The client is a manufacturer / assembling unit of hydraulic valves, pipes and fabrication. It has a turnover of approx. 30 crores with a workforce of just 130 employees. Their HO is located at Bangarapet, Kollar (Karnataka). They have another factory cum office at Bangalore. Their customers include Volvo, Tata, Bharat Earth Movers Ltd., etc. They have diversified customers in Automobiles, Engineering, Agro based industries. They are also exporting their products to VOLVO, Sweden and 30 % of their revenue comes from exports. They outsource around 70 % of their production requirements to sub-contractors.
Objectives of ERP Implementation
The Management of the company had realistic plans of growth for the future but wanted to cut down the operating costs and time involved. The company however had serious issues while drawing future plans with material supply process from suppliers, tracking the same at sub-contractor’s site and managing sales data against delivery against sales order used to get delayed, costing the company dearly. True inventory value was not known. Production cost was not available as the system was not integrated and centralized. Managing sub-contractors was a big problem.
To overcome these critical issues, the client decided to implement ebizframe, an ERP solution from Eastern Software Systems Private Limited, after examining multiple other mid segment ERPs available in the market. The major reason for this choice was ESS’ stellar track- record in ERP implementation, its clear implementation methodology and transparent costing system.
Pre ERP Scenario
The client was using some Visual Dbase / Foxpro based systems which worked in islands and Tally for its day to day accounting. This meant enormous manual work to run routine business activities. Much of the precious time of the employees was wasted in repeated data entry resulting in redundancy and inaccurate data entry. There was lack of co-ordination, hence, lack of confidence on the system. The Management had serious problems with decision-making, as the right data was not available, when required. It was a massive task for them to reconcile materials lying at 126 sub-contractors. The situation got out of hand when the technical specifications followed by the Production team, suppliers, sub-contractors and customers were running haywire. This in turn caused variations in required and supplied material from suppliers and materials going and coming in from sub-contractors. These problems caused rejections from the customer’s side thus raising operating costs significantly.
Implementation of ebizframe started in March and the client went live in 13 months with an investment of 12 man-months only. ebizframe was adopted with minor customization and major re-engineering of their business processes to improve overall performance. So far, Sales, Purchase and Inventory Modules are implemented fully and Finance, Production Planning Modules are undergoing more customization due to the business process that they followed which involved complete view of in-house as well as sub-contracted production.
All specifications for raw material, semi-finished and finished goods are now incorporated into the system. Turn around time of delivery against orders has reduced remarkably. Company now has the required control over suppliers and sub-contractors. The Management gets crystal clear MIS Reports of Material Reconciliation/Inventory status at the sub-contractors. As of now, Sales and Distribution (including Exports), Purchase, Inventory, are live. The confidence level amongst the employees and management has increased due to correct and timely data availability. Better and faster decisions are possible by the top Management as DSS (Decision Support System) is available as live data due to centralized system. Dead stock has come down remarkably.
ebizframe has been implemented on one P4 server with 1 GB RAM. Oracle RDBMS and associated tools have been used. At present there are 20 users in the HO using normal low end Pentium desktop PCs. Rest of the branches / factories are connected with available connectivity including dial up. Total number of existing users is 36.
The client is very eager to implement full Production Planning / Production Module and it is looking at more sophisticated MIS Reports and customization wherever essential. It will be looking at enhancements in ebizframe ERP functionalities as the business grows.