Catalyzing Growth

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 crore company individually; but

further growth was stifled 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.

At a Glance Issue: Data efficient MIS Reason: Burdened with data transfers every month-end and transparency Vendor/Solution: SAP/ERP Benefits The company became totally process driven Able to maintain transparency Avoid many cumbersome data transfer processes, reports generation and reconciling activities Instant response to customers

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 time 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.

Goutam Das



goutamd@cybermedia.co.in