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Case Study

MRF implemented SAP ERP to address inefficiencies from outdated legacy systems. Problems included slow information availability, manual data entry, lack of flexibility, and high costs. SAP ERP provided an integrated solution across MRF's global operations and improved productivity, insight, and low cost of ownership. A collaborative implementation went live in 2007. Benefits included standardized and real-time data access, faster decisions, streamlined processes, and IT becoming a critical business enabler.

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188 views6 pages

Case Study

MRF implemented SAP ERP to address inefficiencies from outdated legacy systems. Problems included slow information availability, manual data entry, lack of flexibility, and high costs. SAP ERP provided an integrated solution across MRF's global operations and improved productivity, insight, and low cost of ownership. A collaborative implementation went live in 2007. Benefits included standardized and real-time data access, faster decisions, streamlined processes, and IT becoming a critical business enabler.

Uploaded by

Prashant Shrikrishna More
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INTRODUCTION

Madras Rubber Factory Limited, commonly known by the abbreviation MRF, is an


Indian multinational and the largest manufacturer of tyres in India and the fourteenth
largest manufacturer in the world. Madras Rubber Factory limited was incorporated
as a private company in November 1960 and ventured into manufacture of tyres in
partnership with Mansfield Tire & Rubber company based in Ohio, United States.
The company went public on 1 April 1961 and an office was established
in Beirut, Lebanon to develop the export market in 1964 and its current logo of the
muscleman was born. In 1967, it became the first Indian company to export tyres to
USA. MRF manufactures the largest range of tyres in India and enjoys the highest
brand preference for superior quality, company manufactures the largest range of
tyres in India and is the market leader with the largest market share it tyre industry.

The company’s operations relate to manufacture of rubber products, such as


tyres , tubes, flaps, tread rubber and conveyor belt, as well as specialty coatings for
a variety of applications. MRF has six production facilities in India and around 80
sales offices. From its humble origins in 1946, the company has come a long way to
become the market leader in the tyre manufacturing industry. MRF exports its
products to over 75 countries worldwide.

Today, global tyre manufacturers have to plan and adapt to changes in


customer demand, fluctuations in raw material prices and availability, while
keeping pace with timelines for shipments; in the face of increasing competition
in the global marketplace.
OBJECTIVE
The objective of this case is to analyse the problem the MRF tyres were having
before implementing the ERP system in their organization and how they improved
their efficiency after implementing the SAP ERP in their organization.

PROBLEM IDENTIFICATION
Before implementing ERP in MRF was running several outmoded legacy systems
that could no longer keep up with the company’s expanding operations, and, as a
result, the company was plagued with inefficiency. Problems of slow availability
of information, tedious manual entry and data transfer, lack of system flexibility,
excess manpower utilization and costs started to have a negative impact on the
business. Consequently, the company was spending a lot of time in
consolidating the information, getting the data together, and on time. It did not
take long for MRF to know that it had to replace its non-integrated,
independent systems if it wanted to gain strategic insight and higher productivity
to manage rapid business growth. The company wanted a flexible solution to allow
IT to keep pace with changes while offering a low total cost of ownership.
MRF decided to reengineer its entire IT landscape by implementing SAP ERP
and SAP CRM solutions, based on the SAP Net Weaver platform.
SOLUTION
A Core Team called the Power Users team was formed to determine the
requirements of the company and the selection of a suitable ERP solution. MRF
brought in IBM Global to facilitate the process and the Core Team was sensitized
to the process of reengineering. The company did a detailed evaluation based on
various criteria such as experience in the manufacturing sector and product-
offerings; Oracle and SAP were short listed. MRF participated in a SAP
summit which helped the company to take the final decision. SAP came
out on top in terms of product superiority, post-sales support, and record
customer satisfaction. SAP offered a clear solution for MRF’s manufacturing
operations which included process as well as discrete production.

IMPLEMENTATION
MRF chose Siemens Information Systems as the implementation partner after a
thorough selection process. The project went live on December 1, 2007. There were
around 60 members from MRF and 35-40 members from Siemens involved in the
implementation process. The core team and the partner’s team worked in full
collaboration, while ensuring that the implementation was carried out according to
time schedules. One of the complications was that their systems were
in silos. Change management was been a big challenge. There were many
instances when MRF looked to SAP India and SAP Labs for assistance and support
during the implementation. SAP ERP has been implemented at the company’s Head
Office in Chennai, 6 factories in Thiruvattiyur, Arakkonam, Pondicherry, Medak,
Goa and Kottayam, and around80 Sales Offices. MRF went in for all core modules
including Financials and Controlling (FICO), Sales & Distribution(SD),
Materials Management (MM), Production Planning (PP), Quality
Management (QM), Plant Maintenance(PM), Human Resources (HR), and
SAP Net Weaver Business Intelligence(SAP Net Weaver BI). Today, there are
around 700 users who have accepted the implementation in a positive manner.

BENEFITS
With SAP ERP, the company has one harmonized, standardized and integrated
solution. The solution has enabled MRF to transform its business operation
management from time consuming and in flexible to real-time and adaptable. The
users can now count on easy access to accurate, complete, and up-to-the minute
information, thanks to centralized, integrated data. This has led to quicker decision
making and improved business transactions for MRF. The implementation of SAP
has brought in a major shift in the work-culture in the company. SAP ERP has
streamlined processes and enabled real-time management within the company. With
SAP, the sales team can monitor the order status from the office with the dealers
logging into the system. This is just one example of how IT can become a critical
business enabler. The implementation of SAP ERP has created a tech savvy
environment in the organization.

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