Tech Articles

Transition- The New Face

In order to succeed in today’s volatile economy, companies need to change the way they do business by seeing, thinking and acting with increased lucidity. Change is constant; keeping that in mind Abhishek Industries Limited has underwent SAP implementation in the year 2003 across all locations and businesses identifying the major issues in the business environment. Here we present a case study wherein we showcase the issues faced & the steps initiated by them, the benefits derived by them and the future implementation.
Process used earlier:
Till late 2003, Abhishek Industries Ltd was using legacy computer applications, mainly developed using PB / FoxPro / VB and other heterogeneous programming languages.
Issues In front:
Constantly changing demand, increased market competition, higher cost of raw materials, equipments, transportation, maintaining margins and profitability are just a few challenges one faces in a business scenario.
Way outs:
In response to these challenges of global competitiveness in Business they had formulated a strategic plan to leverage IT to improve the operational efficiencies and decision support systems in five major areas, viz. Supply Chain, Financial Management, Customer Services, Manufacturing Processes and Human Resources Management.
To align with this strategy, numerous modules of SAP have been implemented successfully like mySAP ERP has generated many tangible and non-tangible benefits, which have been realized during the last three years:
• Materials Management (MM), Sales
• Distribution (SD)
• Production Planning (PP) /APO
• Finance and Costing (FI&CO)
• Funds Management (FM)
• Plant Maintenance (PM)
• Quality Maintenance (QM)
• Human Resource (HR)
” The implementation of ERP solutions in Trident Paper has created a positive impact on the business revenue by enlarging the customer base, increasing customer satisfaction and forming best alignment between business infrastructure and IT solutions. It has created synergy among team members to realize the best value proposition in a globally competitive scenario with more focus on business processes”, says Mr. Rajinder Gupta, CEO, Trident Group.
Tangible Benefits:
• Business revenue increase of more than 100 % handled with basically the same non manufacturing infrastructure due to SAP implementation
• Reduction in WIP (work in progress)
• Reduction in typical Production Cycle time
• Delivery performance improvement from OTIF (On Time Delivery in Full)
• Integration with Process control system has resulted in elimination of duplicate work and improved accuracy.
• Reduction in bill of materials failure due to better control on waste.
• Automated workflows in the areas of approvals & authorizations have tremendous impact on the overall efficiency of the organization. A conservative 5% improvement has been estimated.
Intangible Benefits:
• Inbound & outbound logistics has improved significantly
• Decision support system has created agility among managers to take decisions in time
• Helps is setting up new benchmark and monitors KPI (Key performance indicators)
• Availability of information to all stakeholders/Employees
• Functional coordination and transparency of on-going activities
• Over all Business continuity in terms of plant uptime has improved
• Faster Customer service and fulfillment
• Efficiency of its post-sales operations, reducing the amount of time needed to process customer claims and product returns
• Improves productivity management and workforce optimization by offering online training options.
” For the success product quality alone isn’t enough. It takes differtiating your business from the rest in how you make and move your product. And that requires improvements in the supply chain efficiencies improvements that will ensure company’s ability to thrive by adapting to changing demands, enhancing service, and lowering costs”, says Mr. Rajinder Gupta, Chief Executive, Paper Division. ” In Trident Paper, SAP has made all the procurement work standardized and process oriented. mySAP SCM has transformed our supply chain into a responsive, adaptive network that is being instrumental in driving our business towards the ultimate goal of improved service, reduced costs, and increased profitability”, he adds.
Below mentioned are some of the features of SAP which ABIL has utilized optimally which has resulted into higher benefits
Vendor management: This has provided a platform where all the concerned commercial staff can request for the Vendor along with the concerned details and attachments (ITR, PAN, Balance sheet etc) which is approved from all the concerned authorities before the creation of a vendor code. This helps in making lean database of the vendors along with the required details.
Vendor categorization: In system it’s a management’s tool for rationalizing the vendors and converting performing vendors into Strategic partners which has resulted in reducing vendor base and involving vendors in the business. Hence this has enabled overall risk mitigation, reduced inventories, and procurement cost reduction.
Vendor evaluation: It proves to be a management’s tool to ensure timely deliveries, best quality products and bulk purchases at lowest prices.
SAP also provides a platform to do the consumption based planning where requisitions for the materials are generated keeping into consideration current stock levels, safety stock, planning and procurement lead time. Whenever stock of material (which is configured according to consumption based planning) falls below re-ordering point (which is calculated based on above mentioned parameters) then system automatically generates an indent for the same.
SAP also handles Vendor managed inventory which is maintained by the vendor at Trident’s location and material is consumed as and when it is required. Vendor is paid for the consumed material
Benefits Derived:
• Better communication and reporting
• SMS for goods receipt, expected deliveries.
• Auto mailers to vendor at the time of RFQ (Request for quotation) creation and Purchase Order/ Scheduling agreement release
• Daily auto mails about the Consumables, WIP and FG aging.
• Vendor overdue reports, Mat rejection mails etc
• Shift from procurement patterns of group level to single SKU (Stock keeping units) level
• Price histories
Trident group is a Rs. 25 billion conglomerate having interests in Paper, Textiles, Energy and IT. It has been conferred with the SAP Award for Customer excellence in the year 2007.