SAP® Customer Success Story
Tata Motors
AT A GL ANCE
Company
n Name : Tata Motors Limited
n Industry : Automotive
n Product &
Services : Commercial
vehicles and
passenger vehicles
n Employees : 24,000
n Website : www.tatamotors.com
n Implementation partner :
Tata Technologies and a little bit of
consulting organized by SAP India.
Challenges &
Opportunities
n Replacement for homegrown
legacy systems
n Build a single location-independent
integrated enterprise
n Richer quality of data and
real-time access to database
Objectives
n Rationalize business processes n A single unified database
across all manufacturing units
n Improve efficiency by reduction in
effort-duplication
n Reduction in operational costs
n Reach and respond to the
customer rapidly
SAP® Solutions &
Services
SAP® ERP Solution Version 4.6
Implementation Highlights
n Time frame: 2 years
n Users: 3500
Why SAP
n It was the clear leader in the
market for such solutions
n It was the best package available
for automotive industry
n Multiple functionalities were
covered
Benefits
n Enterprise integration
n Financial benefits of reducing
inventories
n Better control of receivables Jamshedpur, Pune and Lucknow, supported by a nation-wide
n Significant reduction in time taken
for financial consolidation
Existing Environment
Database : Oracle
Hardware : Pre-dominantly IBM with
a smattering of HP and Sun
Operating System : Unix
“SAP has a clear superiority in the market.
It has a large presence and good support,
so we chose the SAP ERP Solution for our
company. The results have definitely
exceeded our expectations”
Probir Mitra, CIO, Tata Motors.
TATA MOTORS
SAP® ERP helps Tata Motors to serve their customers
better and faster
Tata Motors Limited, India’s largest automobile com­pany,
is the leader by far in commercial vehicles in each segment,
and the second largest in the passenger vehicles market with
winning products in the compact, mid-size car and utility
vehicle segments. The company is the world’s fifth largest
medium and heavy commercial vehicle manufacturer.
Established in 1945, Tata Motors’ presence indeed cuts
across the length and breadth of India. Close to 4 million
Tata vehicles ply on Indian roads, since the first rolled out
in 1954. The company’s manufacturing base is spread across
dealership, sales, services and spare parts network comprising
over 2,000 touch points. Their annual turnover last year was
Rs. 27,000 crores. The company’s 24,000 employees are guided
by the vision to be best in the manner in which they operate,
best in the products they deliver, and best in their value
system and ethics.
They became the first company from India’s engineering sector
to be listed in the New York Stock Exchange in September 2004.
They have several international collaborations and acquisitions
including Daewoo of Korea and MarcoPolo of Brazil. Tata Motors
and the Fiat Group have recently signed a Memorandum Of
Understanding to establish an industrial joint venture in India to
manufacture passenger vehicles, engines and transmissions for
overseas markets.
“SAP has a clear superiority in the market. It has a large presence
and good support, so we chose the SAP ERP Solution for our
company. The results have definitely exceeded our expectations,”
Says Probir Mitra, CIO, Tata Motors.
Before implementing the SAP ERP Solution, there were several
homegrown applications that managed all of the company’s
IT requirements. Since they were developed over long periods
of time, they were on multiple platforms and hence difficult to
merge. The biggest draw­back of the legacy applications was that
they were func­tion and location specific and were built on local
and individual perception of needs. Common and rationalized
processes and practices across all organizational units were not
enforced. Therefore, managing functions like HR, sales and finance
across three manufacturing units spread across the country and
their corporate office was tedious and time-consuming. Integrated
functions like materials management and payment processing
were separate entities, causing delays in individual transac­tions.
This led to unnecessary increase in overhead costs and duplicated
efforts at each unit.
Tata Motors soon understood that the need of the hour was a
unified real time database that gave up-to-date information to all
their stakeholders - both internal and external. They had to move
from their legacy decentral­ized platforms into a consolidated
enterprise platform and rationalize the business processes across
the various units. This would give them an enterprise perspective
both across process and IT infrastructure. The company could
then serve their customers much better and faster, even while
reducing operational costs and cutting manufactur­ing cycle times.
They decided to go in for the SAP ERP Solution, which
provided them all the answers and much more. The
SAP Solution would enable them to improve busi-
ness continu­ity by unifying the database and functions
across the coun­try into one single entity. It would no
longer require any location-specific expertise and thus
be much easier to maintain.
With the SAP solution, customization and upgradation costs could
be lowered. Risks, which emanate from attrition or change of
guard in the company, would also be minimized.
Implementation of the SAP ERP Solution.
Tata Motors outsources their IT to Tata Technologies, which is
their 100% subsidiary company. So Tata Tech­nologies became their
implementation partner. SAP India also organized some consulting
for them, which had consultants from both India and abroad. In
1997, when the seed of implementation was sown, the WAN infra­
structure in India did not permit a single server implemen­tation.
Hence a distributed server implementation was done in stages over
a period of two years between 1998 and 2000. The version used was
3.1H. In August 2003, they moved over from SAP 3.1H to SAP 4.6C
on a single server platform. There are 3500 users across the country.
Once SAP was implemented, rationalization of several processes
was done extensively. Various business processes like
materials, finance, logistics, etc. were stripped down to their
basic components and a lot of re-engineering had to be done, as
all these processes became location-independent. Tata Motors also
opted for the standard cost functionality, which was a significant
busi­ness process change for them.
Benefits
With the SAP ERP Solution in place, Tata Motors has experienced
significant benefits in productivity and cost control. The number
of servers as well as the number of different applications run on
them has been greatly reduced. The disaster recovery management
is being done only for one entity rather than for every application.
Non-value-add activities have been lowered. The implementation
of a single SAP instance forced a much required change in the
organization. A BPR to achieve uniform processes with business
users talking the same language was the outcome.There is a
significant reduction in inventories and better control over
receivables and other credit control. A shared services platform has
also been created for IT and shared financial services.
Currently, they are exploring the possi­bility of a shared services
platform for HR too. There has been a reduction of almost 2
weeks time in financial consolidation. The statutory compliance
of quarterly closing of books and audit has been very largely
facilitated by SAP. Compliance has thus now become more
struc­tured and easier to manage.
The speed and granularity of cost data availability is a big
improvement. The richness of analytical data using BW has
provided enormous benefits. SAP® SRM has provided a seamless
integration with vendors.The biggest benefit has been the large
unified database for the entire enterprise.
“Now anyone across the enterprise can just look in and find out
what customers we have, who are our suppliers and vendors, what
prices we offer, etc. very easily. It brought a synergy in purchasing
by strategically sourcing critical components for the entire
organization. This resulted in strategic partnering with vendors
with volume discounts,” says Mitra.
“With the Company being listed in the New York stock
exchange, SOX compliance becomes mandatory. With-
out SAP, SOX compliance would have been extremely
difficult with the large and fragmented spread of legacy
application.”
adds Probir Mitra.
SAP Solution has helped Tata Motors serve their customers better
and meet all their needs. Since informa­tion is now on a real-time
mode, they are able to quickly respond to their customers, vendors
and suppliers demands. “Previously, we had to pick up data from
four different locations and then consolidate them before you
could update your customer. Now, we have up-to-date information
about the customer right up to his last transac­tion,” says Mitra.
Future Plans
Tata Motors is now a satisfied customer of SAP - they have the
largest deployment of the SAP Solution in the automotive industry,
considering the spread of functional­ities they use. They are
keeping abreast of all the new developments and ensure that the
applications they run commiserates with the SAP enhancements.
They would definitely choose SAP for their future plans too.
“Our experience with SAP has been very good. We are consis­
tently looking to add new functionalities to our existing suite of
coverage,” says Mitra.
Tata Motors has been able to achieve enterprise integra­tion, a high
productivity gain and also build a stronger, enduring relationship
with its customers, thanks to the SAP ERP implementation. Thus,
the company has not only retained its leadership in India but has
also been able to enlarge its footprint in the global automotive
industry.
 www.sap.com/contactsap

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