l amp t petrol pump project report

LARSEN&TUBROPetrol Dispensing Pump Division

THE COMPANY….

Larsen & Tubro is India’s fourth largest company in the private sector. For more than five decades L&T has held leadership position in designing, manufacturing, installing plant and equipment for vital industries-food, chemical, petrochemical, fertilizer, cement, steel, nuclear and thermal power generation. L&T also supports India’s space programme by manufacturing rocket motor casings. L&T’s range of activities includes shipping, manufacture of switchgear, petrol pumps, valves, electronics, computer peripherals, cement and a comprehensive range of construction services. Today the focus is on turnkey projects demanding innovative technology. The company has spent half a century developing the expertise. Its strength lies in its largely diversified range of products and services, the commitment of its people and its ability to absorb technology from collaborations worldwide. L&T has been manufacturing petrol pumps for 25 years. Thousands of L&T petrol pumps serve motorists on India’s roans and highways. These pumps are installed at the world’s highest service station at Leh, Ladakh (India) at 3658 meters. This installation has the unique distinction of being featured in the Guinness Book of World Records. Over 8,000 petrol pumps have been exported to several countries. They are used by leading companies like SHELL, BP, CALTEX, TOTAL….

Around 1,000- 1,500 pumps of each type are manufactured per month and 12,000 pumps per annum. The volume of production is 5 crores per month and around 80-90 crores per annum.

The Mission…

The company’s mission is to provide Equipment, Sales and Services for dispensing petroleum products to oil industry, distributors and consumers in India and abroad. They shall retain their market leadership and grow by providing the best value for money to their customers through:

Enhanced product reliability Prompt after sales service Faster introduction of state-of-art product Effective communication

VISION

“L&T shall be a professionally-managed Indian Multinational, committed to total consumer satisfaction and enhancing shareholder value. L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value and attaining global benchmarks. L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society.”

Design

The products are designed and manufactured to meet stringent requirements such as power fluctuations, extreme temperatures, humidity and dusty atmosphere. Sophisticated advanced techniques are used in manufacturing and assembly. The integrated manufacturing activities are covered by ISO 9001 and ISO 14001 standards. In-house R&D set-up develops new products/features indigenously, which meets customer’s requirements. The laboratories provide support in testing raw material/components.

Components

Mechanical: Motor: ¾ HP, continuous rating, flameproof motor with thermal protection. Suction Unit: Vane type, positive displacement pump.

: Suction Head 3.5 Meters : Standard or Heavy Duty

Metering Unit: 4 Piston positive displacement Pump

with split drop accuracy. Electronics: Microprocessor based Electronic Register.

Volume Display: LCD Display (on both sides) Five/Six digits with floating decimal.

Optional Components: Automatic Nozzles Swivel Joint

Sight flow indicator

Standard Features

The standard Duty versions have a delivery rate of minimum 45 liters per minute at full flow.

The Heavy Duty versions have a delivery rate of minimum 80 liters per minute at full flow.

Meter is made of die cast aluminium and the cylinders have seamless stainless steel liners to provide a consistent accuracy between delivery rate of minimum 5 l.p.m. up to maximum rating.

Motor of minimum ¾ HP flameproof single phase suitable for operation between 180 to 250 V. in-built Thermostat protection is provided to safeguard against motor burn off.

Nozzle body is made of aluminium with brass spout suitable for standard /heavy duty hoses. It has in-built anti-milking check valve to prevent unauthorized draining.

Double braid hose confirming to IS 2396 fitted with reusable couplings at both ends.

In case of electronic display, the LCD sizes are 1” for volume and sale display and ¾” for Rate display.

The electronic components are of industrial grade suitable for operation at 80degree Celsius. The devices are immune to CMOS latch up problems. PCBs designed to withstand 2kV EFT.

For better reliability, gold plated dual contacts and flat cables are used.

Sheet steel fabricated components undergo extensive pretreatment and painting process.

The petrol pump mainly consists of motor, suction unit, meter, sump, solenoid valve and pressure reducing valve. The Production Process .

The various production processes existing in the company are:

1.Inspection and testing of parts

Before assembling all the parts are sent for inspection. There are 3 main machines for inspection a.) OPTO-MET In this machine the component to be tested is placed on it . Then light is paced and the reading is taken.b.) Digital height gauge It is used to check the heights of the bolts with the help of an overnier micrometerc.) Gauge Used to check the heights of the components: 1.) Go-gauge If the go-gauge fits in to the bolts and nuts properly then the size of the component is correct. 2.) No-go gauge If the no go gauge does not enter the component then the size of the component is correct. If it fits into the component then the component is big in size.

2.) Assembly line

After inspection and testing of all the parts they are assembled to make the metering unit and the suction unit. 1.) Metering unit The metering unit is the heart of the petrol pump. This meter is the most widely used gasoline pump meter in the world .One reason for the popularity is the antifriction

ring on the pistons. These rings protect Teflon pistons and stainless steel liners and guarantee longer life. The meter valve is ground and lapped on both the surface to achieve split drop accuracy. The simplicity of calibration, effected by an easily reached calibrating wheel, remains unmatched .The dry calibrating facility permits instant predetermined as small as milliliters in a delivery of 20 liters. The cam of the meter is specially designed for uniform acceleration of the pistons. This reduces wear on the moving parts. The meter measures up to the highest standards in split-drop accuracy.

2.) Suction unit and air separator.

Suction unit and air separator combine efficiency with durability. The two plus points add up to total efficiency, which has been proved for years. The compact design allows plenty of space all around for accessibility and easy maintenance. The unique feature is the coalescing pad of woven stainless steel wire, which guarantees effective air separation. The suction capacity of the pump is maintained even after the blades are subjected to slight wear, since a self-sealing action of the blades ensures consistent performance.

Easy accessibility to stainless steel wire filter facilitates routine maintenance. The lip seal prevents leakage from the shaft bearings. Carbon blades can be replaced without removing the suction.

The’ jig’ holds the components well. The hand grinder is used to give a surface finish to the components. It has around 20,000 rpm .The lathe machine is also used to give a surface finish .It is also used to change diameters. At different speeds the lathe machine can be used for knurling and threading.

Computerised Numerical Control (CNC) Machine

The CNC machine is a horizontal machine. Before the machine is started a computer programme is fed in it as to how the machine has to function. The component is placed

on a turret. The turret is multistationed. The component goes into the machine, the tools are placed on it and it rotates. Then the drilling and boring is done to give the component a better surface finish. While the process is going on coolant is sprayed on it continuously. At a time two tools can be drilled and bored and the whole process takes 56mins. 16 components are drilled and bored in a day (per shift).

All the parts including the metering unit, suction unit, motor are placed in the kiosk (frame). After assembling all the parts, thermax paint is sprayed on it. Thermax paint is a paint, which is mixed with some chemicals to avoid rusting of the components on which it is sprayed.

3.) Packaging

After assembling the petrol pump kerosene is passed through it to check if there is any leakage anywhere in the petrol pump and that all the parts are functioning properly. After testing, the petrol pumps are packed and sent to the respective customers.

Different companies have different colour codes and symbols on the petrol pumps. Also the customers manufacture the pumps as per the order place. The company has a product layout and the products manufactured don’t serve as an intermediate product for any other industry.

Performance Plan 2004-2005

Enhance production capacity. Initiate quality improvement drive. Accelerate new products development and

introduction plan. Improve shop ambience. Reduce pump thru put time to 2 days.

Performance Improvement Plan.

Auto setups for pump testing. Reduction of pump thru put from 7days to 2 days. Implementation of new meter assembly line. Elimination of cast iron components. Elimination of NPT threads (National Pipe Threads). Introduction of Viton ‘F’ Grade. Noise reduction.

Current Projects. Prevention of water entry into motor. Modification of sump base to avoid Rubber Seal

Cracking. Introduction of ‘O’ rings in meter assembly. Commissioning of new meter assembly line. Ordering new CNC machining center.

Manufacturing ExpensesRs.LakhsDescription Budge

t2003-04

Budget2004-05

CumMar-04

ActJun-04

CumJun-04

Variance +/-

Personal Related Exp.

571.0 660.0 749.9 46.8 167.8 (2.8)

Traveling & Conveyance

20.0 34.0 28.2 3.3 8.5 0.0

Power & Fuel 10.0 14.0 10.2 1.1 3.2 0.3Indirect Material

19.0 73.0 20.8 (10.8) (17.2) 35.4

Office Running Exp

24.0 3.0 7.8 0.7 0.9 (0.2)

Repairs & Maintenance

87.0 124.0 48.1 1.8 5.4 25.6

R & D Expenses 52.0 59.0 39.0 2.8 4.5 25.6Process Development

0.0 0.0 0.0 0.0 0.0 0.0

Int & Ins on WC (6.0) (33.0) (22.4) (5.5) (15.8) 7.5Int Dep & ins on FA

25.0 72.0 24.7 6.0 17.9 0.1

Floor Space Charges

18.0 27.0 18.3 2.3 6.8 (0.0)

Tools 51.0 195.0 16.7 35.8 37.1 11.7Material Adjustments

19.0 19.0 13.5 0.2 0.7 4.1

Rejection, Rework&Reli

11.0 11.0 7.0 0.6 1.1 1.6

Freight & Octroi.

75.0 115.0 79.4 12.0 23.1 5.7

HIRE CHARGES 3.0 0.0 0.0 0.0 0.0 0.0PGM Expenses 54.0 51.0 0.0 0.0 0.0 12.8Other Exp, Rent 20.0 25.0 82.5 4.1 10.8 (4.6)Total Expenses

1053.0

1449.0 1123.6

101.5

254.9

107.4

Less: Scrap (5.0) (5.0) (14.6) 0.0 (3.5) 2.3

Recoveries

0.0 (24.0) (23.7) (2.0) (6.0) 0.0

Gross Expenses

1048 1420 1085.2

99.5 245.4

109.6

Less:duplication (43.0) (50.0) (26.5) (4.2) (12.5) 0.0Add:allocation 104.0 110.0 104.2 9.2 27.5 (0.0)Net Mfg Expenses

1109.0

1480.0 1162.9

104.5

260.4

109.6

Debit to SBU1 40.0 0.0 6.0 0.0 0.0 0.0Net Mfg Expenses

1069 1480 1157 104 260 109.6

Types of Petrol Pumps

Z-LINE Fuel Dispensers (Rs 55,000)(output: 250-300 pumps per day and around 1200 per month)Types:

Standard Duty(Delivery rate 45 L.P.M)

Heavy Duty(Delivery Rate 80 L.P.M)

Preset Standard Duty Preset Dispensers Dispensers

(With submersible pump)

Suction pump: Self-priming Positive displacement vane pump with air

separator ,bypass valve and suction strainer. Rate of delivery: 45 L.P.M minimum, at full flow

(std.duty) Rate of delivery: 80 L.P.M minimum, at full flow

(heavy duty) Suction lift: 3.5 meters.

Motor (For suction pump):

¾ HP flameproof with 180-250 volts, 50Hz operating band

Class “F” insulation, Thermostat protection Emergency hand drive provided for non-preset

pumps.

Meter: Four piston positive displacement metering unit Accuracy +-0.25% between 5 L.P.M and full flow Calibration range-500ml to +100ml for 20 liters in

steps of 5 ml

Hose: Double braided, petrol resistant, antistatic ¾”-std.duty 1”- heavy duty

Nozzle: Spout sizes 13/16” , 1” Optional-Auto cut-off nozzle

Totaliser: Mechanical seven digits (minimum)

Electronic Register: Liquid Crystal Display Five/Six digit sale display-1” high Five/Six digit volume display-1” high Four digit rate display-3/4” high Battery back up. Self diagnostic

Preset: Volume/Sale preset Sixteen key keypad

Panelling: CR/HR steel sheets Sixteen key pad

Operating Environment : Temperature: -10 degree Celsius ~+50 degree

Celsius Relative humidity: 5%~ 95%

Multi-Product Dispensers.(Rs2.5 lacs)

Types: Two product/Four hose-two display Two display Three product/ six hose-two display Quad-single/Four Display Oil mix

Suction pump Self-priming Positive displacement vane pump with air

separator ,bypass valve and suction strainer. Rate of delivery: 40 L.P.M Minimum, at full flow (std.duty) Rate of delivery: 80 L.P.M Minimum, at full flow (heavy duty) Suction lift: 3.5 meters.

Motor (For suction pump) ¾ HP flameproof with 180-250 volts, 50Hz operating

band Class “F” insulation, Thermostat protection.


steps of 5 ml

Hose: Double braided, petrol resistant , antistatic ¾”-std.duty 1”- heavy duty High Hose System.

Nozzle: Spout sizes 13/16”, 1” Preset/Auto cut-off nozzle

Totaliser: Mechanical seven digits Electronic twelve digits.

Electronic Register : Backlit Liquid Crystal Display

Six digit sale display-1” high Six digit volume display-1” high Four digit rate display-3/4” high Battery back- up. Self-diagnostic feature for trouble shooting and

maintenance

Preset: Volume/Sale preset Sixteen key keypad or four push button type.

Panelling: CR/HR steel shits Long lasting stowing enamel painted.

Operating Environment : Temperature: -10 degree Celsius ~ +50 degree

Celsius Relative humidity:5%~ 95%

Optional features: Safe-Break couplings, Safety shear valves.

Pacemaker II (Rs1,10,000)

Types: Standard Duty

(Delivery rate 45 L.P.M) Heavy Duty

(Delivery Rate 80 L.P.M) Standard Dual Mechanical

(Deliver rate 45 L.P.M.)

Suction pump: Self-priming Positive displacement vane pump with air separator,

bypass valve and suction strainer. Rate of delivery: 45 L.P.M Minimum, at full flow (std.duty) Rate of delivery: 80 L.P.M Minimum, at full flow (heavy duty) Suction lift: 3.5 meters

Motor (For suction pump)

¾ HP flameproof with 180-250 volts, 50Hz operating band

Class “F” insulation, Thermostat protection Emergency hand drive provided for non-preset

pumps. Optional 3 phase motor.


steps of 5 ml

Hose: Double braided, petrol resistant, antistatic ¾”-std.duty 1”- heavy duty

Nozzle: Spout sizes 13/16”, 1”

Totaliser:

Mechanical seven digits

Register Veeder root three-wheel/Four wheel register. Computing/ Non computing.

Panelling: CR/HR steel sheets, Stainless Steel Sheath Long lasting stoving enamel painted.

Operating Environment: Temperature: -10 degree Celsius ~+50 degree

Celsius Relative humidity: 5%

STANDARD APPLICATION OF PRODUCTS (SAP)

L&T uses Standard Application of Products (SAP) software to conduct its day-to-day activities. All the materials management functions i.e. planning, sourcing, purchasing, controlling the materials etc. is done with the help of SAP.SAP solutions are built on SAP NetWeaver, a comprehensive and integration and application platform that works with the existing IT infrastructure. With the help of SAP NetWeaver a company can flexibly and rapidly design, build, implement, and execute new business strategies. SAP delivers a comprehensive suite of integrated solutions designed to meet the specific needs and challenges of the business – helping to coordinate complex projects, partner with vendors and subcontractors and adapt new technologies. SAP supports the full range of business processes from specification to design and manufacturing. Also there are different SAP business maps that help in this process:

The Solution Map – Outlines all your business processes so the management can visualize, plan

and implement a coherent, integrated and comprehensive solution.

The Business Scenario Map – Gives a detailed view

Of end-to-end processes and defines the activities, roles, system interfaces and business documents that will enhance collaboration.

Quality Control

SAP software helps in quality control function of the company. Continuous improvement

The quality notifications contained in SAP PLM Quality Management are designed to process and document problems of any type, especially those relating to poor-quality products. This includes internal malfunction reports, as well as complaints against a vendor or complaints from customers. They can also be used to handle positive events, such as proposals for improvement. Usually, the author of the notification records the problem in writing. It is also possible to attach related documents.

The notification coordinator, a person responsible for processing the notifications, is immediately informed via workflow. The coordinator defines the type of the notification, sets a priority, and dispatches the notification to a suitable processor (expert).

The expert investigates the problem type and location, detects the causes, and suggests a solution. Usually, the proposed corrective actions have to be performed by other parties responsible for the related areas. Those parties may be informed via workflow.

The cost of the tasks may be recorded by a QM order, which can be analyzed and approved later. Each action is documented in the notification. The statuses of the tasks are controlled and the deadlines are monitored.

Once the corrective tasks have been processed, the solution has to be approved by the author of the

notification. Feedback to other interested parties may be required. After this feedback has been given, the notification can be completed.

Value Potentials Business Benefits

Up to 60% reduction of time delay* Quick, easy, and transparent problem notification

Problems efficiently transferred to expert

Up to 100% reduction of paperwork* Web-enabled process

Assignment for all relevant documents

Increased quality

Reduced cost of failure

Online problem documentation

Up to 100% reduction of costs related, to insufficient quality*

Deadline monitoring

Total control of all problem issues

Feedback for continuous improvement

Company-wide information available with company database

Up to 80% reduction of repetition of systematic defects

Proven solution

Increased customer satisfaction

Immediate reaction

Up to 40% accelerated processes Direct allocation of responsibilities

Mobile inspections

It shows how the inspection planner, the inspector, and the quality manager work together, from inspection plan creation, through on-site results recording, to the usage decision and the monitoring and benchmarking of quality

When the inspection plan is set up, different kinds of inspection lots can be created manually or automatically (for example, goods receipt inspections and inspections during production).

The inspector normally uses personalized worklists to get all the inspection lots he or she is responsible for.

The mobile results recording function provides support when performing quality inspections in inaccessible or external locations (for example, inspections for cracks on tankers). After allocation of the inspection lots to an inspector and the transfer (download) to a handheld device, the inspector can record measured values, codes, nonconforming units, and the number of defects offline. When these inspections are completed, and the results are recorded, the data can be transferred to SAP PLM QM using a docking station. With status control, it is always possible to identify who performed which inspections, and when. If one of the inspectors has recorded a value that represents an exception, the quality manager is notified after the data has been uploaded.

The inspector or quality manager finally completes the inspection lot by processing the usage decision. For this purpose, they use a special worklist. The usage decision has significant consequences (for example, goods movements and batch and vendor evaluations). Digital signatures ensure that a product can only be released by authorized users. After the usage decision has been made, the quality manager monitors the data.


Up to 30% cost reduction for inspection planning*

Efficient inspection planning using mass processing tools or cross-system transfer tools

Up to 50% reduction of hardware costs for inspectors*

Handheld device (PDA) instead of workstation

Up to 20% improved user efficiency

Direct allocation of responsibilities

Personalized worklists

Ease of use

Up to 60% reduced appraisal costs

Paperless document

Results recording without system access

Recording of data only once

Avoiding human data recording through electronic data transfer

Up to 50% reduced time for approval

Speed up product availability with faster results

Increased security (digital signature)

Up to 80% reduction of repetitive of systematic defectsUp to 80% reduction of repetitive of systematic

Recording Inspection Results via Web (Concession Request)

This shows how the vendor and the customer use the business Internet to exchange information about inspection results. The company can post the results of the goods inspection on its homepage which can then be collected and confirmed by the vendor.

The company would like the vendor to make the inspection results available on the Internet. The company gives the vendor access to its Internet service and creates a selection variant for the vendor-specific worklist.

The vendor can log in the company's Homepage, select inspection lots from the worklist and enter the results. The inspection results are valuated in the customer's system according to the valuation criteria. If the vendor confirms that the inspection is finished, the inspection lot disappears from the worklist. The company makes the usage decision in its system.

Value Potentials

Business Benefits

Customer wishes are taken into account regarding data to be recorded and expenditure

Up to 35%* Reduced effort involved in sending certificates

Up to 30%* Simpler results recording

Up to 60%* Reduction in the number of returns

Existing master data can be used

Up to 33% Early information on the quality

Up to 48% No recording needed

Up to 35% Can decide at an early stage whether to accept or reject the lot

New product development

To work efficiently in all phases of the new development process a powerful and integrated tool is

required: This is where the Product Designer from SAP PLM comes in. It is based on integrated product and process engineering and a powerful document management system. The enormous number of people involved and the high volume of data that is created and has to be structured and managed, are indicators that the value potential of using an efficient tool and sophisticated processes cannot be overestimated.

The strength of the new development process with SAP PLM is based on the concept that all ideas, documents, structure information, early process information and early layout information are collected and managed in one central tool. This starts with the initial idea and goes right the way through to start of production, and also after SOP, if necessary. The tool has one basic user interface, which can be extensively adapted to the needs of every single user.

The company often provides the responsible product managers with thousands of unstructured or only partly-structured documents relating to the new product. Product managements initial task is to handle this huge amount of information in so-called Feature and Requirement Structures. During this process phase, direct and seamless communication between these two parties is essential and is supported by Web interfaces for occasional users. After releasing these feature and requirement structures, and after verification , the engineering process is started via effective cooperation between product management and the engineering departments. Different phases are supported perfectly by SAP PLM and step-by-step handling of the evolution is therefore no problem from the functional structure to the concept or design structures, through to the released product structure. This released product structure is checked one last time by the product engineerr before it is finally handed over to manufacturing.


All departments affected can add content easily using web-

interfaces.

Different views on one consistent structure supported

Up to 30% reduced design cycle times*

With the product designer all structures required throughout the development process can be defined from the feature and requirement structure down to the final product structure

Up to 10% reduced redesign

Step by step engineering allows flexible processes where content is added according to progress

Up to 30% reduced costs foe interfaces

Structuring of features and requirement, functions and concepts in early design phases ensures quality from the beginning- and that’s where the major part of the costs of the product is

Order change management

Traditional change management processes can influence only planned procurement elements such as planned orders. As soon as production is released and really started it cant be influenced any longer, so that necessary changes result in manual modifications of running production orders.

This is true for:

Neutral or customer-specific products that have to be changed for technical reasons and

Customer-specific products that have to be changed because the customer changes his mind

With Order Change Management these error-prone and time-consuming manual modifications can be substituted by a smart and secure process, which reduces effort to a minimum. The idea is to support the change process based on rules that take into account both the current status of the affected production orders and the company-specific type of production.

Therefore rules are set up to define which kind of changes are allowed, allowed with warning or disallowed for a specific status of the production order. For example, the change of a component might be allowed as long as the corresponding operation is released, but disallowed as soon as it is confirmed. All these rules are finally combined in a profile and assigned to the products.

If changes to the product structure or to the sales order of a configurable product occur, the OCM process can be triggered and the affected production orders can be determined. Now the actual change process is started, which is processed in different steps:

Simulation of changes Check of changes against company-specific rules Real change of production order if allowed Goods movements according to changes can be done

automatically

Since all steps can be done in the background, manual work is reduced to a minimum. Only if warnings or errors come up during the check is a manual decision required about the next steps. In addition to the reduced work, the time required for the change process and the rework is reduced via this controlled and efficient mechanism.

Nevertheless, the major benefit of OCM is increased customer satisfaction because companies can fulfill the wishes of their customers for an extended period of time, without increasing the delivery period.


Product structure management and variant configuration can be used to set up configurable product structures

Up to 100% reduced integration costs* Customer-specific product structure is directly used for planning and production

Up to 100% reduced costs for order creation*

New order can be created directly by the customer via the web

Up to 100% reduced time for BOM creation*

Customer-specific product structure is determined automatically

Customer-specific product structure can be extended or modified if necessary

Up to 20% increased revenues due to increased customer satisfaction and competitive advantage*

Increased customer satisfaction since OCM allows the flexible incorporation of last minute changes

Up to 50% reduction in order change cycle time

OCM processes can be done in the background as long as no user decision is needed

Goods movement according to changes can be done automatically

Process engineering

When the new product development process is in its final phase, in which the product structure is set up, a fast transition to production is essential for successful ramp up and product introduction. Efficient process engineering is key at this time, and this requires tight collaboration between process engineering and production.

Process engineering is supported by the engineering workbench, which allows the parallel processing of several bills of material and routings. The tight integration of these structures allows digital mockup (DMU) viewing of the mechanical assemblies (after conversion of native CAD files into neutral viewing files) during the initial set up of routings. Graphical controls allow the copying of existing operations into a new routing, using Drag&Drop. The assignment of components to specific operations in the routing is supported in the same way. These mechanisms, together with advanced mass processing capabilities, such as the replacement of a work center in hundreds of preselected operations within a few seconds, speed up the work of the process engineer.

Later on, the assignment of components to specific operations allows precise procurement, especially if the production or assembly process takes several days or even weeks.

Due to the tight integration of engineering into other business processes, SAP PLM can support a phased release concept for both product and process structures. For example, the product structure can be released first for process engineering, then for product costing, and finally for material requirements planning and production. This ensures fast but secure processes.

Production is started as soon as product structures and process structures are released for production, after which all relevant documents can be transferred into the production order as well. The people in production have direct access to all documents needed to produce and assemble the product. For the product structure, they can utilize digital mockup (DMU) viewing of the mechanical assemblies, in the same way as the process engineers in the engineering workbench.

With access to these documents, production can easily provide feedback if things need to optimized or changed to improve production processes. For example, the redlining capabilities of the integrated viewer allow the creation of electronic comments on the viewing files. This input then can be used by engineering to trigger engineering change management (ECM). With ECM, all objects affected by a change can be modified in one controlled process. So product structures, process structures, and documents can be changed all together, resulting in a new, consistent change status of the product, which can be used for ongoing production. This means that collaboration is supported for continuous improvement as well as for new product introduction.


Up to 30% reduced design cycle times*

Product structures are immediately available for process enineering - no information islands

Up to 50% more precise procurement of components*

Assignment of components to specific operations in the routing for advanced scheduling capabilities

Up to 20% reduced time for routing creation*

Advanced processing via graphical browsers, e.g. copying of existing operations or component assignment via Drag&Drop

Processing of multiple product and process structures supported, only edited parts are locked to allow simultaneous processing of huge structures

Digital Mock-Up (DMU) viewing files and product structure, e.g. for process engineering and production

Advanced environment for concurrent engineering of product and process structures in one workbench

Mass processes such change of workcenter or storage location supported

Project management in R&D

When management has decided to develop a new product, triggered by internal portfolio management or external market research, time to market becomes the crucial success factor. A comprehensive and flexible project management tool is needed to optimize the use of resources and the network of activities, including the interdependencies between them.

Documents are an important part of projects in R&D. They are used as input for tasks such as specifications as well as output of designs or test protocols, for example. With SAP PLM the company assigns documents to the part of the project structure where they belong, or to the relevant activity in the network. This ensures faster document access and higher quality.

Another important task of the project manager is the selection of appropriate resources and the planning of resources to avoid overload. When this is done and the project is released, the different team members have to be notified about their activities, and all the information they need has to be provided as well. This can be done automatically with workflow support. The confirmation of an activity or milestone can trigger the next workflow tasks. At any time, team members can send project elements or documents to each other with a note. For important documents, distribution lists can be set up, so that everybody is notified automatically as soon as the document is changed. These mechanisms ensure that no time is lost due to lack of information or communication.

As soon as work has been done on activities, team members confirm them, in order to report progress continuously. Due to tight integration with SAP Financials, the actual costs are automatically posted to the project, at the same time as the actual dates are used to update the schedule. This allows real-time controlling of the costs and budgets.

The comprehensive reporting capabilities of SAP PLM project management support out-of-the-box reporting for all aspects of a project: progress analysis (including milestone trend analysis), cost and budget controlling, schedules, and resources. Planned and actual data can be compared, and alerts can be sent as soon as differences become too great.

Finally, tight integration with procurement and production are an important feature. Single materials or entire bills of material are assigned to activities, in order to trigger procurement and production from the project. All project dates are used to calculate the procurement and production schedules. Project-specific stock is supported, as well as direct posting of all procurement and production to the project. This is of particular interest if prototyping and testing activities are part of R&D projects.


New product development can be triggered using advanced tools, e.g. portfolio management

Up to 20% reduced product development time*

All phases of development projects are supported from concept through to planning and execution to the closing of a project,

Up to 30% reduced Project Set Up Time*

New projects can be set-up quickly by using templates and graphical interfaces

Milestones or confirmations can be used to trigger workflows, e.g. to notify responsible agents to fulfill their project-related tasks

Up to 20% higher delivery date accuracy*

All kinds of predefined reports allow effective project controlling regarding progress, costs, budgets, schedules and resources

Baselining of project versions enables tracking the history of projects

Content Management

It shows how employees of the purchasing organization can create, cleanse and manage their own catalogs facilitating a smooth flow in the procurement process

The Content Management process starts when you import content in the form of a catalog file into the catalog-authoring tool (CAT). Content can originate from internal or external sources, such as suppliers, marketplaces or SAP R/3 backend systems.

The incoming content passes through a technical quality and syntax check. Customizable filter rules are applied to exclude data that is not wanted from the import. To enhance the flexibility and efficiency of catalog searching, you can further classify and organize the content into a

centralized schema. SAP's Content Management provides the tools for data categorization and enrichment and supports standards. The content is further normalized through data transformation and the values of the product attributes are validated to cleanse the data.

Subsequently, a workflow is triggered that manages exception handling and corrects values exceeding certain limits or violating specified rules.

The data can be distributed to two modules - Master Data Management (MDM) and catalog search engine. When the cleansed data is ready for distribution, a decision is made for data routing. If the data already exists in MDM, then it is flagged as existing and distributed accordingly. The non-flagged data can be routed to the catalog engine.

The data can be personalized into views and variants while creating virtual catalogs. Some examples of personalization attributes include effective data, supplier name, categories etc. Finally the data is distributed out to the catalog search engine, where the buyers can search for items and create shopping carts within the procurement application.

Business Benefits

Electronic data loading saves time and money

Ensuring data integrity by validating incoming data

Personalizing catalog to meet the buying organization needs

Filter unnecessary data

Centralized classification to facilitate catalog searching and reporting

Data normalization to ensure data completeness

Value check to ensure data completeness

Workflow facilitates manual intervention for exception handling

Automatic routing of appropriate data to Master Data Management (MDM) or catalog

Facilitation and standardization of the procurement process

Speed up of communication via electronic document exchange

Contract management

This allows purchasers from different business units at different locations to take advantage of common contracts for specific product categories and items that are used throughout the company.

A company can negotiate a contract with a supplier on the basis of an RFQ or auction, for example. Once terms and conditions have been agreed, the strategic purchaser can create a central contract in SAP Enterprise Buyer. The contract will then enter an approval workflow. Once the purchaser's manager has approved the contract, it can be released for the entire business unit.

The company can inform purchasing organizations in backend systems by e-mail about new contracts that have been released. The company can search for and register themselves for contracts. Once they have registered, they can take advantage of the terms and conditions negotiated for a contract.

When the company selects a specific product from a contract, a purchase order is created, which is then sent by EDI/XML, fax or e-mail to the supplier. At this point, the regular procurement process starts. The supplier ships the requested goods to the purchasing organization. The requesters complete a goods receipt, on the basis of which the supplier creates the invoice, which is then paid by the requesting organization.

Business Benefits

Seamless integration with bidding functionality

More efficient negotiated terms

Cross enterprise contract visibility

Significant boost of productivity

Reduced administrative costs

Higher compliance

Higher sales volume

P

Plan driven procurement

The Plan-Driven Procurement scenario focuses on material or service requirements that come from planning systems, such as MRP, PM or PS systems that are typically production-planning systems.

Even small changes in dates and quantities can impact critical elements, such as production schedules, transport logistics, and just-in time inventory levels. Because enterprise planning and production systems, the Plan-Driven Procurement scenario with SAP SRM typically manage these costs and changes is the best solution to prevent such incidents. A demand is created in an SAP R/3 system as a result of MRP.

Once the source of supply has been assigned using the Sourcing application in SAP Enterprise Buyer, a purchase order can be created. This is then replicated as a copy to the R/3 backend system for further processing, such as material evaluation and inventory management.

The supplier sends the company an Advanced Shipping Notification (ASN) and ships the goods.

An inbound delivery is created in the procurement system. When the company receives the goods, he or she creates a goods receipt based on the inbound delivery.

There are two possible methods of invoicing:

The supplier sends an invoice to the purchaser The purchaser sends a credit memo to the supplier

Business Benefits

Reduced process costs

Faster deployment of best source of supply

Reduced material costs

Increased transparency & compliance

Reduced purchasing process cycle time

Utilization of negotiated contracts, only

Reduced process cycle time

Less errors

Less manual measurements


Higher efficiency

Reduced process cycle time

Increased transparency


Sourcing

With SAP SRM qualified suppliers are invited to submit their proposals. The company then compares the results and accepts the best bid or bids. This allows company to identify the best suppliers and minimize the costs for individual orders. The company receives an open requirement, for example from an expiring contract or for a missing product part. The company creates a bid invitation with the relevant product information. This can include, for example, attributes, additional text for the suppliers, quantity, and delivery date of the requested goods.

If the design engineers have not already done so, the purchase manager can create a collaboration area within cFolders in SAP Product Lifecycle Management (PLM) to specify details of the requested goods and to facilitate advanced collaboration between the purchasing and supply sides.

For example, the design engineers can store and update specification and design information in this area. Once the purchase manager has entered all the required information, the bid invitation can be published. Selected suppliers receive an e-mail that includes a link to the bid invitation. They then create a bid stating their terms and conditions. They can also attach documents to the

collaboration area in cFolders before finally submitting their bid.

The company receives the bid response with all the relevant information. Using SAP Business Information Warehouse the company can compare all the bids before deciding on the best supplier. Design engineers can collaborate once more before the bid or bids are finally accepted.

The purchasing organization can create an order or contract out of the evaluated bidders, or they can create a live auction involving the bidders who have been short-listed in the previous bidding process.

Business Benefits

Accelerated purchasing process through fast and easy creation of bid invitation

Find new sources of supply, better prices using all the information you already have

Accelerate the product life cycle

Deepen your relationship with already existing suppliers by offering them easy to handle RFxs via the web

Procure goods and services by negotiating best price and best terms

Collaborate with engineers, suppliers and purchasers to define the right product, ensure the right deals with the right companies

Get new customers through participation at bid invitation

Less errors due to easy-to-handle collaboration possibility

The invited suppliers receive an invitation for the live auction and can submit their bid information within the timeframe specified by the purchaser. Once suppliers have submitted their bid, they can monitor the competitors' bids and can react accordingly. Once the live auction has ended, the company accepts the offer of the supplier who best suits the selection criteria. The purchaser then creates a purchase order or contract out of the winning bid or bids

Strategic Sourcing – Global Spend

It shows how SAP SRM supports spending analysis across a heterogeneous system landscape. This allows strategic purchasing professionals to analyze corporate spending across a complete enterprise.

In order to be able to assess the volume of procurement across a complete enterprise, the company needs to analyze spending in all purchasing systems involved. Global Spend Analysis makes this possible using key mappings that enable unique identification of materials and vendors in a heterogeneous master data environment.

The Global Spend Analysis scenario comprises two steps. In the first step, master data from heterogeneous systems is mapped and these mappings are uploaded to Business Information Warehouse (BW). Mapping information is generated for material classification schemas and supplier master data either internally or externally using third-party services, such as Dun & Bradstreet.

In the second step, the mappings generated in the first step are used to perform the actual reporting activities on transactional data. The company analyzes corporate spending by product category across the various suppliers.

On the basis of these analyses, the company can identify sourcing opportunities and starts negotiations with one or more suppliers in order to realize the savings potential identified.

Business Benefits

More efficient identification of saving potential

Cross-enterprise spending visibility

Better prices due to better volume leverage

Lower supply risk due to global supply base assessment/consolidation

Reduced stock level due to improved visibility

Collaborative planning, forecasting and replenishment

This business scenario shows how enterprises can carry out collaborative supply chain planning activities with their business partners over the Internet. By sharing information over the internet, the buyer and seller develop a single dynamic forecast. The result is more accurate forecasting with lower inventory levels. These benefits save time and money.

Collaborative Planning Forecasting and Replenishment (CPFR) represents a paradigm-breaking business model that extents Vendor Managed Inventory principles by taking a holistic approach to supply chain management among a network of trading partners. CPFR has the potential to deliver increased sales, organizational streamlining and alignment, administrative and operational efficiency, improved cash flow, and improved return-on-assets (ROA) performance.


Up to 40%* More accurate forecast

Up to 4 %* Increased service to distributor

Up to 18 %* Reduced inventories

Reduced planning / deployment costs

Up to 20 % Reduced replenishment cycle

Up to 8%

Simplified, exception-based process

Inventory Control

Inventory is defined as the sum of the value of raw materials, fuel and lubricants, spare parts, maintenance consumables, semi-processed materials and finished goods stock at any given point of time. Since resources are idle

when kept in stores, inventory is defined as an idle resource of any kind having an economic value.

Currently the company has 18 days of comsumption inventory. B

ut by the end of 2005 they plan to reduce it to 14 days of consumption.

Factors influencing inventory functions of the company:

Production Plan Amendments. (Planning and Scheduling)

Entry of the received material. (GR-Goods receipt) Bill and material.

A stock is maintained mostly of the A and B category items since they are expensive. But stock is not maintained of the C, D, E category items since they are less expensive and they are supplied by the vendors’ everyday.

The company does not manufacture any parts in-house, only the assembling is done in the factory. Around 1100 parts are required in the production of the

petrol pump. The vendors on a regular basis supply these parts. The orders are given in bulk about 7-8 months in advance.

The company follows the method of ‘Kitting’ i.e. for example, if the company has to place an order of 17 parts; they place the order with only one vendor for all the parts. In this way they have to make only 1 bill and only 1 payment. Presently the company has 78 vendors in all. And by following this method they have reduced their procurement cost by 5 %.

In case of any defective parts, they are sent back to the respective vendor.

Storage or disposal of obsolete materials is generally avoided. For example, if there is a change introduced in the design of any part, the existing stock of the part is used and then the new part is supplied by the supplier

The company spends around Rs. 20 lakhs per annum in insurance of the materials stored in the factory. The materials in-transit are also insured and as soon as the goods arrive at the factory, the insurance expires.

The cost on materials amounts up to 72 % of the total costs.

The company has reduced cost on materials by 9% in 2003-’04 and they plan to reduce it further by 5% by the end of 2005.

The company spends around 2.3% of is total expenditure on materials overheads.

The company has currently introduced a service team of about 200 people spread across the country to help assist in the installation of petrol pumps in rural areas.

Special type of material-- Electronic Cards: Stored in special racks and in anti-static packages.

Around 50-60 pumps are manufactured every month.

ABC Analysis

Since 1100 parts are used to manufacture one petrol pump, the company has classified in to A, B, C, D and E categories. The A- category items mostly consist of pumping unit, motor, meter body, imported items etc. Since these items are expensive, they are ordered in bulk since the vendors on bulk purchasing give high discounts.

A-items: High consumption value

B- items: Moderate Value

C , D , E – items : Low consumption value

Very strict control Moderate control Loose control

Bulk ordering for 6-8 months

Once in three months Frequent ordering or weekly deliveries

Weekly control statements Monthly control statements Quarterly control statements

Rigorous value analysis Moderate value analysis Minimum value analysis

Maximum follow-up and expediting

Periodic follow-up Follow-up and expediting in exceptional cases

As many sources as possible for each item

Two or more reliable sources

Two reliable sources for each item

Accurate forecasts in materials planning

Estimates based on past data on present plans

Rough estimates for planning

Minimization of waste, obsolete and surplus (review every 15 days)

Quarterly control over surplus and obsolete items

Annual review over surplus or obsolete material

Maximum efforts to reduce lead time

Moderate Minimum

Quantity and cost on materials (per month)

Category Quantity Cost (approx.)

A 150 units 90 lakhs

B 2000 units 100 lakhs

C 5000 units 110 lakhs

List of Vendors

Local Crompton Greaves Augangabad electricals TVS Cherry Markwell Hose Industries Evergreen Engineering ASCO India Ltd, Chennai

International OPW fuelling components, USA Tank gauging system from Vedeer Root, USA High-end product from Tokheim Corp,inc ,USA Submersible pumps from FE Petro Ins. , USA Above ground submersible pump from EBS-Ray

Pumps Pvt Ltd, Australia