Enterprise Resource Planning Enterprise Resource Planning - a software system that integrates core business areas such as manufacturing, distribution, financials and human resources. Example: A warehouse in Singapore enters a customer order data automatically flows to other areas of the company. It would flow to the financial and accounting people in New York Automatically update accounts receivable. The order would also flow to the manufacturing operations in Europe instructing them to make another component. Inventory levels would automatically be reduced in the warehouse and an order would be placed to replenish inventory.
Example: Before ERP Systems Transfer to Accounting OfficeSecretary’s New printer application
ERP market in India steadily growing for the last few years(2000). The main factors such as industry best practices, easy and faster implementation and good cost predictions. The Indian ERP market experienced CAGR (compounded annual growth rate) of 25.2 during the period of 2004-2009. The market was $83 million in 2004, and is projected to be over $250 million in 2009, according to a research report.
ERP facilitates a company-wide integrated Information Systems covering all functional areas such as manufacturing, sales and distribution, accounts, payables, receivables, inventory, human resources. Etc. ERP bridges information gaps across a company and focuses on key issues such as productivity enhancement, customer service, cash management, inventory, quality control and prompt delivery. Etc. ERP is the solution for better project management. ERP not only addresses the current requirements of the company but also provides an opportunity for improvement and refinement in the business process on a continuous process
E-resource ERP solutions are designed to seamlessly integrate personnel, processes, applications, and data across an enterprise, enabling the organization to streamline its operations and support business growth. E-resource renders services for complete Enterprise implementation life cycle- Selection of ERP vendor Risk Analysis & Mitigation Plan Pre Implementation Approach Project Management and Monitoring ERP Training and Implementation Operational Audit Post Implementation Audit Measuring Range compatibility and ROI
1. OPERATIONAL EFFICIENCY: Automates all business and functional processes thereby increasing overall operational efficiency.2. CUSTOMER SATISFACTION: E-resource ERP solution help in enhancing internal business processes and enables organizations to improve customer satisfaction.3. EASY ACCESS: Our web-based ERP solution enables easy accessibility and availability of timely information, which results in better decision making and forecasting.4. FLEXIBILITY: E-resource ERP packages have a flexible and scalable structure thereby enabling organizations to adapt and cater to future business expansions and requirements.5. COST-EFFECTIVE: E-resource ERP for Small and Medium Enterprises is affordable, quick to implement thus enabling the SMEs to focus on growth and improvement of their business rather than worrying about software
• Interaction with other areas of the system, gives you a clear view of the customer .• Maximizing opportunities and retaining high value customers enhances revenue and profit.• Provides value-added services enable you to stay ahead of your competitors.• Improves product development and service delivery processes• Prepare your personnel with in-depth knowledge of the customers needs• Organizes the customer experience through quick problem resolution• Easy re-run of customer information over and over again
• To take the battle to its competitors• With an entry into the FMCG sector and believes IT to be an indispensable weapon in this war• The distribution network is the lifeline for an FMCG company and is a greater value add in terms of IT returns than manufacturing• For years, Dabur had been using FoxPro based systems for handling logistics.• By 2000, the company distribution network had grown, spanning 29 factories, 6 mother warehouses, 47 stocking points, 4 zonal offices and over 10,000 stockiest and dealers.• In addition, about one hundred trucks were dispatched daily. With distribution pressures rising, technology up-gradation was necessary.• The company therefore initiated automation of its outward logistics system in April 2001 with its primary distribution system.• Named ‘Project Synergy’, this involved implementation of the MFG/PRO ERP system
Dabur works on two ERP systems. For the outbound logistics it runs QAD ERP suite known as MFG/PRO. For manufacturing locations, theres BaaN BaaN requires a central server. To fit so many locations many of them situated in small and remote areas into a central processing system, Dabur needed a VSAT (Very Small Aperture Terminal) network. As with most companies, sales at Dabur peak towards the last 4-5 days of the month. If the company were to depend on this kind of a central server architecture , which would be connected through VSATs, the network would be enormously overburdened during every month-end. However, the company never wanted to make the network a critical component in the automation of outbound logistics. The company decided to go for an ERP solution that was network independent. It found that MFG/PRO could be run on independent servers at each location it was a good choice that suited its unique needs
Once it was decided that MFG/PRO it will be to handle outbound logistics, a core implementation team which comprised end users from departments, like distribution and planning, finance, sales and IT was setup. The deployment was made in four stages. The first included a requirement study where a model was developed . Dabur has five SBUs (Strategic Business Units), each with diverse needs in terms of the outbound logistics. Since it is a traditional FMCG company into family and health care products, pharmaceutical products, food products, which is a perishable products division , Ayurveda products for both the medicine and home segments. All these divisions have diverse requirements. The core team had its job cut out: It had to develop a common business model, which could cater to every segment at the same time.
Improvement in sales dispatches to the CFA(Chartered Financial Analyst). The sales earlier were heavily loaded towards the last week of the month with over 80 percent of sales taking place during this time. This led to a number of problems such as sales returns and cheque bouncing from pushed· sales to meet sales targets. Improvement in collections. Collections have recorded an improvement of about 6 days and are more evenly spread over the month. This leads to considerable saving on working capital locked up in out-bound logistics. Reduction in sales returns and unsold stock inventory. Stocks in CFAs are visible to central distribution planners in saleable and un-saleable categories leading to better management and distribution. Central management of sales schemes. The schemes and free issues are now managed centrally at the corporate office and the ERP system keeps a strong check on schemes leading to reduction in misuse of schemes in the field
Use of Mfg Pro gives real-time information about the inventory and sales situation of distributors and improves the accuracy of demand forecasts. These demand forecasts are then fed into the back-end system (Baan) for materials planning and production scheduling. Integration of the two systems is expected to significantly enhance their efficiency in 2003-04. Mfg Pro is fully operational in the zonal offices, mother ware houses and CFAs and Baan is already live in five manufacturing locations. A Secondary Sales System is also being implemented to provide country wide information on Secondary pipelines and sales by brand. This new Secondary Sales System, by making focus on secondary sales possible, has played an important role in tracking brand-wise sales, and reducing pipeline inventories
The improvement in area-wise and brand-wise inventory management has scaled up the entire supply chain management through better sales forecasts, production scheduling, materials planning, vendor management and raw material sourcing. Company has implemented yet another new initiative of Claims Settlement using an Intranet/ Extranet based system, for systematic tracking and settlement of claims. The Company also implemented another major initiative-Employee Management System (EMS), an intranet based HR-information system, including Payroll and PF processing
By 2005 Dabur started to feel the pinch of maintaining two independent ERPsystems. They were facing following issues: There were still data redundancies and inconsistencies at times. Considerable amount of rework was necessary in just data format conversion between the two systems. It still did not provide a holistic picture and thus posed problems in formulating a strategy or taking business critical decisions Maintenance costs climbed up because of the above stated points. Therefore, to realize not just the operational excellence but also decision support infrastructure, the idea of a single organization wide ERP implementation was proposed in Dabur. So, With Accenture’s help, Dabur implemented strategic and operational changes by implementation of organization wide SAP core modules
Migrated from standalone ERP systems -Baan and Mfg. to centralized SAP ERP system from 1stApril, 2006 for all business units (BUs). Implemented a country wide new WAN infrastructure for running centralized ERP system. Setting up of new data center at KCO head office in Ghaziabad. Extension of Reach system to distributors for capturing Secondary Sales Data to collect near real-time pipeline information was done by 2004. Roll out of IT services to new plants
Competing on core competencies, while outsourcing non-core functions to trusted third-party providers. Viewing information technology (IT) as a strategic asset that creates real value not simply a cost to be managed. Streamlining processes wherever possible From an IT perspective, Accenture recommended a two-pronged strategy Migration to a nimbler outsourcing model that would generate Value through agility and support business initiatives and maintenance of its SAP enterprise resource planning (ERP)system
Implementing a new sales and distribution strategy- To identify key customer segments in urban and rural markets, customize sales programs for key accounts and reorganize Dabur’s sales teams by one of four trade channels(modern trade, rural, mom-and-popµ and drugstores). The Accenture and Dabur team optimized the company’s internal logistics and distribution processes for mega retail customers, and put metrics and incentives in place to drives pacific goals
Developing a new supply chain management capability- Focused on bringing a market-driven perspective to the new supply chain and building collaboration skills Accenture helped Dabur create capabilities to facilitate the launch of new initiatives, products and trade promotions Instituted a plan to leverage SAP by automating Dabur’s material resource planning processes across the complex manufacturing arena The new approach allowed employees to shift their focus from simple transactions to more strategic procurement efforts such as cost management
Optimizing Dabur’s ERP capabilities- While Dabur had deployed a SAP ERP system to link its corporate headquarters, 12 manufacturing plants and more than 30 distribution centers, the company was not using the system to its maximum potential. Accenture launched a three-phase ERP improvement program that involved Correcting the transactional and management information systems. Conducting change management and synchronizing Dabur’s business processes with realities in an ERP context. Developing value realization projects
Leveraging IT for business initiatives Accenture designed a Web-based demand planning and trade promotion forecasting tool, and installed point-of-sale software at select retail and wholesale sites This latter initiative allowed Dabur to integrate key customers into its IT network and gather real-time market information that would drive better sales and distribution decisionsOutsourcing IT operations Accenture delivered industrialized and cost-effective skills that would allow Dabur to remain at the leading edge of IT delivery . Plus, Dabur gained the flexibility of being able to focus on its core capabilities while realizing increased value and lower costs through improved performance
Forward integration of SAP with distributors and stockists. Backward integration of SAP with suppliers. Implementation of new Point of Sale (POS) system at stockist point and integration with SAP ERP. Implementation of SAP HR and payroll. SAP roll out to Dabur Nepal Pvt. Ltd. (DNPL) and other businesses