For a coal company in India which has an order book much bigger than its production capacity, timely delivery is the key to success. Singareni Collieries Company limited (SCCl) currently operates 13 opencast and 42 underground mines in four districts. The $1.4 billion company is also one of the largest coal mining companies in the country.

While the company has IT set-up in all its branches, the challenge for SCCl was to integrate and streamline operations at multiple locations for enhanced decision making and business consolidation. With either manual or disintegrated systems, there was no central management of information leading to frequent delays in delivery causing financial losses in terms of loss of opportunity. A company that produces 50 million tonnes of coal per annum, integrating all its units and streamlining the processes was perhaps more complex than mining coal.

Integrating Diverse Systems
While thinking of deploying an ERP to solve the problem might sound easy, the bigger hurdle that lay ahead of the company was its own 70,000 employees who feared delays in payments with the new system. The change management process had to be kicked in before any formal rollout could take place. However, this wasn’t the only challenge that had to be dealt with. “our distributed iT architecture had made this difficult,” says m. Sathyanarayana, ERP project manager at SCCl. manual integration of processes for purchasing, sales and distribution, finance, stores, and payroll  resulted  in  duplicated  data  entry  and  paperbased processing  that wasted time and caused errors.

In addition, the company could not process data for logistics and financial supply chains in real time. Inventory visibility was poor, and distributed handling of payrolls for employees who moved from mine to mine led to errors that had to be manually corrected.

To handle these challenges, SCCl chose financial, controlling, materials management, quality management, payroll, and sales and distribution software in the SAP ERP application. Key to this choice were strong SAP references from comparable public sector enterprises in India. Also important were SAP’s global support infrastructure and mining-focused functionality.

One of the first public sector companies in India to undertake a large-scale, enterprise resource planning (ERP) implementation, SCCl rented the hardware it needed early in the implementation rather than trying to purchase it. This minimized procurement delays that are typical in public sector installations. IT employees were thoroughly trained on SAP  technologies and now maintain the software with little external support. Development of certain applications prior to implementing SAP ERP facilitated data migration.

The Benefits
With SAP ERP in place, information is more visible throughout the enterprise and available in real time. This, plus an alert framework within the application, has significantly improved decision making. Integrated materials management has given SCCl better control over stock and inventory.

“Timely provisioning of spare parts and other items for maintenance, repair, and operations has increased the availability of essential equipment and made it easier to meet production targets,” Sathyanarayana opined.

“We have reduced the overall cycle time for sales order processing from months to days, cut the time for settling advance payments made against sales orders, and increased customer satisfaction,” adds N. V. Rajasekher, superintendent engineer for marketing and movement at SCCl.

There has also been a significant decrease in the time needed to close annual accounts. Singareni is the first coal company in India to use an SAP solution–supported balance sheet in the first year the new software was implemented.

The company can now manage and control spending at the enterprise level. The new software, which supports 300 to 400 items related to material requirements planning, has significantly reduced the purchase requisition cycle and eliminated accounting at individual store locations.

Increased integration has also facilitated better procurement policies, encouraged collaboration with suppliers, and significantly reduced stock-outs at plant locations. In addition, paper consumption related to the accounting process has dropped significantly.

“The four SAP modules we’ve added are like the first floor of a building that will help us build many floors in the future,” says m. Sathyanarayana, ERP project manager at SCCl.

“Today, SCCl is a truly integrated enterprise. As we continue this journey, we hope to leverage other functionalities and develop a robust business intelligence platform that will further enhance decision making.” J. V. Dattatreyulu, Director of operations, Singareni Collieries Company limited

Next Step
After reaping the fruits of a successful ERP implementation, SCCl is planning to implement SAP’s man maintenance module which is very useful for the coal mining industry. “We are also planning for certain HRM and CRM modules within the next six months or so,” Sathyanarayana.

M. Sathyanarayana, ERP Project Manager at SCCL has moved from a segregated infrastructure model to consolidated infrastructure

By Varun Aggarwal