isos mini case study_acc chaibasa sap phase iia roll out

DISCLAIMER- THIS DOCUMENT HAS BEEN DEVELOPED SOLELY FOR ACADEMIC PURPOSE.

ISOS Assignment

A Mini Case Study on:

SAP R/3 Roll Out at Chaibasa Cement Works

Submitted by:

Anwesh Kumar Chakraborty

Jayant Singh Patel

Saikat Basu

Samrendra Singh

Siddhant Goel

Sourav Gopal Mukherjee

Amarjot Singh Sidhu

The author wishes to express special thanks to the management of M/s ACC Limited for providing the

relevant materials for developing this case study


ACC Chaibasa SAP Plant Maintenance (PM) Roll Out

It was almost 01:30 am when Anwesh finished the final draft of the presentation “SAP PM Roll Out Plan

for Chaibasa Cement Works”. He looked over his shoulder and saw his boss Mr. Ashish Kumar

Srivastava, Works Manager, Chaibasa Cement Works, sitting in his chair and going over the roll out plans

and associated documents laid in front of him. As Anwesh switched off the computer and rose from his

chair, Mr. Srivastava looked at him, smiled and said “Let’s make 24th Feb 2007 a memorable day for

Chaibasa Cement Works. Go home, sleep well and revise the presentation once in the morning before

coming to the office. Our Unit Head Mr. I. M. Sharma wants us to deliver the presentation immaculately

in front of the Managing Director Mr. Sumit Banerjee and Business Head Mr. Ramit Budhiraja. And for

god’s sake, be on time. The presentation starts at 10:00 am sharp.”

Background

ACC Limited is India’s foremost manufacturer of cement and ready mixed concrete with a countrywide

network of factories and sales offices. Established in 1936, ACC is acknowledged as a pioneer and

trendsetter in cement and concrete technology. Among the first companies in India to include

environment protection as a corporate commitment, ACC regularly wins accolades for best practices in

environment management at its plants and mines, and for demonstrating good corporate citizenship.

The quality of its products and customer services make ACC the most preferred brand in the Indian

cement industry. ACC Limited is part of the worldwide Holcim Group.

Chaibasa Cement Works (CCW) is one of the sixteen cement manufacturing facilities of ACC. This cement plant was commissioned in 1946 with an installed capacity of 1.0 lakh Ton Per Annum clinkering based on wet process technology and comprising one kiln of 300 TPD clinkering capacity. The installed capacity was increased to 3.2 lakh TPA at the end of 1957 by commissioning of two numbers of kilns of capacity 300 TPD (each based on wet process technology). In the year 2004, Ministry of Environment & Forests granted environmental clearance for the expansion and modernization of existing cement plant, Chaibasa Cement Works, to a capacity of 1.2 Million Tons Per Annum (MTPA) Clinker production. The expansion and modernization project got completed in the year 2005 and full scale operation of the new unit started in the year 2006.

SAP R/3 Implementation Launching


In the year 2006, ACC Ltd. and subsequently Chaibasa Cement Works embarked on the journey of “SAP R/3 Implementation Launching Phase Ia” wherein Material Management (MM), Sales & Distribution (SD) and Finance and Costing (FI-CO) modules were rolled out. In 2007, “SAP R/3 Implementation Launching Phase IIa” was to be rolled out. On the eve of “CONNECT India Phase IIa” Mr. Sumit Banerjee, Managing Director, ACC Ltd said: “Dear colleagues, I truly believe that leveraging Information Technology can transform an organization. This happens through higher speed, enhanced performance, smooth workflows and more accurate decision support. We have already embarked on a long journey of IT implementation in our organization. As you know, we have just completed CONNECT India Phase Ia and are in the process of sorting out the kinks in “cash in-cash out” processes. In continuity of our IT strategy, we are now launching the second phase of our ERP implementation project which we call “CONNECT India Phase IIa”. This will broadly cover very important business processes like production planning, maintenance and product costing. As you can see, robust implementation of this system will provide us with a strong foundation of data in future. Friends, I welcome you to the team which is going to implement this critical project, and I have no doubt that you will individually, and as a team, rise to the challenge and give us an authentic and defect-free implementation. However, this is only just the beginning. We have many more elements of our IT strategy which will slowly, but surely fall in place. These will include implementation of SAP HR, implementation of net -based B2B activities and maybe, sales force automation as well. Overall, I look forward to a very exciting and challenging journey ahead of us in the realm of Information Technology, and let us traverse this distance together.”

Why SAP R/3? Brief overview of SAP:

System Applications & Products in Data Processing

Founded by IBM employees in 1972 in Germany.

Global provider of client/server business software solutions.

Leader in Enterprise Resource Planning System (ERP)

Have more than 96000 Installation across the globe

Covers appx 40% Market share in ERP segment.

Over 12 million users across the globe

Available in Multiple languages.


SAP R/3 will provide the following benefits: 1. Integrated computer system 2. Supports the entire customer (quote to cash) and vendor life cycle (need to pay) 3. Information is entered once and stored in one electronic location 4. Provides shared access to the same data to multiple functions and locations

An excerpt from the dialogue of Mr. Durga Prasad, PP & PM Leader, ACC Ltd. is given, which highlights the benefits ACC Ltd is targeting. “In brief, SAP Plant Maintenance system automates/facilitates the processing of unscheduled repair requests and scheduled preventative maintenance requests for entire plant. Some of its unique features are: • Generate maintenance order ahead of due date of an activity as per predefined strategy • Ease in monitoring maintenance activity • Easy traceability of spares assigned to particular equipment resulting in better spares management & control of inventory at unit level and so on with MM module. • Breakdown analysis and various cost analysis reports in real time. At present, the production processes are being mapped manually. The implementation of SAP PP module in the plant will facilitate in monitoring production processes more effectively since it is getting integrated with other modules like MM, PC, and SD. Moreover, it will track any volatile behavior of production processes like cost of production, raw material consumption etc. The results of Contingencies, like - change in demand, unscheduled stoppages, late delivery from suppliers etc. can also be managed effectively through SAP PP module. There is no doubt, PP and PM implementation will definitely bring changes in working style and work environment. These changes shall make our organization more competitive in the market and enhanced business. Some immediate benefits to employees include knowledge of contemporary IT systems, data availability which will make jobs easier and planned working schedules. The success of this project depends upon a few critical factors namely: • Communication: The need for change and its advantages should be communicated to one and all. Everybody at all levels in the hierarchy needs to be involved and made a part of this project. • Training: The new systems can be put in place only when employees acquire the required skills. Training infrastructure, trainers and quality of training imparted are crucial to success of the project. • Master Data: The time and quality of the data being sent from CMU’s are crucial.”

What is CONNECT India Phase IIa - Inside the Plant?

The CONNECT India project comprised of two main implementation phases.

1. Phase I: “Money In/Out” which went live on 2nd February 2007 and

2. Phase II: “Inside the Plant”.

“Project Phase IIa” or “Inside the plant” will focus mainly on Production planning, Plant maintenance and Product costing. The implementation covers 3 main modules and enhancement of the existing module.

• Production Planning module (PP)

• Plant Maintenance module (PM)

• Product Costing module (PC)


• Material Management module (MM)

“Project Phase IIb” will focus on HR module.

CONNECT India project Phase IIa (Inside the Plant) also is a very challenging project for ACC which

requires high level of cooperation, support, commitment and involvement from everyone in the

organization particular in our Plants.

The outcome of the project will give a significant improvement in production planning, plant

maintenance and product costing business process execution and alignment. All users will have the

benefit of using "integrated system", which will provide the accurate information with real time update

to support the operation task and decision making. To manage the project and ensure its achievement

according to the project mission, the project management team must be very strict on project scope,

milestones and ensure user's confidence in the system. The project achievement depends on "Change

management", "Infrastructure" and "User training". The CONNECT India Phase IIa project is a major

initiative at ACC for implementing the Holcim “CONNECT” template as well as Holcim Standard on

Maintenance Cement system (MAC-SAP). Through this template, Holcim brings to ACC its Asia Pacific

(APAC) best business practices.

What is the “Timeline” of the project?

Who will be Involved in the project?

There are 6 groups of resources who will be involved in the project:

• ACC steering workgroup will secure the availability of resources, show commitment with regard to the

project and ensure that project costs-benefit justification is maintained. The steering workgroup for the

project will comprise of the ACC Top Management, HSEA and HSSA Top Management


• ACC core teams will be involved in addressing ‘gaps’ if any between ACC’s present processes & the

best practices in the template. They will also be involved in testing the system, creating training

material, training the end-user and providing project post go-live support

• ACC business users will be involved during the training phase when they will be required to attend

project training, perform requisite practice, perform cutover to the new system and finally using the

new system after 01 December 2007

• HSEA/HSSA (Holcim Services Asia/ Holcim Services South Asia) team members will provide guidance on

the CONNECT Template to project team, solving implementation issues and in providing support on the

implementation approach

• TCS (Tata Consultancy Services) is HSEA’s strategic partner whose consultants will provide basic

training to the project team, set up the system, do technical problem solving, support end user training

and support project post go live.

• HGRS (Holcim Group Support) will be also involved where specialized focuses program knowledge is

required

.

World class Master data

Completeness, adequacy and reliability of Master data as per the pre-defined APAC templates and is the

Key for the successful implementation of SAP modules and also to sustain with ease the systems after go

live. The quality of data does matter a lot for the business to go on seamlessly before, during and after

implementation. Timely submission of Master data is equally important for successful implementation

on the go live date of 1st December 2007. Experts in the implementation of ERP and more so the SAP


implementation are unanimous in their observation that once the quality master data is in place the

80% the battle is won. “There is no margin for error when it comes to quality in the integrated ERP

environment as data from one module is used by all other modules” said Mr. K. Narayan, Head Master

Data Coordinator for ACC Ltd.

This diagram display how important the master data in general for an organization in an integrated

environment. The time and efforts required in the error handling of erroneous master data after go live

is exponential. The erroneous data leads to cascading impact across all others systems. Hence it is worth

our investment in terms of one time big effort in the creation high quality master data for seamless

migration from our legacy system to world class SAP systems. However, the ”one-off big efforts” must

be “sustainable” after implementation. Sustainability is the Key!!!

What is Master Data?

Master data is referred as parent / base reference data which do not frequently change with the time

and with the day to day transactions. Master data is time independent to a great extent and in most

cases. On SAP system, all the processes and departments are integrated, and they share the same

master data, therefore, a master data error propagates to the whole organization. Having a single (and

clean) set of master data is the key for benchmarking, business and performance analysis.

Establish Master Data

The quality of your master data is a critical factor on which the business processes in the R/3 system

depend. Storing the master records centrally and sharing them between applications means that you

only have to enter data once. If a site has a change of address, for example, the new address only ever

has to be entered once.


It sounds well to say that left hand does not know what the right hand is doing when organization do

not have centralized master data maintained by the dedicated team.

Well thought out Master Data team Organization

Several tasks are being done by a dedicated professional team, whose main responsibility is to secure

the correctness of the master data on time prior to its "upload" into the new system. Master data is

widely considered as a Key Success Factor in any SAP implementation. As important as the data

preparation for migration as part of the CONNECT India project, is the establishment of the proper

organizational structure and processes to secure the sustainability of Master Data Strategy along the

time. How to make it happen? In order to address the whole master data issue, it must be understood

first, that on SAP, the different repositories of master data are inter-related and all together are integral,

therefore Master Data must be tackled as a "whole" and not be split on different sections or parts.

Connect INDIA establishes the concept of "Central Master Data Strategy (MDS)" which places Master

Data under a central countrywide organization which will coordinate and rule the master data

maintenance exercise.

The Master Data concept is based on three pillars:

• Business units will assume ownership of each individual master data segment, for which, each of them

will have dedicated and capable resources to attend to this key task.

• It is of utmost importance to clearly identify “business owners” for each segment of master data. They

are responsible for identifying and setting what is required in terms of data from the business needs

perspective.


• A central master data controller / team will oversee and coordinate the master data as the different

elements of master data on SAP are interrelated.

Commitment and adhering to schedule of submission of Master Data for the Successful go live on 1st

December 2007.

Detailed weekly schedule in align with the overall project schedule has been put in place to help

business units to monitor and ensure that the master data information flows regularly. Management

Approach towards effective understanding of master data templates by the entire Master Data team at

CONNECT India as well as Units

• Workshop: Two days’ workshop to be organized on 17th and 18th May 2007 on the familiarization of

master data templates and followed by two days program on HAC which will be essential for the

understanding of Flow Sheet.

• Proactive approach: Maintaining one to one contact with all concerned on every day basis over

telecomm to provide on the spot guidance to team working at the units followed by detailed

explanation through email.

• Sharing of knowledge: “Self Learning by Listening” Tele Conference with all units will be held twice a

week (Mondays and Thursdays) to discuss queries and discuss it out to participants satisfaction.

• Sample data: Sample received from one unit to be corrected where it is required and circulated to all

other units as a guiding & reference documents.

• Visit of Core team members to Units: A team of 4 core team members of CONNECT India Phase IIa will

be formed to visit each unit to give further push to Master data collection.

The objectives of deputing this team will be the following:

• To assist master data team and other plant staff in the further familiarization of Master Data

templates on the first day of visit

• To test the sample data of all templates which plant might have gathered before the team visits and

clarify the doubts then & there and ensure that understanding of every file of the templates is correct

among all. This also will have to be done on the first day of their visit.

Training activities

Success of the project would depend on the training. Majority of end users in this phase would be from

maintenance and production functions from plant. Each location would have its own training centre. To

support various training activities training coordinators have been identified from each plant who would

play a very important role during the project.

Roles and responsibilities of Training coordinators

• To work and manage training according to central training team leader’s direction

• To support central team in coordinating with ACC plant team


• Reporting of training status on timely basis and issues if any to central Team

• To assume responsibility of training facilities and training sessions

• Training administration at plant Knowledge Transfer session for Training coordinators

Effective training would define the success which again would depend how the training coordinators

manage and coordinate activities amongst various challenges of the plant. The participatory and active

role of the training coordinators would define the success. End users can contact respective training

coordinators for any training related query or the central team.


Change Management

“Every organization needs to change with time; failing which, it stands the risk of being pushed into

oblivion and being labeled as obsolete by the more enterprising competitors in the market. Change you

must, at the needed intervals. To change, you will surely face a challenge while implementing the said

change – Resistance to the change! Yes! You will encounter stiff resistance to change. To implement

successful change, you need an overall leadership force that is greater than the combined force of

resistance”. While implementing SAP systems, ACC management for the first time decided to form a

separate team to carry out Change Management in scientific way.

Why people resist change:

1. Lack of Communication: Change often does not take off because the people, who are to carry it out,

do not know what they are supposed to do. People may only understand the change in broad terms and

not in practical terms. They may not see what they should do differently.

2. Procedure: Change may fall through because the staff does not know how it should go about it. They

may lack the knowledge, skills and experience to implement the proposed change and the staff does not

feel comfortable disclosing its lack of knowledge or skills. Thus, it may go about change in the wrong

way, as itdoes not possess the right skills or knowledge.

3. Goal Oriented: Another reason why the staff may resist change is that they do not know why they

should undertake a specific change. They may not be convinced about the purpose of the change or

they may not see the benefits of the change. Hence, they would not commit themselves to the change

and cooperate to ensure its success.


4. Involvement of Parties: Resistance may also arise if people are not clear about who are specifically

involved in the change. Too many parties involved in the change without a clear definition of their roles

will bring confusion and frustration. It leads to conflicts and affects the results of change programmes.

5. Proper Support: Commitment to change from the top is critical. Support in terms of resources, know

how, moral support and motivation is needed to ensure smooth implementation of change. Often, you

encounter teething problems along the way and thus continuous support is needed to ensure that the

change stays on track.

6. Lack of Courage: Change Program often fails not because of lack of skills but because of absence of

courage to implement the change. Management does not create a safe environment for people to

experiment or try new things. People feel that it is risky to undertake any change.

7. Poor Motivation: This is a powerful resistance to change. There are more Change Programs that failed

due to lack of motivation rather than the lack of knowhow. A clear and outright declaration on how

people are going to be rewarded if they achieve successful results from change would go a long way. An

environment that penalizes mistakes and not reward change will have everyone preferring the status

quo.

Considering the resistance to Change from the employees, task of Change Management team is to help

the ACC take ownership of the changes (i.e. new systems & processes, new roles, new policies &

procedures) for enhancing acceptance to the change.

Benefits of Change Management

• Increase acceptance of the change

• Reduce barriers to change

• Leverage enablers of change

• Reduce risk of implementation failure

• Enhance effective use of new technology

• Minimize disruption to the normal operations of the business during the transition phase.

• Increase ability for continuous improvement

Main tasks to be carried out by Change Management team are

• Stakeholder Management

• Communication

• Job Design

• Training (set up as a separate team)

Stakeholder Management

Stakeholders are groups and individuals who are affected by and/or can influence the Change process.

Different stakeholders see the same the Change differently based on their expectation, personal


characteristics, personal interest, previous experience, vested interest, work pressure, hidden agenda

etc.

Project team need to gain the support and commitment of key Stakeholders. Hence it is necessary to

know

• Who they are

• How they will be affected

• What is their likely reaction?

• Understand their level of influence & support required

• Monitor their position

One can categorize them in 3 groups

• Opponents Individuals who resist the change and may actively disrupt the project

• Followers Individuals who passively accept the change and go along with management decisions

• Supporters Individuals who grasp the opportunities for change and help make it happen

Once critical stakeholder’s characteristics are known one can plan to

• Leverage influential Enthusiasts and retain their commitment

• Increase the commitment of Followers

• Reduce the resistance of influential Opponents

Communication

It is necessary that the right message is delivered to right audience at the right time, in the right way by

the right person.

It is necessary to communicate

• What we are doing

• Why we are doing it

• How it will work

• Who will be involved & when

• Progress and results

• Training

• Post go live support

• What we will do next


Through E-mail, Roadshow, Workshop one can achieve two way communication while Posters, Banners,

Info-sheet is use to spread

Job Design

Job design is one of the key components of Change Management to support alignment of the

organization to change.

Objective of Job Design Includes

• Determine change on roles as new, change or shift in responsibilities are required in order to help

facilitate the use of new processes & system

• Determine resource requirements

• Provide input to the Authorization Team in determining individual’s system access authority

• Provide input to the Training Team in determining individual’s training needs Change Management

Structure for CONNECT India Phase IIa

As scope of Phase IIa covers entire plant workforce, special attention is given to have more persons from

plants involves in the process.

A new structure as shown on the next page is established to have Change Management process in place

at all Plants in close coordination with core team stationed at Thane.


Chaibasa Cement Works during this period

By December of 2006 there were 21 resignations, 5 retirals and 12 transfer outs, mostly in the functional

(engineer to senior engineer) and lower middle management (assistant manager to deputy manager)

level at CCW. A fresh lot of 8 nos. of Management Trainees had joined in the month of July 2006. The

new lateral joinees (6 nos. - 4 nos. in the functional management grade and 2 nos. in middle

management grade) were mostly 2 to 3 months old. By end of 2007 another 8 retirals in the same 2

grades were pending. There was widespread discontent among the non-management staff and the

functional management staff due to less than satisfactory level of annual appraisal and announcement

of a very short promotion list after the expansion project was completed. The operations of the new

plant (1.2 MTPA clinkering unit) had not yet stabilized. Apart from the senior management (unit head)

and the upper middle management (works manager and other technical managers), the average

experience level of all other technical management staff was around 3 years. In the month of October

2006 the local IT Support department was dissolved and the services were subcontracted to NIIT. The

new IT team had started its operations in the month of November 2006. Concurrently the hardware

contact with the local vendor was also terminated in the month of October and a new contract with IBM

was made via NIIT.

Furthermore, the General Stores was in a mess. The expansion project had ended in the last quarter of

2005 and the new inventory was still to be codified completely. Many items were still to be transferred

from the legacy system to SAP MM. There were huge number of duplicate codes, incomplete codes,

wrong item descriptions, wrong MRP parameters in MM to add to the trouble. Many Bill of Quantity

(BOQ) for the new machineries were still not available. Similarly Standard Maintenance Practices (SMP)

and Standard Operating Procedures (SOP) for many new machineries were also unavailable.

The Single Line Diagram (SLD) for the plant and the actual plant distribution were very different. The

new plant SLD and distribution were alike but the old plant SLD and distribution were totally different.

Numerous modifications have been done in the old plant distribution since 1946 but the same had not

been incorporated in the drawings. Similarly the SLD for 15MW CPP and its actual distribution were

same but the SLD for 6MW CPP and its distribution were very different.

The TARGET

Mr. I.M. Sharma, Unit Head, CCW had called Mr. Ashish Srivastava to his office on 20.02.2007 and

instructed him to prepare a detailed SAP R/3 Phase IIa roll out plan for CCW. Mr. Sharma wishes CCW to

be named the best roll out plant within ACC by the end of 2007.

Mr. Srivastava has had many meeting with his senior managers (engineering, production, HR, finance,

mining, purchase & procurement) over the next 3 days to devise a roll out plan to be presented on 24th

in front of the MD, the BH, the Connect India dignitaries and the entire CCW team.

Assignment

Help Mr. Srivastava and his technical assistant Anwesh in preparing the detailed roll out plan.

isos mini case study_acc chaibasa sap phase iia roll out

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