AVT McCormick spices up IT with Ramco e.Applications

AVT McCormick’s Integrated Spice Project, a 100 percent export-oriented facility, processes a wide range of spices. The company has made a successful transition from a disjointed legacy system to an integrated ERP system, says Prashant L Rao

AVT McMormick has just put the e.Application system in place and is expecting to reap the benefits within a year, says V Ramesh

AVT McCormick Ingredients, a joint venture between AV Thomas Group Companies, India and McCormick and Company, USA, needed an IT set-up to support business functions centred around process manufacturing. The company offers a wide range of steam pasteurised dry spices, including whole-sterilised spices, pepper, red pepper, white pepper, celery, turmeric, ginger, fenugreek, curry powder and spice oleoresins in whole, ground and blended form. Its customers are spread across USA, Europe and the Far East.

The company’s Integrated Spice Project uses machinery and methods that meet international standards of food safety and hygiene. AVT McCormick’s equipment can handle a wide range of spices. Continuous and precise process control is ensured by programmable logic controls. The plant has 100 percent captive power generation, letting it sustain long and uninterrupted production runs. Farm grade spices are cleaned to get rid of extraneous matter, after which the pasteurisation system uses steam to reduce microbial contaminants. Milling and sifting systems handle a wide range of granulation without losing the active principles that impart distinct spice flavours. An array of magnets and metal detection systems guarantees freedom from metallic impurities.

The legacy system
AVT McCormick had a legacy database system; the system was on FoxPro, used by various functions like PPC (process production control), finance and HR. The features available in this legacy system were very limited; they did not cover all the business functions and were not integrated across functions. The standalone information systems were resulting in duplication of work and made information compilation a time-consuming process. As the company had aggressive plans for rapid growth in the coming years, it needed integrated software that could be used company-wide by all the functions so that information from one function was available to others for their use. The speed of data and information retrieval was a critical requirement.

Evaluating options
“We considered standard ERP products and custom-made mini ERP software as alternatives for our implementation. The standard ERP products considered were Protean from Baan and J D Edwards. Two other software products from local vendors were also evaluated,” says V Ramesh, chief financial officer, AVT McCormick. Ramco was chosen due to the following reasons:

• Comprehensiveness: Ramco had the entire suite of modules required by AVT in its Ramco e.applications product. It did not need to be integrated with any other system for meeting AVT McCormick’s functional requirements.
• Track record of successful implementation: Ramco systems had a good track record of successful implementation at many sites in similar industries.
• Product fit: AVT McCormick’s business functions could be realised through the modules—either directly or through workarounds. The screens were user-friendly and the interaction with the system was easy.
• Product Flexibility: Workarounds were possible without changing the base code through the Extension Development Kits (EDK). “Such workarounds are very helpful since they help the IT department handle any troubleshooting and modification easily and eliminate the chances of bugs. The payroll is very adaptable since it leaves provision for formulating rules as per the customer’s site. The analytical tools available, such as DCubes and graphical representation, add value to the product,” says Ramesh.
• Implementation methodology: Since Ramco themselves implemented the product, troubleshooting and modification of the product at the implementation stage was possible.
• Local presence: As Ramco’s was a home-grown product, it incorporated many Indian systems such as tax structure, payroll structure, Customs and Excise.
• Service support: Ramco’s full-fledged service support centre and systematic approach to problem-solving through its Vantive software via e-mail and through the Web appealed to AVT McCormick.

The implementation
The entire implementation was divided into several phases:

• Business engineering: This was done in-depth to ensure that there were no surprises during the live run; the process went on for almost two months after the launch of the project, perhaps one of the longest phases in the entire implementation cycle.
• User training: This involved training key personnel on features that had relevance for AVT, keeping in mind the company’s requirements as understood during the business engineering stage. This took nearly three weeks.
• Business modelling: Proposed solutions were demonstrated to users with real-time data so that they felt confident about the solutions meeting their needs. This exercise took a month to complete.
• Parallel run: This was carried out for two months, the duration was intentionally prolonged to make sure that users got sufficient time to understand the workings of the new system using real-time data. The second objective was to make sure that users were fully conversant with the product in terms of speed, confidence and knowledge. This ensured that cutting off the legacy system was not an issue and that there was a company-wide trained pool of end-users across all functions.
• Live run: AVT McCormick went live on all the modules as planned. The emphasis was on making reports that are needed for effective usage of the software.
• The team: The implementation team from Ramco included a project manager, three business analysts and a technical resource member.

Key challenges faced

1. To complete the implementation on time and within budget. The Ramco implementation team completed the implementation well within the estimated time frame of seven months without exceeding the budget.

2. Meeting customer requirements.

3. The costing solution was central to AVT McCormick’s functioning and Ramco’s product was tuned to meet the complicated requirements of costing at AVT.

4. The live run was accepted only after satisfying customers with regards to all its business processes.

Ramco’s ERP Solution (version 3.1 SP4) fulfilled most of AVT McCormick’s business requirements. The modules implemented at this site include general ledger, accounts payable, accounts receivable, fixed assets, financial administration and control, management accounting, payroll, personnel, purchase order management, inventory management system, process production, statistical process control and maintenance. Apart from this Ramco also addressed the unique requirements of export:

• Pricing engine in sales order management.
• Determining the sale price with several cost inputs.
• Sale order costing.
• Export documentation.
• Fumigation records of spices.
• Integration between attendance recording system (ARS) and ERP
• Locations: AVT McCormick has its corporate office and factory at a single location in Cochin where Ramco’s ERP has been implemented. 15 seats of Ramco e.Applications are in use at AVT McCormick.
• Training: The Ramco implementation team conducted a month-long training programme. A core team of users was trained, which in turn trained other users. This ensured that all potential users were aware of the package and its features during the implementation itself.

Investment and payback
The total cost of implementation of the ERP project amounted to Rs 45.5 lakh, including both the hardware and software parts of the implementation. “Since we have just put the system in place it is not yet ripe to ascertain the payback. However, we should start getting benefits from a year onwards,” adds Ramesh.

Future plans
“We have put most of the functions in place. Production scheduling has not been realised through this system, which we will be looking forward to in the future. Workflow automation for instant messaging, alarms and triggers are to be streamlined. Interfacing to the Web is right now not on the cards,” concludes Ramesh.