L&T Makes The MOST Of Technology
In an exemplary instance of IT usage to reduce wastage of inventory, the Heavy Engineering Division (HED) of L&T has interfaced a nesting application called MOST with its Baan ERP.
Elaborating on the achievement, a beaming Satish Gune, Joint general manager, finance, accounts and information technology, HED said, “The raw materials at our division are steel plates which are to be cut to profiles of various sizes. What is crucial in this process is to ensure that resource use remains at the optimum level and wastage is minimized.” Thus arose the need for an automated way to carry out the task ensuring minimum wastage of steel plates during the profile cutting operation.
Gune informed, “We are using a nesting application named MOST (Material Optimization Software Technology) that is interfaced with our ERP. So once the Bill Of Material (BOM) is created by the design department in the ERP (detailing the size & specification requirements of components), the application takes those inputs and checks for the stock availability of the required specification & size. If the stock is available, then the stock plate is reserved and allocated for those components. The application generates accurate and optimized plate cutting layouts reducing wastage.
Further, the application also generates an NC program for oxy-fuel, plasma, laser and water-jet cutting machines. In case the stock is not available, the ERP application generates a planned purchase order for the material required. Interestingly, the application was implemented by the in-house IT team at HED. The amount spent on the MOST software and its integration with the BaaN ERP was just Rs. 20 lakh.
This two way data transfer between the ERP and the nesting package has resulted in the whole material allocation / reservation process becoming streamlined as well. Gune says, the time saved in comparison to manual allocation of plates, nesting and CNC programming time is to the range of 40-50%.
Another unique use of IT at the HED is what is termed as the critical chain project management system, which is based on the ‘theory of constraints’. Critical resource constraints in a production schedule can be capacity handling, marketing, regulatory policies etc. Gune says, The system sends an alert to the production floor managers every morning as to what work to be performed, how much of resource available for the same, what is the time limit and many such parameters. Thus the work flow gets smoothened.
As a result, targets such as reduction of the cycle time of project execution, increase in delivery performance are quickly achieved and that in turn leads to increased output. The implementation of the system was completed by Goldrat Australasia and Siemens Information Systems only last month.
The Baan ERP at HED interacts with an Informix database and the IT team is gearing up for a major server consolidation and disaster recovery initiative. The connectivity at HED is on a WAN facilitated through leased lines. Wi-Fi (802.11 b & g) is also used albeit in a limited scale on a VPN connectivity to support mobile computing in conference rooms.
The HED has allocated a budget of Rs. 4 crore for hardware, software and network upgrades for 2004-05.
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