L&T Heavy Engineering improves logistics with upgraded ERP

Larsen and Toubro Heavy Engineering is a manufacturing and construction equipment powerhouse. The company caters to process plant industries, nuclear power and aerospace sectors in India. It manages its operations with over 2700 employees. 

The challenge

Larsen and Toubro Heavy Engineering was up for a huge upgrade of its warehousing and logistics operations. For many years now the company had been running its supply chain on Baan ERP.  As this was an old version, it could not be scaled up  to the current supply-chain management demands of speed and efficiency. “With multi location projects and pressure on costs, project managers needed stringent cost control,” says Anil Kulkarni, GM-IT, ERP, PLM, Larsen and Toubro Heavy Engineering. 

This outdated system involved a tedious transaction with stock transfer from various units.  “There would be work for each location and shifting metal from one location to the other for stock transfer was a tedious process,” says Kulkarni.

The poor user interface in the software added to the delays.

Bshell, the core application previously present in BAAN, was certainly a hindrance in timely processes. “Bshell architecture is slow in performing large data queries and transactions,” he says. This was not helping in fast and efficient logistics operations.

The solution

The old version of Baan ERP hadn’t received any updates to address new warehousing needs. “Our team analyzed these requirements and designed a tightly integrated system of Single Logistics and Single Finance (SLSF),” says Kulkarni. The implementation took place in April 2015.

The updated software offers a user friendly interface open to customizations. This integrated design comes with an advanced functionality for warehousing. “The new ERP architecture helps streamlining of the location and business unit wise data for financial consolidation. Consequently, no additional work was required,” says Kulkarni.

The upgraded ERP offers solutions for finance, freight management, warehousing and aftermarket services. “The CRM (contract management system) looks after the marketing and distribution aspects like the customer purchase order, other deliverables, and major milestones. Go-to-market strategy will require CRM functionality to be enabled in, which is under consideration,” he says.

The benefits

The upgradation of the ERP system has also helped the the company go paperless. “A lot of physical paper movement has been avoided and online clearances are in place. For instance, digital signatures, online inspection clearance, and no pre-printed stationary for the invoice are a few examples.” A big advantage of the upgradation is that we are processing large volumes of data at a faster pace. Direct database inserts are almost 50 times faster than earlier.”

A crucial feature has helped reduce expenses as well. “With simplification of the material-movement process in the ERP, much of the documentation and logistic costs have been optimized,” says Kulkarni.

In addition to reduced costs, the company has derived other benefits from the ugrade. The new ERP has fool-proof security, according to Kulkarni. Moving forward, he is optimistic about deploying analytics. “In the near future, IoT, digital manufacturing inputs would be required for integration with the ERP database, further leading to analytics,” he says.