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Peer-to-Peer
Transformation at Havell’s
With its ERP deployment, QRG has a system that gives it tighter
control over and more transparency into its business operations, says Vinutha
V
One size does not fit all. That’s especially true when it comes to manufacturing
processes and the supply chain. If manufacturing processes are not integrated,
there are bound to be hiccups, and QRG Enterprise—formerly known as Havell’s
India—faced this problem.
Legacy blues
When Havell’s India commenced operations in 1982, the accounts department
was the only one to be computerised. In 1989, the company developed in-house,
using FoxPro, software packages for sales & distribution, manufacturing,
invoices and accounts. Supply Chain Management (SCM) and Material Resource Planning
(MRP) solutions were done using Microsoft Excel. Having over 10,000 different
products, Havell’s found it difficult to plan production, maintain a steady
supply chain, and make forecasts. The SCM and MRP process involved a lot of
manual work that led to failures in production planning. Since the core activity
involved manufacturing, marketing and distribution of products, Havell’s
operations were spread across multiple locations with eight factories, a depot
and a corporate office. Typically, Havell’s needed to co-ordinate with
its suppliers, distribution channels and stock depots regarding movement of
goods and materials. Any interruption would cause a delay or disruption of the
movement, leading to production delays.
| From the CIO’s desk |
- Be clear about the company’s requirements, and purchase hardware
accordingly.
- The implementation team should be created in such a manner that it
includes all functions. The team should be allowed to work on a sample
of a month’s actual data on a single company, and should work as
if they are working on live data. The team should pass through all processes—forecasting,
production planning, purchase planning, manufacturing, order booking,
execution, accounting and MIS. This will even out all irregularities
and open up the benefits of re-engineering in the existing system.
- While selecting the key end-user teams, a good mix of department
heads and actual users should be ensured. The people hired should have
a positive attitude.
- One should be clear that any ERP system can be implemented
only with the help of the top management. At QRG, the management
was committed, and this lead to the successful implementation
of the project.
- Vertika Yadav
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“The legacy application and non-availability of data
in real-time affected our entire MRP and supply chain, and we were not able
to make business decisions or take corrective action. Production at the manufacturing
facility was undertaken based on data that was 15-days-old, and this affected
our decision-making process,” recalls Vivek Khanna, General Manager for
IT at the company. Moreover, Havell’s lost out on business opportunities
and was not able to respond to market requirements quickly. Because of the non-
availability of data on time, order processing became sluggish. When a dealer
placed an order with a Havell’s branch office, it used to take three days
for the consolidation of branch data—each branch in turn had multiple dealers—
based on customer requirements. These consolidated details were sent to the
headquarters by courier, which added another two days of delay. By the time
an order reached the factory, the data would be 15 days old. (The entire manufacturing
process involved making a purchase order, preparing details on the bill of materials,
MRP, scheduling, manufacturing and distribution.) Additionally, there were discrepancies
in data across departments. As the software package developed in-house was more
accounts-oriented, distribution data was not versatile. The absence of documentation
procedures led to inaccurate information.
| After the implementation |
- Order processing time reduced to a day from 15 days.
- Increased transparency in the availability of production schedule
information.
- Automatic processing of purchase orders through material resource
planning.
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Standardising core processes
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Mergers and acquisitions as well as steep growth necessitated
an integrated real-time information
management system across the organisation
Vivek Khanna
General Manager, IT
Havell's India
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In 1998, Havell’s decided to roll out a new marketing
strategy—to open more depots across the country. Having faced a number
of challenges with its legacy application, the company wanted to embrace a complete
IT solution to improve the consolidation and integration between the manufacturing,
distribution and finance departments. “Mergers and acquisitions as well
as steep growth necessitated an integrated real-time information management
system across the organisation. We felt the home-grown software package could
not handle this. Hence there was a strong need for a tried-and-tested package
that could overcome all these complexities,” explains Khanna.
Havell’s evaluated several ERP vendors such as SAP, JD Edwards, Ramco Marshal
and SSA Global, and finally settled on Baan (now SSA Global) which has a strong
presence in manufacturing. Baan promised the shortest implementation time for
going live with its ERP solution, Baan C3, which worked in the company’s
favour.
In February 1999 Havell’s did a pilot at its Badli facility (near Delhi)
that was completed within six months. In December 1999, Havell’s rolled
out Baan at nine locations in a fortnight. The company discontinued its legacy
system and went live with the Baan ERP system in January 2000.
No looking back
Post-implementation, Havell’s has been upgrading to newer versions of Baan.
From Baan C3 in 1999 it migrated to Baan C4 IN3 and currently runs Baan C4 IN5.
Some of the key modules chosen by Havell’s for customisation are manufacturing,
sales & distribution, purchasing and finance. From a 50-user licence, the
company has upgraded to a 150-user licence. It spent Rs 2.5 crore for the entire
package, including training, hardware, software, network infrastructure and
implementation.
After the implementation, Havell’s had a minor problem compiling its balance
sheet for fiscal 1999-2000. Data for the first nine months of the financial
year (April-to-December) was on the legacy system, and the remainder (January
to March) was on the ERP system, but the problem was quickly sorted out.
| Baan implementation snapshot |
| Industry |
Havell’s India manufactures building circuit protection, industrial
and domestic switchgear, cables, wires, energy meters, fans, luminaires,
bath fittings and modular switches. |
| Solution implemented |
Baan C4 IN5 |
| Operating System (Server) |
Sun Solaris 8 |
| Application Servers |
Sun Fire V440, V880 and V480 servers; 1.28 GHz CPU and 8 GB
memory |
| Database Server |
Sun Fire V880 with 1.26 GHz CPU and 12 GB memory |
| Test Server |
Sun Fire E250 with 400 GHz and 2 GB memory |
| Number of user licences |
150 concurrent user licences |
| Database |
Oracle 8i |
| Source: Havell’s India |
Beyond ERP
The Baan implementation has brought about total control on process improvements.
Havell’s gets complete MRP information in real-time. Through the availability
of online information, marketing personnel get useful data without any confusion
about targets and the type of product available with dealers. Outstandings from
a particular customer are visible now. The adoption of ERP has become a platform
to deploy other applications such as CRM, SCM, sales force automation, dealer
portal and business intelligence software.
“Our customers are satisfied as correct information is available at all
stages of manufacturing. We can give the appropriate production schedule to
our suppliers and help them plan their production as well. In this way, we intend
to automate additional activities as well as enable our distributors to book
orders online,” informs Khanna. Today, with 11 manufacturing plants, 33
branch offices and over 3,000 professionals across India, the group has achieved
rapid success in the past few years with its ERP implementation.
Prior to the implementation in 2000, Havell’s had a
turnover of Rs 150 crore. In 2004-05 it clocked Rs 900 crore—and plans
to reach Rs 1,500 crore in the next fiscal.
vinutha@expresscomputeronline.com
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