ERP And Network At Dabur Information Technology Essay

DaburA is a Indian ‘ consumer goods company with involvements inA Oral Care, A Hair Care, A A Skin Care, A Health Care, Home CareA andA even in nutrients. From its low first stage in the bylanes of Calcutta in the twelvemonth 1884 as an Ayurvedic medical specialties company. Dabur has come a stretched manner today to go among the top companies. Dabur India LimitedA is the fourth largest FMCG Company in India. Dabur had a turnover of about Rs. 3390.9 Crore FY 09-10 & A ; Market Capitalisation of over Rs 15500 Crore which clearly shows the company ‘s base. The company has kept an oculus on new coevalss of clients with a assortment of merchandises that provide to a modern life style, while supervising non to estrange past coevalss of faithful clients.

Degree centigrades: UsersdellDesktopDabur_India_90.jpg

Dabur ‘s web is in the signifier of star topology with 6 DAMA ( Demand Assigned Multiple Access ) links from Hughes Escorts Communications Limited ( HECL ) . There are about 40-50 Time Division Multiple Access ( TDMA ) VSATs ( Very Small Aperture Terminals ) , which will be used for associating the distribution web. Then there is Virtual Private Network ( VPN ) connectivity affecting Dabur ‘s offices at assorted topographic points like Delhi and Mumbai, furthermore the corporate office. This nexus will shortly be un-mitigated to other locations, also.The pick of the web depends upon location and feasibleness tallies on multiple media. The company uses IDSN connectivity as a support for its premier connectivity. Amazingly, contrary to the current tendency, Dabur does n’t hold assorted leased lines to keep up its datacom web.

The Situation: Problem Faced By The Company Before ERP Implementation

For many old ages, Dabur had been utilizing Fox Pro based systems for its handling logistics but as the web has grown the distribution force per unit area rises engineering development was necessary. Fox Pro was a database in which each of the section likes gross revenues, finance etc had a separate database for their several sections. It was non a relational database. The company faced a batch of job because this similar information incompatibilities etc. It become necessary to incorporate the disconnected distribution web for the benefit of the company. This was the clip when Dabur felt the demand to implement some sort of ERP system.

ERP Implementation in 4 phases till now

1st ERP execution – Baan

Dabur implemented Baan ‘s ERP system in 1999 for mechanization of the fabrication procedure. This was the first ERP system which was implemented by the company in the major workss at Sahibabad and Baddi severally. The waiter used for this was Alpha Unix waiters and this was situated at the commercial office are used for Baan and about 200 coincident users can login from in cooperation with workss utilizing PAMA VSATs and fiber in the distant Baddi works. In Baan ERP system the cardinal faculties includes finance, fabrication, maestro production planning, intelligent resource planning, trader planning and costing. The assorted faculties maintain the path of the stuff as the stock list moves through the works and they are synchronised to each other. The primary distribution program becomes a really of import constituent of the fabrication system. The planning procedure of the compnay includes one month ‘s stable Rolling Production Plan ( RPP ) of the company and two month ‘s peal program subsequently on, based on a Rolling Gross saless Forecast ( RSF ) of Dabur.

Problem in instance of Baan

The operation of the fabrication system has been really hard as natural stuffs for Dabur ‘s merchandises are largely sourced from the assorted unorganized sectors where fruits and herbs and other natural resorts are procured. The other challenge was of extended customisation which was necessary to run into rigorous FDA ordinances in the quality circle in Pharma merchandise lines. Not merely this, BaaN requires a cardinal waiter which was besides a job for the company.

As with the bulk companies, gross revenues at Dabur crest in the last 4-5 yearss of the peculiar month which leads to more burden on the waiter. If the company dabur in this instance, depends on this kind of cardinal waiter architecture, which would be associated through VSATs, the web would be highly overburden during each and every month-end. However, Dabur ne’er required doing the web a serious constituent in the mechanization of the outbound logistics.

The company determined to travel for an ERP reply which was Network Independent and it found that MFG/PRO could be run on independent waiters at every location it was a good pick that suited its alone demands.

2nd ERP execution MFG/PRO ERP

Dabur hence initiated mechanization of the outward logistics system in April, 2001 by agencies of its primary circulation system named ‘Project Synergy ‘ , which involves the executing of the MFG/PRO ERP system. The MGF/PRO system was running in greater than a twelve Carrying and Forwarding Agents ( CFAs ) and the major warehouses all over the state. It had covered more than 90 sites in the chief Distribution will be finished by 2002.

Execution

Once it was decided that MFG/PRO it will be to pry the outbound logistics so a nucleus execution squad was made which includes terminal users from dissimilar sections, like IT, gross revenues, distribution and planning, finance and was set up in order to work. The deployment was made in four phases. In the first phase a demand survey was done here a theoretical account was developed. Dabur has many other strategic concern units each one of it is holding a different demand in footings of outbound logistics. It is a traditional FMCG company into household units and health care merchandises, pharmaceutical merchandises, nutrient merchandises, which is a perishable merchandises division, ayurvedic merchandises for both the medical specialty and place sections. All these divisions have diverse demands. The bosom squad had its occupation to cut out plus it had to develop a ordinary concern theoretical account, which could provide to each and every section at the indistinguishable clip.

Significant benefits were seeable in locations where the ERP system had been implemented. These include:

Improvement occur in gross revenues despatchs to the carrying and forward agents ( CFA ) . The gross revenues earlier were greatly overloaded with 80 per centum of gross revenues taking topographic point in the last hebdomad of the month which led to a figure of problem such as check bounce and gross revenues returns from ‘pushed ‘ gross revenues to run into gross revenues marks.

Improvement was seen in aggregations procedure besides. Collections have recorded an betterment of about 6 yearss after implementing ERP and now are more equally spread more than the month which leads to significant nest eggs on working capital protected up in out-bound logistics.

Decrease in unsold stock stock list nad gross revenues returns. Stockss in transporting and forwading agents are noticeable to cardinal distribution contrivers in commercial and un-saleable classs most of import to better distribution nad direction.

cardinal direction of gross revenues strategies. The corporate office manages the strategies and free issues and the ERP system keeps a tough trial on strategies most of import to worsen in abuse of strategies in the field.

Reasons: why the shifted to another ERP system ( SAP )

By 2005 Dabur felt the demand of keeping two independent ERP systems for the company. They were confronting some of the issues like there were still data redundancies and incompatibilities in the database system. Significant sum of rework was indispensable in merely informations format interlingual rendition between the two systems. It still did non supply a holistic image and therefore posed problems in explicating a policy or taking concern important determinations. Care cost of MGF/PRO was besides really high. Dabur realized that it is non merely the operational excellence it needed but in besides needed determination support substructure and as a consequence of this the proposal of a lone organisation broad ERP execution was planned in Dabur. So, with the aid of Accenture, Dabur implemented strategic and operational alterations by execution of organisation broad SAP nucleus faculties.

3RD ERP execution – SAP ( major alteration )

Migrated from standalone Enterprise Resourse Planning systems which includes Baan and Mfg to centralise SAP ERP system from 1st April, 2006 for all the concern units of dabur. Dabur implemented a state broad new Wide Area Network substructure for running centralised Enterprise resourse planning system and puting up of new informations centre at KCO caput office in Ghaziabad. Addition of system to the distributers for capturing Secondary Gross saless Data information to roll up near real-time grapevine information was done by 2004. Dabur decided to turn round out the IT services to the latest workss in the state. Dabur is no unsusceptibility with regard to other industries and realized it needed to put to death enhanced and rapidly and do more rapid determinations in order to outpace its upper category in gross and prosperity growing. Accenture projected infront of dabur that Dabur to better its supply concatenation direction, to run into such ends and gross revenues and distribution capablenesss should besides be improved and utilize IT as a strategic enabler for its concern scheme. This integrated migration to a nimbler outsourcing theoretical account that would make significance through adeptness and sustain concern enterprises and safeguarding of its SAP ERP system. SAP fundamentally, was selected due to the extended experience in India and it is used by its rivals besides.

How Accenture helped Dabur

Accenture proposed that Dabur better its gross revenues and distribution services and supply concatenation direction capablenesss and utilize information engineering as a tactical enabler for its concern scheme. From an IT point of view, Accenture suggested a two-pronged scheme to Dabur that includes relocation to a nimbler outsourcing theoretical account that would make value through mental dexterity and keep up concern enterprises and protection of its SAP endeavor resource planning system. Accenture assembled a group of highly trained industry experts so that it can convey these enterprises to life, every bit good as some professionals who have widespread SAP design and execution experience in this field which was an of import factor.

It implemented a new gross revenues and distribution scheme and in this Accenture helped in developing a widespread scheme that was noticeable as Dabur ‘s first important enterprise to place cardinal client sections in urban and rural markets, custom-make gross revenues plans for cardinal histories and reorganise Dabur ‘s gross revenues squads by one of four trade channels. There was some net income from these enterprises like addition in one-year gross revenues by 17 % whereas amplify in net incomes by over 40 % public presentation more operational effectivity and cutting down of costs.

Operational Benefits

Impact

Lost Gross saless

-40 %

Forecast Mistake

-53 %

Full, on – clip delivers

+7 %

Rolling production program attachment

+73 %

Accenture supported this concern attack with a moneymaking IT solution. It has developed in-house over several platforms, which captured actionable information crosswise the national footmark of practically 500 distributers. In the country like that of merchandise distribution, the coveted squad focused on bolstering the efficiencies and rural market diffusion and designed a channel-specific scheme for chemist, modern trade, jobbers and convenience shops.

In merely the beginning of a auxiliary efficient gross revenues plan, Accenture paid particular consideration to how Dabur might retrieve service to Indian extra-large retail merchants, which are likely to account for an extra 15 per centum of consumer merchandise gross revenues by 2010. For this group of clients, the group recognized a wholly new runing theoretical account that includes a pricing architecture model to help dialogues and revised function and uneven occupations for each and every one members of the trade field force. In inventing this scheme, the Accenture and Dabur squad optimized the company ‘s distribution procedures and internal logistics for mega retail clients, and put inducements in set to drive definite ends such as uniformity of gross revenues in food market shops, increased gross revenues via sweeping channels.

4th ERP execution SAP – APO ( Current Scenario )

Automatizing prediction: Dabur hence decided to automatize the process to develop its prediction process. The company was already running SAP ERP from 2006 and decided to set into pattern SAP ‘s Advanced Planner and Optimizer ( APO ) .To guarantee the preciseness of SAP APO, chronological information was deconstructed to arise the baseline gross revenues and impact of ATL/BTL inputs. Dabur has to a great extent gets benefits from SAP APO with enhanced concern results.

Undertaking was divided into four different stages. The first stage was Diagnosis in which design and administration construction was done. It besides established the possible chance size and the concern instance. In the 2nd stage the design of the supply concatenation took topographic point. The 3rd stage the existent execution of APO faculties took topographic point. In the last stage the actuall running took topographic point ( April 2010 ) . Once you have input the growing target the full gross revenues volume program will be generated. All the other computations are in existent clip like required capacity planning, markets where we can acquire more concern. The ERP system will so change over the gross revenues which was forecasted into the real/actual gross revenues at mill degree.

Changes experienced in top line, bottom line and stock list turnover due to ERP execution

Before the deployment, the lost gross revenues which were earlier accounted to 6 % were decreased to 3.75 % . More-over the company ‘s mistake prognosis was besides reduced from 85 to 40 per centum and its prognosis truth amplified from 25 to over 60 per centum. Achieving this act in less than eight months was a tremendous success for Dabur. This would non hold been possible sole of a concern benefit-led move towards to the exercising reasonably than an IT-led attack. With the recent executing of ERP, the effectivity of the distribution and logistics web is expected to progress more in the hereafter. Consumer wellness division grew by 12.5 % , that division has been impacted in the first one-fourth by the ERP platform conversion.

The Undertaking

A Solution

A SAP Advanced Planner and Optimizer ( APO )

A Project Duration

A Eight months

A Benefits

Lost gross revenues chances reduced from 6 to 3.75 per centum

Mistake prognosis reduced from 85 to 40 per centum

Forecast truth increased from 25 to over 60 per centum

Future Challenges

Forward integrating of SAP with distributers and stockists is a large challenge.

Execution of SAP HR and paysheet has to be done.

Along with this backward integrating os SAP providers.

Decision

The execution of ERP system in a consumer goods company is an tremendous composite project, ERP system can consequence every facet of organisational operation and design.ERP system lead to extremely standardized and extremely computerised information. A strong plan direction attack and an execution spouse holding good concern apprehension and proved experience were other factors that served as accelerators.