Godrej Industries Ltd and Godrej Consumer Products Ltd (GCPL) recently went live with SAP ERP across all plants and offices. Before the de-merger in March 2001, both the companies were under a single entity known as Godrej Soaps, which was one of the earliest adopters of Enterprise Resource Planning (ERP) in the country.

The company has been using MFG/PRO (an abbreviation for Manufacturing Progress), by QAD, as early as 1995. After using MFG/PRO for more than 10 years why did the company decide to opt for SAP ERP? This question arises due to the changing requirements of an enterprise, which has to keep pace with the constantly moving and competitive business scenario. GIL’s move from MFG/PRO to SAP intends to achieve centralisation of business information, which in turn will ultimately lead to faster decision-making and efficiency.

Distributed Architecture

MFG/PRO is a distributed architecture in which software applications can be deployed locally to suit individual sites. Bhavin Purohit, General Manager, Information Systems, GIL explained, "When10 years ago the infrastructure was not strong enough to sustain a centralised ERP, we decided to go ahead with a distributed architecture (MFG/PRO). This was done, so that different factories could have their own instances, as well as run ERP for those specific locations." With time the dependency of business operations on the systems has grown significantly. Getting real time data in the decentralised environment had then become a major problem.

The company had to put up a server for integrating data from various systems. Though it used to run integration work thrice a day, the data available at the head office was not real time in nature. Distributed architecture also had other problems, for instance, the company had to maintain different sets of vendor and customer musters at all locations. Therefore, getting specific information on customers, distributors or vendors was a tedious task. Thus, the company was looking for a truly integrated ERP that could provide a centralised view. It then decided to completely change the ERP and select a more robust backbone.

GIL had evaluated three ERP solutions including, SAP, Oracle, and the latest version of MFG/PRO. The company decided to go ahead with ECC 6 version of SAP ERP as it best suited the requirements.

Upgrading Hardware In Advance

It took four and six months to implement SAP at GCPL and GIL respectively. The MFG/PRO system has now been completely scrapped; however, the data will be maintained for the next ten years as per the legal requirements. Different modules of SAP that have been implemented at both the companies include, sales and distribution, finance controlling, material management, production planning, quality management, plant maintenance, export-import etc. While the software requirements were looked after by SAP, the company had to meet the hardware requirements in advance to support the new initiative. The complete infrastructure of the company was shifted to the blade architecture a year ago, which made it ready for the SAP implementation.

Meeting High Expectations

Generally businesses face a lot of challenges while moving from a non-ERP to an ERP environment. However, this was a different kind of ERP implementation. "People are bound to have high expectations once they have been users of a similar solution. The users were quite clear about their requirements, so the biggest challenge was to match up to their high expectations," Purohit mentioned. People are bound to compare both the systems, once the new system has gone live. Added Purohit, "It is very important to inform users in advance about the features which will be made available, while at the same time also letting them know those which won’t be available."

The transformation from a decentralised to a centralised structure also led to changes in several roles and responsibilities, which employees were needed to adjust to. A centralised system follows a standardised reporting format that requires a lot of changes in management and staff training.

Centralised Thinking

With the SAP implementation, all the information is now available at the centralised integrated database. The combined view of operations has led to better and faster decision-making. The new infrastructure has made people think about centralised purchases, branch operations and the work flow, which Purohit thinks will ultimately result in increase of efficiency and cost saving.

The company has also started implementing the Business Information Warehouse (BIW) package from SAP and plans to go live with it in February 2008. Access to real time data and analytical solutions like BIW, will enhance the decision-making capabilities of the management. BIW will allow the managers have a single view of various business operations and make optimum usage of data generated by ERP.

While ERP has become a must for a unified view of business operations in case of FMCG industries, Purohit believes that the future trend will be to move towards value added solutions like BIW, SCM, or CRM. "In the case of SAP ERP implementation, I believe BIW has to be a very well integrated part of the whole project and once the decision to go live with ERP has been made, the BIW backbone should be ready."