Background The Adhunik Group of Industries is a renowned name in the Iron & Steel and Ferro Alloys industry with over a decade of extensive as well as in-depth knowledge in the manufacturing and marketing of Iron and Steel products including Sponge Iron, Pig Iron, Billets/Blooms, Rolled Products, TMT Bars, Wire Rods etc. The group manufactures a chain of value added products for the Automobile, Construction and Engineering Industry. Adhunik’s fivemain companies are Adhunik Metaliks Ltd, Adhunik Ispat Ltd, Adhunik Alloys & Power Pvt Ltd., Adhunik Thermal Energy Ltd & Adhunik Corporation Ltd. Need for SAP The top management at Adhunik Group felt the need for an ERP solution to enable them to optimize production cost and generate more revenue, improve quality and enhance customer satisfaction, while increasing competitiveness as well as meet market demand and sustain organic growth. To fulfill this ambition, Adhunik Group realized the need to deploy better business processes to support its finance, store, costing, procurement, production and project management. “With improved stocks management at stores, things are under total control. The most important benefit which we have achieved after deploying SAP® ERP is zero wrong dispatch” Rajat Subhra Dutta, General Manager IT, Adhunik Group of Industries. AT A GL ANCE Company n Name : Adhunik Group of Industries n Head Office : Kolkata, India n Location : Rourkela, Jamshedpur and Durgapur n Industry : Iron & Steel and Ferro Alloys n Products : Iron & Steel n Employees : 1200 n Revenue : INR 1200 Crores n Website : www.adhunikgroup.com n Implementation Partner : Price Waterhouse Coopers (PwC) Challenges & Opportunities n Integrate organizational information systems n Access to up-to-date information to accelerate decision-making Objectives n To streamline the various processes across its companies SAP® Solutions & Services SAP® ERP Implementation Highlights n Time-frame : 9 months n Implementation : Smooth, friendly and effective Why SAP n SAP’s large customer base and manufacturing experience n Integrity and flexibility Benefits n Availability of reliable information at all relevant levels on a real-time basis leading to improved decisionmakkin and control n Increased organizational efficiency n Improved ability to manage distributed network of operations Existing Environment n Individual PCs with distributed data throughout the organization, accounts was running in Tally n Database : SQL Server n Hardware : HP Itanium Servers n Operating System : Microsoft Windows 2003 Adhunik Group SAP® ERP integrates key Business processes across the Adhunik Group of Industries SAP® Customer Success Story Adhunik Group of IndustriesFurther, the group recognized that in order to improve these processes, it was imperative to resolve issues related to fragmented IT systems spread across multiple locations. Informs Rajat Subhra Dutta, General Manager IT, Adhunik Group of Industries, “It was a cumbersome process for the top management to access data as and when necessary. It was also very difficult to get exact pictures of our plants located at Rourkela, Jamshedpur and Durgapur. There was an urgent need for the drastic reducion of the complexity of processes and the operating costs of the multiple systems accumulated over the years”. Further, there were problems in the management of stocks at stores. The finance department was also burdened by the huge investment in terms of manpower during the auditing period. Adhunik decided to reengineer its entire IT landscape by implementing SAP ERP software – with the purpose of increasing efficiency, reducing costs, and coping with rapid growth. Streamlining business processes Adhunik deployed SAP ERP to automate and streamline key business processes such as sales and customer service, logistics, finance, stores, procurement and reporting. The group evaluated the ERP solutions from SAP and BAAN, before zeroing in on SAP. SAP was found more suitable in terms of integrity, support, user feedback and market share. “We wanted a strong solution with flexibility and the capacity to coordinate with other applications. As SAP has a large customer base and experience in manufacturing, we decided to deploy SAP ERP,” states Dutta. The SAP project was started in May 2006. The group chose PwC as its implementation partner. The solution went live on 16th February 2007. “Given the realities, we took a pro-active and strategic decision to align with industry leaders to deploy a highly integrated suite that adds value at every facet in our organization,” says Dutta. The modules which have gone fully live at Adhunik Metaliks Ltd., Rourkela are MM (Materials Management), PP (Production & Planning), QM (Quality Management), FI CO (Finance and Control), and SD (Sales and distribution). The business processes are quiet complex in a steel plant and implementing SAP in such a small time frame was a challenge for the group. Further, Adhunik is coming out with rolling mills in the next 2-3 months to reduce its dependency on other companies for getting steel rolled. “Integrating the different companies, the different plants and the different production areas has been a complex process. Further, the stores are huge and there are so many products and by-products and maintaiinin the chain is not a simple matter. We also wanted to integrate the sales force of the 12 branch offices,” adds Dutta. There were around 50 members from Adhunik and around 15-20 members from PwC involved in the implementation. Today, all the users have accepted the implementation in a positive manner. Benefits While enhancing overall efficiency across the organization, the centralized system ensures that information across the business is available to management, not just as raw data, but also detailed reports. Through these reports, management gains a clear view of revenues and costs, and the performance of the business. SAP ERP has brought in the following benefits at Adhunik • Work duplication has been removed • Clarity of the work flow • Correct production figures across the whole organization • Easy and methodical Product Cost analysis • Coordination of Production and Sales (less inventory pile up) • Better realization and cost optimization via age analysis of inventory • Huge store, dispatch, raw material handling are under total control • Zero Wrong dispatch • Precise gate entries of trucks and their exits • Better Quality Control • Timely and accurate payment to statutory bodies like excise • Accurate billing figures and excise figures • Accurate service tax deductions • Simplified and streamlined audit • Clear picture of debtors minimizes the debt within a short time • Fast payment of bills • Happier Sales Force • Auto generation of MIS Earlier, the group was facing problems in terms of stocks management at stores. There were instances when the top management was unable to access the procurement stocks, used and unused materials, product mix and pricing, which resulted into unnecessary expenses and reduced profit margins. The deployment of SAP ERP has immensely helped the top management to directly oversee the operations of stocks and procurement as and when necessary. Adhunik expects better inventory management in the coming months. “Now, everything is visible. We have ready availability of data such as production figures, the total value of the materials, the vendors etc. We are slowly getting a clear picture,” says Dutta. Today, Adhunik is in a better position to synchronize manufacturing and logistics processes to deliver on time and complete orders. “With improved stocks management at stores, things are under total control. The most important benefit which we have realized is zero wrong dispatch. In SAP, whenever goods are being loaded, the dispatcher knows the exact situation leading to better monitoring and tighter control. Managing more than one lakh items of finished goods is very, very difficult without a proper ERP system,” says Dutta. Product cost analysis has been streamlined. “Before SAP, there was no system of proper analysis of the product cost and it became difficult to measure costs based on inaccurate calculations. Now, we are able to arrive at a more realistic product cost in a methodical and easy manner,” says Dutta. It has also helped the finance department drastically reduce their time spent on auditing and maintaining financial records. Dutta opines, “With its powerful, comprehensive functionality, SAP ERP has helped us expand our offerings, increase profitability and achieve significant competitive advantage through businessprooces innovation.” The solution has integrated the Group’s key business processes across the head office, production facilities and branch offices located throughout India. The tighter integration of busines functions and processes has led to real-time information availability, yielding superior productivity, eliminating duplication and standardization of processes. “Earlier, the lack of availability of real-time data and visibiilit led to fighting between the production personnel and the sales staff. With SAP, our sales force is happiie as they know the exact situation on the production front,” says Dutta. It is also likely to contribute significantly towards optimisation of Adhunik’s supply chain, boosting user productivity and reducing the time-to-market of new products. With SAP, employees can quickly and accurately respond to customer inquires regarding product status and delivery date, which enhances business relationships. “Managing the business has become easier. Our relations with our customers have www.sap.com/contactsap improved as our sales force can get information online and give the necessary feedback for their queries as and when required. For instance, if a customer makes a complaint, the sales staff has access to relevant real-time data on the production parameters, the quality parameters, whether the complaint is truly genuine etc. We are in a position to give the correct feedback to our customers and keep them happy,” says Dutta. The sales team can react faster to market changes and plan more effectively for sales activities, leading to an increase in productivity and efficiency throughout the sales process. Adhunik can now focus on customer value-adding activities. The group expects to complete the implementation of SAP at all the group’s branch offices in a month’s time. Adhunik can see the competitive edge that SAP ERP has provided to its branch offices. “Our branch offices which have SAP seem to have a clear advantage over those branch offices which do not have SAP. In fact, these branch offices want the SAP solution to be implemented as soon as possible,” says Dutta. Adhunik can leverage its inherent resources, strengths and capabilities, while effectively using technology to add business value. With SAP, Adhunik is starting the implementation of HR and Transportation module within this month.