Peer-to-Peer

RFCL streamlines business processes

RFCL has successfully integrated its business processes by using SAP ERP resulting in better visibility and transparency in its processes along with adherence to regulatory norms. By Abhinav Singh

Being part of a larger entity has its advantages. Ranbaxy Fine Chemicals Limited [now called RFCL] had the privilege of access and hands on experience on SAP ERP systems, when it was a part of the Ranbaxy Group. RFCL was bought over by ICICI Ventures and had plans for a global footprint and it wanted to broaden its product portfolio. There was also a growing need to comply with regulations and the company was looking to automate its business processes. Post SAP ERP implementation the company has complete visibility across its operations and there has been efficient management of the production and procurement process.

Preparing for growth

Until 2005, RFCL was comfortably placed as an allied business of pharmaceutical major Ranbaxy. With the parent company divesting its stake in allied businesses, and ICICI Ventures becoming the new owner, the RFCL management was faced with a challenge as well as an opportunity. The challenge was to manage the emerging business independently but also to lay the foundation of independent IT systems to serve its expanding market. Ganesan Ramadurai, senior manager, IS and Business Solutions, RFCL says, “When we became an independent entity a separate and effective ERP system was required to handle our business processes. We did not lose any time after the spinoff. Since we had already witnessed the benefits of automated systems, we realised that a reliable and robust IT foundation was mandatory to support our ambitious growth plans. Our decision to embark on an enterprise-wide implementation was proactive and guided by the desire for an integrated ERP solution which would make our business processes and operations efficient and transparent.” As a company RFCL is one of the major life sciences and laboratory solution companies in India. The company’s operations span 30 locations and RFCL felt that handling and controlling operations could soon become a challenge if it lacked the right systemic support and a standardised ERP system. It surmised that the right ERP system would provide complete visibility and transparency of operations and at the same time, improve efficiency, ultimately leading to enhanced productivity.

The natural choice

RFCL did not evaluate any solution other than SAP. In its path towards its goals, RFCL wanted to be associated with a proven and time-tested player and product. Ramadurai says, “Our own experience and knowledge told us that SAP was the right choice. Additionally SAP’s proven track record in many industry verticals including life sciences in India, including our former parent Ranbaxy, was an influencing factor prompting us to go ahead with SAP ERP.” The company also went ahead with SAP ERP due to its ease of use and ability to manage a wide spectrum of processes and also because it’s entire staff was already trained on SAP systems while being with Ranbaxy. With its comprehensive features and ability to scale up in alignment with the business needs, SAP was seen as the perfect solution for the company.

A quick implementation

SAP was implemented as part of the iBEAMS (infrastructure and Business Enabling Archiving and Modelling Solutions) project on which the company had embarked upon to bring about change and innovation in its IT infrastructure. The implementation was completed in a time frame of 100 days as the company had to adopt a whole new set of systems and set aside its earlier systems which were in use when it was part of Ranbaxy. HP was the hardware partner. Finding the right implementation partner was another important criterion to ensure a smooth implementation and PwC (PricewaterhouseCoopers) was chosen for this role.

A total of 20 people were involved in the implementation, which included members of the IT team from RFCL. The SAP ECC 5.0 ERP went live across 22 Sales and Distribution and five manufacturing locations in June 2006 using the big bang approach. According to Ramadurai, the implementation did not require much customisation and the company went ahead with modules such as material management, production and planning, quality management, sales and distribution and finance. The implementation was completed as planned. Ramadurai explains “The internal team’s awareness of organisation’s processes and the acceptance of the ERP systems by people from across teams and the top management’s support streamlined the implementation process. The implementation also became smooth because the employees of RFCL had earlier exposure to SAP.”

Transparency and efficient process handling

It has been nearly a year since RFCL has gone live with the SAP ERP and the company has gained by way of complete visibility into operations allowing it to keep tight control on its production processes and materials procurement. Additionally with real time accurate information availability, decision making by the management has become faster and easier. Ramadurai says, “The information flow status on any document which is generated across the company has been streamlined and is on a real time basis. Through this any changes to a document can be made in real time and they are reflected immediately on the system and all the departments across the organisation can access the system simultaneously in real time.” Post ERP implementation the company has automated its workflow process and if any critical task has to be undertaken an immediate alert is sounded. For instance an immediate alert will be triggered to the sales department when a cheque from any of its customers bounces. Similarly a sudden spike in the demand from customers can trigger an alert from sales to the production department. With ERP in place there is no physical verification of inventories as all the information is online. Financial reports are available timely and are readily available in case there is an audit.

RFCL has taken a 50-user license for SAP ERP.

Add-ons in the pipeline

RFCL is planning a portal, which will be linked to its ERP system. This portal will help its channel partners directly place orders online with the company. The actual invoice value will be generated on the system once the demand is put forward. Once the consignment reaches the customer then it is immediately reflected on the system and is also available on the ERP system almost immediately. An in-house developed Sales Force Automation tool has also been proposed to be implemented by RFCL. Additionally the company will also implement a CRM solution later and is in the process of identifying the CRM vendor for the same. Meanwhile the company is also preparing for extend the SAP ERP rollout at one of its manufacturing facility at Haridwar, Uttarakhand very shortly.