India's largest engineering conglomerate Larsen & Toubro (L&T) is teaming up with PricewaterhouseCoopers (PWC) to implement the SAP template, tailor-made to handle large turnkey operations in sectors like engineering, construction, switchgear, electricals and cement.
L&T's chief executive officer A M Naik told newspersons that the company plans to offer the SAP template created by the two partners globally, either by roping in L&TITL, a subsidiary of L&T, or by creating a separate organisation.
"Now that we have excellent package, we want to enter the global market with this model and find the value it creates in the market," Naik said. He expects the company to be more competitive in the domestic and global markets after implementing this package.
More From This Section
Last Monday, L&T had implemented and commissioned the SAP package in consultation with PWC at its engineering, procurement and construction units. The implementation is unique in three areas, including purchase order, site-related activities and taxation, where L&T chalks out various work contracts which are customised.
Explaining the package, L&T's senior vice-president (operations) K Venkataramanan said, "The site material control will provide accurate database for moving materials from the vendors to virtual stores and then to the project site. This will save 20 per cent non-constructive activities of the workforce and plug profit leakages to improve competitiveness".
The package will encompass other divisions and cover the entire L&T operations within the next 6-9 months. The mundane activities and volume handling will reduce resulting in quicker implementation of the fast-track projects. L&T is introducing BAAN's ERP package for its heavy manufacturing units at Powai, located in the suburbs of Mumbai and Hazira in Gujarat.
Commenting on the new organisation to the created, Roopen Roy, managing partner, MCS, PricewaterhouseCoopers said, "Both the companies have done their ground work. We are thinking of converging our abilities to create the best product for the global market."
Implementation of SAP ERP at L&T group II has been unique for various reasons. Construction site management has been implemented for the first time. This enables monitoring of the site-related activities from the controlling office. Meanwhile, the company is planning to become global within two years as part of its medium-term strategy. "We plan to go global within a year or two," Naik said. However, considering high risks involved in construction in other countries, L&T has identified select regions of operation like the Middle East, the UAE, Malaysia, Singapore, Bahrain and Kuwait . In Malaysia, the company has bagged $26 million integrated plant for Petronas to set up fertiliser unit.