Moser Baer’s tryst with ERP

Moser Baer, the world’s third-largest producer of removable storage media, adopted technology a little late, but adopted it so well that it left others far behind, says RAHUL NEEL MANI

EVER since Moser Baer embraced technology and process integration, it has not only not succeeded in business but has also set new benchmarks in both production and quality. The company has a clear vision: to be the largest global player in the low-cost, high-volume removable storage media segment. Deploying ERP was the first step the company took to realise its dream. Within three years, it became the third-largest producer in this category.

Did it need ERP?

Officials felt that the primary objective of IT at Moser Baer should be to get the right information at the right time since information was very critical in the high-volume product business. The second major objective was to shorten the decision-making cycle in matters of finance, purchase or materials management. With these objectives in mind, Moser Baer wanted to lift itself from manual systems to the most contemporary IT applications. Although it was a company manufacturing hi-tech products, systems and support were predominantly manual up to 2000. The reasons for leapfrogging from the manual to the automated environment of ERP were simple. “When the company decided to deploy ERP, our turnover was close to Rs 700 crore. But much of the stores and points of sales were on a manual system, except for financial accounting, which was on a standalone system,” says Ramesh Sanka, the company’s finance controller and chief information officer. The management’s requirement of the data with respect to profitability, cost of production, etc. wasn’t fulfilled. “The data would be available at a later time, which was of little use to us,” says Sanka. Dissatisfied with the state of affairs, a goal was set within the company to link everything so that financial accounting would give precise details right down to the last paise. Moser Baer thus decided to implement ERP across the company.

Evaluation

Moser Baer had very specific requirements from the ERP system. First, the company wanted the system to support all export-related financial and commercial issues, including customs, foreign exchange, duties, etc. Second, Moser Baer wanted everything on the Microsoft platform, including both the front- and back-end. Third, the company also assessed the probability of in-house maintenance and upgradation at some later time. Says Sanka, “Apart from that, we wanted the ERP system to support various layers, levels and multiples of products.”

Moser Baer’s internal IT team prepared a checklist of 12 essentials that the ERP system had to support. That checklist was sent to the selected ERP vendors, requesting them to send their proposals with detailed information. The company didn’t look at SAP because it (Moser Baer) was already very powerful on MRP (Materials Resource Planing) and the PP (Production Planning) part of the ERP package. With that, the company restricted its search to three companies: JD Edwards, MFG Pro and Ramco Systems. Proposals from these three companies were scrutinised. “After analysing all the critical pre- and post-implementation aspects, we zeroed-in on the Ramco solution, which was the most suitable for our requirements. Today we can confidently say that we took the right decision,” says Sanka. In the last two years, apart from rolling out Ramco’s ERP, Moser Baer has extended its reach to all the other product categories of Ramco, such as Business Intelligence and Collaboration Management, which ride on the basic engine of ERP though they are not part of the core ERP system.

Modular implementation

Here lies the uniqueness of the whole story: instead of going in for a Big Bang, the company decided to implement peripherals first and then go for divisional implementation. “We went ahead and implemented the maintenance part first, followed by PRPO. Next we went division by division,” says Sanka. The company has five divisions, and each division went live one month after the other.

Why is this approach unique? Hear it from Sanka, “The skill-sets we developed in one division were replicated in other divisions. We also learnt from some mistakes; the best way to avoid repetition of those mistakes is to attain perfection in a smaller implementation.” The five divisions where the ERP system was rolled out were two manufacturing plants, a floppy manufacturing plant, the head office and a branch office at Rotterdam. The modules of the Ramco ERP system implemented included sales, purchase, finance, maintenance, HR and salaries. “The production planning (PP) and materials resource planning modules were purposely put on hold earlier but now the company has implemented them,” says Sanka. The product manufactured by Moser Baer is so complex that no single ERP could help in doing the PP. The company needed a very specific extracting tool called Preactor, exclusive software to support finite capacity planning in a volume business with several constraints.

Simultaneously, the company was implementing a LAN at three locations and a WAN link using radio frequency. This wasn’t just for the ERP system. It was also to be used by other applications, including e-mail. Second, existing servers weren’t suitable for ERP so the company bought the appropriate servers. “We identified key ERP users from each department and explained to them Ramco ERP’s functions and capabilities. “We haven’t tweaked the Ramco software at all because we wanted to cut down on specific developments that were required for customisation. With that the implementation process became easier,” says Sanka. There was a lot of emphasis on training, which was divided into three parts. The first was the awareness round. The second round was just before implementation so that the implementation process became a little easy. In the third round—after one month of implementation—the company provided more training on the actual usage of ERP.

Problems faced

Asked whether Moser Baer faced any problems after the implementation, Sanka says that except for some clerical snags, there were few errors found. “We have not come across any process-related error from the day we went

live till today.” During the implementation phase, Moser Baer allowed its users to play around with the ERP. “We have put the test server and development servers separately. Every time development was over, we put that on the test server for users to test it.” That gave the company greater confidence in the system and software. This was good for those who were using a computer system for the first time. “Some users have moved from a completely manual system to a highly automated system. But we have managed the migration very well, except for a little handholding during the initial days. “We never stopped ourselves from spending on user training.

There were no budgetary constraints since we knew that training is the foundation for boosting user confidence,” says Sanka.

Bonhomie

During this whole process, Ramco provided the requisite amount of expertise. For five modules, Ramco provided five implementation experts, supervised by a team leader. “These people were located in the Moser Baer office for six to eight months till the time of rollout,” informs Sanka. From Moser Baer’s side, the key users identified were also involved in the process. There were a couple of people coordinating from Moser Baer. One was for providing hardware and software linkages and support, and the other for generation of reports. In both the cases the internal IT team played a very important role. Training on the ERP system was taken care of by experts from Ramco. Even after the implementation, Moser Baer asked two Ramco experts to stay on its premises for another four to five months to help troubleshoot post-implementation problems.

If Ramco comes out with a new version or version upgrade, it will be provided to Moser Baer at no extra cost. The licence signed by Moser Baer is based on a per-user basis. Since the company is growing at an exponential pace, every three months there are new users added and the licence terms are reviewed with Ramco.

Benefits

The first benefit Sanka can recall is that monthly accounts are closed within the required timeframe. The company can now easily estimate inflows and outflows of money. The second major benefit is that of tracking critical documents. “Tax-related papers and custom papers are also automatically generated,” says Sanka. All HR-related functions like salary and employee benefits have also benefited. The company has now started aligning other systems with ERP. “We are now linking Moser Baer’s ERP with the ERP of our external customers so that invoicing is done electronically in less time,” Sanka explains. Analysis of sales has now become very easy; the company can easily analyse various products in terms of their sales and growth. All production machines are now integrated directly with systems so that data generation is automated. Quality of products can also be measured, which helps Moser Baer in meeting customer expectations.

rahul@expresscomputeronline.com