IT @ VIRAJ INDUSTRIES

Acknowledgement

This IT project has been possible with the direct and indirect help of a number of people. It would be

failing in my duties if I do not express our gratitude to all of them.

I would wish to thank FORE School of Management for giving me this opportunity of taking this course

whereby I could make a project which has enhanced my knowledge and given me a concrete path to

work on. My heartiest thanks are to our faculty, Prof. Devendra Punia for his continuous facilitation and

guidance. He guided me on every step which helped me thoroughly to prepare this project.

My sincere thanks are to Ms. Sushmita Chakroborty, a part of the IT department of 3i-Infotech Ltd. for

providing valuable information about various workings of the ERP system implemented in Viraj. Her

specialized knowledge and valuable suggestions helped me a lot of in designing the

project. I would also like to thank Mr. Parekh of Viraj as he has been a great support and help

throughout the planning and development of the project.

CONTENTS

S.NO. TOPIC PAGE NO.

1 Introduction 4

2 Information Systems Function & Components 5

3 Information System Management and Governance 5

3.1 Internet Policy 5

3.2 Auditing policy 7

3.3 Disaster recovery planning/ Business continuity plans 7

4 Enterprise Systems and other Software 9

4.1 Orion Enterprise solution

4.1.1 Implementation

4.1.2 Benefits derived by ERP Implementation

10

4.2 Time card system for Attendance 16

4.3 Document Management 16

5 References 17

1. Introduction

Viraj is a global player in the stainless steel industry. High quality stainless steel products, timely

delivery and a broad customer base with exports to around 80 countries across the world, has gained

Viraj a wide acclaim. In the last 15 years, the company has grown in size and product ranges, keeping in

mind its customer centric approach, timely delivery and quality products. Today, Viraj’s operations are

spread over four continents with above 9000 employees working for the brand and has an annual

turnover of USD 1 billion.

The products manufactured at Viraj are of a high quality and value which is a direct reflection of the

organization’s beliefs and values in operating the business as a global leader in steel production. Viraj’s

products are increasing their respective market share.  It is the largest producer of stainless steel flanges

in the world. With more than 95% of the production going towards exports, Viraj has operations and

agents in active hubs of the world, to cater to the local market.

Viraj produces Austenitic, Ferritic, Martensitic, Austenitic-Ferritic (Duplex) stainless steel grades while

supplying special grade stainless steel of Precipitation hardening, Cold heading & Electrode quality.

Viraj’s products have wide applications across diverse industries including Petrochemical Plants, Oil

Pipelines, Ships, Structural design, High tensile springs & cables, Boilers, Pressure vessels, Liquid

storage terminals, Liquid cargo ships and Surgical instruments to name a few.

Viraj group of companies has 6 companies into it:

1. Viraj profiles Ltd

2. Viraj Steel Ltd

3. VSL Wires

4. Viraj Flanges Ltd

5. Viraj Alloys Ltd

6. Viraj Impo Expo Ltd

Viraj group of companies is situated in the interiors of Tarapur, Boisar, Mumbai. The head office is also

located at Tarapur. Viraj runs its business through the value contract system. They agree with the

customer or draw a contract for a fixed period of time to sell their products for a fixed price. Their end

products are wire, steel, billets, rods, bars, flanges. These products basically contain nickel in their main

composition and the price of the nickel is not fixed rather it is forecasted to appreciate in the future

period.

2. Information Systems Function & Components

Viraj profiles has got 16 people under their IT department. The main head of the IT department is the

COO of the company as well.

Components of Information System

IS components used by the organization are:

1. Hardware platforms : HP Systems

2. OS: Windows 2000

3. Enterprise software applications: Orion 10.4.0.004 (3i-Infotech)

a. Front End: D2K

b. Back End: Oracle 9i

3. Information System Management and Governance

Viraj’s profiles emphasizes on IT to drive their business needs. All kind of operations of their Business

flows starting from creation of Purchase order till making Sales to end customer is captured in the

system. Though the manual entries are still maintained but the records in the system are as well stored.

PWC (Price water cooper ) is the main auditing firm for five of their division. It does financial auditing

on the basis of records available in the ERP. Hence management forces the employees to capture their

day to day transaction in the system.

3.1 Internet Policy:

The use of the Internet by company employees is permitted and encouraged where such use is suitable

for business purposes and supports the goals and objectives of the company and its business units. The

Internet is to be used in a manner that is consistent with the company’s standards of business conduct

and as a part of the normal execution of an employee’s job responsibilities.

Viraj Profiles Ltd considers the following as un-acceptable use of company provided Internet access and

Viraj employees are required to use Internet appropriately

General prohibitions:

Visit sites that contain obscene, hateful or other objectionable materials.

Make or post indecent remarks, proposals, or materials on the Internet.

Download or upload of any obscene, political, racist or religious material.

download of music and video files from internet

Users are discouraged from subscribing to unnecessary and irrelevant newsgroup subscriptions.

Waste time on non-company business activities

Any use of the network for personal, private, commercial or for-profit purpose

Personal use of Viraj Profiles Ltd network resources to host personal home pages, FTP sites,

Gopher servers, etc

Any use of the network for product advertisement, political lobbying, or political purposes

whatsoever

One of the imperatives of Viraj vision is assurance of the security of information assets belonging to

Viraj, and also the information that is entrusted by employees, customers, vendors, investors and the

public at large.

Information security translates to the preservation of the following three goals:

a) Confidentiality: assurance that information is accessible only to those authorized to have access.

b) Integrity: assurance of the completeness and accuracy of information and its processing methods.

c) Availability: assurance that authorized users have access to information and associated assets when

required.

Information can be stored, processed or transmitted in many different ways. Viraj makes extensive use

of Information Technology (computers, high speed storage, communication devices etc.) for these

purposes. They use traditional means of storing, processing and transmitting information – for example,

by writing or printing it on paper, or communicating it over phone, fax or in face to face conversations.

Information must always be appropriately protected, regardless of the manner in which it is stored,

processed or transmitted.

Inadequate protection of information and information assets can severely impact their capability to

achieve and sustain their vision. For example:

A virus attack on a single computer in a network could result in the virus spreading to all other machines

in the network, and impact all work.

Unauthorized alteration of the contents of Viraj’s home page on the Internet can seriously affect their

brand image.

Inappropriate disclosure of confidential customer information, whether it is revealed to unauthorized

users on a computer system or it is told to them in a conversation, can lead to violation of contractual

agreements with a customer, financial loss, and loss of trust.

3.2 Auditing policy:

Viraj’ security framework is aligned with the ISO27001 standard. The external surveillance audits for

the same happen twice a year.

3.3 Disaster recovery planning/ Business continuity plans:

Viraj has adopted the best practices towards Business continuity management. This includes aligning

their practices to global frameworks including

a) TR 19 (Spring Singapore standard)

b) BS25999

c) ISO 27001/2005

d) eSCM

The company has categorized the Business continuity plans that it can offer to its clients into three

distinct levels. The information about these is summarized as below:

Level 1: Minor Technical and Telecom Problems such as Server Connectivity failure, LAN/LAN

Component Failure, Desk Top Failure, Power supply failure etc. Viraj will ensure redundancies

with respect to the above issues during the technology design phase & ensure connectivity in

case of primary link failure.

Level 2: Major Technical or Telecom Problems or building / city are out of bounds at the

primary site.

Site temporarily unavailable for a period in excess of 24 Hours (Long run public

disturbance/strike etc) or unavailable for a period in excess of 24 hours due to limited damage to

the building.

Site temporarily unavailable due to Failure of the Telecom connectivity on both the Primary and

the Secondary lines.

Viraj resources operate from an alternate recovery site in Level 2 Disaster, within the same city

and/or country.

Level 3: Major Technical Problem and Both Primary and Secondary Sites are not available.

Non availability of the primary and secondary site due to country level disaster.

Viraj resources operate from an alternate recovery site, outside the country, in Level 3 Disaster,

within the same city and/or country.

One of the basic tenets of the company’s BCP/DR strategy is proactive readiness and not just

reaction to the BCP/DR when it strikes. To that end, they have ample readiness in terms of

Infrastructure, Security, BCP & Risk Education, Floods, Cyclones & Lightning, Transport

Disruptions, Mass Sickness, General Strike, Electricity Redundancy, Technology & Telecom

redundancy.

Viraj has a detailed Disaster Recovery & Business Continuity plan called the Phoenix plan at the

Corporate Level. There is a comprehensive Disaster Recovery Plan (DRP) in place that takes into

consideration eventualities from a Partial Disaster and a Total Disaster.

The Business Continuity and Disaster Recovery (BC&DR) plan is done at Organization level,

development centre level (location specific) and client account level (applicable for large

relationships). The disaster recovery plan is documented, communicated and tested to ensure the

continuity of operations and availability of critical resources after a disaster.

4. Enterprise Systems and other Software

Before we dwell on how Viraj implemented an ERP system for integrating their various departments, let

us try to understand what exactly an ERP system is. ERP is an industry term for integrated, multi-

module application software packages that are designed to serve and support multiple business

functions. An ERP system can include software for manufacturing, order entry, accounts receivable and

payable, general ledger, purchasing, warehousing, transportation and human resources. Evolving out of

the manufacturing industry, ERP implies the use of packaged software rather than proprietary software

written by or for one customer. ERP modules may be able to interface with an organization's own

software with varying degrees of effort, and, depending on the software, ERP modules may be alterable

via the vendor's proprietary tools as well as proprietary or standard programming languages.

By becoming the integrated information solution across the entire organization, ERP systems allow

companies to better understand their business. With ERP software, companies can standardize business

processes and more easily enact best practices. By creating more efficient processes, companies can

concentrate their efforts on serving their customers and maximizing profit.

Key Points of the System

System should be flexible, expandable and easy to manage

Reduce complexities of the IT environment

Reduce the reliance on certain people to maintain the systems

Better control over various department functions.

A Standard system which can be easily scaled for rapid expansion of business

4.1 Orion Enterprise solution

ORION , an enterprise solution from 3i-Infotech Ltd. is functionally rich, highly configurable, scalable,

robust integrated enterprise class solution that can be deployed on Windows, Unix and Linux platforms.

It supports centralized, distributed and web based computing architecture. Orion has been developed on

Oracle environment utilizing its robust, reliable open systems architecture.

A highly scalable ORION enables one to integrate all areas of businesses such as Operations,

Manufacturing, Warehouse Management, Web Portals, Sales Route Accounting to increase operational

efficiencies across the enterprise. It helps to boost customer satisfaction through effective control over

costs and enhanced profitability.

ORION’s flexible design and extensive parameterization allows it to cater to dynamic, vast business

requirements. In addition, its high scalability ensures to sustain business growth.

In order to secure investments, business continuity risks and to reduce total cost of ownership, Orion is

offered on Software as a Service model.

Orion focuses on the unique and specialized requirements of midsize to large process manufacturers and

distributors in food and beverage, chemicals, life sciences, pharmaceuticals, medical devices, cosmetics,

warehousing-logistics and, related industries.

ORION is an end-to-end integrated software application and deployment platform, is a seamless, open

product that includes full-featured ERP expertise coupled with CRM (Customer Relationship

Management) and SCM (Supply Chain Management) features. Implementing the ORION platform gives

the power to combine individualized customer and supplier management, transactional fluidity, incisive

strategic analysis and Internet procurement and sales, with strong financial and production operations. It

allows you to monitor order status, and concurrently coordinate manufacturing, inventory and dispatch

of finished goods - across multiple locations.

ORION supports multi-company, multi-division/profit centers and other multi-department/cost-center

kind of organization structures. It has 9 levels of Accounting hierarchy

Viraj has implemented Orion Enterprise solution to capture their day to day transaction start from

procure to pay till order to cash cycle. The suppliers, customer and material information is stored at

master data level. Day to day processes are captured at transactions level.

The customer orders for material. The sales order for the customer is created in the system.

The system then checks the availability of the material. If it’s not there it gives a request to shop

floor for the production of the same. This is called as make to order production.

Once the shop floor receives the request it will estimate by which date the material will be

delivered to the end customer based on the raw material availability. The raw material can be

stored at storage location or can be procured externally.

If it has to be externally procured then they will generate a material requisition request through

the system. The requisition will be approved by the store manager.

Once the request is approved a purchase order for the same would be created in the system.

Once order is created supplier would deliver the raw material.

The system will capture the goods receipt i.e material inward data. Now the raw material is

available for the production of finished goods.

Generally they use material requirement planning which triggers the system to create the

requisition as soon as a sales order is created in the system.

Once the finished good is manufactured the sales invoice is created where in they will add all

necessary excise duties and VAT to come up with the total Sales amount. The goods are then

shipped to customer at their address.

Currently in Viraj the shipment to the customer is not captured through the system. But in future they

are planning for Fleet management system to be integrated with Orion enterprise solutions.

All financials impacts are created when the sales invoice is posted in the system. It actually internally

passes a voucher through which the customer account is debited and their sales account is credited.

Orion Enterprise

Chart of accounts is also maintained in the system. Every quarter they generate their balance sheet

through Orion Enterprise.

Orion HRMS and Payroll module

HR operations are also captured through Orion HRMS and Payroll module which is actually an Add

in into the Orion enterprise. The Purchase order for this module is created separately. All leave and

attendance, Salary processing, transport, deductions, performance management is captured through this

module.

4.1.1 Implementation:

The implementation for various processes in ORION Enterprise solution has been done in the following

way:

Sl

.

Processes Sub Processes / details Product Mapping

1 Goods

Receipt Note

(GRN)

GRN is prepared for accepted

quantity only. Rejected quantity is

mentioned in the challan & it is sent

back to the supplier. Stock is

In Orion, this is mapped through Goods Receipt Note

entry referring Inspection note. Accepted quantity to be

entered as received quantity. Stock is updated for

received quantity.

updating for accepted quantity only.

Excess quantity is accepted in

certain cases.

Accepted quantity is taken in the

stock at respective location and

payment is made for accepted

quantity only.

Currently at site / location, for cash

purchases below 500, there is direct

GRN, i.e. No PO.

During Inspection entry, quantity in excess of PO

quantity can be accepted within set Tolerance limit for

each item as per item master definition. Negative

tolerance as well as positive tolerance can be defined in

this case for individual item.

During GRN entry, stock for entered Location will be

updated for received quantity. Bills to be registered for

received quantity only and payment also to be

accordingly.

Each site store is mapped as separate location-code

through Orion Location master.

Separate transaction codes to be configured for

Purchases below Rs. 500 for each site and GRN to be

entered directly without PO reference.

2 Goods

Receipt Item

Costing

Accounts department does GRN

Costing.

Cost calculation: Costing is done

after receipt of the goods. Costing

will capture different kinds of

expenses as per GRN. The costing

of items should be linked to Stock

valuation and accounts.

Various tax & expenses as

applicable will be accounted in

GRN.

In Orion, this is mapped through GRN Costing and

Level 1 Authorization (Authorization type - Vertical

All).

Various Tax / Expenses / Discounts can be either pulled

from PO or to be entered through Item level Tax /

Expense / Discount (TED) block during GRN Costing.

Accordingly Item landed cost will be calculated and

stock valuation will be maintained. Stock Financial

entries will also be passed based the GRN Item landed

cost.

Item WAC(Wholesale acquisition cost) to be defined as

stock valuation method in Item master. Accordingly

Item WAC will be updated.

3 Obsolete

stock

handling and

sale of

obsolete

stock.

Obsolete stock is identified and sold

to the scrap dealer.

Through Stock ageing report one can find total quantity

of Obsolete stock. This obsolete stock selling is

mapped through normal Sales process (Sales Order à

Sales Invoice à Payments from Customer and so on).

4 Stock

reconciliation

Stock reconciliation is done at the

end of every month to reconcile the

In Orion, this is mapped through Stock reconciliation

process i.e Stock take plan, Stock take sheet, Stock

process

(Physical

Stock

verification)

physical stock balance (Closing

balance) based on inward and

outward movement of the item.

This Stock reconciliation is done for

all sites / locations separately.

Any deviation in the stock is

adjusted with the permission of

management at the end of financial

year.

variance report and stock adjustment.

In Orion, this is mapped through separate site-wise /

location-wise Stock Take Plan. Stock reconciliation

process is executed separately for each site / location.

In Orion, this is mapped through Stock adjustment &

Level 1 Authorization. (Authorization type - Vertical

All)..

5 Rejection

Note / Debit

Note

Debit note along with Rejection note

is prepared & sent to supplier in

case of material is rejected

subsequently to GRN acceptance

due to non-usability of materials /

equipments because of malfunction.

Stock is updated for rejected

material.

This is mapped through Supplier Return entry. Debit

Note / Rejection Note document can be printed as per

PIL given format.

Stock will be updated (reduced) during stock

confirmation of Supplier Return document.

6 Supplier Bill

booking

Provisional Liability is booked in

separate Provision Account during

GRN accounting.

At the time of bill booking, actual

supplier liability is booked and

provisional liability is reversed.

Provisional FEG will be passed based on Supplier

Suspense Account Setup at the time of GRN posting.

At the time of Supplier Bill registration, provisional

entry will gets reversed and actual supplier liability will

be booked.

7 Inventory /

Supplier

Accounting

Currently Supplier accounts are

maintained as follows:

o Sundry creditors for goods

o Sundry creditors for

Expenses

o Sundry creditors for

Capital

o Sundry creditors for

Subcontractor

Supplier classification is based on

Supplier Class as ‘A’,‘B’, and ‘C’

and not based upon the type of

material he is supplying.

Separate Creditors Control Accounts for various types

of creditors needs to be defined through Main Account

Master and Creditors as Sub-Account to be linked to

corresponding Creditors Control Account.

Supplier classification as ‘A’, ‘B’ or ‘C’ is mapped

through flex-1 in Supplier Master. PIL to enter the

Supplier corresponding class manually.

Stock value posting will be based on Inventory Account

Setup.

Stock value is posted in Finance

based on Item sub-category.

8 Inventory

related

Documents /

Reports

List of Documents:

o GRN

o Material Issue slip

List of Reports:

o Location-wise (Site-wise) Stock

Ledger

o Stock Ageing Report

GRN Costing Sheet printing

Issue Slip document printing

Inventory Stock Ledger / Unconfirmed Stock Ledger

Location-wise Stock Ageing / Location group-wise

Stock Ageing

9 Finance related Documents / Reports

List of Documents:

o Cash / Bank Receipt Voucher o Cash / Bank Payment Vouchero Journal Vouchero Debit Noteo Credit Noteo Cheque Printing

Voucher PrintingVoucher PrintingVoucher PrintingVoucher PrintingVoucher PrintingAvailable standard format in Orion. Customized as per Viraj’s requirement

4.1.2 Benefits derived by ERP Implementation:

1. A common database from ERP, accounting no longer requires duplicate files and redundant data

entry. As manufacturing transactions are recorded, the financial equivalents are automatically

generated for updating the general ledger. This provides a complete audit trail from account

totals to source documents, ensures accurate and up to date financial information, and permits

tracking of actual versus budgeted expenses. Detailed transaction activity can also be easily

accessed online for answering account inquiries.

2. Since manufacturing transactions automatically update the general ledger, time-consuming

manual journal entries can be eliminated. Period end closing procedures can be performed in

hours or days, rather than weeks. This reduces clerical accounting work, and improves the

timeliness of financial reports.

3. Financial reports can be easily customized to meet the needs of various decision-makers.

Financial projections can be based on detailed ERP calculations for future requirements.

4. Effects on product and process design - the product structure database offers engineering much

greater control over product and process design, especially in terms of engineering change

control. Planned changes can be phased in and emergency changes can be communicated

immediately. ERP systems offer numerous analytical tools for the engineering function. When

diagnosing the impact of changes to materials and resources, for example, engineers can check

where used information to identify the affected products.

5. Effects on production and materials management - ERP systems help establish realistic schedules

for production and communicate consistent priorities so that everyone knows the most important

job to work on at all times. Visibility of future requirements helps production prepare for

capacity problems, and also helps suppliers anticipate and meet your needs. As changes to

demands or supplies do occur, ERP helps identify the impact on production and purchasing.

6. Effects on sales - Customer service can be improved by making valid delivery promises and then

meeting those promises. Custom product quotations can be developed faster and more

accurately, which improves job estimating. Delivery lead times can be shortened and customer

inquiries on order status can be answered immediately.

7. Effects on the MIS function - An ERP system implemented as an integrated software package

offers several advantages to the MIS function. The software package can offer a growth path

from simple to comprehensive applications built on top of a database management system. It

provides an upgrade path to technology and functional enhancements supported by the software

vendor. It can reduce the development time and cost for software, documentation, and training

classes. These costs would be incurred before the firm can start obtaining the benefits of an ERP

system. It permits the MIS staff to focus their attention on organizational change and servicing

user needs for customization and professional assistance.

4.2 Time card system for Attendance

Viraj has implemented an automated attendance for its offices and workshops. Each employee has a

punch card which stores employee information. The employee needs to use the punch card at the

security gates which then automatically updates their attendance.

4.3 Document Management

Microsoft SharePoint Portal Server provides complete document management functionality, with a

robust routing and approval process for documents.

Versioning capabilities streamline collaboration efforts and make it easier for users to track changes in

documents. This improves the quality of documents and speeds the time to publication. With the

extensive SharePoint search and categorization features, published material is easier to locate, manage

and maintain.

These implementations made by Viraj have provided them with solutions that are flexible and cost

effective. The ERP allows them to scale their operations easily. It has also helped the organization in

getting consignments easily and meeting their deadlines within the given time period.

5. References

http://www.viraj.com

http://www.3i-infotech.com/content/erp/process-manufacturing.aspx

http://www.distributiondownload.com/supplychainmanagement/orion-erp-ii.html