through serial ports.

The new strategy, Govil points out, focussed on having more software solutions in the group. The adoption of open technologies was preferred to proprietary technology and emphasis was laid on having business solutions rather than technology solutions. After assessing its various requirements, the group decided to implement an ERP system to streamline business, a WAN for greater connectivity between branch offices and CAD/CAM systems for designing.

ERP
The Eicher Group began implementation of the ERP solution in the year 1997-98 and today eight manufacturing sites and 15 sales and corporate offices in Delhi are connected to the system. The decision to implement SAP was not a chance decision, says Govil. After identifying its requirements, the group evaluated various ERP packages and zeroed in on SAP, as it was best suited to its needs.

The system went live in the year 1998 with modules such as finance, product planning, material management and sales & distribution. The group later added other modules such as production planning and control, plant maintenance, quality and HR management.

According to Govil, the implementation of the ERP system has helped in the reduction of costs and optimisation of resources. It has also helped the organisation in identifying and removing inefficiencies within its supply chain.

WAN
Along with the ERP implementation, the Eicher Group worked simultaneously on the setting up of a WAN connecting various locations of the organisation. The group initially went in for VSAT connectivity at all its 24 locations, which included manufacturing sites, sales offices and the corporate office. All the manufacturing sites and the corporate office were connected on the Pre Assigned Multiple Access (PAMA) based VSATs on account of high bandwidth requirement in these locations, whereas the marketing locations were connected on Time Division Multiple Access (TDMA) based VSATs. This was done through Comsat Max.

The Eicher Group subsequently adopted Frame Relay network at three of its plants which, according to Govil, provides high service levels thus cutting down on the delays. This, he says, is very important for mission critical applications such as SAP. The organisation has also installed ISDN lines at its offices in Mumbai and Bangalore.

Eicher deployed Microsoft Exchange for messaging nearly one and half year ago, which doubles up as the Intranet of the group providing for the sharing of documents, HR related news and also a forum for discussion. The WAN system in the organisation supports the its messaging system, SAP, Intranet and CAD/CAM systems. According to Govil, the WAN has helped Eicher in improving internal collaboration significantly, leading to shorter life cycle time for business processes. Today, the organisation has WAN connectivity in all its 27 locations.

Eicher has also undertaken initiatives to link its dealers with its ERP system. Till date, nearly 80 main dealers of the group are connected to this system, allowing them to place their orders online to for both vehicles and spare parts. Dealers can also enter warranty claims and check their statements online. This practice, says Govil, also helps in sharing other details of the company with its dealers; such as the information about new products to be launched etc.

CAD/CAM
As part of its IT drive, Eicher began using CAD/CAM in its manufacturing units three years ago. It set up an Engineering Solutions Group (ESG), as an initiative to focus on product development and engineering which looks after the high-end CAD/CAM requirements of the Group. Says Govil, “The usage of CAD/CAM packages has helped us in reducing the design cycle and also the number of prototypes that we are required to build for the new products. We are now able to roll out new products much faster.”

As part of the CAD/CAM system, the organisation uses Pro Engineer for 3-D modelling and design. Packages like ‘PATRAN’ are being used for the finite element and ‘ANSYS’ for finite element analysis.

In addition to this, Eicher uses Adams for dynamic analysis. This software operates in a client server environment with high high-end workstations.

On the security front, the organisation has deployed and implemented a comprehensive security policy and architecture, which includes usage of firewalls from Checkpoint, virus checking tools and VPN.

To facilitate IT literacy in the group, Eicher has allocated a set budget and internal resources for continuous training and knowledge enhancement of its employees. It spends nearly 10 percent of its IT budget for the purpose of IT training. It has also set a target for the number of person days of training that it would conduct in a quarter and a financial year. This includes the quantum and type of training. Apart from the in-house training team, Eicher has employed agencies such as NIIT and Aptech for training its employees. Today 60 percent of the white collared workers in the group are IT literate.

The organisation also set up a data centre in Delhi a year back. This facility currently houses all the critical IT infrastructure of the group, which includes the SAP and messaging system. Prior to the setting of this data centre all the servers of the organisation were distributed across the different locations of the organisation, but with the beginning of this data centre, all the manufacturing sites and the marketing offices of the company login over the organisation’s WAN.

Eicher has a 40 member in-house IT team to maintain the IT infrastructure of the organisation and has created a help desk to tackle problems pertaining to IT at it’s different locations. This help desk is central as well as distributed in nature and is used based on the criticality of the problems. However, it is expected to solve problems within two working days.

The future IT plans of the group include the introduction of Knowledge Management (KM) tools in the organisation. Presently, Eicher is in the process of studying various solutions in this area and expects to introduce the solutions in the next financial year. This exercise, according to Govil, is aimed at transforming the organisation into a learning hub. The group is also in the process of assessing Customer Relationship Management (CRM) solutions and it plans to deploy this solution in the near future.