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RAJASTHAN STATE MINES & MINERALS LTD.
SUMMER TRAINING PROJECTOn
TECHNICAL FEASIBILITY IN IMPLEMENTING IN ERP
Submitted to Suryadatta Institute of Business Management and Technology in partial fulfillment of the requirements for the degree of Post Graduate Diploma in Management2009-2011
Submitted By:Ankit Samota (Telecom + IT)
Under Guidance`:Prof. Ashok Benegal
SURYADATTA INSTITUTE OF BUSINESS MANAGEMENT AND TECHNOLOGY
TABLE OF CONTENTS1|Page
1) CHAPTER 1 INTRODUCTION i) EVOLUTION OF ERP
ii) MAJOR VENDORS OF ERP iii) ERP MODULES iv) FEASIBILITY OF ERP
2) CHAPTER 2 COMPANY PROFILE i) COMPANY HISTORY
ii) AMALGAMATION iii) HIGHLIGHTS iv) PRODUCTS v) FINANCIAL PERFORMANCE vi) BOARD OF DIRECTORS
3) CHAPTER 3 RESEARCH OBJECTIVES AND SCOPE OF ERP
4) CHAPTER 4 RESEARCH METHODOLOGY i) ERP IMPLEMENTATION LIFE CYCLE
ii) BENEFITS O ERP iii) COMPARISON OF ERP iv) DATA COLLECTION
5) CHAPTER 5 CONCLUSION & SUGGESTION
Life is a journey of excellence. Every mile that one reaches during the eternal journey is marked by the guidance of the near and dear ones and the endeavor of mine no expectation. The immense pleasure and joy one derives on the completion of assigned job is beyond description. It is the duty of the concerned person to pay this respect & acknowledge the advice, guidance & assistance received from the entire person to an accomplishment. I owe a deep depth of gratitude to the college authorities for giving me the opportunity to work on this project, their valuable help and keen interest, constant encouragement, inspiration and critical supervision during the entire course of this project, without their help and guidance, I wouldnt have got the opportunity to successfully complete the project report. I extent my deep sense of thankfulness to Mr. Shanti Lal Nagda (Public Information Officer) who allowed me to do my project in RSMML, Udaipur. I am extremely thankful to Mr. Probal N. Majumdaar (SM, System) for providing me the necessary information about the working of plant and various aspects regarding my project report. I shell ever remain indebted to Mr. J.Shantaram (Group General Manager, Phos.) for his constant support, guidance & encouragement.
I declare that the project entitled Security Analysis and portfolio management" of Axis equity fund is a record of independent research work carried out me during the academic year 2009-2010 under the guidance of my faculty guide Prof. Ashok Benegal and my project guide Mr. Probal N. Majumdaar. I also declare that the project is the result of effort and has not been submitted to any other University or Institute for the award of any degree, or personal favor whatsoever. All the details and analysis provided in the report hold true to the best of my knowledge.
Name Place. Date..
Practical knowledge has inestimable value for a student because theoretical knowledge is incomplete if it is not correlated with the practical knowledge. The
work & experience gained during training period has increased my knowledge many folds. My report is the outcome of study for the internal project during 2009 10 session and has been submitted in partial fulfillment for the award of Post Graduate Program in Business Management, Suryadatta Institute of Business Management & Technology, Pune. The topic of my project is a study of The New Management Mantra Enterprise Resource Planning (ERP). Enterprise resource planning: a software system that coordinates every important aspect of an organization's production into one seamless process so that maximum efficiency can be achieved.
EXECUTIVE SUMMERYPractical knowledge has inestimable value for a student because theoretical knowledge is incomplete if it is not correlated with the practical knowledge. The work & experience gained during training period has increased my knowledge many folds. In this limited space a brief and comprehensive account has been produced in the light of recent work done on calculation of enterprise resource planning at RSMML through latest information available from various sources. ERP is an industry term for the broad set of activities that helps to manage the important parts of a business. The information made available through an ERP system provides visibility for key performance indicators (KPIs) required for meeting corporate objectives. ERP software applications can be used to manage product planning, parts purchasing, inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resource aspects of a business.
INTRODUCTIONAn Enterprise Resource Planning System (ERP) is a collection of modules/components integrated together while utilizing one database typically used primarily by medium to large manufacturing organizations with multiple sites located worldwide. Connecting to one database allows users from all departments of the organizations located anywhere in the world to attain the necessary information to carry out their responsibilities. The integrated approach offers improved operational processes and streamlined information to the fingertips of anyone with the security rights to access it. Enterprise Resource Planning (ERP) system solutions are currently in high demand by both Manufacturing and service organizations, because they provide a tightly integrated solution to an organizations information system needs. ERP allows professional people to manage their company in one system that integrates the entire business process and creates a wide-enterprise view of significant corporate information. Recently many organizations face a new challenge of increasing competition, expanding markets and enhancement in customer expectations. This issue needs to be considered in relation to the following potential and/or necessary operational improvements. Inventory reduction to a minimum Reduction of total costs of products and/or services Provision of more reliable delivery dates Making of assortment of production Providing higher service levels to customer 7|Page
Nowadays Information Technology (IT) and Business Process Re-engineering (BPR) are used together as important means of giving the organization the leading edge. The increasing need for Implementing a total business solution has already taken place in most organizations. ERP software has been developed to meet this need. In todays dynamic environment, there is a significant need for any organization to develop their policies in order to become globally competitive. ERP is a strategic tool, which helps the organization to obtain competitive edge by integrating all business processes, optimizing the use of available resources, keeping up with technological changes and ensuring timely responses. Chen (2001) conducted research in planning for ERP systems. He suggested that companies introduce ERP for the following reasons: The use of multiple points of input with duplicated effort in the existing system The inability of the existing system to support organizational needs The requirements of extensive resource for maintenance and support The need of enterprise to reengineer their business process The growth of enterprise and subsequent incompatibility of several information systems. The inability of employees to respond easily to questions or information requested by key customers or suppliers.
EVOLUTION OF ERP8|Page
Understanding the history and evolution of ERP is essential in order to understand its current and future application. Material Requirement Planning (MRP) was the earliest computerized information system. The focus of typical manufacturing companies in the 1960s was on inventory, in that period most of the software packages were designed to deal with that. MRP vendors expanded their systems to include more business functions. In the early 1980s, MRP expanded from a material planning and control system to a company-wide system capable of planning and controlling all the organizations resources. This expanded approach was fundamentally different from the original concepts of (MRP) Manufacturing Resource Planning (MRPII) meant to integrate primary services (i.e. customer ordering, inventory control and production control) and other services such as finance, accounting and distribution into the planning process. The increasing need for integrating more and more function led to the development of a total integrated solution. In the early 1990s, MRP II was further extended to cover areas such engineering, finance, human resources, projects management, marketing etc. That led to the development of ERP systems. ERP is running on client-server architecture, and includes all the resource planning for the enterprise. Examples of these are product design, information warehousing, and material planning, capacity planning and communications system. In summary, MRP software dealt with production requirements in the manufacturing environment, MRP II was an extension of MRP to shop floor and distribution management activities, and it is still being used by manufacturers. ERP may be considered as the next generation of MRP II with other application areas (quality, maintenance, marketing, accounting and human resources).
EXPLANATORY DEFINITION OF ERP9|Page
The American Production and Inventory Control Society (1995) defines ERP as an accounting oriented information system for identifying and planning the enterprise resources needed to take, make, ship and account for customer orders. It also states that ERP is the latest enhancement of MRP II with the added functionality of finance, distribution and Human Resource Management (HRM) integrated to handle the global business needs of an integrated and networked enterprise. Another definition of ERP given by Huang states that it is an industry term which is used for a wide set of activities sustained by multi-module compliance software that helps manufacture ring and service organizations to deal with the significant sections of their business. ERP software provides organizations with a set of integrated applications That runs the following business functions: Human Resource (HR), accounting, controlling, project management, production, materials management, and sales and distribution. These applications are linked by a common database. Figure 1 shows ERP system.
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Considering the above definition, ERP systems have some key characteristics such as: o Common access to a single set of data: the objectives of ERP system are to have a single set of data across all business processes within a company o Standardized data definitions: the ERP business process shares the same data definition across all ERP application modules. o System flexibility: an ERP system should be flexible to the changing needs of an enterprise. The client/server technology enables ERP to run across various database. o Beyond the company scope: ERP system should not be confined to a companys boundaries. 11 | P a g e
Instead, it should support the companys online communication with external entities.
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AN ERP DEVELOPMENT MODEL
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MAJOR VENDORS OF ERP SYSTEMSAt this point it is reviewed as imperative to develop the understanding of different ERP software and their capabilities. Currently, SAP, Oracle, PeopleSoft, Baan, and J D. Edwards are the major competitors in the ERP, which provide solution based on Companies requirement.SAP, accounts for roughly 33 per cent of the total market. Other major players include Oracle, PeopleSoft, Baan, and J D. Edwards account collectively for roughly 36 percent of the total market.
(a) SAPEstablished in Germany, SAP initiated operations in 1972. SAP with 33 per cent market share, is the major ERP vendor and currently supports the business of more than 12,000 customers. SAP is one of the largest software companies in the world, as they spend 20-30 per cent of their annual revenues on research and development (R&D) .SAP applications are in use in more than 107 countries and are available in different languages and currencies. SAPs first two products operated on mainframe hardware; R/1, but in 1981 was replaced by R/2, an online system. In 1992, SAP introduced R/3, a powerful client/server architecture product, which quickly gained dominant market share. This application is an integrated suite of programs which has been created for specific type of business data processing such as financial, manufacturing, distribution, logistics, quality control, logistic and human resources. SAP is currently expanding its product line to supply chain management, sales force automation and data warehousing.
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(b) OracleOracle is the second-largest supplier of ERP software in the word its database is offering the most popular repository of Enterprise Systems Data. Oracle was found in 1977 in the USA. Oracle offers ERP applications designed to work with their database software. Oracle is a leading database software provider that sells most of its applications to manufacturers and consumer goods companies. Oracle 8i, its latest version of the database for internet computing, it has developed an Internet enabled suite of software modules for customer relationship management (CRM), supply chain management, financials, projects, and human resource. Oracles applications are used in over 76 countries and are available in 29 languages. It consists over 45software modules falling into the following categories: financial, human resources, projects, manufacturing, supply chain, and front office.
(c) PeopleSoftPeopleSoft is the latest of current Enterprise Systems vendors. It initiated operations in 1987 and went public in 1992 .Its product offerings are divided into two categories: PeopleSoft Business Process Solution and PeopleSoft Industry Solutions. PeopleSoft Business Process Solutions include materials management, supply chain management, service revenue management, and complete suite of enterprise for finance, supply chain planning, manufacturing and human resources. While PeopleSoft Industry Solutions include industry-specific solutions designed to serve customers communications, financial service, healthcare, manufacturing, higher education, public sector, retail, Services, transportation, government, and utilities. Currently, it aims at the service sector with products designed to help the relevant organizations handle their intangible costs. PeopleSoft is appropriate for 15 | P a g e
the service industry, in particular higher education, healthcare and public sector organizations. In these sectors, PeopleSoft systems are able to deploy a unique solution to inventory processes, which allows inventory counts, orders to be automatically placed, purchase orders to be created, and invoices to be produced and payments to be processed.
(d) BaanBaan was found in the Netherlands in 1978, it has roughly 3000 clients in 5000 sites worldwide. Its software was primarily manufacturing oriented. Then the company targeted the public sector. The Baan approach is to conduct concurrent business processes re-engineering during the ERP implementation. Its aim is to shorten the total implementation time frame, help to improve the Internet security problems. Baan provides a scalable architecture making it possible for different size of business to cost-effectively implement the software. It is also Web enabled, giving enough flexibility to the organizations to gain a competitive advantage through its implementation.
(e) J.D. EdwardsJ.D. Edwards provides ERP applications for managing enterprise and supply chain. The J.D.Edwards Enterprise Systems package gives customers control over their front office, manufacturing, logistics and distribution, human resources and finance. Recently the companys software runs on many different kinds of systems. The different modules that are available from J.D.Edwards are: foundation suite, service suite, manufacturing suite, financial suite, energy and chemical suite, customer service management suite, government/education not-for-profit solutions and utility and energy solutions. 16 | P a g e
ERP systems have common characteristics, such as, they are based on central relational database, they are built on client/server architecture, and they consist of various functional modules. Moreover, there have invariably modules for financial, sales order management, customer service management, purchasing, and inventory management. As most ERP vendors have many similarities, they also have substantial differences. Most ERP software vendors make assumptions regarding the business philosophy and business practices .A company that need to implement ERP must accept those vendors assumptions about the organization and change existing processes and Procedures. In similar way J.D. Edwards requires some customization to suit the business requirements. SAP designed to help organize manufacturing and accounting processes and its system support all areas of business on a global scale. Similarly, Oracle provides most of its application to manufacturing and Consumer Goods Company. In contrast Baan offers manufacturing software to companies that are wary of SAP products, and it continues to develop enterprise systems in areas that SAP and Oracle are less competitive, like project and distribution module. Since J.D.Edwards sells software for managing the enterprise and supply chain, Baan is noted for its flexible manufacturing and PeopleSoft has the lead in human resource software and several software for service environment. SAP and Oracle were found suitable for manufacturing environment. Their financial and supply chain systems are very strong.
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ERP MODULESThe names and numbers of modules in an ERP system provided by different software vendors may differ. Most vendors ERP software is flexible enough that an organization can install some modules without buying the whole packages, organizations brook down ERP packages in modules that handle several functional departments including accounting, finance, human resource and material module And they left the rest of the functions to be installed in future. However, these modules interact as the business processes require information exchange among different departments.
(a) Human ResourceThis Module integrates human resources management for guiding personnel-related tasks between managers and individual employees. There are many tasks, including personnel planning and development, human resources administration, automated personnel management, and business travel. In addition, the following areas are covered: payroll-handling accounting and preparation of checks related to employee salaries, wages, bonuses, employee benefits and self-service Human Resource (HR) that allow employees to change their personal information and beneficial allocation online.
(b) FinanceThese modules refer to bookkeeping and making sure that the bills are paid on time. Enterprise Resource Planning (ERP) can facilitate the following finance functions: General ledger: ERP can keep centralized charts of accounts and corporate financial balances, payments to suppliers and distribution. Accounts receivable: tracks payments due to a company from its customers. 18 | P a g e
Fixed assets: manages depreciation and other costs associated with tangible assets such as buildings, property and equipment. Treasury management: monitors and analyses cash holding, financial deals and investment risks.
(c) Manufacturing and LogisticsManufacturers have employed ERP software to streamline their processes and to respond dynamically to the competitive marketplace. Moreover, they use ERP for improving the decision making process by enabling high level of integration, improved information accuracy and improved information flow throughout the company. The use of ERP application in manufacturing has also been found to be critical in improving customers satisfaction, reducing the total cost of manufacturing and increasing the speed of order processing. ERP has also been found to be effective in reducing inventory costs, and it has also been credited with reducing manufacturing lead times.
(d) SalesThis area of application of ERP consists of order management, pricing, sales management, and sales planning. Customer service management, which is another significant aspect of sales and distribution related applications of ERP, administers installed-base service agreements and checks contracts and guarantees when customer call for help.
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ERP can facilitate overhead costs control through analyses corporate costs. Moreover, this function can also manage products and manufacturing cost controlling, activity-based costing, sales and Profitability analysis and project control.
(f) DistributionAn important area under the distribution application is transportation management which includes scheduling and monitoring and delivering products to the customers by tracking of order status. Other areas of related ERP application also include billing, electronic data interchange, address control, shipping, and transportation management, which arrange, schedules and monitors delivery of production.
(g) Quality ManagementQuality management department may use an ERP system for: quality control, inspection processing, quality certificates, and quality notifications. In addition, this application can use ERP for Manufacturing and purchasing quality tracking, test result entry in shop floor control, repetitive real-time notification of out-of-tolerance conditions and unlimited quality comments on each test.
(h) Materials ManagementERP supports all materials management processes, including controlling of purchase of raw materials needed for building products, order entry and processing, 20 | P a g e
and warehouse management that can keep track of goods and process movements in corporate warehouses.
FEASIBILITY OF ERP
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A feasibility study is an evaluation of a proposal designed to determine the difficulty in carrying out a designated task. Generally, a feasibility study precedes technical development and project implementation. In other words, a feasibility study is an evaluation or analysis of the potential impact of a proposed project.
Five common factors (TELOS)(a) Technology and system feasibility The assessment is based on an outline design of system requirements in terms of Input, Processes, Output, Fields, Programs, and Procedures. This can be quantified in terms of volumes of data, trends, frequency of updating, etc. in order to estimate whether the new system will perform adequately or not. Technological feasibility is carried out to determine whether the company has the capability, in terms of software, hardware, personnel and expertise, to handle the completion of the project (b) Economic feasibility Economic analysis is the most frequently used method for evaluating the effectiveness of a new system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits and savings that are expected from a candidate system and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system. An entrepreneur must accurately weigh the cost versus benefits before taking an action. Cost Based Study: It is important to identify cost and benefit factors, which can be categorized as follows: 1. Development costs; and 2. Operating costs.
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This is an analysis of the costs to be incurred in the system and the benefits derivable out of the system. Time Based Study: This is an analysis of the time required to achieve a return on investments. The benefits derived from the system. The future value of a project is also a factor. (c) Legal feasibility Determines whether the proposed system conflicts with legal requirements. E.g. A data processing system must comply with the local data protection Acts. (d) Operational feasibility Is a measure of how well a proposed system solves the problems, and takes advantage of the opportunities identified during scope definition and how it satisfies the requirements identified in the requirements analysis phase of system development. (e) Schedule feasibility A project will fail if it takes too long to be completed before it is useful. Typically this means estimating how long the system will take to develop, and if it can be completed in a given time period using some methods like payback period. Schedule feasibility is a measure of how reasonable the project timetable is. Given our technical expertise, are the project deadlines reasonable? Some projects are initiated with specific deadlines. You need to determine whether the deadlines are mandatory or desirable.
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Rajasthan State Mines and Minerals limited (RSMML) is one of the leading and progressive undertakings of the Government of Rajasthan. It occupies a place of pride in production and marketing of non metallic minerals of India. RSMML is multi mineral and multi location enterprise engaged in mining of Rock Phosphate, Lignite, SMS grade Limestone and Gypsum. RSMML is not only the leader in Mining & Selling of Rock Phosphate, Gypsum across the country, but also global pioneer in technology in open cast mining and mineral beneficiation of Carbonate Rock Phosphate. Besides minerals, RSMML has also forayed into Energy Sector and has setup 74.80 MW installed capacity Wind Power Project at Jaisalmer, Rajasthan.
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COMPANY HISTORYRajasthan State Mines & Minerals Limited (RSMM) was originally established in 1947 under the name of Bikaner Gypsum Ltd. (BGL) for mining of Gypsum. Following the discovery of Jhamarkotra Rock Phosphate (RP) deposit in Udaipur district of Rajasthan in 1968, BGL was appointed as contractor for mining RP on behalf of the state in May, 1970. BGL was taken over by the Government of Rajasthan in 1973 and renamed as RSMM. Mining of Rock Phosphate and Gypsum has been the traditional activities of RSMM. It is the largest producer of Natural Gypsum and the sole producer of Selenite in the Country. It is the only producer of High Grade Phosphate Ore (HGO), having 31% P2O5 content, in the country. RSMM accounts for 91% of the total production and has mining rights to 83% of the total reserves of the country. Rajasthan State Minerals Development Corporation Limited (RSMDC), a State owned enterprise, was merged with RSMM with effect from April 1, 2001. Rajasthan State Mines & Minerals Limited (in short RSMML) is one of the leading and progressive undertakings of the government of Rajasthan. It occupies a place of pride in production and marketing of non-metallic minerals of India. RSMML is multi minerals and multi location enterprise engaged in mining of Rock Phosphate, Lignite, SMS grade Limestone and Gypsum. RSMML is not only leader in Mining & Selling of Rock Phosphate, Gypsum across the country, but also global pioneer in technology in open cast mining & mineral beneficiation of Carbonate Rock Phosphate. Besides minerals, RSMML has also forayed into Energy Sector and has setup MW installed capacity Wind Power Project at Jaisalmer, Rajasthan 25 | P a g e 15
AMALGAMATIONThe department of the company Affairs, Government of India (orders No, issued year 2003, and witnessed completion of amalgamation of Rajasthan State Minerals Development Corporation Limited (RSMDC), another Rajasthan State Government PSU with Rajasthan State Mines & minerals Limited (RSMML). S.O.207 (E) dated 19th February 2003) under section 396 of the companies act 1956 and the same has come into effect from 20th February, 2003, the date of its publication in the Gazette of India (Extraordinary).
Strategic Business Units & Profit CentersAfter amalgamation, the following four mineral based Strategic Business Units & Profit Centers (SBU & PC) namely Rock Phosphate, Lignite, Gypsum and Limestone have been set up as a part of corporate restructuring:
Strategic Business Unit and Profit Centre Rockphosphate at Jhamar Kotra in Udaipur.
Strategic Business Unit and Profit Centre Gypsum at Bikaner Strategic Business Unit and Profit Centre Limestone at Jodhpur Strategic Business Unit and Profit Centre Lignite at Jaipur Rock Phosphate continued its prime position in the business profile of the Company and catered to almost 94% of the indigenous demand. The capacity of industrial beneficiation plant was increased from 1500 TPD to 3000 TPD and the production got streamlined. The production of lignite was streamlined at Giral and the company is gearing up fast for providing one million tones of lignite for the lignite based thermal power plant at Giral under state owned Company, Rajasthan 26 | P a g e
Vidyut Utpadan Nigam Ltd. Being pioneer in the lignite field, RSMML has ensured its strong presence in the lignite based power sector in Rajasthan. Dispatches of gypsum touched 3.39 million ton in 2008-09. Renewed emphasis on environmental management was stressed upon for the management of gypsum mines. Supply of SMS grade limestone to the steel plants of India touched the record level of 2.30 million tones in 2008-09. In the year 2008-09, company has achieved the profit before tax Rs. 177.89 crores in comparison to profit before tax of Rs.186.75 crores in 2007-08. The Company started a number of R&D activities to further strengthen its R&D activities. Generous contributions were made for creation of life saving medical infrastructure in 8 project districts. The dividend of Rs. 15,51,03,000/- was declared for the year 2008-09. RSMML today has broken away from its monopolistic moorings and welcomes competition. From a small backwaters company, it is now rated as a technologically advanced company and an innovator. It boasts of a highly trained and competent workforce and strong financial base. It has established itself as the most successful public sector company in Rajasthan
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The revenue of the company has increased from Rs. 6364 millions to
Rs. 9723 millions in the year 2008-09.
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Completion of the projects for doubling the capacity of the Industrial
Beneficiation Plant from 1500 TPD to 3000 TPD for beneficiation of low grade rock phosphate ore to high-grade concentrate.
Successful commissioning of the Sixth phase of Wind power project at
Jaisalmer. The total capacity is now 74.8 MW and the power generated is of grid quality.
Registration of Companys Wind Power Project and energy saving
project of LGO Beneficiation plant with Executive Board of Clean Development Mechanism under UNFCCC. This project shall get approx. 60000 to 700000 CERs Emission Reduction Certificate every year. Two other projects are in pipeline for registration. 30 | P a g e
Firming up market for the undersized limestone gitty, which was lying
The company has developed the organic fertilizer called Phosphate
Rich Organic Manure (PROM) by using high grade rock phosphate with farm yard waste and organic matter.
The first Bio-Diesel plant of Rajasthan was commissioned with 1 TPD
seed processing capacity (260-270 liters bio diesel per day) at Jhamarkotra Rock phosphate project, Udaipur.
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PRODUCTSWe are producing following product: Lignite It is suitable for power production, cement and agriculture uses. Gypsum
We are producing following products:
Run of Mine (ROM) Gypsum
It is used for manufacture of cement and land reclamation.
It is used for manufacture of cement and land reclamation.
It is used for manufacture of Plaster of Paris and Ceramics. Limestone We are producing following products:
Low Silica Limestone
Low Silica Limestone is used in steel plants with BOF technology as a flux.
Chemical grade Limestone
Chemical grade limestone is used mainly in chemical industries producing quick lime and hydrated lime. It is also used in White Cement and Grey Cement plants for the same purpose.
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We are producing following products:Crushed " size High Grade Rock Phosphate
(SSP Manufacturing Units)
Crushed " size High Grade Rock Phosphate
(DAP/ Nitro phosphate Manufacturing Units)
Crushed " size High Grade Rock Phosphate
(DAP/ Nitro phosphate Manufacturing Units)
Beneficiated Rock Phosphate Concentrate
Ground Low Grade Rock Phosphate (RAJPHOS)
(Fertilizer for direct application to acidic soils) Crushed " size Medium Grade Rock Phosphate
(SSP Manufacturing Units)
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MAP OF RAJASTHAN
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RESEARCH AND DEVELOPMENTThe company has developed the organic fertilizer called Phosphate Rich Organic Manure (PROM) by using high grade rock phosphate with farmyard waste and other organic matter. The field trials conducted through the different agriculture universities in the country have shown that the agronomic efficiency of this new P fertilizer is higher than that of the complex phosphate fertilizers available in the market today. PROM is suitable to neutral and alkaline soils, which will prove to be a boon to the Indian farmers. In the long run, this product will be a winner as it has significant price advantage vis--vis the other chemical fertilizer. Commercialization of the PROM technology will help utilization of waste and also help in conservation of the mineral rock phosphate as PROM shows good residual effect. The company has put a major thrust on the R&D activities in the recent past and several new R&D projects have been taken up. Research project taken up for development of fused CaMg phosphate to utilize the vast reserves of low grade ore of rock phosphate. Converting tailing rejects of IBP to Direct Application
Fertilizer for Magnesium deficient soils. Research project taken up for possible commercial
production of Bio-Diesel from Jetropha plant. Beneficiation of low-grade gypsum for producing high
grade 80 % + material for industry. 36 | P a g e R&D efforts on apatite mineral to be used in jewelry and
decoration.(Moving towards value added product)
Company has started a Training and consultancy Center at
ENVIRONMENT AND SAFETYAs a responsible corporate citizen, RSMML accords equal importance to ecological and social sectors. The company is concerned about not only the economic bottomline reflected by the impressive performance an all quarters and higher profitability but also the benefits and impact of our operation, processes and products on the environment and the health and safety of your employees and the community. RSMML has constructed a huge dam of 200 mcft. Fresh water storage capacity on Jhamari River, which has helped in recharging the regional water table. Extensive a forestation / plantation work is being done in and around all mines. The industrial Beneficiation Plant is Zero Discharge Plant. The waste water is treated at acid water treatment plant, resulting in a saving of about 1.5 million cuM fresh water.
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Regular monitoring and control of different environmental parameters i.e. air, water, dust, noise and heat etc. Installation of dust extraction system at crushing and screening plant and at central Gypsum Grinding Unit, Rawla, Bikaner. The mined out area is being back filled simultaneously to reclaim the land. Sajjan Niwas Garden established in 1883 has been adopted by RSMML and is being restored to its pristine glory.
Company has a safety and health policy. Company follows statutory requirement as per Mines Act 1952. Every year safety week celebrated at different units under the aegis of Director General of Mines Safety (DGMS). A well equipped vocational training center at Phosphate SBU caters to need of various training regarding safety and occupational health for employees. 38 | P a g e
SOCIAL RESPONSIBILITYAs a responsible corporate entity committed to discharge its social obligations, RSMML has been contributing generously towards the development of the areas located near its mining sites and other areas of operation. These contribution have been in the area of Medical & Health Care Drinking Water Education Environment Development of Village Infrastructure 39 | P a g e
The company has been providing medical and other facilities to the village situated around its mines. To improve medical infrastructure of Udaipur region, which is predominantly? a tribal district, RSMML has contributed Rs. 3.05 crores for establishment of Cardio-Thoracic Surgery Center and Neo natal Special Care Unit at the M.B. Government Hospital, Udaipur.
A contribution of Rs. 2.888 crores has been made to the Chief Minister Fund for development of medical and Health infrastructure facilities in project districts. The contribution has been made to Medical Colleges / District Hospitals at Udaipur, Bikaner, Jodhpur, Barmer, Shri Ganganagar, Jaisalmer, Hanumangarh and Nagaur. Memorandum of Understanding has also been made entered with Government of Rajasthan for utilization of these funds. Medical Camps are being regularly organized in the village around the mine location and project areas of the company where free check-up and medicines are provided. 40 | P a g e
RSMML has provided land for the project for setting up a 100-beded multi super specially hospital at Udaipur under a JV arrangement with M/s American International Health Management Limited, Udaipur. Total capital investment on the hospital envisaged Rs. 20 millions.
Other work for development of village infrastructure includes: Contribution to Panchayats for school. Improvement in village Goshalas. According high priority to fulfill its social responsibilities, the company regularly takes up works related to socio economic development along with environment restoration and management in the area where the company has major mining operations and other business activities.
SUPPLY OF POTABLE WATERSupplying 7 million liters per day of potable water from Jhamarkotra mines to city of Udaipur since 1994-95. Recently company has commenced supply of 6 million liters per day of portable water from Kanpur mines in addition to the present supply of 7 million liters per day. With this, RSMML caters to the potable water needs of more than 2 lacks people of the water-starved Udaipur City.
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Adequate potable water supply is ensured through a permanent pipeline & 75,000 liters capacity GLR in each village.
MEDICAL & HEALTHFull Fledged dispensaries at mine site and corporate office; Managed by Qualified Doctor and Paramedical staff Regular annual Monitoring of Occupational Health Health facilities extended to employees dependents at mine site Company also extends medical facility to village population in & around mine site Recently, comprehensive health check-up, covering all the 2200 employees, has been conducted with the help of National Institute of Miners, Nagpur, India
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OPERATIONS (a) Mining... (b) Phosphate (c) Lignite (d) Gypsum (e) Limestone (f) Beneficiation (g) Wind Power (h) Bio Diesel
PRODUCT (a) Phosphate (b) Lignite 43 | P a g e
(c) Gypsum (d) Limestone (e) CERs
Financial Performance Rs. In millions Indicator 2004-05 Total Revenue 5108.9 Profit Before Tax 1185.5 Profit After Tax 776.2 Net Worth 2825.2 Capital Employed 3549.5 Contribution to State Exchequer 1163.5 Share Capital 775.5 Earning per Share 10.31 Output per Employee 2.37 2005-06 5411.6 1418.9 950.4 3553.4 4111.8 1186.6 775.5 12.26 2.53 2006-07 5700.18 1561.11 1024.04 4536.34 5157.72 1123.66 775.5 13.2 2.68 2007-08 6364.12 1867.51 1223.81 5576.95 6349.33 1380.52 775.5 15.78 3.14 2008-09 9723.47 1778.94 1206.76 6596.69 7306.69 4071.55 775.5 15.56 5.09
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BOARD OF DIRECTORSThe present constitution of the Board is as under:2.
Shri T Srinivasan Chairman. Shri Rajeev Mehrishi, IAS Principal Secretary to the Government of
Rajasthan, Department of Finance, Jaipur 4. Shri Ashok Sampatram, IAS Principal Secretary to the Government of
Rajasthan, Department of Industries, Jaipur 5. Dr. Ashok Singhvi, IAS Secretary to the Government of Rajasthan,
Department of Mines, Jaipur 45 | P a g e
6. 7. 8.
Shri G.L. Vyas Director, Department of Mines & Geology, Udaipur Shri A.C. Wadhawan, Ex-CMD, Hindustan Zinc Ltd, New Delhi Shri R. K. Sharma Secretary General Federation of Indian Mineral Industries
(FIMI), New Delhi-199.
Shri Sanjay Malhotra - Managing Director
CORPORATE OFFICE:4, Meera Marg, Udaipur 313004 India. Phone : +91-294-2528681 to 85 Fax : +91-294-2523170 +91-294-2521727 E-mail : [email protected]
REGISTERED OFFICE:46 | P a g e
C-89-90, janpath, Lal Kothi Scheme, Jaipur 302004, INDIA Phone : +91-141-2743734 +91-141-2743934 Fax : +91-141-2743735 E-mail : [email protected]
RESEARCH OBJECTIVES & SCOPE OF RESEARCH PROJECT
Why do ERP projects fail so often? At its simplest level, ERP is a set of best practices for performing the various duties in the departments of your company, including in finance, manufacturing and the warehouse. To get the most from the software, you have to get people inside your company to adopt the work methods outlined in the software. If the people in the different departments that will use ERP dont agree that the work methods embedded in the software are better than the ones they currently use, they will resist using the software or will want IT to change the software to match the ways they currently do things. This is where ERP projects break down. 47 | P a g e
Political fights erupt over howor even whetherthe software will be installed. IT gets bogged down in long, expensive customization efforts to modify the ERP software to fit with powerful business barons wishes. Customizations make the software more unstable and harder to maintain when it finally does come to life. The horror stories you hear in the press about ERP can usually be traced to the changes the company made in the core ERP software to fit its own work methods. Because ERP covers so much of what a business does, a failure in the software can bring a company to a halt, literally. But IT can fix the bugs pretty quickly in most cases, and besides, few big companies can avoid customizing ERP in some fashionevery business is different and is bound to have unique work methods that a vendor cannot account for when developing its software. The mistake companies make is assuming that changing peoples habits will be easier than customizing the software. Its not. Getting people inside your company to use the software to improve the ways they do their jobs is by far the harder challenge. If your company is resistant to change, then your ERP project is more likely to fail.
How do companies organize their ERP projects? Based on our observations, there are three commonly used ways of installing ERP. The Big Bang In this, the most ambitious and difficult of approaches to ERP implementation, companies cast off all their legacy systems at once and they install a single ERP system across the entire company. Though this method dominated early ERP implementations because of the need to revamp old systems for Y2K, few companies dare to attempt it anymore because it calls for the entire 48 | P a g e
company to mobilize and change at once. Most of the ERP implementation horror stories from the late 90s warn us about companies that used this strategy. Getting everyone to cooperate and accept a new software system at the same time is a tremendous effort, largely because the new system will not have any advocates. No one within the company has any experience using it, so no one is sure whether it will work. Also, ERP inevitably involves compromises. Many departments have computer systems that have been honed to match the ways they work. In most cases, ERP offers neither the range of functionality nor the comfort of familiarity that a custom legacy system can offer. In many cases, the speed of the new system may suffer because it is serving the entire company rather than a single department. ERP implementation requires a direct mandate from the CEO. Franchising strategyThis approach suits large or diverse companies that do not share many common processes across business units. Independent ERP systems are installed in each unit, while linking common processes, such as financial bookkeeping, across the enterprise. This has emerged as the most common way of implementing ERP. In most cases, the business units each have their own "instances" of ERPthat is, a separate system and database. The systems link together only to share the information necessary for the corporation to get a performance big picture across all the business units (business unit revenue, for example), or for processes that dont vary much from business unit to business unit (perhaps HR benefits). Usually, these implementations begin with a demonstration or pilot installation in a particularly open-minded and patient business unit where the core business of the corporation will not be disrupted if something goes wrong. Once the project team gets the system up and running and works out all the bugs, the team begins selling other units on ERP, using the first implementation as a kind of in-house customer reference. Interestingly, many companies that initially 49 | P a g e
installed ERP using a franchising strategy are now trying to consolidate as many of those different instances of ERP as possible down into a handful or even one for the entire company. Slam dunkERP dictates the process design in this method, where the focus is on just a few key processes, such as those contained in an ERP systems financial module. The slam dunk is generally for smaller companies expecting to grow into ERP. The goal here is to get ERP up and running quickly and to ditch the fancy reengineering in favor of the ERP systems "canned" processes. Few companies that have approached ERP this way can claim much payback from the new system. Most use it as an infrastructure to support more diligent installation efforts down the road. Yet many discover that a slammed-in ERP system is little better than a legacy system because it doesnt force employees to change any of their old habits. In fact, doing the hard work of process reengineering after the system is in can be more challenging than if there had been no system at all because at that point few people in the company will have felt much benefit from the new software.
How difficult is it to upgrade ERP software? Its extremely difficult, unless you are one of the rare companies that did not tinker with the system while installing it. In the early days of ERP, vendors pursued a vision that has since been disproved: Business processes built into the software should be adopted by every customer. Change your business to fit the system. CEOs like the sound of reengineering, but take that logic to the departmental head that wont be able to serve her customers as well with the process in the software box and suddenly reengineering sounds less compelling. CIOs were forced (or acquiesced) to tinker with the innards of these packages to avoid losing valuable 50 | P a g e
chunks of business processes and it made their lives hell. Vendors ignored this reality for years. They thought changing the system to fit your own processes meant you were a weak girly man who couldnt stand up to your business people. Those processes couldnt be any good anyway if they hadnt made it into the vendors best practice pool when they developed the stuff. Modifying the core code of ERP was like turning your Pinto into a low rider. You just voided the warranty, dude. ERP vendors would not support customized versions of their software. When a new version of the highly integrated suite arrived with cool new features, customers sometimes could not afford to install them because they had made so many changes to the previous version. CIOs had built so many different links to the enterprise systems to get them working with other systems in the company that an upgrade was akin to starting over. Many of the old links had to be torn apart and rewritten to fit with the new version. And many of those rewrites were completely pointless. The new suite might have one new piece and nine others that had changed little since the last version. But it was all so integrated together that every custom link had to be redone, even to the pieces that didnt change. When vendors began breaking up and componentizing their suites to make them easier to integrate with each other and with legacy systems inside the company, they also broke up one of the value propositions that had been so enticing in the first place: free upgrades. Freed of the suite model, enterprise software vendors started charging fresh license fees for the new components they developed. Many early ERP suites had their development frozen. Customers could continue to get support, but newer features cost extra and worked much betteror sometimes onlywith the newer version of the vendors software. And CIOs stuck with the old suites began wondering where all their maintenance fees had gone. They couldnt afford to upgrade to the newer, componentized version of the 51 | P a g e
vendors software models and if they could, theyd pay a new license fee for their trouble. In theory, early users of ERP paid for those new versions of the software through yearly maintenance fees to the vendor that every ERP vendor charges. The largest percentage of those fees went to R&D rather than to support and maintenance of existing software. But the economics became untenable for vendors. When the ERP boom crashed after 2000, sales of new software slowed to a crawl and vendors said they were forced to charge for new components. It may be true, but it ended the short era of free upgrades.
Will service-oriented architecture (SOA) replace ERP? No. Every company needs a core transactional system that records the information from its most important business processes. But companies are realizing that ERP is shifting from being the sum total of their software architecture strategy to being a component of a larger strategy based on expressing technology as specific business services that business people can easily understandsuch as customer record or get credit rating, for examplerather than arcane software applications like ERP. The services strategy entails building an integration layer that is separate and distinct from any of the software applicationsincluding ERPin a companys portfolio. The foundational pieceknown as the messaging infrastructureis like a good executive assistanttranslating, routing and monitoring information from different systems without these systems needing to connect directly. Adding, changing or removing a system becomes a matter of modifying a single link, rather 52 | P a g e
than ripping apart connections to all the different systems it may need to communicate with. But while the messaging infrastructure makes connecting systems easier, it doesnt free business processes from their mainframe prisons, or eliminate redundancies in applications, or provide any impetus to create a useful architecture. Indeed, a good messaging infrastructure can perpetuate the chaos by making it easier to deal with. Messaging has long lacked a higher purpose, a strategy. Service objects (or just plain services) are that strategy, and it is the second core piece of the integration layer. This is an old concept, based on object-oriented programming from the 80s. Services extract pieces of data and business logic from systems and databases around the company and bundle them together into chunks that are expressed in business terms. At telecom company Verizon, for example, the service called get CSR (get customer service record) is a complex jumble of software actions and data and business logic extractions that uses Verizons messaging infrastructure to access more than 25 systems in as many as four data centers across the country. Before building the get CSR service, Verizon developers wanting to get at that critical lump of data would have to build links to all 25 systemsadding their own links on top of the web of links already hanging off the popular systems. But with the get CSR service sitting in a central repository on Verizons intranet, those developers can now build a single link to the carefully crafted interface that wraps around the service using the Web services standard simple object access protocol (SOAP). Those 25 systems immediately line up and March, 53 | P a g e
sending customer information to the new application and saving developers months, even years, of development time each time the service is used. The most interesting new feature being developed by the ERP vendors today is the extent to which they will make their software part of a service SOA using their own homegrown integration software, known as middleware, and Web services so that customers can more easily link ERP with other types of software in the architecture. Each vendor has claimed fealty to the concept and each has its own vision of how to create an integration layer independent of its own software that is capable of linking to any other piece of software in the universe. But view their pronouncements skeptically because if they do it well they will eliminate an important piece of their competitive differentiation: dominance over the software acquisition process of their customers. When CIOs call themselves a SAP shop or an Oracle shop, its because software from those companies dominates their architecture and new software from those providers works better with their existing code base than does code from other vendors. Vendors who make integration with their software truly universal eliminate the built-in advantage they have with existing customers. Some ways that vendors use their new middleware strategies to keep customers: The middleware is offered only to customers who upgrade to the latest version of ERP, or customers are charged a fee for using the middleware to link with software from another vendor.
How does ERP fit with e-commerce?
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ERP vendors were not prepared for the onslaught of e-commerce. ERP is complex and not intended for public consumption. It assumes that the only people handling order information will be your employees, who are highly trained and comfortable with the tech jargon embedded in the software. But now customers and suppliers are demanding access to the same information your employees get through the ERP systemthings such as order status, inventory levels and invoice reconciliationexcept they want to get all this information simply, without all the ERP software jargon, through your website. E-commerce means IT departments need to build two new channels of access into ERP systemsone for customers (otherwise known as business-to-consumer) and one for suppliers and partners (business-to-business). These two audiences want two different types of information from your ERP system. Consumers want order status and billing information, and suppliers and partners want just about everything else. Traditional ERP vendors are having a hard time building the links between the Web and their software, though they certainly all realize that they must do it and have been working hard for years to develop it. The bottom line, however, is that company with e-commerce ambitions face a lot of hard integration works to make their ERP systems available over the Web. For those companies that were smart or luckyenough to have bought their ERP systems from a vendor experienced in developing e-commerce wares, adding easily integrated applications from that same vendor can be a money-saving option. For those companies whose ERP systems came from vendors that are less experienced with e-commerce development, the bestand possibly onlyoption might be to have a combination of internal staff and consultants hack through a custom integration. 55 | P a g e
But no matter what the details are, solving the difficult problem of integrating ERP and e-commerce requires careful planning, which is key to getting integration off on the right track.
Can I use ERP to manage a network of foreign suppliers? ERP was designed at a time when process management was an internal affair. The systems have lagged behind the explosive growth of globalization and offshore outsourcing of manufacturing. When most U.S. manufacturing was still mostly local, companies could link their ERP systems through expensive electronic data interchange (EDI) connections. But EDI links (and ERP systems themselves) never penetrated much beyond a manufacturers top tier (read biggest, richest) of suppliers, due to the cost of installing and managing the links at the supplier. In third-world manufacturing destinations, even an Internet connection is often a luxury. The market for managing the core ERP information (orders, inventory, etc.) of the extended supply chain, is only now beginning to emerge.
What are the hidden costs of ERP? Although different companies will find different land mines in the budgeting process, those who have implemented ERP packages agree that certain costs are more commonly overlooked or underestimated than others. Armed with insights from across the business, ERP pros vote the following areas as most likely to result in budget overrun. 56 | P a g e
1. TrainingTraining is the near-unanimous choice of experienced ERP implementers as the most underestimated budget item. Training expenses are high because workers almost invariably have to learn a new set of processes, not just a new software interface. Worse, outside training companies may not be able to help you. They are focused on telling people how to use software, not on educating people about the particular ways you do business. Prepare to develop a curriculum yourself that identifies and explains the different business processes that will be affected by the ERP system. One enterprising CIO hired staff from a local business school to help him develop and teach the ERP business-training course to employees. Remember that with ERP, finance people will be using the same software as warehouse people and they will both be entering information that affects the other. To do this accurately, they have to have a much broader understanding of how others in the company do their jobs than they did before ERP came along. Ultimately, it will be up to your IT and businesspeople to provide that training. So take whatever you have budgeted for ERP training and double or triple it up front. It will be the best ERP investment you ever make. 2. Integration and testingTesting the links between ERP packages and other corporate software links that have to be built on a case-by-case basis is another often-underestimated cost. A typical manufacturing company may have add-on applications from the majore-commerce and supply chainto the minorsales tax computation and bar coding. All require integration links to ERP. Youre better off if you can buy add-ons from the ERP vendors that are pre-integrated. If you need to build the links yourself, expect things to get ugly. As with training, testing ERP integration has to be done from a process-oriented perspective. Veterans recommend that instead of plugging in dummy data and moving it from one application to the next, you should 57 | P a g e
run a real purchase order through the system, from order entry through shipping and receipt of paymentthe whole order-to-cash banana preferably with the participation of the employees who will eventually do those jobs. 3. CustomizationAdd-ons are only the beginning of the integration costs of ERP. Much more costly, and something to be avoided if at all possible, is actual customization of the core ERP software itself. This happens when the ERP software cant handle one of your business processes and you decide to mess with the software to make it do what you want. Youre playing with fire. The customizations can affect every module of the ERP system because they are all so tightly linked together. Upgrading the ERP packageno walk in the park under the best of circumstancesbecomes a nightmare because youll have to do the customization all over again in the new version. Maybe it will work, maybe it wont. No matter what, the vendor will not be there to support you. You will have to hire extra staffers to do the customization work, and keep them on for good to maintain it. 4. Data conversionIt costs money to move corporate information, such as customer and supplier records, product design data and the like, from old systems to new ERP homes. Although few CIOs will admit it, most data in most legacy systems is of little use. Companies often deny their data is dirty until they actually have to move it to the new client/server setups that popular ERP packages require. Consequently, those companies are more likely to underestimate the cost of the move. But even clean data may demand some overhaul to match process modifications necessitatedor inspiredby the ERP implementation. 5. Data analysisOften, the data from the ERP system must be combined with data from external systems for analysis purposes. Users with heavy analysis 58 | P a g e
needs should include the cost of a data warehouse in the ERP budgetand they should expect to do quite a bit of work to make it run smoothly. Users are in a pickle here: Refreshing all the ERP data every day in a big corporate data warehouse is difficult, and ERP systems do a poor job of indicating which information has changed from day to day, making selective warehouse updates tough. One expensive solution is custom programming. The upshot is that the wise will check all their data analysis needs before signing off on the budget. 6. Consultants ad infinitumWhen users fail to plan for disengagement, consulting fees run wild. To avoid this, companies should identify objectives for which its consulting partners must aim when training internal staff. Include metrics in the consultants contract; for example, a specific number of the user companys staff should be able to pass a project-management leadership testsimilar to what the consultants have to pass to lead an ERP engagement. 7. Replacing your best and brightestIt is accepted wisdom that ERP success depends on staffing the project with the best and brightest from the business and IS divisions. The software is too complex and the business changes too dramatic to trust the project to just anyone. The bad news is a company must be prepared to replace many of those people when the project is over. Though the ERP market is not as hot as it once was, consultancies and other companies that have lost their best people will be hounding yours with higher salaries and bonus offers than you can affordor that your HR policies permit. Huddle with HR early on to develop a retention bonus program and create new salary strata for ERP veterans. If you let them go, youll wind up hiring themor someone like themback as consultants for twice what you paid them in salaries. 59 | P a g e
8. Implementation teams can never stopMost companies intend to treat their ERP implementation as they would any other software project. Once the software is installed, they figure the team will be scuttled, and everyone will go back to his or her day job. But after ERP, you cant go home again. The implementers are too valuable. Because the implementers have worked so closely with ERP, they know more about the sales process than the salespeople and more about the manufacturing process than the manufacturing people. Companies cant afford to send their project people back into the business because theres so much to do after the ERP software is installed. Just writing reports to pull information out of the new ERP system will keep the project team busy for a year at least. And it is in analysisand, one hopes, insightthat companies make their money back on an ERP implementation. Unfortunately, few IS departments plan for the frenzy of post-ERP installation activity, and fewer still build it into their budgets when they start their ERP projects. Many are forced to beg for more money and staff immediately after the go-live date, long before the ERP project has demonstrated any benefit. 9. Waiting for ROIOne of the most misleading legacies of traditional software project management is that the company expects to gain value from the application as soon as it is installed, while the project team expects a break and maybe a pat on the back. Neither expectation applies to ERP. Most of the systems dont reveal their value until after companies have had them running for some time and can concentrate on making improvements in the business processes that are affected by the system. And the project team is not going to be rewarded until their efforts pay off. 10.Post-ERP depressionERP systems often wreak cause havoc in the companies that install them. In a recent Deloitte Consulting survey of 64 60 | P a g e
Fortune 500 companies, one in four admitted that they suffered a drop in performance when their ERP system went live. The true percentage is undoubtedly much higher. The most common reason for the performance problems is that everything looks and works differently from the way it did before. When people cant do their jobs in the familiar way and havent yet mastered the new way, they panic, and the business goes into spasms.
How can ERP improve a company's business performance? ERPs best hope for demonstrating value is as a sort of battering ram for improving the way your company takes a customer order and processes that into an invoice and revenueotherwise known as the order fulfillment process. That is why ERP is often referred to as back-office software. It doesnt handle the up-front selling process (although most ERP vendors have recently developed CRM software to do this); rather, ERP takes a customer order and provides a software road map for automating the different steps along the path to fulfilling the order. When a customer service representative enters a customer order into an ERP system, he has all the information necessary to complete the order (the customers credit rating and order history from the finance module, the companys inventory levels from the warehouse module and the shipping docks trucking schedule from the logistics module, for example). People in these different departments all see the same information and can update it. When one department finishes with the order it is automatically routed via the ERP system to the next department. To find out where the order is at any point, you need only log in to the ERP system to track it down. With luck, the order process moves like a bolt of lightning through the organization, and customers get 61 | P a g e
their orders faster and with fewer errors than before. ERP can apply that same magic to the other major business processes, such as employee benefits or financial reporting. That, at least, is the dream of ERP. The reality is not so rosy. Lets go back to those inboxes for a minute. That process may not have been efficient, but it was simple. Finance did its job, the warehouse did its job, and if anything went wrong outside of the departments walls, it was somebody elses problem. Not anymore. With ERP, the customer service representatives are no longer just typists entering someones name into a computer and hitting the return key. The ERP screen makes them businesspeople. It flickers with the customers credit rating from the finance department and the product inventory levels from the warehouse. Did the customer pay for the last order yet? Will we be able to ship the new order on time? These are decisions that customer service representatives have never had to make before, and the answers affect the customer and every other department in the company. But its not just the customer service representatives who have to wake up. People in the warehouse who used to keep inventory in their heads or on scraps of paper now need to put that information online. If they dont, customer service reps screens will show low inventory levels and reps will tell customers that the requested item is not in stock. Accountability, responsibility and communication have never been tested like this before. People dont like to change, and ERP asks them to change how they do their jobs. That is why the value of ERP is so hard to pin down. The software is less important than the changes companies make in the ways they do business. If you use ERP to improve the ways your people take orders and manufacture, ship and bill for goods, you will see value from the software. If you simply install the 62 | P a g e
software without trying to improve the ways people do their jobs, you may not see any value at allindeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does.
Definition of Research: Research is an organization and systematic way of finding answers to questions. SYSTEMATIC because there is a definite set of procedures and steps which you will follow. There are certain things in the research process that are always done in order to get the most accurate results. ORGANIZED in that there is a structure or method in going about doing research. It is a planned procedure, not a spontaneous one. It is focused and limited to a specific scope. FINDING ANSWERS is the end of all research. Whether it is the answer to a hypothesis or even a simple question, research is successful when we find answer. Sometimes the answer is no, but it is still as answer. QUESTIONS are central to research. If there is no question, then the answer is of no use. Research is focused on relevant, useful, and important questions. Without a question, research has no focus, drive, or purpose.
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ERP Implementation Life CycleThe process of ERP implementation is referred as d as "ERP Implementation Life Cycle". The following are the steps involved in completing the lifecycle Shortlist on the basis of observation Selecting an ERP package for the company can nevertheless be compared with the process of "Selecting the right Person for the Right Job". This exercise will involve choosing few applications suitable for the company from the whole many. Assessing the chosen packages A team of Experts with specialized knowledge in their respective field will be asked to make the study on the basis of various parameters. Each expert will not only test and certify if the package is apt for the range of application in their field but also confirm the level of coordination that the software will help to achieve in working with other departments. In simple terms they will verify if the synergy of the various departments due to the advent of ERP will lead to an increased output. A choice is to be made from ERP implementation models. Preparing for the venture This stage is aimed at defining the implementation of ERP in all measures. It will lay down the stipulations and criteria have to be met. A team of officers will take care of this, who will report to the person of the highest hierarchy in the organization.
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Gap Analysis This stage helps the company to identify the gaps that has to be bridged, so that the companys practice becomes akin to ERP environment. This has been reported as an expensive procedure but it is inevitable. The conglomerate will decide to restructure the business or make any other alterations as suggested by GAP analysis in order to make ERP user friendly. Click here for a detailed study on GAP analysis. A choice is to be made from ERP implementation models. Business process reengineering Changes in employee rolls, business process and technical details find place in this phase of restructuring most popularly refered as business process engineering. For more details on BPR click here. Designing the System This step requires lot of meticulous planning and deliberate action. This step helps to decide and conclude the areas where restricting have to be carried on. A choice is to be made from ERP implementation models. In-house Guidance This is regarded as a very important step in ERP implementation. The employees in the company are trained to face crisis and make minor corrections as well because the company can neither be at liberty nor afford the bounty to avail the services of an ERP vendor at all times.
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Checking This stage observes and tests the authenticity of the use. The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. This is seen as a test for ERP implementation. The real test At this stage the replacement takes place viz the new mechanism of operation and administration takes over the older one. Preparing the employees to use ERP The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization. Post Implementation The process of implementation will find meaning only when there is regular follow up and proper instruction flow thereafter and through the lifetime of ERP. This will include all efforts and steps taken to update and attain better benefits once the system is implemented. Hence an organization has to perform ERP implementation safely and correctly.
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BENEFITS OF ERP Improve access to information. Improve workflow and efficiency. Improve controls and program alerts Process re-engineering: update old process. Foundation for new processes, such as e-procurement, with significant ROI.
Following\ contracts termsThe performance of ERP software can be gauged on the basis of its working in relation to the terms of contract. ERP software that accords to contractual terms in relation to working definitely indicates better performance than vice versa. Compare ERP software on the 8 following criteria modules: 1. 2. 3. 4. 5. 6. 7. 67 | P a g e Finance Human Resources Manufacturing Management Inventory Management Purchasing Management Quality Management Sales Management
Compare ERP on Financial Criteria The finance section encompasses modules for bookkeeping and making sure the accounts are paid or received on time. How to compare ERP software on finance? Simple. Compare ERP software on the following financial criteria: 1. 2. 3. 4. 5. 6. 7. 8. 9. General Ledger Accounts Payable (A/P) Accounts Receivable (A/R) Fixed Assets Cost Accounting Cash Management Budgeting Financial Reporting Project Accounting
Compare ERP on Human Resources Management (HRM) The section dedicated to human resources management (HRM) encompasses all the applications necessary for handling personnel-related tasks for corporate managers and individual employees. Modules will include personnel management, benefit management, payroll management, employee self service, data warehousing, and health and safety. How to compare ERP software on human resources management? Simple. Compare ERP software on the following HRMS criteria: 1. Personnel Management
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3. 4. 5. 6.
Payroll Employee Self-Service Data Warehousing Health and Safety
Compare ERP on Manufacturing Management (Discrete and Process) Manufacturing management (for both discrete and process manufacturing) encompasses a group of applications for planning production, taking orders, and delivering products to the customer. How to compare ERP software on manufacturing management? Simple. Compare ERP software on the following manufacturing management criteria. Because we want to compare ERP software systems on an apple-to-apple basis, we need to make a difference between discrete manufacturing and process manufacturing.
Discrete ERP 1. Product Costing 2. Shop Floor Control 3. Production Planning 4. Field Service and Repairs 5. Project Management 6. Product Data Management (PDM) 7. Product/Item Configurator
Process ERP 1. Product Costing 2. Shop Floor Control 3. Production Planning 4. Formulas/Recipes 5. Process Model (Formulas + Routings) 6. Process Batch Control and Reporting 7. Conformance Reporting 8. Process Manufacturing Costing 9. Material Management
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Compare ERP on Inventory Management Inventory management (IM) encompasses a group of applications for maintaining records of warehoused goods and processes movement of products to, through and from warehouses. How to compare ERP software on inventory management? Simple. Compare ERP software on the following inventory management criteria: 1. 2. 3. 4. Management) 5. 6. 7. 8. Locations and Lot Control Forecasting Reservations and Allocations Inventory Adjustments Inventory Management On-line Requirements Processing Requirements Data Requirements Reporting and Interfacing Requirements (Inventory
Compare ERP on Purchasing Management Purchasing management encompasses a group of applications that controls purchasing of raw materials needed to build products and that manages inventory stocks. It also involves creating purchase orders/contracts, supplier tracking, goods receipt and payment, and regulatory compliance analysis and reporting. How to compare ERP software on purchasing management? Simple. Compare ERP software on the following purchasing management criteria:
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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Vendor and Supplier Profile Supplier Rating and Profile Requisitions and Quotations Purchase Orders Prices and Discounts Vendor Contracts and Agreements Purchase Order Management Procurement Reporting, On-line Reporting Capability Repetitive Vendor Procurement Procurement Receipts Repetitive Vendor Procurement Reporting
Compare ERP on Quality Management Quality management encompasses applications for operational techniques and activities used to fulfill requirements for quality control, inspection plan creation, and management, defective item control and processing and inspection procedure collection planning. How to compare ERP software on quality management? Simple. Compare ERP software on the following quality management criteria: 1. hand 2. 3. 4. 5. 71 | P a g e Customer return file: awaiting disposition Damaged materialcorrective action and failure analysis Inspection required indicator by supplier and by item Pre-inspection receipts registered as "inventory on hold" Defective or excess material return processing must update on-
available to vendor on-line
6. queue 7. 8. 9. 10. 11.
On-line inquiry of inspection and material review board (MRB) Validation against automated inspection criteria Inspection disposition with audit trail Disposition delinquency report Quantity rejected Reject reason codes
Compare ERP on Sales Management Sales management encompasses a group of applications that automates the data entry process of customer orders and keeps track of the status of orders. It involves order entry, order tracing and status reporting, pricing, invoicing, etc. It also provides a basic functionality for lead tracking, customer information, quote processing, pricing & rebates, etc. How to compare ERP software on sales management? Simple. Compare ERP software on the following sales management criteria: 1. 2. 3. 4. 5. On-line Sales Management Requirements Reporting and Interfacing requirements Available-to-Promise (ATP) Pricing and Discounting Customer Service and Returned Goods Handling
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Compare ERP on Technology The technology category defines the technical architecture of the ERP system, and the technological environment in which the product can successfully run. Criteria include product and application architecture, software usability and administration, platform and database support, application standards support, communications and protocol support and integration capabilities. Relative to the other evaluation criteria, best practice selections place a lower relative importance, on the product technology category. However, this apparently lower importance is deceptive, because the product technology category usually houses the majority of the selecting organization's mandatory criteria, which usually include server, client, protocol, and database support, application scalability and other architectural capabilities. The definition of mandatory criteria within this set often allows the client to quickly narrow the long list of potential vendors to a short list of applicable solutions that pass muster relative to the most basic mandatory selection criteria. During the process of ERP software selection, a great deal of attention is given to the functional capabilities of the software being evaluated. While this aspect is obviously important, ignoring the technical mechanisms by which the ERP software actually operates can be fatal to the ERP software solution selection project. How to compare ERP software on technology? Simple. Compare ERP software on the following technology criteria: 1. 2. 3. 73 | P a g e Architecture User Interface Client and Server Platforms
4. 5. 6.
Application Tools Workflow and Document Management Reporting
Errors in ERP implementationERP implementation failure is a major concern for companies. ERP implementation needs to be done without allowing any scope for limitations and mistakes. If it is not done perfectly then the success of ERP system will remain a question mark. The first and foremost factor that discourages ERP in an organization is the exorbitant costs and investment. The second one is the drafting of an ERP implementation plan to ensure ERP implementation success.
Enhancement of ERPs function Erp's scope gets wider as it is implemented in an organization. There is a call for including many tasks under the purview. This dilutes the ERP Existing system after modifying it a couple of times. Repeated change in configurations and systems will only add to the confusions. When the functions are operated by a machine it becomes increasingly difficult to make the necessary changes. These troubles arise when they are not foreseen and addressed in the implementation stage. They have to be given a place in ERP implementation plan. Organizational reaction to change
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Changes do happen quickly and immediately in the organization after ERP is implemented. But if there is no proper understanding of the process or mishandling of information, it will result in questioning the ERP process. If updating is not done in the machine it will only affect the business process and create unnecessary confusions. The changes don't happen all on a sudden in an organization and expecting it immediately will only cause needless disappointments. In spite of all this expecting every member in the organization to respond proactively will not happen. If that happens the chances of ERP implementation success are great. Inflating resources for ERP implementation The implementation time and money always exceeds the promises and stipulated deadline and amount. This makes companies to lose faith on ERP and ERP vendors. They think that ERP vendors overplay on the costs and time required but it is not so. Infect they are aware of it in the very beginning stage itself but have a different reason for concealing. They don't disclose it in the beginning because it would look like exaggerating. Infect no one would like to lose a prospective business and vendors are equally aware of the fact that "Truths are always bitter"! However many people mistake this to be the cause for ERP implementation failure. Organizations non adherence to the stated principles Organizations largely experience a wide gap between practices and preaching .Infect this has a negative effect on the entire business scenario itself. The voracity and impact of loss could be greater and more devastating when this turns out to be true even in the case of ERP. Since ERP successful functioning is purely based on following the laid down procedures the lag could throw a serious challenge on ERP'S potential right from the stage of its implementation.
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Problem of Transformation due to ERP Employees find it hard to digest the transformations that place in an organization all on a sudden due to ERP implementation. Infect employees exhibit positive signs as everything goes right in the first place. But as one progresses he finds difficult to work as it gets more complex. The initial interest and expectation turns into apprehensiveness in due course of time. There is another category of people who did not encourage ERP right from the conceptualization stage. Their state of mind during these circumstances deserves The acronym "ERP"for enterprise resource planningwas defined in 1990 by Gartner, Inc. (Stamford, CT). That was then. This is now. Gartner's Research Director in the Business Process and Applications Group, Brian Zrimsek, sees three major changes affecting ERP now: 1. Process extensions. "Today, ERP is still for the enterprise, but the enterprise is changing. It's becoming more virtual." Consider how the OEMs are outsourcing aspects of car design and the rise in contract manufacturing. Both of these business processes span physical enterprise boundaries. "ERP starts to struggle as you outsource more activities," says Zrimsek. The build/made items in ERP become bought/purchased items. The visibility that comes from routings, work-order statuses, and work-in-process data acquisition gets lost. Hence the drive for collaborative information systems among outsources partners. But remember, points out Zrimsek, "ERP wasn't built with the Internet in mind." 2. Virtualization of functionality. ERP was initially built for manufacturing and distribution. Now, fully integrated, feature-rich, ERP systems have extensions for supply chain management (SCM), customer relationship management (CRM), warehouse management, and several other business processes. Zrimsek has seen 76 | P a g e
ERP deployed in just about all industry sectors; food, petrochemical, aerospace and defense, the armed services, and even the public sector. Consequently, ERP vendors are deepening the functionality of their systems to meet the needs of the target industries. 3. Architecture. Before client-server computing in the early 1990s, which was kind of the birth of ERP, resource planning systems were very monolithic. ERP deployments were basically mainframe deployments. Upgrading meant taking out the whole thing and putting in a new system. Today, users are loathe to pay 20% to 60% of what they paid in system implementation for upgrades/migrations. This is putting pressure on ERP vendors to provide software that is open, componentoriented, and migrate in piecesthereby leaving existing, desired, ERP components (as well as SCM, CRM, etc.) in place and functional. Add that all together and you see why Gartner is coining the term "ERP II" to label the "next act in the evolution of ERP, which expands beyond enterprise-centric optimization and transaction processing to a new focus on improving dismiss enterprise anything Erp's Evolution Into ERP II competitiveness." So, written that ERP is dead. "It's not accurate to say there's nothing happening in ERP. ERP is still growing and evolving," exclaims James Shepherd, Senior Vice President at AMR Research (Boston, MA). ERP is still doing what it's supposed to: 77 | P a g e
provide a common database for an entire enterprise. "ERP is truly the enterprise backbone. That can't go away," says David Schaap, Product Marketing Manager for BRAIN North America, Inc. (Ann Arbor, MI). If anything, ERP is manufacturing's equivalent to Microsoft's Office Suite: lots of core functionality and changes that are far more incremental than they once were.
DATA COLLECTIONFor research we need two types of data: Primary data the data, which are collected from the field under the control and supervision of an investigator, is known as primary data. This type of data is generally collected for the first time. In my research there is no requirement of primary data. Secondary data if datas are collected from the journals, magazines, annual report of companies etc. then such are called as secondary data. In order to achieve my objectives secondary data are utilized for the purpose of doings various calculation. In each of these sources of data, the process of data collection has already been done by the respective organization
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