Capital Gains

It's the maker of brands like BoroPlus, Sonachandi Chyawanprash, and Navratna
Oil-names that the Indian middle class swears by. Set up in 1974, Emami-the
flagship company of the Rs 2,200 crore Emami Group-has grown into a leading
player of healthcare, beauty, and personal care products with over thirty brands
in its kitty.

IT has definitely played a key role in managing its multiple product lines,
separate locations and an ever-expanding supply chain. As Vikram Saxena, senior
GM, IT, Emami points out, "IT as a function is completely mixed with our
business. It has been implemented in a way to support all aspects of the
business." Considering this, the company went for SAP ECC 5.0 ERP implementation
in 2006. Unlike a majority of companies that played safe by deploying IT in a
phased manner, Emami took the big leap and implemented the system across its
entire operations at one go. "It took us almost a year and by January 2007, we
had fully integrated our functions with SAP," recalls Saxena. Today, it's
controlling the entire business cycle and enabling visibility of stock. Modules
that come under the SAP package include materials management, sales and
distribution, quality, finance, accounts, etc.

Taking a look at its supply chain, Saxena says, "Our FMCG business includes
suppliers, seven manufacturing units, thirty-two depots, distributors, and
retailers. SAP covers the entire supply chain internally. Also, 50% of
distributors have been integrated with the system." Now the company is targeting
to extend its ERP to external partners which will include distributors and
retailers.

'50% of our distributors have been integrated with the system'	Vikram Saxena, senior GM, IT, Emami

Among the biggest benefits, the SAP implementation has improved demand
forecasting mechanism, which in turn has improved working capital management.
Earlier, the demand was forecast by the sales to customers and distributors, and
not on the basis of consumer demand. SAP tool has helped in collating data on
stock turnover at the distributors, retail, and retail stock positions;
utilizing past trends; hence, enabling accurate estimates and lower demand
variations. Moreover with real-time information available, inventory management
has improved, thus reducing turnaround time and increasing customer
satisfaction. Also, instant availability of sales statistics has enabled the
sales team with a better control on pricing, schemes, discounts, credit checks,
and customer outstanding.

Commenting on the challenges, Saxena recalls, "Non-adaptability was one of
the major issues we faced initially. SAP implementation meant there was no scope
for backlog. As all functions were integrated, backlog at one stage got
reflected on the entire cycle. However, our employees had to be trained, not
only with IT skills, but also to bring about an attitudinal shift."

Looking forward, Saxena informs that Emami will set up a disaster recovery
site at Kolkata soon. Once operational, it will guarantee 100% uptime of SAP,
which has a current uptime of 99%. It is also planning to implement a host of
new applications with channel partners. These include human capital management (HCM),
employee self service (ESS), business information warehouse, and business
informatics among others. These apart, the Emami Group is also working on
end-to-end SAP implementation in two other sister companies, namely-Emami
Biotech and Emami Paper Mills-by the end of this year.

Monalisa Das

monalisad@cybermedia.co.in