Description
This is a presentation describes the extension of company ERP solutions.
GODREJ CONSUMER PRODUCTS LTD
EXTENSION OF COMPANY ERP SOLUTIONS
G C P L C O M PAN Y D E TAI L S Godrej Consumer Products Limited (GCPL) Company Profile Corporate headquarters Mumbai, India Local office address Godrej & Boyce Mfg. Company Ltd., Pirojshanagar, Eastern , Vikhroli, Mumbai 400079 950 Rs. 6573.2 million (146 mn USD) Consumer Packaged Goods The business groups are based on Product Lines Malanpur (M.P.), Guwahati , Silvassa and Baddi (H.P.) Toiletries, Hair Care, Household Care, Fabric Care & Body Care www.godrejcp.com
Number of employees Revenue Manufacturing sub-segment Main business groupings Key manufacturing locations/facilities Products URL
COMPANY OPERATIONS
Regional Warehouse (4 Per region)
Supplier
Factory (5)
Plant Warehouse
Consumers
Retailers (5 lacs )
Distributors (1200 )
CFA
(32)
Distributors – Class A – 70 -80% Sales – 400 No Class B/C - 20-30% Sales - 800 No 1200 No
USE OF IT IN FMCG ORGANIZATIONS
?
Supply Chain Management Dealer Management Customer Relationship Management
?
?
?
Sales Force Management
EARLY ADOPTERS
?
In 1995-96, GCPL adopted ERP. It selected MFG/PRO as the ERP package Benefits within the organization
?
?
EARLY ADOPTERS
?
In 1995-96, GCPL adopted ERP. It selected MFG/PRO as the ERP package Benefits within the organization
?
?
EARLY ADOPTERS
?
In 1995-96, GCPL adopted ERP. It selected MFG/PRO as the ERP package Benefits within the organization
?
?
IT WITHIN GCPL
Leaves and re-imbursements
Best practices
Godrej IT Portal
Performance Appraisal
Information sharing
PROBLEM/OPPORTUNITY FACING THE COMPANY: To connect the business partners outside the organization.
?
The need came because of the nonvisibility of stocks at the distributor end. GCPL had to entirely depend upon their estimates, intuition and knowledge of the field force.
?
LIMITATIONS OF EXISTING SETUP
?
MFG/PRO has a de-centralized architecture and does not support B2B, dealer or supplier networks.
MFG/PRO has not kept pace with the market developments.
?
INITIATIVES TAKEN
?
?
SAMPARK for connecting distributors SAHAYOG to connect to the suppliers.
Accenture was hired to prepare the 'Strategic IT Investment roadmap' for the next five years.
DISTRIBUTOR AND CFA ARCHITECTURE
Factory
Regional Warehouse
CFA
CFA
Trading Partners
Distributors Class A
Distributors Class B
450 class A
Distributors Class A
Distributors Class B
THE CHALLENGE
To bring distributors into the IT infrastructure.
1.
1200 distributors (400-450 are A-class distributors
contributing 75-80% of the total business. Remaining 750800 distributors are B & C class distributors.)
2.
Distributors were not open to sharing their sales data. They felt that GCPL will get insights into their data and they had an apprehension that their data will be shared with other distributors
THE CHALLENGE
?
GCPL needed a solution that was not a technical challenge for all concerned and was aligned to the business logic.
?
GCPL also realized that the initiative can only be successful if distributors see benefit in adopting it.
GCPL faced stiff resistance to their Sampark Initiative.
?
OVERCOMING THE CHALLENGE
?
GCPL made a team of sales manager & 4 Officer Executive level people (one for each region). Educated the distributors on the benefits of using the system and assuring them of increased ROI within 4 months of usage.
?
?
Finally distributors saw merit in adapting to the system and were fully convinced about benefit from much lower inventory carrying costs.
PROPOSED SOLUTIONS
Option 1 Write 450 interface programs individually for all the distributors.
Issues involved ? Big task involving lots of effort & money ? Sustaining 450 programs was another difficulty.
Therefore, this option was ruled out.
PROPOSED SOLUTIONS
Option 2 Develop web based data entry form on Internet. Issues involved 1. Low quality of net connectivity at most of the distributor locations
2.
Time consuming process and it was difficult to gauge the accuracy of the data entered.
This option too was ruled out
FINAL SOLUTION
Option 3 Customize the ERP for distributors.
?
GCPL obtained the BOTREE ERP Solution and decided to customize it. 4-5 months to implement and customize the solution at Distributor end and convince them to use it instead of packages, which they were using earlier.
?
THE PARTNERS
?
BOTREE
?
Specializes in developing ERP for CPG sector.
?
?
Broadvision was associated with building of the back-end logic for replenishment engine Wipro was associated with the rollout on distributor side.
?
High geographic coverage and a good support model.
WHY SAP
?
Technical challenge was to ensure that 5-6 softwares from different vendors (Botree, WIPRO, Broadvision) work together. If any of the individual applications fails, the system fails.
?
Whenever any customization or upgradation is there, it is difficult to incorporate it across all systems. SAP would be more robust as it would be based on centralized system.
The business logic for the Supply Chain will remain the same but the central system will be under SAP in this arrangement.
?
INFORMATION FLOW
Retailer Distributor CFA
Production Schedule
Plant Warehouse
Regional Warehouse
Supplier
SAMPARK-BUSINESS LOGIC
The underlying business concept is based on replenishment.
?
It monitors the inventory levels at distributor end and based on that it suggests a replenishment plan.
?
The distributor has to furnish information on sales to CFA.
The information on current stock levels and Goods-intransit flows from CFA to distributors as also to GCPL The system considers all the above three things to determine the order level by considering the replenishment logic.
?
?
DETERMINING THE ORDER LEVEL
CFA
Current stock and goods in transit
Sales Current stock and goods in transit
GCPL
Distributor
Mini ERP
Mini ERP
Replenishment Engine
Mini ERP
Mini ERP
SAMPARK - WORKING
Portal framework : Distributor enters data (2000 hrs)
Replenishment engine : Generate Sales orders for CFA. (2200 hrs)
Shipping of goods starts (03000400 hrs)
Distributors Factories Broad Vision Application Plant Warehouse Broad Vision Database Central Database Regional Warehouse
Daily Closing Stock & Receipt information Order Confirmation
Carry & Forward Agent (CFA) Shipping and invoicing details Location wise stock
HO MIS Reports (Input for forecasting) (Stock Report Fact, CFA, Dist.)
Reports
Master Reports •Item •Retailer •Scheme/Claim Stock •Stock and Sales •Stock Movement •Current Stock
Sales Reports •Item-wise • Bill-wise • Retailer-wise • Market-wise •Salesman-wise/Vehicle-wise
MIS Reports • ABC Analysis •(Retailer, Item, Market) •Distribution Width (Item) •Productivity Analysis
Collection •Pending bills •Retailer wise collection •Market wise collection •Salesman wise collection
Financial Reports •Trial Balance •Balance Sheet • Profit & Loss Account •General Ledger
This is the most critical transaction carried out by a distributor. It is basically the record of an order against which a consignment of goods is sent to the retailer. Billing also involves various discounts offered to retailers, taxes levied, sales returns accepted, display details & Credit and Debit Note details
This screen records the details of promotions offered to retailers to boost sales. Schemes benefits can be of cash, kind or percentage types. Multi slab screens can be accommodated.
This screen records the details of credit payments made by retailers. Collections can be made via cheque, DD or cash. Collections can be sorted date wise, salesman wise or beat wise.
SAMPARK - IMPLEMENTATION
Pilot Approach Initially the initiative was piloted on 25 distributors and was used for day-to-day billing, invoicing and payment processing. Extended to 450 distributors & 32 CFAs
?
?
SAMPARK- IMPLEMENTATION
?
For 750 B & C class distributors GCPL did not want to give the ERP software so that the investment is minimized.
?
These small distributors call CFA two times a week and read the sales and stock data over the phone. CFA's keys in the data by logging on the web-site and then the data is taken backwards like in case of A-class distributors
SAHAYOG
After Distributors, focus shifted to suppliers.
Distributor CFA Regional Warehouse
Supplier
Production Schedule
Plant Warehouse
BENEFITS
?
On an overall basis inventory level has come down by 50% Sales have gone up by 20-30 %. Payback period with these numbers came close to ½ year. 15-20% increase in the number of outlets covered.
? ?
?
BENEFITS
Inventory Carrying Period (Days)
35
30
25
20
Inventory Carrying Period (Days)
15
10
5
0 2001 2002 2003 2004 2005 2006
BENEFITS
?
?
? ?
Improvement in Quality of Service Reduction in lead times Commercial and financial benefit Benefits for the Sales Team:
? 60%
reduction in time spent on collection and compilation of data from distributors ? Automation of claims data preparation ? Automated sales MIS for the distributor area ? Increased availability of field working time
THE ROAD AHEAD - SAMPOORNA
?
0.1 million retailers are to be connected. PDA’s and mobile application for capturing retailer’s data. Earlier field force used to visit the retailers to get orders.
?
?
?
Now they will be getting stock details using PDA's from retailers. And then the distributors with SAMPARK will synchronize the data taken from the field force.
SCOPE OF ERP IMPLEMENTATION
Scope Implementation Strategy Timeline Cover 450 distributors Vendor Driven Initiative (WIPRO) ,Use of Pilot Sites 18 months from conceptualization to the first roll-out to a Distributor.
Solution components and suppliers of the different components
Sampark DMS( Distributor Management System) Vendor-Botree Software International Ltd.-Chennai Component-Sampark Web site ; Vendor- BroadVision
IT investment amount
SAMPARK: Software cost=Rs 4.5 mn (0.1 mn USD); Hardware cost= Rs 10 mn. (0.02 mn USD) SAHAYOG: Rs 2 mn (0.04 mn USD)
END TO END INTEGRATION
Real Time Visibility
LEARNING'S
?
The Critical success factor for the success of the SAMPARK project has been to ensure the participation from distributors and continuous support of Top Management.
?
GCPL realized that for integrating the stakeholders in supply chain, the Big-bang approach doesn't work. It has to be a pilot-phased success since the word-of-mouth spreads very quickly about the system to encourage others to adopt the system.
Also the robustness of the system is very important because the dependence of business on the system is
?
REFERENCES
www.botree.co.in ? www.wipro.com ? http://www.godrejcp.com ? www.ciol.com ? Ms.Sakshi Sharma (Manager HR,GCPL)
?
THANK YOU
doc_168772857.pptx
This is a presentation describes the extension of company ERP solutions.
GODREJ CONSUMER PRODUCTS LTD
EXTENSION OF COMPANY ERP SOLUTIONS
G C P L C O M PAN Y D E TAI L S Godrej Consumer Products Limited (GCPL) Company Profile Corporate headquarters Mumbai, India Local office address Godrej & Boyce Mfg. Company Ltd., Pirojshanagar, Eastern , Vikhroli, Mumbai 400079 950 Rs. 6573.2 million (146 mn USD) Consumer Packaged Goods The business groups are based on Product Lines Malanpur (M.P.), Guwahati , Silvassa and Baddi (H.P.) Toiletries, Hair Care, Household Care, Fabric Care & Body Care www.godrejcp.com
Number of employees Revenue Manufacturing sub-segment Main business groupings Key manufacturing locations/facilities Products URL
COMPANY OPERATIONS
Regional Warehouse (4 Per region)
Supplier
Factory (5)
Plant Warehouse
Consumers
Retailers (5 lacs )
Distributors (1200 )
CFA
(32)
Distributors – Class A – 70 -80% Sales – 400 No Class B/C - 20-30% Sales - 800 No 1200 No
USE OF IT IN FMCG ORGANIZATIONS
?
Supply Chain Management Dealer Management Customer Relationship Management
?
?
?
Sales Force Management
EARLY ADOPTERS
?
In 1995-96, GCPL adopted ERP. It selected MFG/PRO as the ERP package Benefits within the organization
?
?
EARLY ADOPTERS
?
In 1995-96, GCPL adopted ERP. It selected MFG/PRO as the ERP package Benefits within the organization
?
?
EARLY ADOPTERS
?
In 1995-96, GCPL adopted ERP. It selected MFG/PRO as the ERP package Benefits within the organization
?
?
IT WITHIN GCPL
Leaves and re-imbursements
Best practices
Godrej IT Portal
Performance Appraisal
Information sharing
PROBLEM/OPPORTUNITY FACING THE COMPANY: To connect the business partners outside the organization.
?
The need came because of the nonvisibility of stocks at the distributor end. GCPL had to entirely depend upon their estimates, intuition and knowledge of the field force.
?
LIMITATIONS OF EXISTING SETUP
?
MFG/PRO has a de-centralized architecture and does not support B2B, dealer or supplier networks.
MFG/PRO has not kept pace with the market developments.
?
INITIATIVES TAKEN
?
?
SAMPARK for connecting distributors SAHAYOG to connect to the suppliers.
Accenture was hired to prepare the 'Strategic IT Investment roadmap' for the next five years.
DISTRIBUTOR AND CFA ARCHITECTURE
Factory
Regional Warehouse
CFA
CFA
Trading Partners
Distributors Class A
Distributors Class B
450 class A
Distributors Class A
Distributors Class B
THE CHALLENGE
To bring distributors into the IT infrastructure.
1.
1200 distributors (400-450 are A-class distributors
contributing 75-80% of the total business. Remaining 750800 distributors are B & C class distributors.)
2.
Distributors were not open to sharing their sales data. They felt that GCPL will get insights into their data and they had an apprehension that their data will be shared with other distributors
THE CHALLENGE
?
GCPL needed a solution that was not a technical challenge for all concerned and was aligned to the business logic.
?
GCPL also realized that the initiative can only be successful if distributors see benefit in adopting it.
GCPL faced stiff resistance to their Sampark Initiative.
?
OVERCOMING THE CHALLENGE
?
GCPL made a team of sales manager & 4 Officer Executive level people (one for each region). Educated the distributors on the benefits of using the system and assuring them of increased ROI within 4 months of usage.
?
?
Finally distributors saw merit in adapting to the system and were fully convinced about benefit from much lower inventory carrying costs.
PROPOSED SOLUTIONS
Option 1 Write 450 interface programs individually for all the distributors.
Issues involved ? Big task involving lots of effort & money ? Sustaining 450 programs was another difficulty.
Therefore, this option was ruled out.
PROPOSED SOLUTIONS
Option 2 Develop web based data entry form on Internet. Issues involved 1. Low quality of net connectivity at most of the distributor locations
2.
Time consuming process and it was difficult to gauge the accuracy of the data entered.
This option too was ruled out
FINAL SOLUTION
Option 3 Customize the ERP for distributors.
?
GCPL obtained the BOTREE ERP Solution and decided to customize it. 4-5 months to implement and customize the solution at Distributor end and convince them to use it instead of packages, which they were using earlier.
?
THE PARTNERS
?
BOTREE
?
Specializes in developing ERP for CPG sector.
?
?
Broadvision was associated with building of the back-end logic for replenishment engine Wipro was associated with the rollout on distributor side.
?
High geographic coverage and a good support model.
WHY SAP
?
Technical challenge was to ensure that 5-6 softwares from different vendors (Botree, WIPRO, Broadvision) work together. If any of the individual applications fails, the system fails.
?
Whenever any customization or upgradation is there, it is difficult to incorporate it across all systems. SAP would be more robust as it would be based on centralized system.
The business logic for the Supply Chain will remain the same but the central system will be under SAP in this arrangement.
?
INFORMATION FLOW
Retailer Distributor CFA
Production Schedule
Plant Warehouse
Regional Warehouse
Supplier
SAMPARK-BUSINESS LOGIC
The underlying business concept is based on replenishment.
?
It monitors the inventory levels at distributor end and based on that it suggests a replenishment plan.
?
The distributor has to furnish information on sales to CFA.
The information on current stock levels and Goods-intransit flows from CFA to distributors as also to GCPL The system considers all the above three things to determine the order level by considering the replenishment logic.
?
?
DETERMINING THE ORDER LEVEL
CFA
Current stock and goods in transit
Sales Current stock and goods in transit
GCPL
Distributor
Mini ERP
Mini ERP
Replenishment Engine
Mini ERP
Mini ERP
SAMPARK - WORKING
Portal framework : Distributor enters data (2000 hrs)
Replenishment engine : Generate Sales orders for CFA. (2200 hrs)
Shipping of goods starts (03000400 hrs)
Distributors Factories Broad Vision Application Plant Warehouse Broad Vision Database Central Database Regional Warehouse
Daily Closing Stock & Receipt information Order Confirmation
Carry & Forward Agent (CFA) Shipping and invoicing details Location wise stock
HO MIS Reports (Input for forecasting) (Stock Report Fact, CFA, Dist.)
Reports
Master Reports •Item •Retailer •Scheme/Claim Stock •Stock and Sales •Stock Movement •Current Stock
Sales Reports •Item-wise • Bill-wise • Retailer-wise • Market-wise •Salesman-wise/Vehicle-wise
MIS Reports • ABC Analysis •(Retailer, Item, Market) •Distribution Width (Item) •Productivity Analysis
Collection •Pending bills •Retailer wise collection •Market wise collection •Salesman wise collection
Financial Reports •Trial Balance •Balance Sheet • Profit & Loss Account •General Ledger
This is the most critical transaction carried out by a distributor. It is basically the record of an order against which a consignment of goods is sent to the retailer. Billing also involves various discounts offered to retailers, taxes levied, sales returns accepted, display details & Credit and Debit Note details
This screen records the details of promotions offered to retailers to boost sales. Schemes benefits can be of cash, kind or percentage types. Multi slab screens can be accommodated.
This screen records the details of credit payments made by retailers. Collections can be made via cheque, DD or cash. Collections can be sorted date wise, salesman wise or beat wise.
SAMPARK - IMPLEMENTATION
Pilot Approach Initially the initiative was piloted on 25 distributors and was used for day-to-day billing, invoicing and payment processing. Extended to 450 distributors & 32 CFAs
?
?
SAMPARK- IMPLEMENTATION
?
For 750 B & C class distributors GCPL did not want to give the ERP software so that the investment is minimized.
?
These small distributors call CFA two times a week and read the sales and stock data over the phone. CFA's keys in the data by logging on the web-site and then the data is taken backwards like in case of A-class distributors
SAHAYOG
After Distributors, focus shifted to suppliers.
Distributor CFA Regional Warehouse
Supplier
Production Schedule
Plant Warehouse
BENEFITS
?
On an overall basis inventory level has come down by 50% Sales have gone up by 20-30 %. Payback period with these numbers came close to ½ year. 15-20% increase in the number of outlets covered.
? ?
?
BENEFITS
Inventory Carrying Period (Days)
35
30
25
20
Inventory Carrying Period (Days)
15
10
5
0 2001 2002 2003 2004 2005 2006
BENEFITS
?
?
? ?
Improvement in Quality of Service Reduction in lead times Commercial and financial benefit Benefits for the Sales Team:
? 60%
reduction in time spent on collection and compilation of data from distributors ? Automation of claims data preparation ? Automated sales MIS for the distributor area ? Increased availability of field working time
THE ROAD AHEAD - SAMPOORNA
?
0.1 million retailers are to be connected. PDA’s and mobile application for capturing retailer’s data. Earlier field force used to visit the retailers to get orders.
?
?
?
Now they will be getting stock details using PDA's from retailers. And then the distributors with SAMPARK will synchronize the data taken from the field force.
SCOPE OF ERP IMPLEMENTATION
Scope Implementation Strategy Timeline Cover 450 distributors Vendor Driven Initiative (WIPRO) ,Use of Pilot Sites 18 months from conceptualization to the first roll-out to a Distributor.
Solution components and suppliers of the different components
Sampark DMS( Distributor Management System) Vendor-Botree Software International Ltd.-Chennai Component-Sampark Web site ; Vendor- BroadVision
IT investment amount
SAMPARK: Software cost=Rs 4.5 mn (0.1 mn USD); Hardware cost= Rs 10 mn. (0.02 mn USD) SAHAYOG: Rs 2 mn (0.04 mn USD)
END TO END INTEGRATION
Real Time Visibility
LEARNING'S
?
The Critical success factor for the success of the SAMPARK project has been to ensure the participation from distributors and continuous support of Top Management.
?
GCPL realized that for integrating the stakeholders in supply chain, the Big-bang approach doesn't work. It has to be a pilot-phased success since the word-of-mouth spreads very quickly about the system to encourage others to adopt the system.
Also the robustness of the system is very important because the dependence of business on the system is
?
REFERENCES
www.botree.co.in ? www.wipro.com ? http://www.godrejcp.com ? www.ciol.com ? Ms.Sakshi Sharma (Manager HR,GCPL)
?
THANK YOU
doc_168772857.pptx