A study on issues related to implementation of an Enterprise Resource Planning (ERP) in Dabur India Ltd.

A study on issues related to implementation of an Enterprise Resource Planning (ERP) in Dabur India Ltd.

By: Rishi Vyas

ENTERPRISE RESOURCE PLANNING (ERP)

ERP is a business management software, usually a suite of integrated applications that a company can use to collect, store, manage and interpret data from many business activities, including:-

• Product planning, cost and development• Manufacturing or service delivery• Marketing and sales• Inventory management• Shipping and payment

ERP – A GENERAL PROCESS CYCLE

ERP provides an integrated view of core business processes, often in real time, using common databases maintained by a database management system.

ADVANTAGES OF ERP

• Sales forecasting, which allows inventory optimization.• Order tracking, from acceptance through fulfillment.• It can lead to better outputs that may benefit the company,

such as in customer service and manufacturing.• It can improve data security. • It makes a company more flexible • It supports upper level management by providing

information for decision making.

FUNCTIONAL AREAS OF ERP

An ERP system covers the following common functional areas. In many ERP systems these are called and grouped together as ERP modules:

•Accounting•Human resources•Manufacturing•Order processing•Supply chain management•Project management•Customer relationship management

Problem Faced By The Company Before ERP Implementation

• For many years, Dabur had been using Fox Pro based systems for its handling logistics but as the network has grown the distribution pressure rises technology.

• Fox Pro was a database in which each of the department likes sales, finance etc had a separate database for their respective departments. It was not a relational database.

• The company faced a lot of problem because of data inconsistencies etc. It become necessary to integrate the fragmented distribution network for the benefit of the company.

DABUR’S ERP INITIATIVE

Dabur uses ERP in three parts and is thinking of extending it.It uses the following ERP implemetations:-• Baan• MFG/PRO• SAP

1st ERP IMPLEMENTATION – Baan

• Dabur implemented Baan’s ERP system in 1999 for automation of the manufacturing process. This was the first ERP system implemented.

• The server used for this was Alpha Unix servers and this was situated at the commercial office are used for Baan and around 200 concurrent users can login from in cooperation with plants using PAMA VSATs and fiber in the distant Baddi plant.

• In Baan ERP system the key modules includes finance, manufacturing, master production planning, intelligent resource planning, dealer planning and costing.

PROBLEM IN CASE OF BAAN

•The operation of the manufacturing system has been very difficult as raw materials for Dabur’s products are mostly sourced from the various unorganised sectors where fruits and herbs and other natural recourses are procured.

•The other challenge was of extensive customisation which was necessary to meet stringent FDA regulations in the quality circle in Pharma product lines.

•BaaN requires a central server which was also a problem for the company.

2nd ERP implementation MFG/PRO ERP

Dabur initiated automation of the outward logistics system in April, 2001 by means of its primary circulation system named ‘Project Synergy’, which involves the execution of the MFG/PRO ERP system. The MGF/PRO system was running in the major warehouses all over the country. It had covered more than 90 sites in the main Distribution is finished by 2002.

Benefits were visible in locations where the ERP system had been implemented like-• Improvement in sales dispatches.• Improvement in collections process

3RD ERP implementation – SAP

• Dabur shifted to centralized SAP ERP system from 1st April, 2006 for all the business units of dabur.

• It implemented a country new Wide Area Network infrastructure for running centralized ERP system and setting up of new data center at KCO head office in Ghaziabad.

• Dabur decided to turn round out the IT services to the latest plants in the country.• SAP was selected due to the extensive experience in India and it is used by its

competitors also.• Accenture also helped Dabur in improving its services and supply cahin

management.

Conclusion With the implementation of SAP in Dabur:

• By implementing a SAP ERP system, Dabur India has helped itself in retaining the position as a growing leader in FMCG.

• Better sales forecasting and improvement in their sales.• With the implementation of MYSAP, Dabur has been able to make some very

important strategic decisions and thus increasing its productivity.• The most challenging part from Dabur would be link HR with SAP. They are

planning to implement a SAP HR and pay roll pattern.

THANK YOU