Supply Chain Management in L&T (ECC Division)
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Case Details:
Case Code : OPER045
Case Length : 9 Pages
Period : 1990-2004
Organization : L & T
Pub Date : 2005
Teaching Note : Available
Countries : India
Industry : Construction
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"By collaborating and bringing together different
stakeholders on a single platform, EIP is fast emerging as a powerful ERP
solution."
- K.V. Rangaswami, Executive Vice-President (L&T ECC
Division), March'2003.1
Introduction
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The Engineering Construction and Contracts (ECC) division is the construction
division of Larsen & Toubro Ltd., (L&T). With project sites located in all parts
of India, ECC expanded its operations to countries like the UAE, Bangladesh, Sri
Lanka, Malaysia, and South Africa.
Given its large geographical spread of
operations and the large number of participants involved in the supply chain (in
India alone, it had approximately 6000 suppliers, spread over 350 locations),
the effective management of the supply chain system turned out to be a
challenging task for ECC. The absence of any established IT solution for the
construction industry made the situation still more complex.
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In order to handle the challenge of implementing an effective supply chain
management (SCM) system in the company, L&T ECC opted for a web-based SCM
solution. It not only made the task of tracking the vendors easier but also
reduced the time spent on negotiations with them since the vendors could
post their bids online through ECC's website.
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In order to keep track of its operations at different locations, ECC came up
with the idea of connecting all its project sites with its headquarters in
Chennai through the Internet and launched its in-house information solution,
Enterprise Information Portal (EIP).
EIP not only helped ECC keep track of its activities at different locations
but also allowed it to leverage on its huge purchasing power. It also helped
in reducing project costs and increasing the return on capital employed (ROCE).
Company sources claimed that EIP was of great help in bringing together the
different phases of the construction cycle - design, development,
tendering/bidding, budgets, planning/scheduling, etc. |
It helped the company streamline the huge supplier base it
was working with, and this, in turn, reduced the time taken to identify and
communicate with the suppliers.
Supply Chain Management in L&T (ECC Division)
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