Enhancing manufacturing efficiency through digital transformation

Surya Roshni manufactures pipes and appliances. The company faced several challenges in pipe manufacturing with respect to pipe measurement due to lack of tech integration and supply chain crisis. We helped the client implement a SAP-based solution that improved the operations of its steel pipe division (pipe dimension, price calculation).

Steel pipe pricing is based on complex criteria of material characteristics. The pipe manufacturing process, which needs to be mapped over 18,000+ finished material custom codes, was implemented to meet the requirements of processing steel pipes in different dimensions. The client used to undertake this task manually with minimal tech support, which increased the complexity and scope for error. Further, due to the use of multiple units of measurement, there was batch-to-batch variation in conversion units (eg. kg-gm) of thickness and length. Also, channel partners preferred different measurement units on invoices which was initially not feasible due to lack of automation. 

The client faced issues with stocks and sales closure as the execution strategy posed a challenge—i.e. division-wise scheme mapping/maintenance, material grouping, stock-keeping units (SKUs) (in order of precedence) along with their respective distribution channel of pipes. Manual tracking of letters of credit and credit management due to dynamic exchange rates also made exports cumbersome. 

Manual processing of requests for custom packaging and tracking of pipe stocks was also difficult. 

Orders were taken by one plant, but semi-finished goods were produced in another factory unit. As a result, the company was unable to undertake end-to-end make-to-order (MTO) planning. 

Post quality inspection of pipes, our team implemented a SAP solution to address the above challenges:

• For pipes, batch-specific units of measurement can be created using the batch proportionate functionality which is a standard SAP functionality based on required dimensions and weight. Any changes in the length of pipes at different stages of pipe manufacturing result in differences in weight which are automatically calculated. 
• Weighbridge integration, which is used to measure pipe dimensions, was implemented throughout the process, and any weight variation was distributed in each batch of pipes on a proportionate basis. Tolerance and weighbridge distribution rules were maintained in the system. This allowed flexibility in calculating actual weight throughout the production process. 
• Our team paved the way for a custom pricing procedure by implementing the SAP tool for standard customised calculation based on standard conversions available in the material master. This enabled currency conversion as per actual batch-specific conversion currency for exports.  
• Leveraging the export and import (EXIM) tool—a SAP-integrated tool focusing on real-time tracking of shipments, automation of documentation, and management of export incentives and licences—we were able to undertake end-to-end tracking and administration of EXIM licences, including advance authorisation and export promotion capital goods (EPCG). This led to real-time monitoring of logistics expenses.  
• The team used SAP data to automate letter of credit processes and eliminate errors. Guarantees and bonds for customs and financial compliance could thus be managed. 
• SAP integration was compatible with sales and distribution, metal management, and financial modules, leading to smooth operations. A system based on material requirement planning (MRP) was incorporated for make to order. 

• A manual override option for credit or manufacturing is available to specific users in case of any exigencies. 
• Due to automation of scheme mapping, the process can be reused repeatedly to provide reports in real-time without any dependency on the IT department.  
• Invoices were converted to spreadsheets on the go, leading to creation of invoices in customised formats. 
• All documentation, except commercial invoices, was generated through SAP without manual intervention, leading to effective use of resources in the organisation. 
• Human error could be minimised on account of mass balancing of pipe production. 
• 30% Projected YoY Q2 volume growth in steel pipe business 
• 98% Elimination of manual intervention in invoicing