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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Excerpts

L&T's ECC Division

ECC handled turnkey industrial and infrastructure projects in civil, mechanical, electrical, and instrumentation engineering and it also offered turnkey construction services. Headquartered in Chennai and with more than 50 years of experience and expertise, ECC commanded a leadership position in the industry...

Supply Chain Management Strategy in ECC

ECC structured itself into seven regions in order to handle the complexity in terms of stage of completion, size of project, and the geo-political situation. Each region catered to the demand of specialized construction services in that region and had its own materials department.

The materials department of ECC got itself ISO-9002 certified, indicating the level of importance it gave to the management of its suppliers. ECC adopted a sound and efficient Supply Chain Management Strategy in order to keep the supply chain costs to the minimum. Its quality policies emphasized minimum landed costs, transparent practices, and optimum inventory levels.

The Challenges

One constant challenge that ECC faced was in integrating and collaborating its supply chain participants. The root cause of this challenge was the construction industry itself. The project sites being spread out at various locations and the large supplier base made it difficult for ECC to minimize its supply chain cost...

Supply Chain Management Solution

In order to handle the complex challenge of implementing an effective supply chain management (SCM) system in the company, L&T ECC opted to implement a web-based SCM solution built on Microsoft technologies - SQL Server 2000 and Windows 2000 Server in early 2000. The system worked on an on-line-order-off-line-delivery strategy. The company could now streamline its entire vendor network. ECC also arranged a proper training program for its vendors in order to familiarize them with the functioning of the system...

Exhibits

Exhibit I: Business Units of ECC

 

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