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.