by July 1, 2010 0 comments



Over the past few years, India has fast emerged as a global manufacturing
hub. The cheap but highly skilled manpower of India is attracting a number of
major foreign companies from various industry verticals to shift their
manufacturing base here in India. According to a United Nations Industrial
Development Organization’s (UNIDO) ‘International Yearbook of Industrial
Statistics 2010’, India ranked among the top 10 producers of manufacturing
output in 2009. There’s no stopping from making India a global manufacturing
powerhouse soon, and IT is playing a pivotal role in achieving that.

We have seen manufacturing companies to be the early adopters of IT to
streamline and automate their business processes with solutions like ERP, CRM
and SCM to name a few. This year when we looked at the projects that were
nominated for Best IT Implementations Awards 2010 for manufacturing vertical, we
did find some interesting changes in the implementation trends. Over the last
few years, majority of the  projects we received from manufacturing companies
used to be on ERP deployments. This time around, it’s slightly different. Most
of major manufacturing companies have already been there and done that and now
they are moving ahead with integrating other enterprise applications like CRM
and SCM with their ERP solutions. Also, there is a shift on focus from ERP
towards strengthening the IT infrastructure of the organization and  Business
Intelligence.

Of all the projects that were nominated, there were quite a few projects on
IT Infrastructure and BI and decision support systems.  Second to that were the
projects  nominated for ERP, CRM, SCM or Business Process Automation. The
remaining nominated projects were from Information Systems, Workforce Mobility
and others.

For any organization, information plays a vital role. Information is pivotal
to take the right decision on the right time. Despite having so much information
at hands, most  organizations find it too difficult to have right pieces of
information  at their disposal at the right time. That’s why, this year  most
organizations, who  had implemented their business applications suites earlier,
are now moving forward to have BI solutions implemented so that they can have a
bird’s eye view of business processes and functions across the organization. 
Through BI or Decision Support Systems, organizations can now have automated
reports generated and also take business decisions based on forecasting and
analysis of data through these solutions.

The organizations that are now focusing towards their IT infrastructure are
adopting virtualization so as to do resource consolidation, and also eyeing the
green initiative behind that. For their datacenters, besides doing
virtualization they are also setting up disaster recovery centers (far-site) so
as to ensure business continuity in case of any man-made of environmental
incident. Unified Communication is also a focus towards modernizing IT
Infrastructure so as to gain communications across disparate organization’s
offices/branches and also a way to cut down on travel costs.

Projects in manufacturing Industry 2010

There are organizations that are late entrant into ERP adoption, and this
year too we saw few companies adopting ERP, CRM and SCM solutions. But some
larger companies, like Bajaj Electricals, they went beyond doing just the basic
implementation of ERP, CRM and SCM suites, and integrated them all to achieve
end to end business automation in a big bang sort of implementation approach.

Manufacturing companies in FMCG space are now leveraging IT to mobilize and
automate their workforce for sales activities and to capture that data to gain
insights into the secondary sales across regions or geographies so that
different marketing campaigns can be devised for those areas based on the trends
captured from that information. They are equipping their fieldforce with PDAs
and smartphones to take customer orders and upload them to the central
datastores via GPRS.

Technology Used
When we scan through the detailed audit forms of the nominated projects, we
find that projects nominated for ERP were based on SAP, even some of the CRM
implementations done by manufacturing companies were based on SAP. This could be
attributed to the fact that the organization could be using SAP for their ERP
and it was logical to have CRM from SAP as well so that the integration could be
smooth and hassle-free. Amongst the manufacturing companies we also see the
adoption towards Cloud based services as well; as we saw few companies adopt the
CRM offerings from Salesforce.com.

BI solutions that were adopted by manufacturing companies varied from the
likes of SAP to Indian BI solution vendor, Kautilya. LG Electronics India Ltd.
implemented Kautilya for their BI and reporting needs. The software used Oracle
as the database and had JSP and XML based GUI for user’s interface.

The organizations that implemented portals for their business processes, used
technology platform of IBM and Java. The favorite application server was IBM
Websphere Portal Server 6.0, and java technologies like Struts, EJB, etc were
used on J2EE architecture. The other software technology used in the project
include SAP and DOMINO connectors,  JSR 168 and JSF portlets, BIRT reporting
engine and has IBM DB2 as the database server. The hardware used for same
project involved a 2.40 GHz Intel Xeon CPU having 4GB RAM and Windows server
2003 as operating system.

If you look at trends, the IT budget
allocation in manufacturing industry is low compared to that in BFSI or any
other sector. The biggest challenge is to quantify the RoI and justify the
investment. Traditionally in the manufacturing industry, IT is seen as an
enablement and not as a contributor towards the business. Second challenge
is towards orientation towards the digital space which includes social
networking and Web 2.0 platforms. Now moving forward we want to utilize the
social networking for business benefits like listening to end customer. Most
of the companies in our space work through a channel of distributors and
retailers, and we do not know who our end customer is. Despite having
warranty forms or other forms through which we can know details of customer,
very few customers fill in those and send to us. Therefore to engage
customers and know their details, social networking is a viable platform
where we can directly interact with the customer. Knowing what the customer
has bought, we can now not only offer enhanced services to him, but also do
cross-selling of related products directly to the customer

Pratap Gharge, VP & CIO, Bajaj Electricals

Key challenge that the cable manufacturing
industry faces today is that of handling materials and capacity planning.
Since our product is customer specific, the number of variables are very
high. To achieve order wise profitability through prediction and analysis,
or to do inventory control and traceability, we face system performance
issues due to large amount of data. Also, a good project management system
for the industry is needed that gives turnkey solution. Looking forward, we
plan to deploy following solutions in near future: HR Implementation
Manufacturing Excellence systems, Active Directory and single sign-on
Document Management Workflow solutions.

Nitin Doshi,
Head- Business System, Sterlite Technologies

On the other hand when Bajaj Electricals went for Oracle E-Business suite
implementation, their suite included Oracle E-business Applications(ERP) with
Purchasing, Inventory, Sales Order Management, Accounts Receivable, Accounts
Payable, General Ledger, Fixed Assets and Cash management modules, Oracle Siebel
CRM Applications for CPG (CRM) with Opportunities, Quotes, Trade Promotions,
Pricing, Sales Order Processing modules, Oracle Demantra Demand Management Tool,
Oracle Advanced Supply Chain Management (ASCP), Oracle i-Supplier Portal for
connecting all Suppliers for online transactions, Oracle Daily Business
Intelligence for Financial & Procurement (DBI), and Oracle Business Intelligence
Enterprise Edition for Sales Analytics, Dashboards & Reporting (OBI).

Key Challenges Resolved
Behind every IT project’s implementation, there are few challenges or pain
areas that are to be countered.  For instance, Hindustan Gums had a complex
manufacturing process as different grades need to be manufactured using several
methods, such as the thermo mechanical process.

The challenge for Hindustan Gum was how to effectively monitor and report on
raw material ingredients, processing operations, inventory shelf lives, and
anything else that puts food quality, reliability, or safety at risk. The
company had their business information stored in disparate systems, such as
Fox-Pro based solution for finance and in-house developed bespoke system for
production and manufacturing, which were about 25 years-old with no integration.
In addition, the company also faced enormous problems in capturing and recording
the costing emanating due to dual unit of measure from gaur manufacturing. The
consolidation process itself was largely manual, which was time-consuming and
took staff away from higher-value activities. Therefore, when the company
consolidated data for reporting, the results were inconsistent. To counter all
these challenges, the company implemented Microsoft Dynamics AX, which has
resulted in streamlining all the processes but also has helped the company to
maintain various compliances and standards.

Similarly, LG Electronics India Ltd. had a huge database with highly complex
data structures and due to the size, complexity and security did not want their
users to run reports against their transactional systems. The company also
wanted to ensure that they were able to capture data for a particular timeframe
and freeze the same while still continuing to execute their transactions.

This would be for compliance and trails as well as positions at different
points of time are retained for better planning. The need was also to get
critical information flowing to the users in a single screen including headlines
bulletin like functionality and the users should be able to derive comparative
data from existing versions or combine reports to build new logical reports. The
other issue was how to get very large reports to the users fast so that their
executive time is not wasted and the load on servers is minimized.

These were the two instances that show a challenge and how IT has been used
to counter those. For business processes and their automation, most
organizations implemented ERP like solutions. Whereas for consolidating their IT
resources and also for cost effective measures, organizations adopted
virtualization technologies in their datacenters.

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