BEL Streamlines SCM and Lifecycle Management

by CXOtoday Staff    Dec 10, 2008

“Technology, we know, is critical in ensuring efficiency and competitiveness and recognizing the need of the hour the company has initiated the implementation of Oracle ERP, a powerful IT platform for financial, supply chain and various other business processes and is expected to be completed in FY2008-09,” said Shekhar Bajaj, CMD of Bajaj Electricals Limited.

Encouraged by the CMDs acceptance of technology as an integral tool to enable business growth, 1,700 crore worth BEL is leveraging Oracle’s latest acquisitions such as Demantra and Agile for its supply chain management and product life cycle management.

The end to end solutions will enable Bajaj Electricals to meet the complex business challenges of growing their brand equity, optimizing the trade relations and improving their operational excellence.

R. Ramakrishnan, executive director at BEL said, “We had evaluated both SAP and Oracle. Both are comparable in core EBS applications. But Oracle scored because of its fusion strategy which is taking best of breed solutions such as Siebel CRM, Demantra and Agile.”

He said BEL is deploying the ERP not only as an automation project, but as a business enabler that will provide critical information to help improve the quality of decision making.

Challenges

BEL is a widely distribution-oriented company. It has 25 storehouses and manufacturing units at Uttaranchal, Himachal Pradesh, Pune, Daman, and Ahmedabad. The company has six business units, and each unit has 1500 SKUs. The businesses are spread across consumer durables, projects, and industrial marketing among others. The operations are complex and managing this complexity is a problem.

On the sales front, being able to ensure that the sales forecast is proper is a major challenge. Also ensuring that the order placed to the vendor is for the right demand, meeting supply chain expectations, avoiding stock-outs, reducing slow moving and excess stock (demand management) with minimum inventory are important for the company’s success.

Earlier a lot of work was manual. An in-house team developed the MIS, but it became inadequate as the business grew. In fact, a lot of work was done manually, and people spent a lot of time for administration requirements. BEL chose Demantra to meet the above mentioned concerns. Now the role of the field will be to confirm the forecast and automate the indenting process (which was earlier done at the branch level).

Ram said that plans are afoot to optimize the supply chain, start a central warehouse, reduce inventory in branches and combine truck loads and increase truck frequency. “We need more time for sales force to increase customer touch base. Since the pain of forecasting and indenting is being corrected, the salesforce will be able to tie more to the customer.

OBIEE gives a lot of performance dash boards. So people on the field have information on dealer wise performance and profitablitiy, product wise information, etc. They can learn about the growth, performance and target at the touch of a button. Since they will have information and time on feet, they will be able to address productivity issues.

On the pricing and discounting front, there was a lot of discretion issue. “How is one using discretion? Now we have a standard price through a price controller. This leads to standardization of the pricing policy and discounts, thereby faster execution of order, lesser discrepancy, invoicing errors and greater fairness and transparency,” said Ram.

Going forward, BEL wants greater visibility into the pending accounts and purchase orders of suppliers, who will be able to interact through the portal. The suppliers will have access to relevant information, and will also be able to see orders on line, enabling automatic replenishment.

The Tech Package

Phase One:

* Overall, EBS will be the core ERP implementation,
* Siebel CRM: to capture order, pricing, CRM, quotation and project tracking,
* Demantra: for demand planning and management
Oracle SOA Suite,
* OLAP cubes using SQL server database
* Siebel Professional Edition covering sales, service, marketing,
* Oracle Business Intelligence Enterprise Edition (OBIEE) for sales analytics and decision support system.

Oracle Consulting is the implementation partner with back-to-back support from Deloitte Consulting, informed Pratap Gharge, CIO at BEL. The target go-live date for phase one is February 1, 2009. Phase two will comprise Oracle HRMS and Agile PLM.

Currently, BEL has a home grown HR self service portal (Intranet) which will communicate with Oracle. Phase two will start six months to one year after the go-live of Phase one projects said Ram. The time would be utilized to train employees and make them project ready.

The Process

Ram spearheaded the project with due support from Gharge-his man Friday and the team. Said Gharge, “PWC evaluated the needs of our organization between April to August 2007. With changing dynamics, there was a need to conduct a business process improvement (BPI) exercise. The corporate management committee (CMC) with functional group heads comprising the top most people was founded. Ram said, “We explained to them whether the current legacy can maintain and upgrade in terms of GUI or developments. All felt the need for change.”

“Ram was the catalyst in process steering the CMC toward decisions. The IT council arrived at a road map and worked with PWC on the project. The people we worked with at PWC moved to Deloitte, and hence our transition to Deloitte. Deloitte is helping us with programme management, change management, listing business benefits, and understand how to reduce cycle time,” said Gharge.

And how did Gharge understand the business need? Said Ram, “Pratap had participated in a HR exercise sometime back which was conducted by Hewitt Associates. This was project where he attended all the workshops for all the BU s and departments and was driving the balance score card project organization wide. Due to the same exposure, and his long experience in Bajaj Electricals, he is having very good business understanding of all the processes and all the businesses. He thus has hands on experience on the business side of BEL.”

Convincing the CFO was also not difficult, said he. “The CFO was also a part of the IT and corporate management councils. We kept him updated about the project, and he was also a part of the decision making process at each stage.Overall closure of the accounts was getting delayed and the finance team was facing problems related to compliance as per accounting requirements. Hence, the CFO was in favour of going in for a ready ERP transaction processing system, which will take care of all these issues.”

Ram said that the company has come a long way from being a Rs. 300 crore company in 2000 to a Rs. 1700 crore group presently. “We will soon be in the Rs. 4000 crore bracket.

The only question in everybody’s mind was will IT help us? And so we named this project as SMILE. (S:simplify, M:migrate process, I: integrate, L: learning orientation and E: effective and efficient).”