ACCPAC streamlines Synpack’s manufacturing processes

Most manufacturing SMEs want shrink-wrapped ERP systems that can get them quick RoI and go live in the shortest possible time. Akhtar Pasha finds that ACCPAC ERP helped Synthetic Packers streamline its production planning, putting it on track to get RoI in less than a year

Synthetic Packers needed a system that could cope with production scheduling and integrate with financials, says Anil Kabra

Synthetic Packers (Synpack), a Bangalore-based SME with annual revenues of Rs 8.5 crore, was formed in 1981. It is the first ISO certified polythene manufacturer in South India. The company manufactures polythene film products such as rolls, liners, bags of high molecular weight high density polyethylene (HMHDPE), low density polyethylene (LDPE), linear low density polyethylene (LLDPE), lay flat tubes (LFT) and sheets. Its clientele consists of food, pharmaceuticals, newsprint, garments, coils and FMCG companies. Synpack supplies packaging to companies such as APC, Cipla, Tata Tea, MTR Foods, Jyothi Laboratories and Godrej Sara Lee, besides others.

The requirement

Over 95 percent of the company’s production is made to order. Therefore, each and every order received had to be tracked from order entry through purchase planning, inventory check, production planning, reduction or elimination of waste, timely production and dispatch. Anil Kabra, managing director for Synpack says, “The complexity of our manufacturing requirements is similar to that of larger organisations. We needed a system that could cope with our production scheduling and integrate with our financials.”

Manual and legacy apps affecting production

Synpack has been using Tally as its accounting package. It used to manage production planning, scheduling and generation of reports in Excel. The company was using a decade-old manual paper-based system for tracking purchase orders, production planning and scheduling. This was leading to problems such as duplication of information, making accurate inventory control and forecasting impossible, hampering production in the process.

Nagesh A N, senior manager at Synpack adds, “The company’s main pain areas lay in scheduling, production planning and dispatching finished products to customers.” Because of manual processes, where information on a piece of paper was passed to the production-planning section, accounting problems existed at various stages of manufacturing. There was no standardised procedure for tracking the purchase order number to items, inventory control, re-order level and to manufacturing. The company was not able to generate analytical online reports such stock level, production planning and work-in-progress.

Nagesh says, “Generally customers used to give us the delivery schedule for various products in different sizes required on a weekly basis and we used to manufacture accordingly. But at times the products that were supposed to be delivered in the second week got manufactured in the first week. Similarly, at times two or three products that had different delivery dates ended up getting manufactured together. The entire process was hampering production planning, scheduling and dispatching.” It was also leading to production errors. There was no way to check which product was getting manufactured at what plant (Synpack has five of them), which was affecting the preparation of load chart (specifications of bags to be manufactured and at which plant). Nagesh adds that tracking work-in-progress was difficult at each stage of manufacturing, leading to overlapping of production.

Hunt for an ERP system

In 2001, Synpack had a bad experience with an indigenous ERP package. Kabra says, “Having burnt our fingers with the earlier ERP package, we wanted an off-the-shelf ready-to-use solution instead of investing in a customised solution.” ACCPAC came to its notice as a solution for small and medium businesses. The company wanted an ERP package that was global and could provide it with hands-on support and help it to scale up as the company grew. Kabra says, “Since ACCPAC was a subsidiary of Computer Associates, that gave us a lot of confidence, and after speaking to their customers we decided to implement ACCPAC’s ERP solution in September 2003.”

Why ACCPAC?

ACCPAC ERP maps the entire functional requirement of Synpack—right from the core financials, manufacturing, multi-level bill of materials (16-level deep), Material Resource Planning (MRP) to master production scheduling, and also has a comprehensive product suite which caters to future requirements. Kabra says, “Unlike most traditional ERP systems, ACCPAC manages all the India-specific requirements viz., excise for manufacturing, sales tax, fixed asset (with two depreciation rates applied on each asset—in terms of Companies Act and Income Tax Act), payroll and TDS.” ACCPAC has morphed itself from Finance Resource Planning (FRP) to ERP and financials being the core functionality, it addresses the SME’s concerns of effective costing as all the organisational activities are related and tracked for cost benefits.

Staged implementation

A dedicated three-member team (all charted accountants) from Eselen Web Soft Technology, ACCPAC’s solution partner, oversaw the implementation in a record 20 days. G Nagaraj, managing director, Eselen Web Soft Technology says, “It is an achievement and this is exactly what SMEs are demanding nowadays—faster implementation so that RoI comes quicker.”

The project was divided into four stages. In the first and second stage, Eselen Web Soft gave a detailed presentation to the employees of Synpack explaining why an ERP system was being implemented. A team at Synpack defined its key business being implemented. A team at Synpack defined its key business requirements from the outset and a future road map was drawn up. During the third stage, a system requirement study was conducted to finalise the modules required to connect the various stages of manufacturing. In the fourth stage, Eselen Web Soft suggested the ACCPAC Advantage series ERP package, which includes modules like general ledger, account receivable, account payable, purchase order, inventory control and order entry. A separate package, ACCPAC Manufacturing Level-1 was implemented for material resource planning (MRP) and Level-2 for bill of materials (BoM) and manufacturing order management. Eselen Web Soft documented every stage in detail. The implementation was completed before November 15, 2003 and the company expects to go live in mid-December.

IT infrastructure

Synpack’s IT infrastructure follows a typical client-server architecture. A HP Vectra VL 420 runs ACCPAC Advantage Series and ACCPAC Manufacturing. The Vectra is a Pentium 4 1.5 GHz machine with 256 MB SDRAM, ATI RAID Pro128 and Intel 10/100 LAN card. The server runs Microsoft Windows 2000. The five clients in use are all assembled machines running Windows 98. IBM DB2 is the database. The project costs amounted to Rs 6 lakh, including the cost of ERP (three-user licenses), training and implementation.

Quick benefits expected

Kabra says, “Our financials, manufacturing, inventory and forecasting are all captured with ACCPAC Advantage Series and Manufacturing Level-1 and Level-2 online. We are instantly expecting time savings by not having to duplicate information.” He says another key benefit is the ability to better forecast for the business. Information is processed in real-time so any changes are immediately reflected in the system. “We’re in a far better position than ever before to control inventory, costing and production scheduling and dispatching—and can make clearer business decisions, “ says Kabra.

With the new ERP system in place, purchase orders are fed into the system online, triggering the inventory control where a detailed MRP is planned and plant-wise production scheduling is carried out. After freezing the BoM, the material is sent for production and the system simultaneously triggers the necessary stock-level maintenance.

The company says scheduling will improve significantly; with ACCPAC Advantage Series it can pinpoint what products it needs to manufacture and highlight potential product shortfall. The new ERP system should also improve control of Synpack’s purchasing as the system tells exactly what to order and when.

Kabra adds, “Even if we are able to reduce 0.5 percent of our cost of wrong production annually, we will be able recover the ERP cost in a six-to-eight-month period.”

akhtar@expresscomputeronline.com