ERP Impact on Organizational Efficiencies

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Transcript of ERP Impact on Organizational Efficiencies

Page 1: ERP Impact on Organizational Efficiencies
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OEM to Suzuki

60% reduction in the inventory management cost due to implementation of barcode for material issue.

As job card is allocated automatically on basis of customer schedule and mould cavity hence it’s gets easier for them to get the actual requirement of raw material .

Fully automated excise register. Implementation with e-nagare, saves dispatch time, reconciliation issues

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FMCG Mfg. and Distr ibution organization

Receivables cycle down by 1 month, Financial Reporting time cut by 15 days,

Payroll generation time cut by 4 days. Relocated 30 people

Dry Cell /Battery mfg. MNC

Financial Reporting time cut from 5 to 2 days with Reports in Indian and Japanese formats

Easy inter-branch financial transactions and reconciliation with auto inter-branch JVs generated by system, used to waste days for this reconciliation

Inventory monitoring totally online with turn around time cut by 2 days Payroll generation cycle cut to 1 day,

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Fine Chemicals Company Quarterly MIS reports used to take 20 days after the end of the Quarter,

available within 3 days of end of Quarter Easy price list management saves huge time in creating new list every time

there is a change in policy, schemes or pack types

Mult i- location Mining Company Monthly Cost Reports used to take 25 days to compile – Accuracy was also

a problem, now available on 2nd of every month. C&F agents can get information about deliveries on-line

White Goods Mfg. Co Spares requisitions used to take 20 days before an item reached the

service engineer while onsite - Cycle time cut from 20 days to 3 days

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Auto Ancil laries Fastener Company  Fast Invoice Cycle: 5 persons involved in generating 125 invoices. Fast

Invoicing option allows 300 invoices in a day involving only one person. Credit limit control at Group level: - Required involvement of both

marketing and accounts team to track credit limits and authorizing dispatches. With group MCL, only two people are able to work efficiently with group level credit limit check with no errors.

Reduction in M/c set-up time: - reduction in machine setting time from 18 min. to 13 min. with the help of Product wise specs set in “Process Control Master”

Lower Inventory Carrying cost - D3 stocks reduced from 1.35 Cr to approx. 35 lacs. Slow moving items reduced by 70% from stocks

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Duty Free Retail Chain

Month end MIS as per statutory requirements reduced from 5-6 days to 4-5 hours with centralized integrated on-line system.

The processing time task which used to take 4-5 minutes for each customer has reduced to 1 - 1.5 minutes now.

Complete control on various schemes, centrally controlled. Special sales schemes and offers pop-up on screen for both sales person

and customer, more customer delight, no mistakes. On-line Bill of Entry wise on-line inventory reports control pilferage and

result in easy compliance with statutory requirements. Efficiency has increased 3 times today. It takes only 87.5 hours per day

against 233 hours for each location. For 60 location savings up to 8730 hours (5250 hours now to 13,980 hours) per day.

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Large Mult i- location Trading House

Group consolidation of Financial reports is now available in few minutes earlier it used to take 1 week to prepare.

Preparing sales executive incentive calculation report used to take 1 week now available in few minutes from the system.

They have been able to enforce proper control on damaged stock by implementing re-bagging cycle.

Credit Limit to Customers – There was no control on credit limit before the implementation of ebizframe resulting into huge outstanding. Now they have been able to implement a full proof credit policy in ebizframe.

Selling Price – There was not much control on selling price earlier resulting into loss of margin. With the system in place now they have a better control on margin. They have auto generated minimum selling price from the system on the basis of product costing with a fixed percentage as margin.

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NAME OF THE CUSTOMER Blow Moulding MfrBUSINESS TYPE REGIONYEAR 2004 2005 2006 2007 2008 2009

ANNUAL TURNOVER OF THE COMPANY 24,98,42,912.37 80,50,64,341.37 99,59,24,674.47 1,07,86,14,168.41 1,29,03,15,007.68TOTAL NO. OF EMPLOYEES - - - - 440.00NO. OF EMPLOYEES IN FINANCE DEPT. - - - - 15.00NO. OF EMPLOYEES IN SALES DEPT. - - - - 10.00TOTAL SALARY PAID IN THE YEAR - 3,87,43,175.42 5,67,07,576.78 5,88,97,794.13 6,84,14,863.62 9,41,31,531.74TOTAL NO. OF COMPUTERS - - - - - 86.00TOTAL NO. OF ERP USERS - - - - - 98.00TOTAL NO. OF PRODUCTS - - - - - 2,009.00TOTAL NO. OF CUSTOMERS - - - - - 596.00TOTAL NO. OF SUPPLIERS - 788.00TOTAL OUTSTANDING - - - - - 42,03,52,903.06VALUE OF FIXED ASSETS - 15,42,37,621.81 18,42,37,621.81 21,04,65,551.69 21,04,65,551.69 33,58,08,510.46VALUE OF NON-FIXED ASSETS (STOCK VALUE) - 20,96,14,756.00 21,26,14,756.00 21,61,14,756.00 21,36,14,956.00 18,76,37,632.00NO. OF INVOICES PREPARED - 5,975.00 13,701.00 13,923.00 11,623.00 11,909.00TOTAL AMOUNT OF INVOICES - 24,98,42,912.37 80,50,64,341.37 99,59,24,674.47 1,07,86,14,168.41 1,29,03,15,007.68NO. OF PURCHASE ORDERS PLACED - 4,031.00 2,609.00 2,195.00 1,757.00 2,005.00TOTAL AMOUNT OF PURCHASES - 60,40,90,281.84 55,06,38,748.05 63,31,23,121.97 83,35,39,142.74 77,68,45,812.87

Trend Analysis of eff iciencies with ERP

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Logist ics Organization Errors like two vehicles landing up at customer site to pick up consignments

eliminated. Vehicle/ consignment tracking only available after vehicle reached

destination. Now web based ERP allows continuous monitoring and better customer satisfaction.

Better control in driver payments, elimination of duplicate payments.

Paper Processing plant Barcode based generation of packing list has increased productivity multiple

times. Box number/pallet number tracking through system eliminated manual

checking and laborious process in picking the right material. On-line stock reports help plan purchase better, reducing procurement time,

lower inventory carrying costs. Better cash flow control with on-line receivable and payable control

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NAME OF THE CUSTOMER Distribution CoBUSINESS TYPE REGIONYEAR 2004 2005 2006 2007 2008 2009

ANNUAL TURNOVER OF THE COMPANY 555541894 653079170 822803229 1179101161 1106530861 1232900823TOTAL NO. OF EMPLOYEES N/A N/A N/A N/A N/A N/ANO. OF EMPLOYEES IN FINANCE DEPT. N/A N/A N/A N/A N/A N/ANO. OF EMPLOYEES IN SALES DEPT. N/A N/A N/A N/A N/A N/ATOTAL SALARY PAID IN THE YEAR N/A N/A N/A N/A N/A N/ATOTAL NO. OF COMPUTERS 10 12 15 15 15 18TOTAL NO. OF ERP USERS 10 12 15 15 15 18TOTAL NO. OF PRODUCTS 2836 3348 3900 4564 4942 5845TOTAL NO. OF CUSTOMERS 345 390 442 474 503 532TOTAL NO. OF SUPPLIERS 189 234 280 332 365 398TOTAL OUTSTANDING 175610 195829 1413818 3934984 1720621 320662252VALUE OF FIXED ASSETS N/A N/A N/A N/A N/A N/AVALUE OF NON-FIXED ASSETS (STOCK VALUE) 113590090 117279069 166224065 286064442 399284465 327660276NO. OF INVOICES PREPARED 16806 20570 24422 27829 23705 26646TOTAL AMOUNT OF INVOICES 555541894 653079170 822803229 1179101161 1106530861 1232900823NO. OF PURCHASE ORDERS PLACED 16887 20650 24326 27811 23781 26577TOTAL AMOUNT OF PURCHASES 370084592 480008117 518039306 679976645 828027771 909855009

Trend Analysis of eff iciencies with ERP

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Jewelry Mfr – Exporter

FOB Reports took1 month to compile with huge report sets of 7-8 reports with detail of each invoice w.r.t. remittance etc. Now all reports on click of mouse.

Online information including consignment wise profitability as compared to consignment wise lot wise tracking of goods and sales done on spreadsheet which was unreliable.

On-line consolidation of accounts at group level reduced quarterly result generation from weeks to virtually on-line.

System generated Forex gain/loss account, inter-branch transaction with internal JVs for auto-reco. a great saver.

Export remittance reports now system generated and the Loan accounting gets settled as per the disbursement of actual entries made by Bank. Earlier all this was manual.

Contractor manpower billing and TDS done automatically through ERP, saving time and efforts.

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Weighing scale and lab equipment MNC

Cash inflow time cycle reduced from 10-15 days to 5-6 days. Credit control policies reduced cash flow problems.

Month end reports generation effort reduced from 5-6 days to 2 days now, and without additional resource required for

Transportation expense booking and reconciliation took 1 day. With automation the effort time reduced to 2 minutes. Pilferage and wrong billing brought under control.

Monthly MIS presentation preparation with PPTs reduced from of 3-4 days to 1/2 a day.

Eradicated the constant disputes between the sales and finance department personnel due to discrepancies due to error free data in the system.

Sales incentive and commission distribution management resolved with ERP with integration of sales invoices and accounts, transparent view of reports resulting in happy employees.

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Steel and Alloy products mfg and exports

Prior to ERP, Sales order use to take 3 days to process. It is now on-line. Processing of sales invoice use to take 3 days, now online. Receivables report would take 5 days to generate now online and on the

click of the button. Lower rejections, better quality as Purchase bill passed only after QC Heat number has helped in back tracking the material from the supplier

ensuring better customer satisfaction. Finalization of accounts now takes 1 month prior to ERP it would take 2

months to finalize. Easy implementation of ISO procedure thus saving major efforts of human

resources to adopt ISO.

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Internet Service Provider

Customers with even zero credit used to avail the service this has now been stopped and automatic deactivation of account is handled through ERP. Activation & deactivation process used to be done manually, used to be difficult to manage.

ERP implemented with many services hosted and controlled on the portal and integrated tightly with back-end ERP

They had lot of problem in there manual scratch card concept which has been resolved with ERP through auto- generation of pin from ebizframe on the portal

Top management sitting outside can remotely monitor and control exact fund position- bringing down misuse of fund

Company’s growth in terms of revenue has gone up by 30% whereas the total man power has gone down by 10%.

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Plastic Container manufacturing

Although Turnover increased by 55% in last 4 year inventory carrying cost has reduced by 10% in this 4 year.

Number of purchase order has reduced by 80% year after ebizframe has been implemented In last 4-5 year purchase order raising has reduced by 100%

Centralized server allows HO monitoring of accounts, inter-branch reconciliation with no additional effort

Integrated debtor credit control across branches Waste monitoring has resulted in lower wastage Production department has transparent view of sales and purchase

functions for better management of production planning

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Chemical Mfr. Exporter

Moving from nearly manual system to ERP reduced data entry efforts and manpower for this by 60%.

Export related documentation creation cycle reduced from 6 days to 6 hours.

Remote location management issues resolved and sales and purchase turn around time reduced from 2-3 days to 2-4 minutes

MIS reports related to Purchase, Sales, Inventory took 5-6 days, now available at click of mouse.

Petrochem downstream chemicals

4 to 5 Trucks get loaded for dispatch and delivery as against 1 truck earlier as approval process of sales is reduced from 4-5 days to 1 day with online approval by senior managers.

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Electronics Mfg. and Distr ibution

It can generate the MIS reports before 4th of every month, previously they took 15 days to give this reports to management.

All the reports of Sales, Purchase, Inventory and Finance module are based on product brand.RAL can easily calculate brand wise the expense, revenue and profit.

Exporters & Distr ibutors of Books

Sales Order Processing became faster by 30 to 40%Able to track booked order till dispatch to customer.

Automation of the export documentation.

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Tire & Auto parts Dealer & Retailer

One of the largest business group on Kenya. Hybrid system – 3 branches on-line on central server, 4 off-site with data replication

With central data repository, misuse of credit limits by customer stopped totally

Online inventory visibility and controls from HO Distributor, Trader of white goods, Kenya (Hypermart) Excellent control over supply chain. ERP generated procurement system

with monthly cover takes sales trends into account to recommend timely purchase as imports take 3 months to arrive.

Key product wise, customer wise, department wise, region wise sales and margin and contribution monitoring, ranking optimized profits.

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Plastic Pipe Manufacturing Industry

The cycle time from order to Invoice time has reduced by 50% Reduction in number of staffs in sales invoicing process. Sales yield report is now possible to get in 2 minutes which used to take longer

time earlier. The system enables them to generate cost of production which was not available

earlier.  Stock valuation report used to take more then a month earlier now available with

the click of a button.  It used take a month to prepare P&L. Now available on a real time basis. They could reduce Production wastages - various reports like stock ledger with

even detailed information on shop floor stocks available for control and monitoring purposes

Better usage and recycling of the shop floor wastages to produce new product.

 

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Sugar Mfg. & Plantations

26000 farmers grow sugarcane on contract with the company Planning for cane harvesting and lifting with age wise cane maturity report

through ERP and use of fleet management module. Weigh bridge integration with fleet management and farmer accounting has

ended accounts manipulation, misappropriation of funds, cheating of farmers.

Multiple payments for same account to farmer or transporter no more possible.

Commodity Trading & FMCG Distr ibutor Distributed system, data synchronized at day end Data on consumer behaviour and sales available nearly on-line Procurement based on demand analysis, JIT and inventory carrying cost

reduced. Logistics system provides clear view of the fleet’s activity, expense control

and dispatches.

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Projects & Services

Enable to arrive at project profit at any given day Also customer can review project related all review in one shot through

project management Information System from a single screen -a) Manpowerb) Project Summaryc) Expense Detailsd) Work done material consumptione) Contractor Detailsf) Labor Detailsg) Labor Purchaseh) Bill Details

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White Goods MNC – Services division

Reconciliation of Loan outstanding of Sales Force – increased from 14 Lac annually 67 Lac annually

Purchase planning based on MSL and actual consumption from earlier no planning

Major reduction in stock buffering/storing – reduced from 6 crores to 2.5 crores

Control on cannibalization of FG - 85 lacs to 44 lacs Just in Time availability of spares - from32% fill ratio to 78% fill ratio. Track of spares kept with engineers – from No tacking to Complete Tracking

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Print ing and Packaging Industry

Job estimation process used to take 30 Minutes with 60% Accuracy, Now can be completed within 5 Minutes with more than 90% accuracy.

Production coordinator can now generate reports for Jobs for design, design to Pre-Press and reprint Jobs prior to ebizframe it used to be a daunting task planning all these

Prior to ebizframe, multiple way bill generation for a single job used require at least 4-5 resources. Now it is available on click of a button.

In case of Job Ticket cancellation due to improper Quantity/Quality of Paper-used to take 4-5 hrs just to inform concerned departments to stop the process. Resulting into production losses. Now can be done in 5 Minutes. Reducing wastages.

Quarterly Sales Executive wise enquiry report used to take 10-15 days, Now available on a real time basis

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Print ing and Packaging Industry

Statement of accounts is now available easily otherwise it used to require 2-3 personnel to prepare. Accuracy used to be a problem

Prior to ebizframe, overtime calculation used to be error prone. Now available in few seconds with 100% accuracy.

Payroll processing time has got reduced from 2-3 days to ½ day. Complete control on the cost of CTP and Normal Plates now, prior to

ebizframe calculating cost of CTP Plates associate with various jobs used to be difficult to calculate.

Easy availability of paper/plate price list has saved huge amount of time in the Job estimation process.

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NAME OF THE CUSTOMER Stationery & Printing CoBUSINESS TYPE REGIONYEAR 2004 2005 2006 2007 2008

ANNUAL TURNOVER OF THE COMPANY 1,07,31,19,391.62 1,47,97,33,040.41 1,60,80,45,803.94 1,63,62,41,678.01 1,75,66,11,763.76 TOTAL NO. OF EMPLOYEES - - - - -

NO. OF EMPLOYEES IN FINANCE DEPT. - - - - -

NO. OF EMPLOYEES IN SALES DEPT. - - - - -

TOTAL SALARY PAID IN THE YEAR 1,64,01,918.09 4,08,65,848.05 5,26,68,147.52 6,54,25,615.80 8,42,45,867.89 TOTAL NO. OF COMPUTERS - - - - -TOTAL NO. OF ERP USERS - - - - -

TOTAL NO. OF PRODUCTS - - - - -

TOTAL NO. OF CUSTOMERS - - - - -

TOTAL NO. OF SUPPLIERS - - - - -

TOTAL OUTSTANDING - - - - -

VALUE OF FIXED ASSETS 48,57,47,024.35 52,66,11,733.28 64,23,84,435.63 66,06,81,760.64 VALUE OF NON-FIXED ASSETS (STOCK VALUE) 17,06,84,748.69 35,81,19,151.54 33,55,25,292.43 1,02,33,23,333.47 47,52,69,919.12 NO. OF INVOICES PREPARED 18,909 24,538 27,370 26,751 27,111 TOTAL AMOUNT OF INVOICES 1,07,31,19,391.62 1,47,97,33,040.41 1,60,80,45,803.94 1,63,62,41,678.01 1,75,66,11,763.76 NO. OF PURCHASE ORDERS PLACED 663 1,359 1,636 1,865 1,940 TOTAL AMOUNT OF PURCHASES 1,21,05,25,064.10 1,27,07,69,280.23 79,56,55,045.09 44,23,58,129.94 38,14,51,214.95

Trend Analysis of eff iciencies with ERP

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Large Steel Manufacturing Company

All branch related transactions used to be entered at the Head office. This process used to done on every Sundays involving 1-2 personnel. Now with the central server in place all branches are online with the system, management can generate any report any time.

Easier to track various types of charges paid for every import consignments helped them in analyzing all overheads with every shipments.

Bank reconciliation is now done very easily unlike earlier manual time consuming process.

LC opening and payment process automated in ERP, saving huge time and effort and good tracking of historical data

For the Francophone country branch all statutory reports are available with click of a button in French as well as in English like VAT, Trial Balance, Sales register. Earlier they used to be done manually by an accountant.

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Super Market Chain

Used to take around 7 days with 5 people to process 1200-1300 employee’s salary in the previous system. With ERP within 2 days with 3 man power salary is processed now.

It used to be nearly impossible making payments against specific order earlier, now within 1minute user can check payment detail, creditor ledger and ageing report.

Tax reports, overtime details, bank salary report, salary slip (detailed and summary) are available with just click of a button now. In the previous system they used to do prepare all these reports on excel. Data accuracy was also a problem.

Price change/revision process takes few minutes even for huge number of SKU’s at one go, as compared to time consuming and error prone shop wise system earlier.

Destruction of expired item has been reduced by 40%.

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Super Market Chain (continued)

Verification and adjustment of stock is online from HO, while earlier it had to be done shop to shop, saving time and money

Improved customer management for all kind of customers like regular customer, VIP customer, Special Card Customer.

Management of schemes with multiple options has become easy and takes care of misuse of schemes, resulting in reduction in pilferages

At a glance stock report displays complete item history like item name, pack size, reorder level, price, warehouse stock, shop stock, requested stock, all purchase order of selected item and costing in just one click. In Previous system all these information at one go were not available.

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Retail and Distribution company in UAE

Calculating and assigning sales targets to the sales executive reduced from 5-6 days to 2 days.

Brand wise targets for each executive are automatically calculated based on previous trend which can be increased or decreased based on a %. Top management used to spend 2-3 days in each branch for this. Now it has been reduced to 1 day for finalization.

Company was not able to track the sales done without the invoice. After Ebizframe ERP, a report generated showing the discrepancy between the item scanned and invoice finally saved, reducing the possibility of theft at the sales counter.

Data replication from various branches across the GCC countries was a nightmare and above all possibility of data loss was too huge. Due to ful ly automatic data transfer , the data reaches the head office the next day with out any possibility of data loss.

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Retail and Distribution company in UAE (contd.)

Delay in cash moving from sales counter to banks as process was manual, But ERP, cash f low is managed online thus reduced the delay in cash movement.

With centralized ERP, the promotions and schemes are fully controlled and monitored by the head office. Thus reducing the possibility of giving fast moving items under promotion.

There was possibility of sell ing many items under cost . With ERP a full fledge control is in place where by user will not be able to sell the product below cost until and unless approved from head office.

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Retail and Distribution Company - Mult i-country garments chain Stock taking use to take 2-3 days for each showroom and another 2-3 days to take

2-3 days for adjusting the system stock. With ebizframe ERP stock taking using PDA has reduced the stock taking of each showroom is finished within 5-6 hours including adjusting of stock in the system.

No control in terms of promotions and schemes, it was left open to the branch manager or showroom manager. After a centralized ERP, the promotions and schemes are fully controlled and monitored by the head off ice.

After the ebizframe ERP, a full fledge control is in place where by user will not be able to sell the product below cost until and unless approved from head office.

Managing the wholesale customer was difficult, specially when the number of customer are more. Each customer needed a dedicated sales executive writing down the product code from the various samples placed at various places in the showroom.

After ERP, each customer is provided with a cordless scanner which has reduced the number of sales executive in the wholesale division.

Above all time taken for each customer is reduced drastically.

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Logist ic & Procurement Services/Clearing Agent

Sales quotation cycle reduced from 2 days to 2 hrs. Payroll processing time has been reduced by 4 days. Major problem in cash management and in customer billing system. Multiple

cash issuance against same file and billing manipulation used to be a common affair earlier now the same have been controlled and substantial cash gain observed in the company.

Poor tracking of Import documentation resulted in company losing actual projected margin in many occasions. This has been reduced substantially by controls through various MIS reports and online usage of ebizframe by top management even from outside the country.

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Plast ic bott les and Poly packaging – Injection & Blow Molding

Managing actual production consumption used to be difficult earlier, with the implementation of ebizframe it has become much easier to manage e.g. for a sales order of white bottles with green caps, many times white bottles with black caps used to get manufactured due to lack of integration which is now controlled by BOM and MRP cycle.

Complete control on Inventory specially spares parts which were difficult to manage earlier. Reduction in multiple ordering of spares.

Product Costing is now done by the system by defining BOM which helps in deciding and adjusting the selling price of products. If there is any increase in direct & indirect mfg. cost, selling price can be adjusted accordingly.

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Cosmetics & Perfume Manufacturer

Import documentations used to take 2 days now it takes 1 hour. Achieved good control on wastage by implementing auto checking of balance

mix at shop floor which was not controlled prior to ERP. For every job card fresh material used to be issued without considering balance mix.

Reduction in time in attendance data feeding and payroll processing from 3 days to 2 hrs- Automatic interface between attendance machine and ebizframe has made the operation easier and hassle free

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Brewery - Beer and Energy Drink Manufacturer

Better control on returned waybills and accountability of empty bottles. There have been reduction of bad debtors, accounting of which was difficult

earlier, now controlled through receipts and sales order linking. They have good control on customer outstanding through customer statement

with complete details on full (liquid) and empty bottle balances. Better control on transporter payment as the system can generate auto debit

notes in case of short supply or breakage of bottles through empty bottle return entry cycle.

Reduced payroll report generation from 3 days to ½ day.

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I t is an ever growing l ist of immense benefits that ebizframe can deliver!

Thank You

www.essindia.com/ebizframe-erp-software