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Catalyzing
Growth  |
March
16, 2007
Dataquest- Mumbai
The firm gets
the right dose of chemicals to iron out data
transfer woes
It was a wake-up call from the East. Reeling
under increased threat from Chinese companies,
a chemical manufacturing firm, Navin Fluorine
International, an Arvind Mafatlal group company,
took a re-look at its business processes,
the IT architecture.
It was at the high end of the SME market already;
it is now a Rs 250 core company individually;
but further growth was stilled by legacy applications
and poor information systems that dragged
on the sales cycle, customer order processes,
dispatches and response time, killing productivity.
With three product lines (refrigerant gases,
specialty chemicals, bulk fluorides), two
manufacturing plants (in Surat and Dewas in
MP) five sales offices and a corporate office
(Mumbai), the company was burdened with data
transfers every month-end and transparency
issues as well. It needed an ERP, a management
information system analytics. The expectations
were mainly in terms of integration, real-time,
on-line processing, tapping business opportunities;
the hope was for a scalable solution that
kept pace with the business growth of about
20%-30% year-on-year.
Navin Fluorine went in for the enterprise
version of SAP in April 2003. The approach
was to start small and grow big; therefore
a modular and two-phased roll out program
was chalked out. With Mahindra Consulting
(now Bristlecone) as its implementation partner,
it initially went ahead with six modules.
It took 90 days to go live and the next phase
started after four months. The idea clearly
was to complete both the phases in the same
financial year so as to have an integrated
balance sheet in the SAP system.
The benefits started flowing soon after, according
to Sanjay Mittal, head of IT with Navin Fluorine.
In terms of lifetime benefits, the company
went totally process driven, having also benchmarked
itself against the best business practices.
It was also able to maintain transparency.
Immediate benefits were in terms of ROI because
the company could avoid many cumbersome data
transfer processes, reports generation and
reconciling activities among others. "Earlier,
a lot of time was spent in these areas and
a lot of polluted data came in too. After
the SAP implementation, we could avoid our
month-end data exchange," says Mittal.
There are still more quantifiable benefits
to share. Earlier, the company took six -
seven days to process customer order; now
it is processed the same day. Dispatches,
in terms of logistics to the customer, earlier
took up to nine days; it now takes three days.
The response rime to the customer is instant;
earlier if a customer called to know his ledger,
the company would have taken three days; it
is now done on-line.
The benefits came but not before Mittal saw
off deployment challenges. Very much used
to the traditional environment, the staff
resisted the implementation initially. A second
challenge was to adopt the best practices
and re-engineer existing processes to make
it world class and competitive. Since the
company worked on the outsourced model, there
were substantial risk management issues to
be handled in addition.
Part of the challenge was also training. "We
created a three-layered team for the implementation
- the core team, key user team and the end
user. As part of the knowledge transfer, we
first trained our core team members. They,
in turn, trained the key users who then transferred
knowledge to the end users," says Mittal.
This was to ensure that everybody participated
in the process. Industry specialists and process
experts are called in from time to time to
conduct the training programs.
With phase two of the implementation now stable,
the company has started getting analytics
benefits through the module called profitability
analysis. As an extension to this, Navin Fluorine
plans to implement BI in phase III, starting
April this year. After running SAP for two
and a half years, it now has a good historical
data that can provide strategic trends and
help predict the future. The Chinese are no
longer to be feared. |
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