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Case Studies

On-time and on-budget ERP Implementation

Business Challenge

The Client, a leading manufacturer of indoor units of split air conditioners needed to scale up its operational efficiency to support its growth targets. The goal was as ambitious as it was daunting. The company had to manage five operational manufacturing units (sixth coming up) and was heavily dependent on seasonal demand cycles.

Defying the traditional myth that ERP is only meant for large enterprises, Client chose to implement an ERP solution. It deployed Profmax ERP in record 45 days, which helped in effective inventory management and allowed the company to cater to seasonal spikes in demand.

Prior to implementing an ERP, the company used standalone softwares. One for financial accounting and the other software for automating the HR function.

However the level of automation was not robust enough to take care of the highly dynamic and competitive environment as well as the future growth requirements.

Further, maintaining data security as well as the accuracy of facts, accounts, and inventory management was just not possible with stand alone softwares. Apart from these issues, the solution resulted in pile-ups of surplus inventory.

Without an effective enterprise-wide system the company was inclined to keep higher levels of goods in inventory, which were often not required, leaving too much scope for revenue loss to the company. Due to the unavailability of even the smallest of components like a sticker, production could get delayed adversely impacting the time-to-market.

On the other hand, maintaining excess inventory levels could be an expensive proposition considering the costs involved in holding the inventory.

Our Solution

Client required a solution that would help the company improve operations while remaining competitive by performing the following functions:

  • Effective allocation, planning and control of crucial resources of men, machines and materials.
  • Well-tuned production environment with good synchronization among the various units to enable adaptation to the fluctuations in demand.
  • Effective cost control to be able to deliver better value to its customers.
  • Inventory visibility among the various units and inventory reduction across the supply chain.
  • Availability of up-to-date and concise information to the top management to allow better decision-making.

These requirements, the company understood, warranted an enterprise-wide automation solution.

The company implemented the HR, Payroll, Finance, and the Manufacturing modules of Profmax ERP Solution.

Benefits Realized

  • Data security
  • Effective handling of demand fluctuations
  • Clear and concise definition of Bill of Materials and Routing.
  • Accurate production planning and material requirement planning
  • Computerization of excise and taxation records
  • Better capturing of various costs and periodic reports on line of business wise and product wise costs and revenues
  • Accurate costing of each order and indication of having made profit or loss
  • Inventory based invoicing which was not possible in legacy systems
  • Automatic posting of logistic information to finance, which was totally manual earlier
  • Streamlining of the payment and receipts procedures
  • Online availability of customer and supplier aging analysis
  • Online availability of trial balance of various units
  • Automatic preparation of Balance Sheet and P&L A/c Consolidation of financial information enabled with multi company setup

The ERP implementation eliminated the information islands that were scattered across all business units and replaced disparate systems with a single one.

One of the most prominent benefits of deploying ERP was effective inventory control. The company is now able to maintain the right inventory levels for all its product lines so as to avoid both over and under availability of stock.

Inventory visibility across the various units has also helped make better-informed decisions and commitments to end customers.

Another key realization with ERP has been the inculcation of a disciplined approach leading to more effective and efficient way of working. The company is now able to meet its delivery deadlines well on time in order to be able to take the lead over its competitors.

Having already recovered almost 40% of its total ERP investment within the first year of implementation, the company looks forward to more returns in the future.