Dimexon Diamonds is a diamond manufacturing and distribution company. It has 7 manufacturing units in southern India; and its distribution networks cover 7 countries in Asia, Europe and North America. After undertaking a strategy review, the company decided to focus on profitable growth through a robust IT system to support the business.

Identifying the Gems

The top management identified that they needed an application architecture and a BI system to strengthen their processes. They evaluated their requirements, business process and expectations and wanted to bring a technology that matches all this. None of the ERP packages met all their requirements, but SAP ECC 6.0 came the closest.

Implementation partner Siemens Information Systems deployed SD, MM, PP, QM, FICO, BW and FI in phase 1. It uses the IBM P5 series servers and functions on Unix OS with Oracle as the database. The legacy system, which was a combination of Oracle and VB, along with Tally was phased out.

The well planned implementation was spread over nine months. After the project preparation stage, they went through the ‘business blueprint’ stage where they had rigorous integration tests. They also had extensive SAP training sessions where they trained about 300 people, including top management, some core team members and key users. The project went live on 18th January 2007 and there are currently about 250 users.

Polishing the Rough Edges

Implementing a solution that doesn’t have very strong presence in the diamond industry vertical was a big challenge at Dimexon Diamonds. As this was one of the first implementations for SAP in the gems and jewellery industry, it didn’t speak the language of ‘carats’ and ‘pieces’.

Satyanarayan B, CIO & VP, Dimexon Diamonds, reflects, “With some aspects we knew that SAP didn’t have a solution for our vertical, but some came as a surprise to us when we were about midway into the project. We had to take a call on whether to continue with the solution or develop our own solutions. We realised it wasn’t a major setback and we developed in house programmes using the SAP language for global lot management and dual unit of measures.” Apart from that, their manufacturing plants are in tier3 cities, where IT infrastructure and literacy is relatively lower.

The Glitter of success

The implementation led to a number of positive outcomes. One of the major changes was interfacing the weighing machines directly with the SAP system, eliminating the need for employees to enter weight in person. Satyanarayan explains, “In a weight reading such as 9.8375, it is important to be accurate. There are some chances of error while entering manually even if the employees are careful. This has a serious impact on our financial values.” The direct interface rules out any error in this regard.

Another difference made by the system has been in terms of inventory tallying. Diamonds are high value items and every piece makes a difference. Earlier, it was a high-pressure situation when the employees tallied manually. Now, through the ERP implementation, the workers are able to go home much earlier and in some cases even an hour earlier. This can be co related with financial value; if the number of employees going home an hour early is multiplied by their salary.

Satyanarayan concludes, “We now have constant availability of online information, data accuracy and security, credit management, a strong control over inventory, controlled WIP and huge cost savings.”

Maintaining the Shine

The first two months post implementation, threw up a few glitches where data regarding value flows and transactions weren’t upto the mark. It was important at this time to understand user problems and correct them immediately. To tackle the situation, Satyanarayan shifted some key IT people closer to the users, so their problems could be addressed when required. The system has stabilised now, and the data servers are running full time without any hitches.

Dimexon Diamonds has plans of roll out phase 2 soon, which would cover modules like CRM, APO and Portal.