Peer to Peer

VISA Steel’s post-ERP sales soar

VISA Steel Limited has been able to integrate business processes running across plants with its ERP system. Better decision-making and process control have upped revenues. By Abhinav Singh

VISA Steel Limited, a part of the VISA Group and a global organisation in metals, has multiple plants in India catering to diverse businesses such as glass furnace, power plant, rolling plant etc. The metals and minerals industry in India is an organised one and companies face stiff competition from both national and international players. VISA Steel Limited wanted to integrate its plants located on 525 acres of land in Kalinganagar, Orissa. Post implementation of mySAP ERP 5.0, each plant’s process has now been integrated with mySAP ERP and this has led to the improvement of operational efficiencies besides streamlining business processes. Optimising business processes has helped drive more sales on account of better decision making. This in turn has helped the company compete by keeping its investments at an optimum level.

Too many systems

Each plant functioning at Kalinganagar Orissa had its own unique standalone systems. This was leading to a lot of problems for the company as a separate inventory list had to be generated for each plant in a different format. Reports had to be generated based on assumptions after which MIS reports were generated which took an average of two to three days depending on the data. Manoj Digga, chief financial officer, VISA Steel Limited says, “Due to the disparate systems working in different plants there were many discrepancies as there was no integration amongst the systems. This was leading to inaccurate and delayed reports based on assumptions. A lot of corrections had to be made and there was a lot of duplication of work as reports had to be collated from different plants and then re-entered into the system for a centralised approach. It was a time consuming process.” VISA Steel, which is in the midst of a project expansion plan of Rs 1,400 crores wanted an integrated system for project costing and faster decision-making. It wanted a system that could integrate processes running across its different plants, and wanted to link the same to the company’s corporate office in Kolkata. The disparate systems were unable to achieve this objective resulting in the requirement for a standardised ERP solution.

mySAP ERP 5.0 version was chosen by VISA Steel Limited. In addition to SAP, Oracle and Navision was also evaluated. Digga explains, “SAP has more referenceable customers in major steel plants in India than any other ERP vendor and we were satisfied with the SAP R&D vis-a-vis Indian customs and excise rules and payrolls. We felt that the package suited Indian conditions better than any other package and would be of great help to a company operating out of India.” The package was also chosen based on the company’s perception of it being a stable and scalable solution that could support its future growth and included capabilities for the metal industry such as best practises and templates. The package was zeroed upon in September 2005 and the project went live in April 2006.

A key challenge that the company faced was that of data migration. Data from disparate systems had to be entered into the new one. This was part of an exercise to discard all parallel systems working in different plants and shift completely to mySAP. Secondly there were initial challenges of acceptability and retaining those people who were involved in the implementation exercise as they had a thorough knowledge of the system. The company adopted a big-bang approach and went ahead with all the modules of the package except the quality assurance module. It is now using modules such as Material Management, Plant Management, Business Intelligence, Payroll and HR. The implementation was completed in a matter of nine months and around 16 people were involved in the implementation exercise. PricewaterhouseCoopers was the implementation partner.

Integration solves many problems

VISA Steel has automated and streamlined its key business processes—from finance control to sales distribution, material management, production planning, project management and HR and payroll. The ERP solution has been designed to help the company improve customer service by delivering products on time with enhanced quality management. Ever since the package went live the company’s inventory control has been integrated leading to timely decision making. Now every process is online and linked to the corporate office in Kolkata. Earlier all the reports had to be physically couriered which was time consuming and delayed decision-making.

The corporate office is linked to the plant site in Orissa by means of a high speed 2 Mbps link from VSNL and in case of any discrepancy of data corrective action is taken immediately and the reports are accurate and timely. Digga says, “The annual operating plan, material and the fund management have all been streamlined. MIS generation that used to take three days has been reduced to a few minutes as the data is online.” There is also better control over transportation costs through consolidated orders and shipments. Additional benefits include optimisation of working capital, consolidation of MIS data, improved project management, sales and distribution. The solution is also beneficial in improving visibility and gaining control across processes at VISA Steel Limited and helps the organisation innovate for growth by quickly adapting its processes and systems to changing market conditions.