Project Log

Papyrus Revolution

Anil Singh of N R Agarwal Industries tells Vinutha V that deploying mySAP ERP will improve the company’s business.

"We decided to implement mySAP ERP 2004 to improve our overall business processes by reducing production cycle time, lowering costs and improving decision-making" -Anil Singh General Manager Information Systems N R Agarwal Industries

Competition is intensifying in our business, which is the manufacture of newsprint and duplex boards. Earlier, we were grappling with business issues such as lower margins and increasing expectations on the part of customers, especially with regard to quality. Considering these aspects, our business needed a makeover in terms of process standardisation, and integrated information systems and practices. Transparency in processes was essential to make informed decisions. Similarly, building routine rules to enable consistency was a priority. We therefore focussed on improving key strategic, operational, technical and financial areas by deploying an ERP solution.

Earlier, the pattern of buying from suppliers was sporadic. We were unable to track the performance of materials from different suppliers, which prevented us from taking the right decisions. Purchase authorisation for spare parts to manufacture machines was non-existent. We were not able to identify the employees who had
performed quality check in cases where our customers had rejected the manufactured material. Employees individually handled the despatch of manufactured goods. Such a scenario cried out for transparency and operational control.

We are headquartered in Mumbai and have three manufacturing plants, all of which are located in Vapi, Gujarat. Order bookings obtained from our headquarters are sent to our plants the same day. The manufacturing process kicks off the following day. Time was being wasted and we were unable to plan the manufacturing or analyse the quality of and time spent on manufacturing material. The lack of an integrated system posed a big challenge for us. There was no timely information on the performance of each cost centre, and hence there was a lack of budget and expense planning in these centres.

We were forced to consider the idea of deploying an integrated information system in other processes as well. Towards the financial year end, consolidating data by digging out historical data and preparing a balance sheet by collating the financial status of each cost centre—quality control, manufacturing plants and maintenance departments—was time-consuming. It was difficult to keep track of our liabilities.

We decided to implement mySAP ERP 2004 (ECC 5.0 with NetWeaver) to improve our overall business processes by reducing production cycle time, lowering costs and improving decision-making. We internally named this project Papyrus (paper in Greek) Revolution. The decision was to get the best possible solution, and we chose SAP over Oracle. We were looking at improving business functionality and integration between modules. SAP supported us with open technology in terms of hardware, databases and operating systems.

We have taken 50 user licences to start with, and have begun implementing the solution at our headquarters and manufacturing plants from November 2005. Our implementation partner is Aakit Technologies, and we aim to go live by April 2006. mySAP ERP will be implemented across the finance, sales and distribution, supply chain, production, quality, maintenance and HR functions across locations. We are facing minor problems in the implementation with regard to change management.

Earlier, work was accomplished manually, so the shift towards a systematic way of working is posing a bit of a challenge for us. However, we are training our employees to work on the new systems, and we educate them on the advantages we will get through ERP implementation.

Expectations from ERP

Substantial results are anticipated within six months after the mySAP implementation. We will be able to take a call on the performance of materials supplied by our OEMs. Production time will be saved as the information regarding order booking will be available online. The man-hours and the hassles of taking out historical data during the year-ending will be a thing of the past. We expect to access all finance-related data in real-time. With integrated information available on time, we will have our production plan and schedules in place. We expect to know the status of and changes in production schedules as well.

On the production front, we will know the productivity and profitability of machines on a regular basis. We expect a 10 percent improvement in our revenue. The aim is to bring in operational efficiencies and incorporate best practices in our core operations through this deployment. After this project, we will upgrade our IT infrastructure further by implementing a CRM solution.

vinutha@expresscomputeronline.com