Sterlite Technologies : Commodity, Forex & Risk Mgmt System

The Conductor Manufacturing Business of Sterlite Technologies is order based.
Depending upon the customer's requirements they manufacture and deliver power
conductors to their project sites. Aluminum, which is the main constituent of
the power conductor products, is a high value metal whose prices keep
fluctuating in the market. London Metal Exchange (LME) is the organisation which
fixes the base price and the future prices of the metal. The company's sourcing
department had to ensure that the organizational exposure to market risks (both
commodity and forex) was minimum.

As the company was already running SAP, they took up the extensive customization
and Z-development in SAP to create the new system to accommodate commodity
related functions in SAP. To implement this system the ABAP developers changed
the standard screens for Sales Order Entry and Purchase orders to include
additional data and to implement checks and controls. Eventually around 8 new
screens for entering data and around 50 specialized reports were added into the
system.

With implementation of this system, the profitability of any sales order can be
established instantaneously as all the process is automated. The system has
removed manual interventions and picks up the RBI rates and LME rates
automatically and makes all calculations.