TISCO - The World's Most Cost-Effective Steel Plant

In a bid to reduce costs further, TISCO used IT as a strategic tool. In 1999, the company formed a small cross-functional in-house team consisting of consultants from Arthur D Little and IBM Global Services. The team was responsible for re-designing two core business processes - order generation and fulfillment and marketing development. The program began with a study on cost-competitiveness. The aim of the program was to enhance customer focus enabling better credit control and reduction of stocks, thereby reducing the costs. After considering several packages, the team decided to use SAP R/3. TISCO wanted the team - also known as ASSET (Achieve Success through SAP Enabled Transformation) - to integrate SAP into the existing information system and make it compatible with future SAP implementations. After SAP solutions were introduced in TISCO, the business processes became more efficient. It also improved customer service and productivity, and reduced costs. The introduction of SAP also decreased manpower cost from more than US $ 200 per ton in 1998 to about US $ 140 per ton in 2000. There was a significant reduction in inventory the carrying cost, from Rs 190 per ton in 1999 to Rs 155 per ton by 2000. There were also significant cost savings through efficient management of resources.