The story of ERP at Triveni

Deploying SAP R/3 4.6C has enabled Triveni Engineering to control inventory costs, track projects online, and put a number to the total project cost. Akhtar Pasha digs out the details

Rajiv Jain says Triveni wanted to avoid unnecessary costs and delays, which is why it decided to take the Big Bang route for implementation

TRIVENI Engineering & Industries started in the sugar business in 1933. Today it is a Rs 750 crore enterprise with diverse business lines. Along the way, the group diversified from sugar to sugar machinery. In 1964 the company began manufacturing, in technical collaboration with Peter Brotherhood, UK, steam turbines for mill drives and power generation. It now has over 2,500 installations across a range of industries including sugar, fertilisers, petrochemicals, chemicals, carbon black, solvent extraction, paper, pig iron and sponge iron. With a production capacity of over 200 turbines a year, the company has emerged as a leader in the Indian market for turbines rated at a capacity of up to 6 MW. Triveni now manufactures turbine models up to 15 MW.

It also makes high-speed gearboxes.

Challenges

The spares sales division of Triveni sells spares for steam turbines that are used in power plants of companies such as Samtel Color, Modipon Fibre, Alembic Chemical Works and MTZ Polyesters; these businesses directly depend on keeping their power plants available 24x7x365/6. An hour of downtime could cost them pots of money. Since the shelf-life of the machines is high—between 25-30 years—they need to be supported by new spares and maintained on a regular basis (at least every three months).

The task was not easy. There were three areas where Triveni wanted to improve.

• The first was customer support. Critical information such as the case history of spares at the customers’ premises was maintained manually, and the systems were paper-based. Occasionally, spares changed were not recorded. Other areas such as the number of complaints closed, number of open complaints and preventive maintenance schedule (similar to an AMC contract) were all paper-based. In the absence of the engineer who attended to the last problem, follow-up action could not be planned in advance, nor could the root cause of the problem be traced. Says Rajiv Jain, the company’s deputy general manager, operations, “Because of the data being unavailable, we ended up overstocking spares. Additionally, a PMC could not be prepared for follow-up action. Since data was not available online we could not analyse the root cause of the problem.”
• The second area of concern was systems for tackling projects. Each item/spare is tracked with the associated project. Triveni manufactures some of the items/spares, and partially outsources/procures from third parties. A purchase order is issued against each item/spare bought directly. Triveni had to deal with a large number of items at a time (on an average, 80 to 90); there was no means of tracking these projects.
• The cost of the project was the third area that Triveni wanted to calculate. It was necessary to determine how much Triveni was investing in a given project. Jain explains, “It was easy for us to calculate the cost of the spares, but because of their longer shelf life (25-30 years), it was difficult for us to calculate the travel expenses incurred while getting to the customers’ premises, the value of spares supplied during warranty conditions, etc.”

Legacy applications

For over a decade the company spent money on in-house legacy applications prepared by NIIT with Sybase on Unix. These applications (such as inventory, production planning, purchase and spares) were not integrated with finance. Tally 6.3 version was used for accounting. While the range of applications covered almost every facet of business operations, the mechanism to integrate islands of computing was rather crude. No standard or unifying process could be established to provide seamless integration; besides, the methodology was paper-based and depended on manual entries. Because of this, every application system became function-specific. This resulted in a great deal of resources being spent on reconciling functional figures. Due to non-integration of data across various functions, sometimes an item was booked twice or it was difficult to trace where material was lying.

In 1999, with the help of Accenture, Triveni decided to go in for business process re-engineering to improve its customer support and project systems, and to analyse project costs. The company took the decision to have an ERP system in place to solve business problems. Three enterprise application software vendors were identified—SAP, Baan and Oracle.

SAP

Although the solutions from SAP, Baan and Oracle were equally good, Triveni was looking for a solution that needed the least amount of customisation. Explains Jain, “Customisation of the package meant shelling out more money and delaying the implementation, which we wanted to avoid. Besides, we wished to deal with a company that could provide future upgrades and whose solution gelled with our future plans. Hence SAP was the natural choice since we had plans to invest in a PLM and CRM solution soon after implementing ERP.” SAP R/3 4.6B was identified as the ERP package that could provide Triveni with the following:

n The ability to provide full visibility of information as against pockets of information.

n Modular, scalable and integrated architecture based upon best practices in the consumer products industry. In-built features to support optimisation of the supply chain, richness in functionality (including India-specific requirements of excise and taxation), and a growth platform.

Triveni picked the solution in 2000.

TCS, implementation partner

Having identified the package and modules required for meeting its business requirements, the choice of implementation partner for the project was a difficult decision to make. The likes of TCS, HCL, Satyam and Tata Infotech were all bidding for this project. Triveni chose TCS because of its end-to-end solution offerings and its close association with F C Kohli, ex-deputy chairman of TCS who is now on the board of directors of Triveni.

Big Bang route

After the first round of assessment, Triveni took a call on the modules it wanted to implement. It was decided that the company would implement 11 modules taking the Big Bang approach. The modules picked were sales, distribution, project systems, financial, cost accounting, product planning, quality management, customer support, executive information, workflow and payroll.

The implementation began in January 2001. While it was going on SAP brought out a new version, R/3 4.6C, with some value additions such as improved customer support and India payroll. The first step of the implementation was to convert all existing data from the legacy applications into SAP’s preferred format. Due to a large inventory of bill of materials (60,000-70,000 items), it took five months for data conversion. Nearly 120 people from various departments (and their functional heads) were trained on the new SAP environment. Triveni went live with R/3 4.6C on March 2003 after an implementation that took all of two years.

Jain justifies the delay by stating that Triveni is into the ETO (engineering to order) business, and very little has been done to understand its requirements. “It took time for SAP to understand our requirements and make adjustments accordingly. Additionally, we picked up 11 full-fledged modules to implement in one go instead of implementing fewer modules in phases. We wanted to avoid unnecessary costs and delays, and hence decided to take the Big Bang route for implementation.”

The company invested Rs 2 crore, including the cost of the package, hardware, software, training and implementation. There are now 55 users of SAP R/3 4.6C at Triveni.

Benefits

Barely seven months into implementation, Triveni is noticing early benefits. Says Jain, “We are already seeing hidden profits.” Since data is now available online, Triveni can trace where its materials are lying in the factory. The company no longer needs to overstock spares; this has led to a reduction in inventory cost. Duplication of entries has stopped. The core objective—to improve project systems, project cost analysis and customer support experience—is already being attained. The company is now able to get to the root cause of a particular problem, rectify it, and leave behind follow-up instructions that need to be looked at during the next visit. From the time a tender is floated till the time an item is manufactured, each item is tracked online on a project basis, thus helping to calculate the total cost of the project.

Plans

Having implemented all 11 modules of R/3 4.6C at its Bangalore office, the company is planning an all-India rollout in seven offices—Delhi, Allahabad, Hyderabad, Vijayawada, Pune, Mumbai and Latur in the next two months. After that the company plans to invest in a PLM solution to reduce the product lifecycle and associated change management. CRM too is high on the agenda.

IT infrastructure at Triveni Engineering

Triveni Engineering has two Sun SPARC servers that run the R/3 4.6C ERP application. One Sun server is used as a production server while the other is used as a development server. The production server [R/3 4.6C] runs on a Sun E450 server with dual processors expandable up to 4 CPUs with 2 GB memory (expandable to 4 GB). The Sun E450 runs Solaris 2.8 and Oracle 8.1.7 database. All the modifications/changes are directly done on the primary server. The development server, a Sun E250 with one CPU and 1 GB memory runs Solaris 2.8. Both servers are connected to a Sun 8000-external Raid 5 storage box. The company uses Jeeva software from Wipro to provide back-up and 99 percent uptime to users. If the primary server goes down, the secondary server (production server) takes over, letting users continue to work on the system without disruption.

Snapshot of implementation
Industry	Triveni Engineering Industries is a manufacturer of sugar machinery, steam or gas turbines and high speed gear boxes.
Solution	The company deployed SAP R/3 4.6C with 11 modules—sales & distribution, project systems, financial, cost accounting, product planning, quality management, customer support, executive information system (EIS), workflow and payroll.
Hardware	Sun Sparc E450 server with two CPUs, 2 GB memory and a Sun E250 with one CPU and 1 GB memory
Operating systems	Sun Solaris 2.8
Database	Oracle 8.1.7

akhtar@expresscomputeronline.com