L&T's Heavy Engineering Division manufactures customized industrial-grade machinery for

global clients. In order to gain more business from demanding customers it had to reduce
the time to deliver the finished goods from 16 months to 10 months. It implemented
Product Lifecycle Management to achieve this. A look at the strategies used by the
company. by Soutiman Das Gupta and Minu Sirsalewala
Larsen and Toubro Limited's (L&T's) Heavy Engineering Division (HED) manufactures
industrial-grade equipment for various process industries like petrochemical, fertilizing, and
other manufacturing companies. These products are typically customized for every client.
Every piece of equipment in each order is built on unique specifications, and the company
has a large number of worldwide clients placing orders every year.
In order to reduce the product lifecycle time (the time between receiving an order, and
making the delivery of the finished product) and introduce better workflow and smoother
operations, the company deployed a Product Lifecycle Management tool from Baan.
"L&T now enjoys 30 percent betterment in delivery performance, rise in export content by
60 per cent, higher turnover rate from our production centers, and significantly better
response to business pressures," explained B. J. Shenoy. Shenoy is the Joint General
Manager, and Head of Pressure Vessels & Special Equipment SBU (Strategic Business Unit)
of the Heavy Engineering Division, at L&T in Mumbai.
Customization for profit
The company takes care to customize every product according to the specifications of its
customers. Every product is unique with an individual design like an 'engineer to order'
business. Timely delivery is very important to many of its customers. And being able to
bring products to market more quickly was the key for L&T to increase profitability.
Globalization spurs the change
In the early 90s, after the economy opened up and the company began to attract clientele
from other developed and developing countries. This called for a radical change in the style
of manufacturing, operations, and conducting business.
Since these clients expected world-class products with no room for consideration, and
expected timely completion, the company felt the need to manage the product lifecycle
better.
Before the open economy, L&T's clients, which were mostly Indian companies, allowed
products to be delivered within 16 months. But after the economy opened up, the company
realized that most international companies expected delivery within 12 months.
Efficiency at the enterprise level

To achieve a shorter delivery cycle, all the business departments in the company, which was
based out of Powai (Mumbai), began activities aimed to promote efficiency in the delivery
cycle. And the departments created customized software tools and applications to manage
their businesses.
"This resulted in the decrease of the delivery cycle to around 12-14 months," said Shenoy.
"But our customers' expectations began to grow and they expected delivery within 10 or 11
months."
The company realized that increasing efficiency in each department provides considerable
help, but to achieve better, it must look towards increasing the efficiency of the enterprise
as a whole. "Instead of seeking optimization of processes in individual departments, we had
to seek optimization of processes in the enterprise," explained Shenoy.
L&T felt that effective Product Lifecycle Management (PLM) could help increase engineering
productivity, cut product development timelines, and reduce change cycles.
L&T's objectives
The main aim of the PLM solution was to manage the entire product lifecycle. It also had to
reduce delivery periods and shorten the fabrication cycle-time.
The company needed to have a comprehensive system that reached across its extended
enterprise of customers and partners to collate data from 7,000 drawings, 50,000
documents, schedules, purchase orders, O&M manuals, and applications like AutoCAD and
Office. It also wanted to enable its executives to approve versions, routings, specifications,
and to authorize actions throughout the product lifecycle.

"The number of drawings and documents were growing at a rate of 900 and 15,000 per
annum respectively. There were a lot of data islands with redundant and duplicate data.
Data volumes were creating problems with ownership. Different functions were using
different terminology and were referencing the same data differently. Archiving and
retrieving data was also a big problem," explained Shenoy.
In order to improve CRM, the company wanted to customize progress reports, speed up
internal processes, and enable the customer to demand online status and project
management for their orders.
Many customers asked for changes to be made in the product even though the order was
placed a few months ago. The PLM solution had to provide the customer information
regarding the impact of changes, like delay of job completion and the need to re-procure
high lead-time items.

"A complication was that we work across multiple manufacturing sites (Mumbai and HaziraGujrat) and perform multi-time manufacturing, which requires complex networking," added
B.J. Shenoy. "And different levels of people required different levels of access to documents.
The system needed to allow security levels for access to data like purchase orders and
authorization to amend drawings."
Choosing the enterprise application
In late-1997 L&T evaluated 14 vendors including SAP, Oracle, and QAD. L&T's Electrical
Business Group was already using a few modules of SAP at that time. In mid-1998, the
company decided to use iBaan PLM.
The selection criteria comprised three main factors
1) The solution had to be able to integrate with AutoCAD with no separate data transfer
steps and live link with drawings.

2) The solution had to allow direct data entry into enterprise application without customization and independent drawing preparation.
3) The solution had to allow ease of import and export of data from the existing enterprise
applications running with easy synchronization, and without data re-entry.
The company also performed a package-based BPR deployed simultaneously with the PLM
solution and went live with iBaan PLM in October 1999.
Deploying the solution
The implementation was done in three phases and PWC was the consulting partner. In the
first phase the Document Management system was implemented and iBaan PLM was used to
store, search, retrieve, and archive all the documents. In the second phase, the company
implemented workflow and version control, with the help of an automated engineering
change cycle. In the third phase, the items in product document management were linked
to the Baan product.
iBaan at L&T
L&T's iBaan for PLM helps to enhance internal and external collaboration throughout a
product's lifecycle. The lifecycle includes the stages of initial concept and design,
procurement, fabrication, project management, distribution, and after-sales. The solution
allows the company to focus on its product management and positions it better to deal
efficiently with specialized orders across multiple sites throughout the configuration process.

iBaan now works with a range of other enterprise applications including the Baan Enterprise
system and iBaan Supply Chain Scheduler to help users automate the scheduling process,
drawing making process through AutoCAD, BOM & hierarchy generation via AutoCADObjectARX, and Product Knowledge Management applications. 800 nationwide users work
on this solution.
"For the first time, L&T is able to support its manufacturing staff by maintaining a closedloop system that can help them manage all aspects of a product's lifecycle within one
virtual, yet comprehensive environment. Now users across the extended enterprise are able
to share and link product information across the value chain," explained Shenoy.
The solution connects all the authorized users across the extended enterprise and not just
the workstations. Performance related to delivery has increased by over 30 percent and
export content has risen by 60 per cent. The production centers have also experienced a
higher turnover rate
"Not only has the solution helped to significantly improve the quality of our manufacturing
and design process, but the company now has an electronic database for all our documents
and drawings," said Shenoy. Earlier the documents and drawings were manually filed on
paper, and were very tedious and difficult to retrieve.
"The process is much easier now as authorized users across the extended enterprise can
easily retrieve newly-stored files for immediate reference and authorization," added Shenoy.