Headquartered in Karur, Tamil Nadu, the VNC Group is an excellent example to emulate for all those companies that may be small today but aspire to make it big!

Technology Helps VNC Sustain Continuous Growth

and to systematically organise the

industrial products sector, which

was a highly unorganised sector in

the early 1980s.

Gokul recapitulates a few

decisions that were instrumental

in adding momentum to the

growth story of the group, “The

strategic moves that helped the

company accelerate its pace of

growth mainly comprise its entry

into steel wire manufacture and

its association with Tata Steel

and Lincoln Electric for the

distribution of their products.”

timely adoption of technology and

uncompromising focus on product

quality, the VNC Group has grown

into a dynamic multi-business

company, reveals B Gokul, chief

manager, Strategy and Performance

Improvement, VNC Group.

The turning pointThe journey of the VNC Group

began with the foundation of the

flagship company, VNC Electrodes

by V N Chokkalingam. The founder’s

vision was to provide high quality

industrial products to customers,

“The only way to do

business is to grow,

grow, and grow even

more…” It is this philosophy that

steered the VNC Group from a

modest 6 x 6 sq m room in Karur in

1983, to becoming a Rs 450 crore

group that includes VNC Electrodes,

VNC Steels, VNC Steel Distributors

and VNC Investments, with 12

offices across south India.

The group manufactures general

purpose manual wielding electrodes,

binding wire, and fencing products.

Because of its prudent strategies,

Management

www.consultbenefit.com • BenefIT • September 2011• 45

Vandana Sharma | BenefIT Bureau

Recently, the company won the

'Best Distributor of Tata Tiscon in

Retail’ award for the financial year

2010-11 by Tata Steel Limited.

Technology: The key ally!For the VNC Group, the timely

adoption of technology tools

has always been of paramount

importance. Technology has been one

of the key factors that has propelled

the group forward, reports Gokul.

Underlining the relevance of

technology adoption for growing

businesses, he further adds: “Gone

are the days when one questioned the

necessity of technology. We are in an

age when it is only relevant to ask how

effectively we can use technology to

grow. Besides, it has always been the

group’s ambitious growth plans that

have prompted it to adopt relevant

technology solutions.”

Therefore, at the VNC Group, the

emphasis is not only on investing

in technology but also putting it to

effective and optimum use. Apart

from the ERP system implemented

across its companies and units to

integrate its production, supply

chain and management processes,

the group has also recently

deployed a customer relationship

management solution. A few

servers have been deployed to run

these business applications. The

group also has a search engine

optimised website.

VNC has a 5-member IT

team, which develops tools to

render support to the existing IT

infrastructure.

The leap towards ERPOne of the notable IT

implementations for the group has

been its ERP suite, which integrates

all the group companies.

The group wanted to achieve

operational transparency and

efficiency across the board and

also tightly integrate the disparate

operations of its various companies.

Hence, the company decided to

switch to the Ramco OnDemand

ERP (RODE) solution. The

implementation started in November

2009 and VNC went live with the

RODE solution in January 2010. The

implementation process took eight

weeks, reports Mahaboob Ahmed N,

manager, Projects, Ramco Systems.

The decision to opt for the

Ramco ERP solution was taken after

exercising due diligence, says Gokul.

“We explored solutions from the likes

of SAP, Kennovation, Oracle and a few

others. RODE was chosen because of

the minimal customisation required

when compared to other solutions,

and the value for money that the

solution offered.”

The company opted for an

on-premise ERP model, where the

organisational data captured is

stored in the company's own servers.

The decision to opt for this model

was made due to the huge volume of

transactions, informs Gokul.

We are in an age when it is only relevant to ask how effectively we can use technology to grow.

The group flourishes with the timely adoption of technology

A server that runs the ERP solution

Management

46 • September 2011 • BenefIT • www.consultbenefit.com

“Because of prudent strategies, timely

adoption of technology and uncompromising

focus on product quality, our Group has grown into a

dynamic multi-business company.”

B Gokul, Chief manager,

Strategy & Performance Improvement, VNC Group

Making an ERP implementation effective Talking about the best practices that

were adopted before and after the

ERP implementation, Gokul says:

“The pre- and post-implementation

stages require two different attitudes

towards ERP. While efficiency has

to be the most important aspect in

mapping the business processes

during the pre-implementation

phase, using the new system

effectively needs to be the focal

point post-implementation. In other

words, the ERP solution needs to be

structured with respect to the vision

that the organisation has for its

operations in the future, and not in

accordance with its current practices.

This in itself serves as the foundation

to translate the vision into reality.”

To achieve this, extensive training

was given to all the end users to

make them independent and help

them to use the system with ease,

informs Ahmed.

The benefits derivedAhmed shares his observations

related to the pre- and post-

implementation scenario in the VNC

Group: “Earlier, each company of the

group was operating individually. But

with the implementation of the ERP

solution, all the group companies got

integrated into one entity. The RODE

solution has also addressed the

group’s need to capture its purchase,

production, sales and finance

functions in a single application so

that the end-to-end business related

MIS (management information

system) reports can be viewed by

the management. It also provides

consolidated inventory and financial

statements at the group level.”

Ahmed illustrates a few more

benefits that the ERP solution is

delivering to the company: “Earlier,

in the legacy system, each sales office

(branch) was configured as a separate

finance book and then consolidation

was done. But now, all offices are

grouped under a single organisational

unit. Hence, the tracking of stock has

become easy. By using the production

module of the ERP system, they are

able to track the stock at each stage

of production, and also establish

controlled quality check measures.

The system has made it possible

to establish effective controls over

processes by enabling SMS alerts.”

The system can also generate

consolidated MIS reports at the

click of a mouse. These reports

are used comprehensively by the

VNC Group for strategic as well as

operational decision making and

future strategic planning.

The RoIAssessing the return on investment

that the company has got from the

ERP implementation, Gokul says:

“The tangible ROI that the group is

enjoying is by virtue of its integrated

operations as we have brought all

the group companies onto the same

platform. Every process and function

is now tightly controlled, systematic,

and has defined standards.”

Another important return

is the easy access to data that is

essential for any kind of analysis.

The organisation now possesses the

strategic advantage to launch any

new initiatives or functions, which

will be part of its intangible ROI,

affirms Gokul.

What does the future hold?Going forward, on the IT

infrastructure front, the company

plans to continue with its strategy to

focus on leveraging the most out of

its ERP and CRM implementations

by building sub-systems (such as

customised MIS reporting) over the

next few years.

At the organisation level, the

VNC Group is already proactively

exploring diverse interests such

as manufacturing, distribution,

agriculture, mining, wind power and

logistics—exploring new vistas to

continue growing consistently and

rapidly. And, in this pursuit, we wish

the group all the very best!

“With the implementation of

the ERP solution, all the group companies

got integrated into one entity.”

Mahaboob Ahmed N Manager, Projects Ramco Systems

Management

www.consultbenefit.com • BenefIT • September 2011• 47