IT for the Manufacturing Segment

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.

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.