KMS To Set New Benchmarks For Business Practices At Vedanta

The Vedanta Group will be implementing a Knowledge management solution (KMS) across its business verticals. The company conducted about eight to ten feasibility studies. The final study was done by an independent agency. They interacted with about four hundred employees across Vedanta’s various locations and businesses. Finally, they came up with a report on their implementation strategy. The KMS will function online and will be used by about 7,000 executives throughout the organisation. Through these executives, the benefit will flow to all 30,000 employees, right down to the shop floor level. Biztech2.0 spoke to Jagdish Agarwal, associate general manager, Business Analysis, Vedanta, on how a feasibility study helps in choosing the right solution.

How would you define a knowledge management solution and what purpose does it serve?

Vedanta has been growing since the last decade in various metal sectors. We have the SAP ERP implemented across all our India locations. We wanted to leverage the existing infrastructure to its fullest and thus, thought of implementing a knowledge management solution. This solution will help us improve organisational and project management, operational performance and HR functions like recruitment, job rotations, appraisals etc. We have spoken to a couple of agencies to do an initial assessment about the potential areas for improvement. They have already submitted an initial report.

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The first module of the KMS is asset optimisation that involves plant availability, throughput and reliability. The second is logistics management and the third is organisation, employee skill building and development. The asset optimisation module will be rendering the highest RoI. This module will help us to compare the maintenance time of furnaces. They are shut down for maintenance either on an annual or a bi-annual basis. We can set benchmarks for what should be the ideal time for furnace maintenance after carrying out the necessary comparison. This ultimately affects the plant availability.

The logistics management module will help us set a benchmark for the standard amount of weight to be carried in trucks, loaders or dumpers and the time taken for delivery and maintenance.

What is a feasibility study and how does it help?

The objective of the feasibility study should be to throw options for implementation and further drive towards adopting one or two options out of them. The team members involved in the study should represent all important departments and must own the entire implementation.

The first point we took note of was that Vedanta has a lean structure and we have implemented SAP with different modules for different businesses. Secondly, our company is production oriented so the objective was to improve production-related parameters like production capacity, throughput of the machines, and rationalising costs.

The other important areas to be considered are that it should be a short term but sustainable business project. There should be a harmony between the employees sharing ideas and those executing them. There should be a sensitivity analysis in place to consider how the organisation will respond in the eventuality of a change in the business environment (like change in the foreign currency value or competition). For example, we have done a sensitivity analysis on various scenarios like how would we respond if the competitor or the foreign exchange rate changes.

Going forward, we plan to focus on practices like smelting, mining and other important processes. For example, logistics plays a crucial role for iron ore processes so we will partner with a logistics expert. Similarly, for smelting and furnaces, we will partner with experts in those respective fields.

What are the challenges with a feasibility study?

Lack of ownership to take up projects, meeting the diverse needs of internal and external customers and thinking ahead of time comprise the common challenges faced. A typical feasibility study also involves issues like overcoming preconceived notions. At the end of the study, a final report about the findings of the study needs to be compiled. The study team should do the assessment with an open mind.

When we started the feasibility study three years back, the final report made us realise not to go for a ‘Big Bang’ approach, instead we shifted our focus to making improvements in the required areas. We consciously took a call that instead of adopting the ‘Big Bang’ approach, we will implement the knowledge management solution in a phased manner.

How would you quantify the deliverables?

We finalised the deliverables as a part of our business plan for various units based on production, cost, efficiency, recovery etc. So, for example, on the production side we will reduce the lead-time for inventory procurement by ‘x’ percent or alternatively reduce the inventory cycle by ‘x’ number of weeks.