Enhancing Efficiency & Optimising Costs In Electrical Industries With Automating, Digitization and E-Auctions integrated with SAP

10 Sep 2024

Introduction:

In today’s rapidly evolving business landscape, electrical industries face the dual challenge of increasing efficient working while optimizing costs. Automating, Digitization, coupled with advanced e-Auction functionalities integrated into SAP systems, presents a transformative opportunity to streamline operations and drive significant improvements across the production and services lifecycle. Those organisations which are not on digitisation are losers and may perish due to technology obsolescence and in competiveness. This is the era of application of digitisation and electronic technologies in all functions of industrial electrical organisations. 

Below are the key aspects of digitisation in any electrical industry:

1. Data collection from all the functions and analysing the same.

2. Automation and digitisation of production, services and SCM processes.

3. Real-time visibility of progress of all activities and tracking the same.

4. Automating and digitisation of activities like production, maintainenace, services and SCM.

5. Enhanced collaboration among all stakeholders and functions.

6. Predictive analytics for forecasting and taking benefits of outcomes.

Automating, digitisation helps in Optimization of Production Planning and Scheduling:

SAP’s digital production planning tools facilitate agile decision-making by providing comprehensive data analytics and predictive modelling. This functionality allows production managers to optimize resource allocation, minimize downtime, and synchronize production schedules with demand fluctuations in real-time. By leveraging SAP’s advanced analytics, electrical industries can achieve greater accuracy in all the functions of industry including inventory management and reduce lead times, thereby enhancing overall production efficiency and responsiveness.

Automating, digitisation streamlines SCM Processes:

Digitization enables seamless integration of SCM processes within SAP, allowing for realtime visibility into inventory levels, supplier performance metrics, and demand forecasts. This integration enhances supply chain efficiency by automating purchase requisitions, approvals, and order placements based on predefined triggers and analytics-driven insights. E-auction capabilities further empower SCM teams to negotiate competitive prices and terms, fostering cost savings without compromising quality or reliability. E-Auctions optimise the process in all activities of procurement, sale, disposal of scrap & arising’s, cost in all contracts including transportation, AMCs, rate contracts, constructions projects and what not.

Improved Efficiency:

Automation reduces human error and increases the speed of operations, leading to higher overall efficiency in electrical systems.

Remote Monitoring and Control:

Digitization allows for remote monitoring of electrical systems, enabling proactive maintenance and immediate responses to issues.

Energy Management:

Automated systems can optimize energy usage based on real-time data, leading to reduced energy consumption and cost savings.

Enhanced Safety:

Automation reduces the need for human intervention in hazardous environments, improving overall safety for personnel.

Regulatory Compliance:

Automated systems can ensure compliance with regulatory standards through automated reporting and monitoring

Automating, digitisation enhances Quality Control:

Digital transformation through SAP extends beyond operational efficiency to include robust quality management and regulatory compliance frameworks. Automated data capture, analysis, and reporting capabilities enable proactive identification of quality issues and adherence to stringent industry regulations. This proactive approach not only mitigates risks associated with non-compliance but also enhances product quality and customer satisfaction levels.

Improved Maintenance and Asset Management:

The integration of IT sensors and predictive maintenance tools within SAP enables proactive monitoring of equipment performance and health. By leveraging real-time data analytics, process industries can predict potential equipment failures, schedule preventive maintenance activities, and optimize asset lifecycle management. This predictive maintenance approach minimizes unplanned downtime, reduces maintenance costs, and extends the operational lifespan of critical assets.

Automating, digitisation and e- auctions achieve benefits in process industry:

• Improved operational efficiency in production and SCM areas.

• Cost reduction in all functions but majorly in SCM.

• Better inventory management of finished, semis, raw-materials, spares, consumables and capital goods.

• Enhanced internal and external customer services achieving leadership in industry.

• Increased agility and responsiveness.

• Improves the quality of products and services

Technologies involved forautomating&digitisation:

Necessary knowledge of implementation of digitisation should be acquired by all the concerned executives of companies:

• Internet of Things (IoT).

• Process computing and electronic technology

• Artificial Intelligence (AI) and Machine Learning.

• Cloud computing.

• Advanced analytics.

Challenges of automating&digitisation:

• Initial implementation costs.

• Integration with legacy systems.

• Knowledge and skill of maintenance

• Data security and privacy concerns.

• Skill gap in workforce.

It is matter of importance that in most of the electrical industries, the cost of materials is high , therefore, E-auctions which are part of digitisation is covered as below for accruing financial benefits to the organisation.

Follow the 7 steps for e-Auctions’ success for optimising the prices:

All organisations should follow minimum 7 steps concluded based on experience to make sure that the e-Auction runs smoothly, efficiently and delivers its benefits:

1- Defining target price, is a priority task:

As with every other steps of e-auctioning of items, it is essential to be sure to understand what e-auctioning strategy is most suitable for optimizing the cost in case of purchase as well as in sales.

2- Do not miss to communicate and invite all potential bidders:

It is not always ideal to limit the bidders for e-auctions as per the existing list only, particularly in case of FA. All bidders must be welcome and invited to increase the competition for achieving optimum value of bids. Many times, best cost savings can be obtained from new suppliers in case of purchase, therefore, e-Auction should be open for all potential bidders to get the best results. Of course, in case of e-Auction of purchase of goods and services for clients, due validation as per procedure of new bidders is essentially required and to be done.

3- Act to pre-qualify bidders before bidding in RA:

It is needed to pre-qualify all capable suppliers particularly in case of RA for purchases. By mistake also, service provider should not allow any new supplier to participate in RA without pre-qualification. This is majorly due to the fact that later on it may be encountered that bidder cannot deliver the supplies as per agreed terms of quality. This situation can be very serious for production units where production of the plant will be adversely affected when the items are not available as per the right quality. This is also the reasons why RAs are normally not used for sourcing the critical items of any production plants.

4- Prepare clear documents of all requirements:

Proper documentation of all requirements is also one way for good results in e-auctions. With the global supply base of the some of the items, proper documentation has become more important for understanding the true requirements and can avoid potential miss-understandings, confusions and disputes on the issues.

5- Hold demo and dummy e-Auctions for bidder’s especially new ones:

It is needed to arrange demo e-Auction to train the bidders, especially the new bidders. Dummy e-auctions clarify all steps and aspects of conducting real e-auctions to be understood by all the bidders.

6- Monitor e-Auctions attentively:

It is required to make sure that e-Auction are conducted smoothly with no issues and problems to bidders and other stake holders. If any bidder is facing any problem in E-auction, it should be quickly attended and resolved by employees of service provider. The client should also be always ready to offer solutions of the issues pertaining to his responsibilities, if required.

7- Finalise contracts promptly after e-Auction:

It is desirable from service provider to complete all the formalities relating to post e-Auction promptly. Also e-Auction report should be shared to client soon after the e-Auction is over. Client should promptly finalise the sale or purchase contracts, as the case may be, on the winning bidders so that no new issue comes up in creating some dispute.

Conclusion:

In conclusion, the convergence of automation and digitization and E-auction capabilities with SAP offers electrical industries a transformative pathway to enhance production, efficiency, optimize costs, and sustain competitive advantage in a dynamic market environment. By leveraging SAP’s integrated solutions, organizations can achieve operational excellence, drive innovation, and deliver superior value to stakeholders while navigating the complexities of the process industry landscape.The advantages highlight how digitization and automation are transforming electrical technology by increasing efficiency, safety, and operational capabilities.