SAP To Revolutionize Processes At Adani Wilmar

by Hinesh Jethwani    Jun 21, 2004

Adani Wilmar Limited (a part of the Rs 9,000 Crore Adani group) has purchased 170 licenses of mySAP ERP, and has assigned Caritor the gargantuan task of integrating the ERP to its 80 odd locations mapped across the country.

Speaking to CXOtoday, Pankaj Shah, Senior IT manager, Adani Wilmar Limited (AWL), said, “We used a Financial Accounting System (FAS) for the last four years, which had been developed by Excel Industries and our in house IT team. As the requirements of our sales and marketing department grew, the need for data synchronization became crucial. We needed a solution that would allow us to seamlessly switch over to a centralized database solution, from the existing distributed architecture. SAP offered us exactly that, with its tightly integrated modules and centralized system.”

SAP was short listed after reviewing the usual suspects - JD Edwards, Oracle, Ramco, Baan, IFS and OneWorld.

Although Shah admitted that SAP was the most expensive of the lot, he justified the choice saying, “SAP offers a proven empirical formula for the manufacturing industry. All our competitors - including Marico and ABP - have implemented SAP. Even HLL is planning to go in for the same.”

Although the company has purchased 170 licenses as a part of the initial deal, the figure will increase as operations ramp up, affirmed Shah.

Regarding legacy data hassles, Shah had an interesting insight to share. “We have decided to follow a unique approach wherein a particular date for going live will be set. From that day onwards all new information will be incorporated into the SAP system, leaving the existing records untouched. However, users interested in historical information will be able to access a parallel legacy module. This will negate the complications involved with incorporating legacy data into the SAP system, as it is very difficult to re-punch the backend. Moreover legacy transfers sometimes lead to wrong information being recorded into the database, as SAP already has 2-3% of the existing table system. Sometimes information is just left hanging due to the export process. Due to all these complications, we have decided to transfer only minor strategic information to the SAP system, leaving the financial data untouched.”

The ERP will reside on a centralized database at the company’s HO in Ahmedabad, and will be networked to approximately 80 locations throughout the country. 15 of those branches play a critical role, and will be equipped with leased lines to fulfill the bandwidth requirements, informed Shah.

Caritor will provide an integrated information backbone across all of Adani Wilmar’s processes covering, in Phase 1, the material logistics, manufacturing, planning and execution, finance and customer facing processes. In Phase II, business information warehouse & customer relationship management will be covered. The project will be completed in eight months.

“At some remote locations there are major connectivity problems. Even Reliance and Tata do not provide ISP services in some interior locations where our branches exist. In such cases, we may have to opt for a heterogeneous network,” explained Shah.

The ERP will be split up across three servers - namely a database server, application server, and a development server. The centralized database server will reside on a HP-UX dual Itanium (scalable to a quad system) server.

“SAP implementation with the help of Caritor will enable us to enhance our customer focus and will be a significant value addition to our information backbone to sustain our growth. Post-implementation, our support systems will work in a seamless fashion,” said Pranav Adani, executive director Adani Wilmar Limited.

“Our commitment to Adani Wilmar Limited goes beyond this SAP implementation - we are committed to being their trusted advisors for all their IT initiatives and will certainly bring a business centric approach to all their IT investments” said S G Raja Sekharan, VP-Sales, Caritor.

Justifying the tremendous investment in SAP, Shah explained, “The competition in our line of business - i.e. the edible oil manufacturing sector - is extremely high. Our annual profit ranges between 1-2% of the total annual turnover. With an annual turnover of Rs 1800 crores last year, we made a profit of about Rs 20 crore. We are growing at a rapid rate - starting from a production of 800 metric tonnes, we have expanded to a current capacity of 1200 tonnes. The figure is all set to expand to 2200 metric tones by the end of this quarter. Three more industries have set up shop around our manufacturing premises, and the total output of the area has grown to 5000 metric tonnes.”

“ROI benefits should be visible within the second year of operation,” concluded Shah.

AWL is into manufacturing and marketing of branded edible oil products under the ’Fortune’ brand name. The company owns an oil refinery at Mundra (Gujarat) and seed crushing units at Bundi-Rajasthan and Mantralayam-Andhra Pradesh.

Tags: SAP, ERP