Clutch Auto Stays On First Gear In ERP Race

by Hinesh Jethwani    Aug 23, 2004

While most manufacturing industries in the country are making a beeline for Enterprise Resource Planning (ERP) to get ahead of competition in the corporate race, Haryana-based Clutch Auto Limited (CAL) has decided to play it smart. Patience is the name of the game here, and there’s absolutely no rush to get into a full-fledged ERP system without building the necessary talent infrastructure first.

Speaking to CXOtoday, Yogi Raj Malik, manager - systems and information technology, Clutch Auto Ltd., said, “We have adopted a process called ’seeding’ within our organization. It’s a step-by-step development strategy, which will involve the building of ERP talent within the organization. Familiarizing our internal team with what an ERP looks like and how it operates is the key objective here. Implementing an ERP is all about building a system culture and a sense of responsibility within your organization. We have seen the technical expertise of our team grow leaps and bounds with our customized solution, and probably by next year we will be ready to adopt a full-scale ERP.”

“So as the first step, we decided to build our own ERP, with limited internal IT resources. Our homegrown ERP covers the following modules — purchases, planning, sales & distribution, marketing, accounts (some portion of it runs separately on Tally), payroll costing, excise, production planning, and design,” added Malik.

“Our first tryst with ERP started around two years back. We evaluated this local ERP vendor called Eastern Software Systems Limited, but it didn’t quite fit into our requirements. The basic problem with buying off the shelf ERPs is that without customization it’s difficult to leverage the right benefits,” he explained.

Also scrutinized in the evaluation phase, were PeopleSoft, JDE, SAP and BaaN. CAL finally narrowed down to SAP and BaaN. “However,” clarified Malik, “A new evaluation phase will start in 2005, and this time the decision will be based on the following constraints:

[1] Total automation provided by the ERP
[2] E-commerce flexibility offered by the package
[3] Strengths of the solution in SCM & CRM areas

Underlining the basic need for a branded ERP, Malik explained, “We require total consolidation of our information base, and a system that will provide tools for better decision making. The minimum expenditure budget that we are looking at is around Rs. 50 lakh.”

The legacy haunt still remains, with Foxpro and MS Access databases still prevalent in the organization. Migrating to either Oracle or SQL Server 2000 is currently under evaluation. The company may also opt for a heterogeneous combination of the two, explained Malik.

Currently the company has one IBM xSeries data server, and one HP mail server, running Windows 2000 Server. CAL plans to purchase another backup server soon. One branch has already been networked to CAL’s head office, and plans are afoot to network the other 4-5 branches in the near future.

On the client side, CAL has approximately 80 clients running a mixture of Windows 3.1/98/2000. “Since some of our applications are 16-bit in nature, we have maintained Windows 3.1 on a few clients in our production department. These desktops handle product and data testing, quality report generation, etc.”

CAL manufactures clutch cover assemblies, clutch discs and related components. The company managed a turnover of $16.43 million last year, notching $3.05 million in export markets (Europe and America).