Hero Honda Motors Ltd
The heroes called Hero Honda
S R Balasubramaniam
In a mere three months Hero Honda Motors Limited's IT
team along with SAP technicians implemented an entire Supplier Relationship
Management (SRM) system for a better connected and transparent business process.
S R Balasubramaniam told Deepali Gupta about the pains and gains
through the implementation.
Project: Supplier Relationship Management (SRM) using mySAP's
SuS (Supplier Self Service) submodule
Date Started: February, 2004
Date Completed: May, 2004
Project Cost: Rs 100 Lakh
Project Objective: To establish a system that is transparent, efficient
and responsive to markets when managing supplier functions.
Benefits Accrued: Automatic delivery schedules, Advanced Shipping
Notification, automatic updating of Global Recycling Network, better forecast
purchasing behavior and shorten procurement cycles
Innovation: Implementation of MySAP SRM version 3.0 in a mere 3
Hero Honda Motors Limited (HHML) was among the first in India to setup the
MySAP SRM version 3.0. It became the ramp-up site for SAP and was recognized
for the speed and quality of the implementation.
The implementation started with a business need to become transparent, efficient
and responsive to markets when managing supplier functions and ended up with
a Computer Associates Intelligent Enterprise Award in the manufacturing vertical
Techies at work
Considering that the automotive sector depends on suppliers providing raw material
S R Balasubramaniam, CIO, HHML and his team isolated an SRM solution to coordinate
business processes with key suppliers, make them more effective. And therefore
optimized their procurement strategy, to work more effectively with the vendor
pool, and thus to gain long-term benefits from all vendor relationships.
At the outset
The planning and identification of the appropriate application itself took three
months. Queries went back and forth between the company's research partner,
Gartner. Finally decided to deploy Logis i2 and MySAP SRM.
Given that HHML had just adopted SAP R/3 and migrated their data to SAP it decided
not to enter in contract with a new vendor. Balasubramaniam thus adopted MySAP
The company became the one of the first companies in India to implement the
MySAP SRM version 3.0. The implementation took merely three months despite the
changes in the framework that were required for the exchange infrastructure.
There was an equal give and take with vendor, as HHML consented to be a ramp-up
site for the software. This meant that the company would be a test site for
the package, in return for better vendor support. It was a risk, but it worked
for Balasubramaniam, because a successful implementation means a strategic advantage
to establish an edge over the competitors.
"The people implementing it were not too sure because
they were doing it for the first time. In a few cases there were configuration
problems between SRM and R/3, but we got special attention. There were times
when we posted a query at night and got the solution by the next morning,"
|Mahindra and Mahindra Ltd. for
The use of MySAP SRM. Because:
- It is the first implementation of mySAP-SRM solution
facilitating collaborative business with suppliers.
- It changes purchasing documents at the buyer's end
so that it reflect in the sales document on a real-time basis on the
- It is a single and secure window of website for
multi-location suppliers supplying multiple M&M plants
Pidilite Industries Ltd. for its data security
framework. Because it:
- Deploys such complex security technologies in-house
with limited resources.
- Uses indigenous two factor authentication using
SMS systems developed in-house.
- Has shown no incidence of security breaches as a
pointer to its success.
The new components from SAP use Web programming, interface with Java, J2EE,
HTML, and XML. In addition, SAP uses the Netweaver technology to incorporate
the exchange infrastructure (XI) to talk seamlessly to the external world.
The emerging technologies used by the company, during the course of project
implementation, are mentioned below:
Logical Partitioning - LPAR is a system architecture approach. It allows the
division of a single server into several completely independent 'virtual' servers
or partitions. In HHML's setup LPAR reduces IT infrastructure cost and improves
workload capacity by means of:
- Reduced systems management requirements.
- Reduced use of floor space or rack space.
- Reduced power consumption.
- Reduced equipment service and maintenance costs.
- Improved business operation flexibility by providing mixed testing and
Tivoli Bare Metal Recovery: The company's IT team integrated Bare Metal Recovery
technology into its existing backup management system to back up all LPARs (virtual
servers). The team found it to be a simple and efficient way to back up and
recover data using an installation image known as mksysb.
The company added six servers (each virtual partition as one server) during
the course of the project. Weekly backups for the system would have required
24 tapes. But the Implementation of the Tivoli Bare Metal Recovery reduced the
tape count to four and reduced the media as well as management costs.
SAN Boot: All servers, which were used for this project were
configured to boot from a SAN. Using this technology a boot device was configured
on a more reliable enterprise class storage that the traditional internal disks.
|"We had a very ambitious target of three months,
and our fingers were crossed. Whenever we would reach a target I'd get an
SMS, sometimes even at 12 am. And we achieved the fastest implementation
of MySAP SRM, worldwide. This award really is a great recognition for my
team. When I got it I sent a message to my team members. I am really happy
for my team."
Action and Reaction
The mySAP SRM automatically pushes delivery schedules drawn up by SAP R/3 into
SRM. The supplier can then access it and plan shipment of his supplies. Once
the supplier dispatches goods, the Advanced Shipping Notification (ASN) updates
the database giving visibility to the in-transit supplies. The ASN in turn triggers
the in-entry and the Global Recycling Network (GRN).
As soon as the goods are received, the vendor gets instant information of the
receipt and the quality parameters after inspection. The bill passing too has
In addition to that, the SRM consists of tools to examine and forecast purchasing
behavior, shorten procurement cycles and work with partners in real time.
HHML approximately spent Rs.100 lakh on this project. However, as far as measuring
ROI is concerned, Balasubramaniam stated, "We have not quantified the advantages,
neither do we want to quantify them. It's got our clients closer to us. We see
the business value and the value of IT in the organization as a whole."
So, proof that the SRM has impacted 30 employees, 20 customers and 60 members
in the value supply chain is sufficient.
Hurdles at Hand
Change isnt easy even if it the only permanent thing. And this is a challenge
Balasubramaniam had to handle.
"Despite the advantages that IT has introduced, the business personnel
still ask why we are making changes in the business process" said Balasubramaniam.
He has to reason with them, explain the requirement and benefits of implementation
for people to accept new technology and corresponding change in business processes.
For that, among other initiatives is an awareness drive. "Not only for
the purchase department, we called in our suppliers to give them training. We
covered 13 suppliers already and by the end of the year our target is to acquaint
all our 25 suppliers with the system," said Balasubramaniam.
Balasubramaniam plans to expand application coverage. Transactions like warranty
returns and financial transactions like debit/credit notes will be performed
in future using links to payment gateway for remittances.
HHML will then need to formalize just in time deliveries arrangements with very
little manual intervention. Eliminating the process of quality check seems like
a good option. The company also intends to establish a link for online collaboration
in production by allowing their and vendors' servers to interact directly.
Deepali Gupta can be reached at: firstname.lastname@example.org