R Vishwanathan of Wipro Infotech says the Praxair project is the first of its kind in India, as the cryogenic business itself is very new in these parts

Praxair India is a subsidiary of the $5.1 billion US-based Praxair Inc. The company is headquartered in Bangalore and is a leading industrial and medical gas supplier, catering to 250 customers in India. The company has chosen Wipro Infotech to implement a Logistics Management System (LMS). Wipro Infotech will also be the system integrator for integrating Praxair’s Vehicle Tracking Systems, Tank Telemetry System and demand forecasting modules. Akhtar Pasha finds out how the LMS will help Praxair streamline its logistics and help in better asset utilisation

Praxair India, a leading supplier of industrial and medical gas (liquid oxygen, nitrogen, argon and medical oxygen), caters to more than 250 customers in 35 locations through its 145 tankers. For a business of this nature, efficient logistics and supply management is critical. The company therefore wanted a system that could improve logistics management and improve the total customer experience.

Initial hurdles

Praxair has two types of customers in India. One set need industrial gases on a continuous basis, while the other undertake batch production and require materials on a need basis. Its entire logistics handing was done manually like checking customer stock level every day via telephone, fax or e-mail. The manual nature of operations led to some problems:

Stock visibility was not clear: Praxair’s customers used to manage stock levels at their locations. The quantity in the morning was noted, but this was never updated or monitored during the course of the day. This led to customers dashing out last minute orders to Praxair. On the flip side, because orders were placed at the last minute, Praxair was not able to dispatch tankers in time. Hence, the need for a logistics management system.

Performance of the tanker was not known: If a tanker suffered a breakdown mid-way to the customer site, neither the customer nor Praxair had a clue on when the tanker would reach its destination. A mechanism was required to optimise vehicle routing.

Data was maintained using Excel sheets: Data was static and unavailable for analysing critical areas. Praxair wanted to have a MIS in place.

To tackle these challenges, Praxair entered into discussions and evaluation with Wipro Infotech. After six months, it closed the deal in March 2002. Wipro would implement a Logistics Management Solution (LMS) that would help Praxair support its 250 customers through its three air separation plants located in Bellary, Chennai and Haldia, Kolkata. Wipro Infotech would also be responsible for integrating Praxair’s Vehicle Tracking System (VTS), Tank Telemetry System (TTS), MIS and demand forecasting modules.

Wipro faced a lot of challenges in designing the solution because Praxair’s cryogenic business model was new to Wipro Infotech, and was very different from the processes found in other industries.

R Vishwanathan, chief executive for the Enterprise Solutions Division, Wipro Infotech says, “Synchronising all the databases residing at each of the four locations HO and three plants on a real-time basis, was the biggest challenge for Wipro. This project is the first of its kind, as the cryogenic business is very new to India in terms of the way it is conducted. It needs proper understanding of the business to undertake the right kind of integration. We also had to co-ordinate with the Praxair Inc team in the US for guidance.”

Wipro engaged 11 people to work on the project and it plans to add a few during the final stages of implementation. From the Praxair side, five people participated. Indrajit Mookerjee, managing director, Praxair India says, “Wipro’s LMS will improve our despatch planning and provide operating and cost efficiencies to our distribution process. The LMS will play a major role in forecasting customer demand and in improving our supply reliability. Wipro’s technology expertise and quality processes will be significant contributors to the project’s success. We found Wipro to be the ideal partner for our LMS and we trust their abilities.”

R. S Dhulkhed, vice president-operations, Praxair India says, “We chose Wipro Infotech because they conduct extensive research for understanding requirements during the pre-order stage. They are focused in India and provide quality standards.”

Wipro’s LMS solution for Praxair’s cryogenic bulk distribution business will help Praxair to move from the currently order-based inventory management to vendor-managed inventory.

The project was divided into four modules:

Transport optimisation: Wipro is using the iLog algorithm as the optimisation engine. The iLog Solver and Dispatcher components are being implemented. The transport optimiser will take inputs from customers, check the available number of vehicles and plan the route for the vehicles to ensure that all customer demands for a day are met with the least distribution cost. It will also help in tracking the pressure required at the customer’s tank. The critical part of this module is that the quality to be delivered at the customer’s storage tank varies from customer to customer.

MIS: Since all important data was stored in Excel sheets earlier, data was not available online. With the MIS in place, Praxair can capture trip information from the vehicle. A variety of reports can be created using MIS to provide senior management with information to analyse non-performing areas. In addition, reports will help the planner know how his fleet is performing and enable him to make corrections online and plan his next action. Besides, a set of reports will be developed for the distribution, finance and sales teams to provide online information about the operating parameters of plants and trips.

Demand forecasting: Wipro is developing an ‘Order Generation Logic’ tool, which will automatically flag off supplies to customers, based on their stock levels. An elaborate logic tool is being built, which will continuously monitor the customer’s consumption pattern and stock levels, and flag off an order in the system as soon as reorder levels are reached. Demand forecasting will also help in checking the quantity of stock to be supplied.

System integration: The information generation from demand forecasting will be passed on to a GPS-enabled vehicle tracking system (VTS). GPS systems in trucks will help in keeping a tab on truck movements and position at all points. The LMS integrates the data from the VTS. This will help in predicting expected time of arrival of tankers, both at the customer site and at the Praxair plants.

The scope of the project also extends to integrate the ‘Tank Telemetry system’ (TTS). Through this system, stock levels are passed automatically to a central database at the head office though the GSM network. The demand forecasting and order generation logic tool will use these inputs for computing the customer’s product usage rates and generate orders based on these. This system will help Praxair distribution centres get online stock visibility of customers without their intervention.

For customers who do not have TTS in place, Praxair is setting up a call centre to have the tank levels collected by making phone calls. Wipro is developing the screens, workflow and logic for the call centre. Wipro’s responsibility will be to integrate the call centre, VTS and demand forecasting modules.

Value add by Wipro
Wipro is providing a browser-based end-to-end solution, including redesigning of Praxair’s internal work processes to suit requirements. Wipro is also integrating other applications Praxair is using JD Edwards as a back-end ERP system, and has other proprietary systems. Each plant will have one Intel server, while the Bangalore headquarters will have three servers for MIS reporting, transport optimising and GIS data collection for VTS and DTS. Wipro is using Microsoft Windows 2000 as the operating system, SQL Server 2000 Standard Edition as the database, and the front-end will be created using Microsoft ASP technology.

Post-implementation benefits expected
Says Dhulkhed, “The LMS and the entire integration will help us in improving our supply chain, increase reliability of information and make product distribution more efficient.”

• The LMS implementation will help Praxair move the current order-based inventory management to vendor-managed inventory. The new system will offer better stock visibility and proper dispatch planning can take place.
• Improve the distribution system: Praxair can expect more accurate information.
• Reliability of supplies leading to better customer satisfaction.

n It will help Praxair to optimise vehicle routing and asset utilisation. By tracking vehicles in real-time, if a vehicle breaks down, Praxair will have a clear idea of where it is held up and take a decision. The company will also be able to guide trucks to take the shortest possible route, saving time and money. Dhulkhed says, “The integration of MIS will help analyse critical data on a day-to-day basis and this can be mapped against non-performing areas."