Hero Honda Motors Ltd

The heroes called Hero Honda

S R Balasubramaniam CIO, HHML

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.

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 category.

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 SRM.

Pioneers

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," said Balasubramaniam.

What’s Innovative

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 production environments.

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.

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 been automated.

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.

Money matters

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 isn’t 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.

Future Roadmap

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: deepali@networkmagazineindia.com