AN IDG CUSTOM SOLUTIONS INITIATIVE IN ASSOCIATION WITH
TRANSFORMING BUSINESS THROUGH JUDICIOUS APPLICATION OF IT
PLUS INTERVIEW
The need to cut down its production time drove TAFE (Tractors and Farm Equipment) to build new synergies between its research and manufacturing teams and to revitalize its existing PLM solution.
Dhiren Savla, CIO, Kuoni Travel Group, talks about the changing role of CIOs and how they can act as a bridge between IT and business.
TRANSFORMERS CASE STUDY
Company Tractors and Farm Equipment Limited (TAFE) Industry Manufacturing Offering Tractors and Farm Equipment
ASSEMBLY LINE
WONDERS
The need to cut down its production time drove TAFE (Tractors and Farm Equipment) to build new synergies between its research and manufacturing teams and to revitalize its existing PLM solution.
CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES
igsaw puzzles are the stuff that give problem-solvers a high, and with a few pieces missing, the task can become even more challenging. Just a few years ago, TAFE was in a similar predicament: individually, the manufacturing, design and the operations units performed very well, but a missing link between the units cast a spoke in their coordination attempts. As in traditional manufacturing companies, TAFE had different departments catering to design and manufacturing. Though the two teams interacted at regular intervals, they reported to their respective department heads. Cross-functional team work had been an established practice in the organization, but the sheer enormity of the projects being executed simultaneously created some hurdles. The priorities of the design and research teams for individual projects weren’t always synchronized. In effect, the time taken for product development was high, and TAFE knew that if they had to retain their leadership position, they would have to cut down on the development time. Among other things, a longer product development cycle meant that a particular tractor model ran the risk of being outdated when it hit the market.
MARKET DYNAMICS Being in the market for more than 50 years and having a consistent profit-making record, TAFE had a very good understanding of the tractor business. The market was characterized by alternate periods of two-three years of low demand followed by a similar period of high demand, a pattern TAFE had learnt to make the most of. When the company sensed a pick-up in demand, it ramped up production while investments in R&D remained steady irrespective of market conditions. Being in tune with the market had helped ensure the company’s profitability. Around ten years ago, the company had decided to set its eyes beyond the Indian horizon. It began exporting to the developing world as well as to the industrialized countries, the latter pushing it to raise its bar in quality and innovation. Over the years, it had emerged as India’s largest exporter of tractors. In 2006, when the company’s management took stock of market developments, they found that, in parallel with the development of new tractor models, the customer had also evolved. Carrying new aspirations, the customer was no longer ready to wait for years to buy tractors of better designs. TAFE realized that to leverage its strong design competencies, it needed a way to speed up the time taken in its process of product development. It had
to restructure some of the company’s processes. An important aspect was properly plugging in the ‘missing link’ – that is, to have a seamless workflow between the design and manufacturing teams. Moreover, though TAFE had a PLM solution, its capabilities were not fully utilized. When TCS was roped in as a consultant in the second half of 2006, it prepared a set of recommendations to work through these issues.
THE COMPANY TAFE is a US$ 1.3 billion tractor major incorporated in 1960 at Chennai in India, in collaboration with Massey Ferguson (now owned by AGCO corporation, USA). TAFE acquired the Eicher tractors business, its engine plant at Alwar and transmissions plant at Parwanoo through a wholly owned subsidiary “TAFE Motors and Tractors Limited” in 2005. A member of the Amalgamations Group of Chennai, this company has four plants in India involved in tractor manufacturing at Mandidheep (Bhopal), Kallidaipatti (Madurai), Doddabalbur (Bangalore) and in Chennai and a new overseas plant in Turkey. Apart from being among the top three tractor manufacturers in the world, TAFE is also involved in making diesel engines, gears, panel instruments, engineering plastics, hydraulic pumps, tea gardens and passenger car distribution through other divisions and wholly owned subsidiaries. The company manufactures the Eicher brand of tractors at its plant near Bhopal at Mandidheep, diesel engines at its plant at Alwar and transmission components at Parwanoo. The company has a strong base of more than 15 lakh tractor owners.
As a change management tool, PLM helped in the smooth transformation of our process.” P N RAO, Senior Chief Engineer - R&D, TAFE.
TRANSFORMERS CASE STUDY
FULL THROTTLE
50%
systems existed during the With TCS as a consultant, TAFE transformation, the IT team had constituted a steering committo ensure seamless integration tee comprising its president between them. “This is never compromised in any of our IT and senior management to carry out the transformation. implementations,” he said. The reduction in Rao notes that the PLM enOne of the most significant product development changes that the steering hancements changed the way cycle time, which TAFE operated. “It empowcommittee brought about was one of the ered our operational teams was to realign the structure to collaborate and make deof the organization so that objectives of the PLM sign changes early on before teams were grouped accordimplementation. investing in the appropriate ing to projects rather than tools,” he said. departments. This meant Even activities such as that a particular team could testing of the vehicle were integrated in the new well have design and manufacturing staff workworkflow, which was mapped in the PLM with ing together. This enabled the team to cut down the now-enhanced capabilities. The product on time spent in coordinating between the differfabrication planning cycle now took into account ent departments and improved the teams’ persuch factors as the ideal testing time for the formance. P N Rao, Senior Chief Engineer, R&D, vehicles, which was during monsoon. Efficient TAFE, says that it took time for the company to planning ensured that resources were optimally realign, but, with a firm management backing, utilized. In effect, the new workflow helped cut the system fell in place. down the production time. “One of the objectives The structural changes at TAFE were of the PLM implementation was to cut down the accompanied by an exercise to extend those product development cycle time by 50% and we capabilities of the PLM system that were earlier are heading towards this goal,” said Rao. unexplored. “As a change management tool, PLM helped in the smooth transformation to the new process. This included digital workflow DATA IS KING connections across functions and restructuring For TAFE, the design data of the various products the organization structure for quick decision is invaluable for a number of reasons, not least of making,” said Rao. which is the fact that reviewing the design sheets The enhancements on the PLM system weren’t of of past models helps designers to learn from the touch-and-go type. Integration issues cropped up, their mistakes, improve on the current models complicating the task of the IT team. S Ramakrishnan, and come out with better ones in the future. As Chief Information and Technology Officer, TAFE, such, data integrity, as data passes through varisays that since multiple platforms for running IT ous systems, is of paramount importance.
TAFE’S RESEARCH COLLABORATIONS TAFE has a number of associations with industry and technology leaders such as AVL of Austria, Warwick Manufacturing Group of the UK, Carrara and Ricardo from Europe and from Massey Ferguson in its pursuance of product quality and overall excellence. TAFE Motors and Tractors Limited has technology transfer agreements with Ricardo of UK for engines and with SISU of Finland for higher HP tractors.
AGCO: TAFE has an ongoing collaboration with AGCO Corporation, Duluth, Georgia. AGCO is one of the world’s largest manufacturer and distributor of Agricultural Equipment, selling its products in over 140 countries. The collaboration has lasted for 50 years and is built on mutual trust and respect for each other’s competencies. These competencies are individually and collectively leveraged for mutual benefit.
CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES
For its PLM, TAFE had deployed PTC’s Windchill, primarily because of its closeness and nativity with ProE (the company’s major CAD platform) and user preference. “At every stage of implementation of the transformation process, especially blueprint finalization and the subsequent amendments, data integration and integrity were discussed in depth and put in place,” says Ramakrishnan. The touch points with SAP were decided, and exchange of data between Windchill and SAP was documented. TAFE’s internal SAP team played a major role in accomplishing this. Moreover, a slew of change management issues also had to be addressed. As is true with any software package, there were areas where there was no perfect fit for some of the good practices that TAFE had been following for years. “The steering committee came out with an appropriate solution to address this issue. The TAFE IT team, along with the project core team, helped ensure that the adaptation was carried out properly,” Rao said. “All interfaces were developed by our internal team and deployed in association with TCS. Our entire IT operations, including SAP roll outs and portal development, are being done by our own internal team,” says Ramakrishnan. TCS remained a consultant during the system go-live stage, after which the system was managed entirely by TAFE’s in-house team. A full-blown implementation of PLM solution on the Windchill platform having all the required interfaces with SAP and email/SMS alerts for timely closure of project activities provided the manufacturing major with many ways to leverage its internal competencies. Prior to the transformation, the company had a large number of sub-processes for every tractor model, all of which had to be represented in the new system. “Ours has definitely been a good example for many in manufacturing segment and we would be one of the very few in the country to implement PLM on such a scale,” Ramakrishnan said.
INCREASED VISIBILITY To increase visibility of project status across the company, a dashboard of reports were implemented in Windchill. Later, a full-feature dashboard from SAP/Business Objects was implemented, which enabled project monitoring on a real-time basis by top management and project managers. “Dashboards have served to enhance visibility of project status, provided performance scores of the various teams and enabled decision-making and balancing of resources to enable project delivery,” said Rao.
At every stage of implementation, data integration and integrity were discussed in depth.” S RAMAKRISHNAN, Chief Information and Technology Officer, TAFE
The new system also helped resolve differences between the engineering bill of material and the manufacturing bill of material.
TEAM WORK The process transformations placed a lot of demands on the IT team. “Our internal team had to play a big role in the implementation and process transformation,” said Ramakrishnan. “Our major responsibility was to ensure that the PLM was not a stand-alone system, but a solution which integrates neatly with the other platforms like SAP, BroadVision and MS Exchange-Messaging system.” There were other tasks critical to the success of the transformation that the IT teams had to handle. “We had to implement changes that were required to be made in SAP to suit the corresponding PLM flow,” Ramakrishnan said. “We also had to ensure that all required data from SAP was available to PLM in the correct format, and make appropriate changes in the SAP masters,” Ramakrishnan said. The new PLM capabilities had to process a much larger volume of design data, implying that the hardware and networking infrastructure had to be resized and the required high-availability features had to be put in place. “Our IT infrastructure team carefully planned the requirements to handle current and future volumes and designed the hardware pieces for our datacenter accordingly,” Ramakrishnan said. TAFE has benefitted greatly from the new workflow and used the new PLM capabilities to its advantage. It has grown its business by cutting down on production time and expanding to newer markets.
TRANSFORMERS INTERVIEW
BEYOND BOUNDARIES In today’s knowledge-based economy, the functions of the CIO are becoming increasingly complex and multi-dimensional. Dhiren Savla taks about the changing roles of CIOs and how they can act as a bridge between IT and Business.
DHIREN SAVLA, Chief Information Officer, Kuoni Travel Group, India
Custom Solutions Group TATA CONSULTANCY SERVICES
With the resurgent economy and businesses preparing for imminent growth, how critical have the roles of IT and the CIO become? Today, IT has become an integral part of all sectors, ranging from services and manufacturing to government. IT is becoming more and more critical not only for the growth of a business, but also for sustaining itself in a competitive market. With the changing customer profile and their needs along with geographical dynamics, effective use of technology can bring clear differentiation. If an industry does not change with time, it may lose its relevance in the coming years. The role of CIOs has become extremely important for various businesses. Besides being responsible for IT delivery, they play several roles bridging across different functions. This includes being a change agent, a strategic advisor and an innovation leader among other responsibilities.
The increasing focus on business-IT alignment also implies an increasing dependence on technology for core business processes. Should CIOs then be a technology expert first or is understanding business more important? Today, CIOs are business leaders who also know technology. They should understand the business and more importantly, business priorities and needs. CIOs need not be technology experts but they should have adequate understanding of technology nuances. Technical expertise can be brought in by technical staff and various partners. Mathematics or physics is not as powerful as applied mathematics or applied physics! So success or failure of IT and hence the CIO, is directly linked to how well technology is applied to meet business needs.
When IT has to cater to multiple internal stake holders/ departments, and at the same time there are fewer people to do it, how do you think IT heads should prioritize their projects? IT is one function which gets to work with almost all departments within an organization. While doing so, there is always a requirement from multiple sections and finite resources to fulfill those demands. In my view, IT should be used to save money (operational efficiency) and business should invest the money saved back in IT to make more money (supporting growth). Projects that bring operational efficiency, enhanced revenue or tighter controls should always take precedence. While managing priorities, internal negotiation skills of a CIO come handy and by showing the big picture and returns on various initiatives, CIOs can normally get management support and buy-in.
How can CIOs effectively balance flexibility and scalability while efficiently addressing dynamic business needs? CIOs spend significant time in planning for short, mid and long term needs. They also need to have the ability to respond to unanticipated change. By getting involved in various business-decision making processes, CIOs can get visibility to various dynamic business needs. In extremely dynamic markets
like today, CIO need to be creative to build flexible, predictable and scalable IT landscapes. In today’s dynamic environment, we have to create a capacityon-demand model for people, infrastructure and other IT areas. And while creating a scalable setup, CIOs should always ensure that they have the option of scaling up as well as scaling down.
Not all technology projects can be measured with a numbers yardstick (for instance, security). Some business heads argue that all projects need to have demonstrable RoI. What is your take on that issue? Every single investment or project would have RoI. When we try to look at RoI as purely a number game, we are making a mistake. For instance, cost of information security initiative can be easily justified for meeting regulatory requirements, avoiding third party liabilities and avoiding loss of reputation. In cases like that, cost incurred for not taking up this initiative would clearly outweigh the cost incurred for taking it up. CIOs also perform a sales function here where they have to sell the concept to internal stake holders. When CIOs give valid justification, it’s not very difficult to get support from other leaders. By engaging with various stakeholders, CIOs can change an organization’s mindset from cost to value.
What do you feel about the total outsourcing of IT? Why do you think large enterprises in India are still hesitant to take the plunge? There is an ongoing debate about in-sourcing and outsourcing. In my view, enterprises should talk about right-sourcing. I believe that total outsourcing of IT in some form is an achievable reality. Enterprises can retain their core functions internally and can out-source the rest to the partner. By doing so, one gets a flexible and sustainable IT framework which also brings about a higher degree of technology know-how and external perspective. Given a choice, I would prefer a success linked outsourcing strategy wherein risks and rewards are equally shared. Most of the enterprises do some form of outsourcing but total outsourcing is not done too often. When international clients look at total outsourcing, they also get cost arbitrage which Indian companies do not. At several occasions, the ‘not done by me’ syndrome prevent CIOs from taking bold decisions. Having said that, we have some of the most interesting and forward looking outsourcing deals taking place here.
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