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Riding the ERP Wave

Robin Mathews
Tuesday, February 1, 2005
Robin Mathews
It is the last day of the month. Meghana Motors, a dealer of Hero Honda in downtown Banglaore is preparing the monthly order and sales plan, based on the model and color of motorcycles being sold and also keeping in mind seasonal shifts and customer moods. He sends in this data to the Marketing Office, which is then uploaded to the system.
Requirements from the Bangalore dealer and 550 other dealers from across India—not just specific orders but the model and color as well—are gathered and compiled automatically and passed over to the sales and distribution module of the ERP system. This demand plan triggers the MRP, which compiles the production material requirement plan.

“By streamlining production to match with the demands of the market, we are able to give the customer whatever color or model he asked for. Earlier all of this was not a well co-ordinated exercise,” says Balasubramanian, CIO of Hero Honda. “Now the demand plan, the assembly plan, the manufacturing shops plan, and the materials requirement plan, all work to a common target. It used to be tedious, time consuming and often resulted in buffering at various stages. Now all parts of the organization work in unison,” he continues, elaborating on how ERP has changed the way Hero Honda does business today.

This monthly plan then is given to the production module provided in the ERP package. The work is divided between Hero Honda’s two existing plants in Dharuhera and Gurgaon, both in Haryana. Once this is completed, a weekly plan is drawn for each plant, further translating into a material requirement sheet. This indeed is a complicated task, given the fact that the every single bike requires an assembly of more than 850 parts. Weekly plans further breaks up into a daily plan order and an according bill of materials is compiled. This tells the shop floor manager exactly what material to put out of the store to make the required number of bikes per day.

“With the use of ERP package, today there is less inventory on the shop floor and within our stores,” says Anil Khopkar, CIO of Bajaj who has also, like Balasubramanian, steered the implementation of SAP ERP at Bajaj.

This is very true at TVS Motors as well. “Earlier we had 7 to 8 days of inventory. Today we have less than two,” says Venkat Iyer, CIO of TVS Motors.

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