-
In a
fast-paced market, a two-week turnaround time for specifying, quoting, and
processing orders are not acceptable for some companies. ERP Software - users
can double its sales volume quoted and improve its quote-to-close ratio while
significantly reducing costs for selling various products.
-
The
Situation:
ERP users
come from a variety of industries, including food processing and packaging,
industrial products, hi-tech engineering items, precession components
manufacturing, corrugated box production units, intra-ocular lens, trading and
others. Although many companies stock standard products, they also design and
distribute custom-configured and engineered-to-order items. Many companies sell
directly to end Customers, OEMs (original equipment manufacturers) and through
reseller distribution channel – Supply Chain. The sales are domestic or export.
-
Prof.
Zaveri and his team
has designed and developed an ERP package called Digital Nervous System or ERP.
When ERP users recognized the importance of adopting a new approach to selling
its products, they were cautious in their search for a software partner. Selecting the right software vendor is critical to achieving success. Yet,
understanding which vendors can meet business objectives and deliver results can
be one of the most difficult challenges. He
interviewed users from engineering and technology management teams to understand
key decision-drivers for the ERP design. He learnt that the key strength was the
ability to implement ERP modules in a phased manner, in a short time. Finally,
from a cost savings and time-to-value perspective, companies believed that it
was wise to take advantage of ERP team's twenty-eight year experience.
-
Key
Business Challenges:
Many
companies have a distributed ‘business-process’ system that use a legacy-
system that is inconsistent across multiple company locations. Order
specification information is generally
stored only in the plant in which an interaction takes place and is not
available to staff in other locations.
This makes it difficult for the company to effectively manage its internal
operations and support engineering and manufacturing processes. To complicate
matters, companies have deployed assorted in-house and point solutions to
address distinct problems or specific domains of the business. These islands
of automation create information gaps and do not directly support the
fundamentals of automation. Additionally, not having a common repository of
information makes it difficult for the company to recognize and target
additional revenue opportunities.
-
Another
challenge for users is the lack of visibility into activities across different
divisions and business functions. For example, the marketing department controls
how products are priced and what they sell, while engineering department decides
the rules surrounding what can and cannot be built. Therefore, the solution
needs to be able to separate the pricing configuration from the engineering
configuration, but still create a model that allows the two teams to work in
parallel.
-
The first
software packages were deployed in the early eighties. ERP team along with
enthusiastic growth-oriented companies had the vision to automate business
functions. ERP users discovered that there could be hundreds of permutations of
valid part numbers for a given product. ERP was applied to make the generation
of the bill of material (BOM) modular for each configurable unit. This feature
has been enhanced in the most recent release of ERP. It is now possible to
make a BOM by using unique drag-and-drop
techniques.
-
Before the
ERP deployment, employees and customers had to rely on a FoxBASE system that was
difficult to maintain and required users to know and understand a part-numbering
scheme. Moreover, the system did not allow an immediate response from sales to
convert a quotation into an order.
-
Other
internal and operational problems that needed to be addressed by the ERP project
included:
-
Lost
revenue due to errors in pricing. Discounting and order configurations.
-
A missed
business opportunity due to an incomplete view of customer information and the
customer’s purchasing habits.
-
An ability
to mine and leverage business and customer data
-
An
inability to discern the needs of customers and strengthen relationships.
-
One of the
companies where ERP is used is one of the largest food processing (FMCG)
companies in India. Over 100 SKU are sold through ten depots / CSA located all
over the country as well as export.
-
Many
engineering companies have focused their efforts on delivering flexible
products. This task was becoming increasingly difficult for them because their
legacy systems were not optimal. Opportunities for improved production were
realized and largely attributed to the deployment of advance modules that gave
production planning and control, work order automation and production entry that is linked with BOM.
-
Legacy
processes may have contributed negatively to manufacturing activities. ERP users
felt the obvious advantages of ERP could not be overlooked. ERP users and ERP
team deployed the ERP solutions. Key challenges addressed include:
-
The
inability to accurately manage a detailed production plan for a given product.
This requires an online link with raw-material availability.
-
Inconsistent management of geographically different plants (factories) selling
the similar product lines or third party (sub-contractor) production.
-
A lack of
integration among multiple, disconnected database systems across
the entire business group – e.g. Dos / Netware based programs, Excel sheet based
MIS and / or Tally based accounting. The
inability to utilize existing resources and the expertise of employees.
Inefficient processes and lack of tools to gather customer history, product
data, and pricing information.
-
Solution
Approach:
In early
1999, ERP users began to explore how they could improve their ability to sell
products and take advantage of the ERP package. The company engaged ERP team to
help it form a project team that consisted of engineers and managers and a group
of experts from ERP team's team. The team’s objective was to create an
integrated environment that could be easily modified and maintained without
time-consuming and expensive programming. This integrated framework shows the
assimilation of ERP team's ERP applications and ERP users Order Management
System (OMS) and back-office solutions. This ability to integrate has enabled
ERP users to avoid issues associated with having to enter product orders into
multiple systems (one for sales, one for manufacturing) and ensures the accuracy
of a configuration as it moves through the interactive ERP modules.
-
ERP
pre-sales modules: This quoting management system leverages MS SQL 2000 Server
and existing data model support to allow for the storage, personalization, and
retrieval of quotes from a central repository.
-
In August
2003, ERP team rolled out a new version of its ERP software package. Key
benefits of this new release include improved ease-of-use, more support for
executives, and new enhanced production module and online cost sheet module
capabilities. The enhanced speed and flexibility of the system and increased
usability and maintenance of the product. This latest version gives ERP users
technique that enables both the novice and experienced user to create Item
Master database in an easy, step-by-step style – an important objective for any
ERP user. This upgrade is expected to further accelerate speed and efficiencies
for all ERP users online quoting and ordering activities.
-
Results:
ERP team's
ERP solution has enabled ERP users to address opportunities and demands of
online quoting, pricing, order processing, manufacturing, and preparing
Challan-cum-Invoice (CCI). It has also enhanced the company’s ability to manage
brand consistency, ensure accurate pricing, and recognize additional
opportunities for new revenue. Recent observation suggests that ERP software can
satisfy customers and transform many legacy solutions from passive to active
selling experiences. Finally, ERP deployment has enabled its users to achieve
many of its goals to improve operational efficiencies, cost savings, overall
profits, and user satisfaction.
-
Lessons
Learned and Future Deployments:
At
present, some companies are using some of the modules only, and gradually they have
decided to migrate to other ERP modules. It is expected that eventually 100% of
the business processes will be incorporated into the ERP package. ERP users will
continue to expand the use of ERP team’s ERP software solution to additional
company product lines with similar selling models requirements. Another
important lesson learnt: Learn relaxation and meditation. This will help
in keeping cool during the ERP implementation!
-
During our
onsite interviews, we discovered some important lessons learned by members of
the ERP project team. The most critical noted were to (1) secure executive
confidence early; (2) analyze and determine which business processes make sense
and can be mapped to the ERP processes; and (3) establish clear, well-defined
business objectives and budgetary requirements up-front. Users also indicated
that keeping the implementation process in defined phases – with the
understanding that enhancements can add functionality in the future – helped to
keep the project on schedule and meet management’s expectations.
-
It is also
necessary to carefully define a ‘cut-off line’ - that is entering opening
balances. From which point all entries has to be done in ERP. Usually this is 31
March because the audited balances are available. This also implies that some
backlog data has to be entered twice – in legacy software as well as new ERP
software.
-
Our
Conclusions:
ERP
modules clearly improve the accuracy and completeness of PO (purchase orders)
for complex products, and ease the burden on the Procurement section. The sales
person need not understand every product details to give the customer a quote or
submit a purchase order – he or she can depend on the ERP sales module for
correct technical specification. Yet, as valuable as order accuracy is, the
deployment of selling and configuration technology within LAN-based deployments
has a broader value proposition.
-
For
instance, preparing a Dispatch Order and automatically defaulting the same to
prepare the transfer invoice. ERP-based delivery enables e-Commerce (future)
platforms – previously focused on processing relatively simple transactions – to
expand into selling environments that accommodate transactions that are more
complex; increase the likelihood of successful transactions; and enhance the
value of a transaction through guided cross- and up-sell capabilities.
-
Prof. Jyotindra Zaveri and
his team
has helped ERP users achieve important operational
efficiencies
and improve customer service with its ERP package. The companies are now
generating more revenue, while order error rates for products and pricing have
been reduced significantly. Additionally, ERP users’ experiences that it could
reduce the time required to educate employees describe details of product
features. That has enabled ERP users to focus more on resolving problems,
serving customers, and completing sales processes with greater speed and
increased accuracy.
-
Related
link:
Production Module details.
