L&T's Heavy Engineering Division
manufactures customized industrial-grade machinery for
global clients. In order to gain more business from
demanding customers it had to reduce the time to deliver
the finished goods from 16 months to 10 months. It implemented
Product Lifecycle Management to achieve this. A look
at the strategies used by the company. by Soutiman Das
Gupta and Minu Sirsalewala
Larsen and Toubro
Limited's (L&T's) Heavy Engineering Division (HED)
manufactures industrial-grade equipment for various
process industries like petrochemical, fertilizing,
and other manufacturing companies. These products are
typically customized for every client. Every piece of
equipment in each order is built on unique specifications,
and the company has a large number of worldwide clients
placing orders every year.
Larsen and Toubro Limited's (L&T's) Heavy
Engineering Division manufactures industrial-grade
equipment for various process industries. These
products are customized for every client and each
equipment is built on unique specifications for
its global clients.
To keep pace with global needs, the company had
to reduce the product lifecycle time (the time
between receiving an order, and making the delivery
of the finished product) and introduce better
workflow and smoother operations.
The company deployed a iBaan Product Lifecycle
Management application to fulfil its needs.
L&T has significantly reduced its product
lifecycle time (by 30 percent). There is a higher
turnover rate from its production centers, and
the company shoes significantly better response
to business pressures.
Larsen & Toubro (Heavy Engineering Division)
Click on image for larger view
In order to reduce
the product lifecycle time (the time between receiving
an order, and making the delivery of the finished product)
and introduce better workflow and smoother operations,
the company deployed a Product Lifecycle Management
tool from Baan.
"L&T now enjoys
30 percent betterment in delivery performance, rise
in export content by 60 per cent, higher turnover rate
from our production centers, and significantly better
response to business pressures," explained B. J. Shenoy.
Shenoy is the Joint General Manager, and Head of Pressure
Vessels & Special Equipment SBU (Strategic Business
Unit) of the Heavy Engineering Division, at L&T
The company takes
care to customize every product according to the specifications
of its customers. Every product is unique with an individual
design like an 'engineer to order' business. Timely
delivery is very important to many of its customers.
And being able to bring products to market more quickly
was the key for L&T to increase profitability.
In the early 90s,
after the economy opened up and the company began to
attract clientele from other developed and developing
countries. This called for a radical change in the style
of manufacturing, operations, and conducting business.
Since these clients
expected world-class products with no room for consideration,
and expected timely completion, the company felt the
need to manage the product lifecycle better.
Before the open
economy, L&T's clients, which were mostly Indian
companies, allowed products to be delivered within 16
months. But after the economy opened up, the company
realized that most international companies expected
delivery within 12 months.
Efficiency at the
To achieve a shorter
delivery cycle, all the business departments in the
company, which was based out of Powai (Mumbai), began
activities aimed to promote efficiency in the delivery
cycle. And the departments created customized software
tools and applications to manage their businesses.
in the decrease of the delivery cycle to around 12-14
months," said Shenoy. "But our customers' expectations
began to grow and they expected delivery within 10 or
The company realized
that increasing efficiency in each department provides
considerable help, but to achieve better, it must look
towards increasing the efficiency of the enterprise
as a whole. "Instead of seeking optimization of processes
in individual departments, we had to seek optimization
of processes in the enterprise," explained Shenoy.
L&T felt that
effective Product Lifecycle Management (PLM) could help
increase engineering productivity, cut product development
timelines, and reduce change cycles.
The main aim of
the PLM solution was to manage the entire product lifecycle.
It also had to reduce delivery periods and shorten the
The company needed
to have a comprehensive system that reached across its
extended enterprise of customers and partners to collate
data from 7,000 drawings, 50,000 documents, schedules,
purchase orders, O&M manuals, and applications like
AutoCAD and Office. It also wanted to enable its executives
to approve versions, routings, specifications, and to
authorize actions throughout the product lifecycle.
"The number of
drawings and documents were growing at a rate of 900
and 15,000 per annum respectively. There were a lot
of data islands with redundant and duplicate data. Data
volumes were creating problems with ownership. Different
functions were using different terminology and were
referencing the same data differently. Archiving and
retrieving data was also a big problem," explained Shenoy.
In order to improve
CRM, the company wanted to customize progress reports,
speed up internal processes, and enable the customer
to demand online status and project management for their
asked for changes to be made in the product even though
the order was placed a few months ago. The PLM solution
had to provide the customer information regarding the
impact of changes, like delay of job completion and
the need to re-procure high lead-time items.
was that we work across multiple manufacturing sites
(Mumbai and Hazira-Gujrat) and perform multi-time manufacturing,
which requires complex networking," added B.J. Shenoy.
"And different levels of people required different levels
of access to documents. The system needed to allow security
levels for access to data like purchase orders and authorization
to amend drawings."
Choosing the enterprise
In late-1997 L&T
evaluated 14 vendors including SAP, Oracle, and QAD.
L&T's Electrical Business Group was already using
a few modules of SAP at that time. In mid-1998, the
company decided to use iBaan PLM.
The selection criteria
comprised three main factors -
1) The solution
had to be able to integrate with AutoCAD with no separate
data transfer steps and live link with drawings.
2) The solution
had to allow direct data entry into enter-
prise application without customization and independent
3) The solution
had to allow ease of import and export of data from
the existing enterprise applications running with easy
synchronization, and without data re-entry.
The company also
performed a package-based BPR deployed simultaneously
with the PLM solution and went live with iBaan PLM in
Deploying the solution
was done in three phases and PWC was the consulting
partner. In the first phase the Document Management
system was implemented and iBaan PLM was used to store,
search, retrieve, and archive all the documents. In
the second phase, the company implemented workflow and
version control, with the help of an automated engineering
change cycle. In the third phase, the items in product
document management were linked to the Baan product.
iBaan at L&T
for PLM helps to enhance internal and external collaboration
throughout a product's lifecycle. The lifecycle includes
the stages of initial concept and design, procurement,
fabrication, project management, distribution, and after-sales.
The solution allows the company to focus on its product
management and positions it better to deal efficiently
with specialized orders across multiple sites throughout
the configuration process.
iBaan now works
with a range of other enterprise applications including
the Baan Enterprise system and iBaan Supply Chain Scheduler
to help users automate the scheduling process, drawing
making process through AutoCAD, BOM & hierarchy
generation via AutoCAD-ObjectARX, and Product Knowledge
Management applications. 800 nationwide users work on
"For the first
time, L&T is able to support its manufacturing staff
by maintaining a closed-loop system that can help them
manage all aspects of a product's lifecycle within one
virtual, yet comprehensive environment. Now users across
the extended enterprise are able to share and link product
information across the value chain," explained Shenoy.
The solution connects
all the authorized users across the extended enterprise
and not just the workstations. Performance related to
delivery has increased by over 30 percent and export
content has risen by 60 per cent. The production centers
have also experienced a higher turnover rate
"Not only has the
solution helped to significantly improve the quality
of our manufacturing and design process, but the company
now has an electronic database for all our documents
and drawings," said Shenoy. Earlier the documents and
drawings were manually filed on paper, and were very
tedious and difficult to retrieve.
"The process is
much easier now as authorized users across the extended
enterprise can easily retrieve newly-stored files for
immediate reference and authorization," added Shenoy.
Soutiman Das Gupta
& Minu Sirsalewala can be reached at firstname.lastname@example.org