KOEL: Growing up with Technology

It is among the oldest industrial houses in the country. Not surprisingly,

the first ICL machine that came to India was installed at the Pune based leading

diesel engine manufacturer Kirloskar Oil Engines Limited (KOEL). With an IT

department that was established way back in 1970, it is evident that the

Kirloskar group has attached a great deal of importance to information

technology. Since 1998, the oil engine manufacturer has invested Rs 15 crore in

IT. Says S R Deshmukh, vice president IT (Corporate), KOEL, "The idea was

to integrate all the processes in the chain - from the customer order to the

supplier payment and the receipt of the customer payment."

The contribution of IT to achieve business success is 15%, said Deshmukh. The

company operated on a Burroughs mainframe earlier. Upgradations were a costly

affair and therefore KOEL decided to switch to an open platform. A serious IT

initiative began in 1998 with the implementation of Oracle’s Enterprise

Solution followed by the eBusiness initiative in 1999. Today, about 70-80 % of

business comes from dealers connected electronically. The company now has around

150 suppliers, 35 depots, and 600 dealers.

The cost saving is not just in terms of money alone, but has ensured that the

company is in a position to connect with dealers, suppliers and others in the

chain. For instance, the order registration process, which would take 10 days

earlier, is now completed in minutes. There was laborious paperwork involved.

More than six documents had to be completed before the order could be

registered. Now there are none. KOEL has eliminated its raw material storehouse

and now works on the principle of just in time.

S Gopalakrishnan, managing partner of the Coimbatore-based Electro Controls

is very happy with the IT implementation at KOEL. "Now we are able to get

all the information on the web. We can register our orders straight on the web.

Moreover, financial dealings are now transparent," he says. The firm has

seen a 50% cut in telephone bills from Rs 20,000 to Rs 10,000.

S Chandrashekeran, managing partner, Network Diesel, Madurai agrees that the

time saving has been tremendous. Expenditure has been pruned by 35%. Meanwhile,

all operations at KOEL are IT networked through Yantra, its Extranet for

suppliers, dealers, and OEMs. The next step would be to implement product life

cycle management.