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One
of India’s biggest players in the alcoholic beverages segment,
the UB Group’s Breweries division plans to now implement SAP
R/3 to streamline its operations and cut costs. Akhtar
Pasha details the company’s IT initiatives and their future
plans
The
breweries division of United Breweries, the second largest
division of the group with a turnover of Rs 550 crore and
a market share of more that 40 percent of the beer market,
will soon be using SAP R/3 to smoothen its work flow. But
why would a brewery take to IT one may ask? 13 manufacturing
units, 10 contract manufacturing units and 10 depots scattered
across the country should be reason enough.
Why ERP?
 Over
the last 2-3 years the company had been using MDaemon SMTP
POP3 mail server for all communication ranging from transferring
inventory data and raising invoices to accounting using Tally.
With each office having its own e-mail ID, data was transferred
via e-mail on an Ethernet LAN. E-mail was also used to keep
a tab on production, despatch and cash flow from each of the
locations. A small data warehouse located at the head office
in Bangalore maintained product updates, stockist and despatch
details. The division had also compiled a pre-formatted template
in Microsoft Excel, through which product information and
stockist data filled at branch offices and stockists was sent
to the head office. However, this proved to be a tedious and
time consuming process causing the company to decide in favour
of implementing ERP from SAP.
“The
decision to implement SAP was not a chance decision or taken
on a trial basis,” says S Ramakrishnan, controller-IT,
Breweries Division. “We have been using SAP for some
time now and after identifying our requirements zeroed in
on it as the best solution to our specific needs. We were
looking for a solution that was transparent that could streamline
the manufacturing process as well as connect directly to the
stockists and review their stock details online. We wanted
a technology that was up to date and could integrate with
our applications giving us a complete package.”
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Ramamurthy
says moving to the Net has helped the company create a
young, dynamic image for itself |
P
A Murali, senior vice president-finance, says, “IT makes
decision making faster. Further, we can maintain transparency
across the nation and bring more value to our customers. Reduction
in overhead costs too had a major role to play in sealing
the deal in favour of SAP.” Currently, the company is
in the final stages of negotiation with SAP to implement an
ERP system. It will implement all five modules of the ERP
Finance, product planning, material management, sales and
distribution. The company also plans to add other modules
such as quality management and plant maintenance to increase
efficiency. The ERP system will be limited to the southern
and western parts of the country because both areas are key
markets for the breweries division. The SAP implementation
will cost Rs 2 crore and will take 26-30 months to be completed.
300 people will get trained by SAP with hands-on experience
in using R/3.
Migration to a
single server platform
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Ramakrishnan
says the choice rested on SAP thanks to its capacity
to integrate with existing applications |
Along
with its ERP implementation, UB is also shifting to the Citrix
architecture. The aim is to save on costly hardware and software
upgrades. To get there, the breweries division will move away
from its present distributed computing set up to one where
all applications will be hosted on a single central server.
Users will work on thin-clients or 386 PCs with a minimal
8 MB RAM to access information. “By moving to a single
server platform, the bandwidth required to access information
is very low and this will give us investment protection. We
will initially be using 50 licenses from Citrix for our Bangalore
office. Since all ERP application will be hosted and managed
from the single server, the cost of managing application and
software upgrades will come down drastically,” says Ramakrishnan.
Network at UB’s
breweries
Regional offices at Banga-lore, Mumbai, Delhi and Calcutta
are connected through a LAN with five PCs in each location.
The network is NT-based with Windows 98 on the desktop running
Microsoft Office.
Automating the sales force with i-Nabling
To bring down communication costs of the sales force and stockists,
the company plans to give them low cost Internet access devices
that will let them file daily sales reports (DSR) online.
At present, this is done manually. The change will allow sales
executives to send their sales report and stock details instantaneously
to the office. To implement the same, UB has signed up with
Bangalore-based i-Nabling Technologies, a manufacturer of
low cost Internet access devices that support smart cards.
Leveraging the Internet
The concept of selling beer, apparel and fashion accessories
over the Net came about in December 1999 with the dot com
boom. Shekhar Ramam-urthy, senior vice president-sales and
marketing says, “The objective behind going online was
to create a young, dynamic image for our company. Using our
portal, kingfishernetshop.com, one can shop for beer over
the Internet and the company will deliver it within two hours
at no extra cost. For apparel, the shipment takes around a
week. However, the online store is limited to Bangalore, Mumbai
and Hyderabad.” To commercialise this concept and promote
marketing, the company has tied-up with indiatimes.com wherein
the later will provide a link from the indiatimes shopping
channel to kingfishernetshop. “This association with
indiatimes will give us a large customer audience,” says
Ramamurthy. The company believes that extensive usage of IT
can help it bring down costs and speed up the movement of
information across its sales and distribution chain.
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