Coal India Limited to adopt ERP system, looks set for Rs 1,000 crore in savings

Coal India has decided to implement an enterprise resource planning system that will help it monitor and optimise performance on a realtime basis and save money as the company targets production of 1 billion tonnes by 2019-20.

The state-owned mining company has engaged Gurgaon-based Management Development Institute as a consultant for the project. Coal India will save Rs 1,000 crore every year on better resource and inventory management once the ERP system is fully implemented, according to Mahadeo Jaiswal, a professor of information systems management and a dean at MDI.

“If implemented successfully, it would be the largest ERP package among public sector companies. The sheer size of the company with eight subsidiaries, 82 mining areas, 429 mines, 3.27 lakh employees and over 2 lakh kinds of spares would make ERP a huge task,” said Jaiswal, who is involved in a similar project with India Post – the world’s largest such installation.

The advantages of an ERP system for Coal India would include improved revenue and financial management, introduction to International Financial Reporting Standards-based accounting, optimisation of coal production and its movement by rail, road and other modes of transport, sampling, reduction in spare parts inventory and breakdown maintenance, improved governance, regulatory and environmental compliances, enhanced manpower productivity and innovation.

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