An Edible Oil and Food Manufacturer

Cuts The Chaos with ERP

Note: This case study has been reproduced from BenefIT - a Business Minded Computer Magazine. It was published in October 2009, Vol. 06, Issues 01 of the magazine and written by Onkar Sharma, BenefIT Bureau. Scroll down to download the scanned copy in PDF format.

Recon Oil Industries was on an expansion drive. But what hampered its plan were its own business processes, which resulted in increasing operating costs. The company finally resorted to Ebizframe, an ERP solution to help overcome its problems.

Recon Oil Industries Ltd (ROIL) a Mumbai-based manufacture and distributor of natural oil and food products, is a household name today. Currently, its annual turnover is Rs. 30 Crore. The company has a workforce of more than 225 employees spread across its pan India branch network. Recon's brands are also exported to 12 other countries.

Business processes

Like many organizations, ROIL has had to face upheavals in its operations, as the company grew. The management had realistic expansion plans, but it first had to overcome many issues related to operating costs and long delays. The company  was not able to track suppliers even at the sub-contractor's site. It also wanted to streamline sales data, which due to poor management, affected prompt deliveries, costing the company dearly. In such a scenario, inventory had lost its value. “There were many issues that confronted us. We were not able to measure production costs because the systems were not centrally integrated. Neither were our branches and factories connected with the head office.,” says Sikander Khan, Senior Manager – IT, ROIL.

ROIL Employees used to be engaged in innumerable manual tasks related to data entry, resulting in a waste of productive time. Even then, there used to be cases of repeated entry of the same data, which only caused redundancy and inaccuracy.

“ROIL was swamped in so many manual processes. Thought it was using IT in patches, the solutions hardly helped it reduce the overall work burden. There was a lack of co-ordination across its offices. The management had problems with decision-making as it lacked updated information,” reveals Anil Bakht, Chairman and Managing Director, Eastern Software Systems Pvt. Ltd., a firm that implements ERP Systems.

The company waned a solution that not only integrated its processes but also helped it improve overall efficiency.

Ebizframe ERP: Selection, planning and implementation

To address these challenges and bring its business onto the right track, the company began its efforts to find a robust software solution. ROIL needed an ERP solution that automated its business processes and supply chain to help in informed decision-making.

“To overcome the challenges, Recon Oil selected Ebizframe, an ERP solution from Eastern Software Systems (ESS) Limited, after going through a host of other mid-segment ERP applications available in the market. The solution matched our requirements in all aspects,” Khan further adds.

ESS carried out the implementation process for ROIL. First of all, the vendor involved the company management in order to understand the processes thoroughly and then customized the solution accordingly. “The implementation of ebizframe started only after a thorough analysis of ROIL's business processes. Then, Ebizframe was implemented with minor customization and a major re-engineering of ROIL's business processes to improve overall performance,” says Bakht.

According to the company, the total cost incurred on the procurement of the ERP solution, including hardware was around 15 lakhs.

Benefits derived from the solution

Those at ROIL affirm that the situation is more under control after the ERP solution was put in place. All specifications for raw materials, semi-finished goods are now incorporated into a proper system. The company has more control over suppliers and sub-contractors. It also finds the turn-around time between order to delivery, reduced. “The management gets crystal clear MIS (management information system) reports of receivables and payable. As of Now, sales and distribution, purchase, inventory, production and finance are live. Confidence levels among employees and the management has increased due to correct and timely data availability,” says Khan. Communication has improved across all departments and within different branch offices, resulting in systematic work culture. The company also believes that duplication of work has stopped. The problem of dead stock is almost non-existent now.

Khan further adds, “The management expects more rationalized use of manpower in the coming days. User-friendly systems have enabled IT department to connect the branch offices and the factory with the head office.”

Future Plans

Recon is confident of driving its business to the next level by taking advantage of the various ERP modules at work within the organization. It plans to continue its tryst with IT, since it seems to have realized the enormous potential IT holds for any business.

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