Indofil takes ERP to the shop floor

The chemicals company has successfully integrated its plant system with its ERP backbone, says Chitra Padmanabhan

The toughest step in the implementation was the integration of shop-floor processes and the ERP system, says Gopal Madnani

When it comes to the chemicals business, data generated by the production system has to be supplied to the enterprise resource planning (ERP) software for smooth operation. To ensure this, the Rs 280 crore Indofil Chemicals Company decided to build a system where production data is directly synchronised with the ERP system without any manual intervention whatsoever. Indofil claims that it is the first in the industry to integrate the plant system to its ERP.

Straight from the PLC’s mouth

The shop floor at Indofil is controlled by rugged tools called Programmable Logic Controllers (PLCs) that govern the entire production process. “In a chemicals factory, the final product is a result of a series of chemical reactions, and these permutations and combinations are fed into the PLCs, which automatically carry it through various stages of production,” says Umesh Shah, manager, Planning, Indofil Chemicals Company. For instance, details such as weight and quantity of raw materials, the right temperature for the chemical reaction to take place, pressure levels and so on are programmed into the PLCs. In-built sensors capture the relevant data before production begins. “In order to fully leverage the ERP system, we wanted to avoid manual entry of data concerning shop floor processes, since any error in these entries would affect the flow of data within the ERP system,” says Shah. The company wanted a system that would help in planning its production, purchase and inventory schedule as well as systematise its workflow processes.

An extended ERP rollout

Indofil has six production plants and 430 employees. In the footsteps of its chemical industry peers, the company decided to move away from a DOS-based system and

implement an integrated

system to achieve better workflow processes. Domain experts within the company knew that an ERP system alone would not yield the benefits that it wanted unless it was integrated with the production system. The company approached SSA Global with a set

of parameters that it wanted to see in the integrated system. Apart from achieving an enterprise-wide system, the company also wanted to extend the benefits of ERP to its 22 depots for studying demand from various centres. “It is a common practice to make depots and other external agencies a part of the ERP system. However, achieving integration between shop-floor processes and ERP was a challenging task. The company chose Quinnox Consultancy Services as their implementation partner,” says Gopal Madnani, country manager, India, SSA Global. Indofil wanted to extract accounting and costing-related data from the PLCs to get it into the ERP system. Additionally, it wanted to improve visibility of its supply chain, including monitoring and managing inventory, debtors, and creditors within a system that was compliant with Indian statutory requirements.

Module this

Indofil has opted for iBaan ERP IV with six modules, where the Baan distribution module takes care of sales and distribution, purchase and inventory management, and Baan process manufacturing takes care of shop floor execution. In addition, Baan Finance has sub-modules for fixed assets, reports, general accounting, budgeting and cash management and the Baan Service module takes care of plant maintenance. The key differentiator for Baan ERP is its Dynamic Enterprise Module (DEM) that supports enterprise modeling. The sixth module is the Baan Project module to take care of multifarious projects of an enterprise.

“At Indofil, the plant has been directly integrated to the ERP by using middleware, Invensys’ Wonderware IndustrialSQL Server,” says Madnani. Indofil has 22 sales locations, the corporate office, the main plant at Thane and three other plants that are connected by Sify VPNs, to ensure application availability at all centres. The ERP system interacts with an Oracle 9i database at Indofil and provides application modules to approximately 100 users.

Information synergies

Indofil completed its implementation over a span of ten months (January 2003 to October 2003). Today, the ERP system at Indofil is not only useful in the post-production phase, but it also aids in planning. In every company, the production schedule is based upon certain forecasts. These forecasts, in turn, are based upon demand for various product categories. With an ERP system in place, Indofil is now able to get a consolidated report of the production schedule. “In an environment where production activities are undertaken on a mass scale, an integrated system helps in systematising the entire schedule,” says Shah. Earlier, once the production schedule was ready, it would have to be manually entered into the PLCs, increasing the possibility of errors. To avoid this, the data from the ERP system is integrated in such a way that the production schedule is fed directly into the production process. “It is two-way, the post-production details are fed into the ERP, while the production schedule generated by the planning engine within the ERP is automatically updated into the PLC,” says Shah.

The quality management system that is built into the ERP system updates the quality parameters that have been laid down during the production process into the logistics system. This ensures that substandard products do not evade quality checks as may happen in the case of a manual process.

Reaping benefits

Indofil has a strong presence in the agro-chemicals and the industrial chemicals space. The former business is essentially channel-driven, where the

production schedule remains more or less constant while in the latter, production is demand-driven. The ERP system helps Indofil carry out a demand analysis and prioritise orders as per profitability. “In the past year we have brought down our inventory levels to 26 days across the country from the earlier figure of 42 days. We made an investment of about Rs 1.08 crore with a RoI in eight months,” says Shah. Better yet, visibility into its supply chain has improved helping the company in procurement, inventory and logistics planning.

Presently, Indofil is in the process of optimising its Distribution Requirement Planning (DRP) and Materials Requirement Planning (MRP) with the help of data generated from this implementation. This data will let the company carry out accurate analysis of the various processes within its supply chain.

chitra@expresscomputeronline.com