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Betting on standardised ERP

BCL Springs is excited about its ERP package from Ramco that could reduce its inventory and shrink lead-time, says Abhinav Singh.

BCL Springs, a division of The Bombay Burmah Trading Corporation, has two manufacturing plants at Aurangabad, Maharashtra. The company’s legacy ERP tool, developed in-house, was not meeting its business objectives, and there were integration hassles with the same. Information on production work in progress was not available in real-time. The lack of information on a real-time basis affected decision-making and hampered productivity.

The booming automobile industry is very dynamic as product lifecycles are short and so is the lead-time for manufacturing. Inventories have to be maintained to fulfill customer requirements. Companies in this sector understand that collaboration between suppliers, various functions within the organisation, and customers online is important. For effective decision-making and increased productivity, BCL Springs chose Ramco e.Applications Ver 3.1 Rel 6. Although the implementation is yet to be completed, the company has high expectations from the package. Let us take a close look at the pain areas for the company and what it aims to achieve by deploying the ERP package.

Outmoded system

The lack of information flow between the company’s manufacturing plants at Aurangabad was affecting decision-making. The company had to backup data from one plant and bring it to the other one. The customised ERP solution did not have a direct interface with the financial processes within the manufacturing plants. Other processes such as invoicing, purchase orders and export orders were also not linked to the customised ERP system—resulting in poor capacity planning and inventory overloads.

BCL Springs is a supplier to all the major automobile OEMs in the country, and raw material has to be supplied to different OEMs keeping in mind the automobile models being manufactured by them. Explains N Vijayaraghavan, Vice-president at BCL Springs, “Many of the OEMs change their plans often, and sometimes require raw material at short notice. Some work on a zero inventory concept wherein they do not want to keep any inventory at all. In order to fulfill their requirements we have to keep inventories at our end. Due to the inadequacy of information flow across the manufacturing plants, it was becoming difficult for us to plan our inventories.” The company therefore wanted to gain better inventory control by deploying a standardised ERP package.

BCL Springs decided that a standard package would give the company the benefits of best practices in the industry, and come with better support and service. Additionally, it would eliminate maintenance costs, which were huge in the case of a legacy ERP system (such as the one it had). Vijayaraghavan says, “We had been experiencing many problems with our custom-built ERP solution. The standardised package comes with good service and support too. Standardised packages are scalable, and it is easy to scale them without any problem.”

Making a choice

The company evaluated packages from SAP and Oracle before zeroing on Ramco Systems in early 2005. Company representatives visited many sites where Ramco was being implemented successfully. Adds Vijayaraghavan, “The package from Ramco was very cost-effective. We found it quite useful for reducing our problems after we found that it had a software development kit, making it very easy to customise once it was implemented. We also felt that to manage the package we did not require any specialised skill-sets, which in turn meant a lower total cost of ownership.”

Ramco e.Applications will be implemented at a cost of Rs 30 lakh. The company plans to go live by October 20, 2005, with the assistance of its implementation partners, Sigma Soft Consulting.

Planning right

After the implementation of the Ramco package, BCL Springs expects to have better planning and reduce the production lead-time. It anticipates that better flow of information will help the company achieve better co-ordination with OEMs and respond rapidly to their demands. Comments Vijayaraghavan, “We are producing nearly 2,000 different types of springs for automobiles. For each spring the lead-time is different, and each type of spring is manufactured differently. If we are able to get some accurate information pertaining to raw material inventory we can easily plan our prod uction accurately. Subsequent to the Ramco ERP implementation, we hope to reduce lead time by about 15 percent on each spring.” The company is also aiming to improve resource utilisation, as accurate information will put it in a position to plan in an objective manner. Post-ERP implementation there will be effective tracking of stocks, and since the company has several warehouses across the country, it will now know the status of stocks at different locations. Effective stock-taking is expected to help in efficient despatches on the part of the company. All this will help in better transparency and visibility throughout the organisation with more organised processes.

BI may be next

Once the ERP deployment is over, BCL Springs intends to implement business intelligence tools, and later CRM. Concludes Vijayaraghavan, “Business Intelligence tools will help us in knowing production trends better, and will also help us to make more accurate forecasts. Likewise, the CRM solution will help us in better interfacing with our customers who are the OEMs.”

abhinav@expresscomputeronline.com