Big is not always better or smarter. Who could imagine a relatively small sized biscuit manufacturer in Uttar Pradesh to adopt Business Intelligence (BI)?to overcome the loss of R50,000 being faced every month as interest cost just owing to overstocking of raw materials. And in the larger picture, the company was losing even more money due to a weak supply chain. Gobind Ram Choudhary, director, Anmol Bakers also knows why, ?If we wanted our business to keep pace with the market demand, we realised we had to have up-to-minute information at every user point. The manual system was holding us back from realising our full potential. The need of the hour was an integrated system that would bring the entire area of operation under one roof.? Almost two years back, the company adopted SAP solutions to manage its supply chain management and things are in control now.
Many traditional businesses and small and medium enterprises (SMEs) like Anmol Bakers across sectors are now realising the importance of Business Intelligence to get better results. Maneesh Sharma, head of business analytics and technology at SAP India says, ?In India, SAP serves over 3,715 SMB customers, most of them on license-based models. We are strongly focused on this market in India, with almost 32-34% of SAP?s business coming from SMBs and 70% of new customers being ?below R100 crore companies.?
Sharma mentions that retail and consumer packaged goods (CPG) companies are showing keen interest in adopting analytics and BI among SMEs, which was not the case 18 months back. But, in larger companies, the market for business intelligence is dominated by the financial services sector.
Signifying how the food industry in the SMB segment faces challenges, Anmol Bakers mentions that over a period of time, the company realised it was losing nearly R1 crore every month, the annual turnover of the company being R156 crore. Furthermore on the production front, the company faced twin challenges. On one hand, accumulated inventory led to inflated interest rate and on the other hand, inadequate inventory led to production loss and machinery not being used to their full potential. This made the company sit up to face the challenge and feel the urgency to introduce automation to tide over and help collate the disparate functioning.
Anmol Bakers needed to track every movement of its inventory, control stocks, and plan production in a way that would reduce costs and bring in efficiency in stores, distribution and supply chain. That is how the need to adopt BI came into picture. And today, the company has integrated stores transaction with financials to bring in better control and making each user point accountable for the lapses that might occur from time to time.
Better information flow has improved delivery schedules. The system has improved customer responsiveness and sales have also gone up considerably, while, at the same time, reducing overheads.
Analysts feel that the smaller consumer packaged goods companies have realised the competitiveness in the market. And with bigger multinational brands occupying this space, the smaller ones had to look at solutions to improve their supply chain. The larger scaled Indian companies did adopt BI earlier.
Sample this: Ruchi Soya Industries, an Indian manufacturer of edible oils, bakery goods, and other food-related products like soya bari and vanaspati needed a single IT platform to drive its growth objectives. The company already had 19 manufacturing units, including 13 seed-crushing facilities, six refining plants, as well as 200 depots across the country. Each location was using different, non-integrated systems, which affected data integrity and Ruchi Soya?s ability to manage its vast inventory.
The Mumbai-based company started with an in-depth exercise to identify pain points and crafted a business blueprint to help it reach its goal of achieving maximum process standardisation in a cost-effective manner.
Ruchi Soya and its implementation partner, Wipro, decided to first implement functionality supporting materials management, sales and distribution, and controlling. It also deployed financial accounting software. ?With the SAP ERP application we were able to standardise our processes across multiple units and implement robust control mechanisms. Overall, we have experienced higher operational efficiency,? says Yateendra Chaturvedi, CIO, Ruchi Soya Industries.
Ruchi Soya can now effectively support its growth objectives, benefiting from consistent, standardised processes and more accurate data. It has managed to streamline its financial accounting processes, improving productivity while enabling real-time reporting for better decision making. Managers can also generate reports much faster, allowing the company to respond more quickly to market changes. Period-end closings have been accelerated too, so Ruchi Soya can deliver timely information to shareholders and the analyst community. Sales and distribution processes and logistics functions have also been optimised. Ruchi Soya employees have a much easier time in their daily jobs now that they can quickly access task-critical information.
As the multinational brands continue to adopt newer software solutions and analytical skills, the Indian consumer packaged goods companies? bigger or small are catching up too.