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Monsanto’s ERP implementation

Harvesting the ERP crop

Here's how Monsanto, the biotechnology giant reaped the rich benefits of BPCS, a lesser known ERP solution. by Soutiman Das Gupta

"SAP needs a lot of resources in terms of hardware and costs. We did a comparison study between SAP and BPCS in Asia, and BPCS offered us better benefits", says Dayama

As the clientele grew, the company had to live up to the service standards expected of a global company

The company
Monsanto is a global provider of agricultural and biotechnology-based products. The company produces herbicides, seeds, and related genetic trait which provide growers the means to produce crops at higher yields. The net sales registered a 5 percent increase in 2000 to reach $5.5 billion.

The problem
The parent company in USA uses SAP and decided to extend ERP capabilities to India and other APAC countries. But the APAC operations needed a solution that offered more flexibility in terms of infrastructure and costs.

The solution
The company decided to implement BPCS, an ERP from SSA Global Technologies (SSA GT) in India and other APAC countries. It felt that SSA GT offered the best features and price compared to any other organization.

The benefits
Critical operations are centralized, data inputs are recorded in real-time, and reports are created daily. The company feels that there's a lot of discipline in operations and a substantial cut in costs.

Monsanto, a global biotech research firm shunned the big boys of ERP, to settle for BPCS, a lesser known ERP solution from SSA Global Technologies (SSA GT). Now the company reaps immense benefits from the customized ERP solution for its operations in India and APAC (Asia-Pacific).

The US-headquartered Monsanto felt a need to organize its operational processes and strengthen the supply chain to expand its market. So Monsanto chose SAP as an ERP solution to structure its organizational processes. They felt that SAP was the best choice because it offered modules that suited the biotechnology company's specific needs very well.

But, when the company had to extend ERP capabilities to the APAC countries, it turned to SSA GT. SSA GT provides an ERP solution called BPCS, which the company implemented in India and other APAC countries like Australia, China, Singapore, Indonesia, and Malaysia. The company felt that BPCS was more cost efficient for the APAC region.

BPCS takes root
The company's decision to switch ERP vendors was very strategic and critical. Rajesh Dayama, Commercial Application Manager, Monsanto India says, "it was the parent company's decision to use BPCS in APAC even though it uses SAP in the US."

SAP was not implemented in the APAC because of high cost and skills needed to implement and run SAP systems. "SAP needs a lot of resources in terms of hardware and costs. We did a comparison study between SAP and BPCS in Asia, and BPCS offered us better benefits", says Dayama. Since the two continents run different ERPs, a bridge has been created to link the ERP systems and offer interoperability.

In APAC, Singapore, Australia, and China were among the first to implement BPCS. India implemented BPCS in May 1999, followed by Indonesia and Malaysia.

ERP solutions for every industry should have modules that can meet the specific needs of that particular vertical. "At the time of evaluation, no vendor other than SSA GT and SAP had modules built for biotechnology companies like us. So, our choice was limited between the two. Other ERP vendors companies whether big or small were not on the list", Dayama pointed out.

IT takes seed
Even though Monsanto started operations in India 45 years ago it introduced computerization only in 1995. This was the 'baby step' in creating an IT infrastructure that now spans six locations nationwide and supports a multi-module ERP across APAC. Monsanto has an India head office in Mumbai, a customer service center in New Delhi, a R&D (Research and Development) center in Bangalore and three manufacturing plants located in Silvassa, Elluru (Andhra Pradesh), and Bellary (Karnataka).

Before BPCS was implemented in India, the company did not have any unified application package to take care of its operational needs. People used individual desktop applications to prepare reports. A few remote locations even had to submit reports manually. All these reports had to be collected and consolidated. The figures had to be keyed in every month. "You can imagine the scope for errors. We had to correct errors everyday, and at times had to repeat the entire cycle", says Dayama. The decentralized process made it difficult to control the flow of information and critical data was never available instantly. One could only compile reports at the end of the month.

As the clientele grew, the company had to live up to the service standards expected of a global company. The parent company in the US realizing this decided to extend ERP support in India.

The fruits of BPCS
In India, Monsanto uses the inventory, SCM (Supply Chain Management), GL (General Ledger), payment, and manufacturing modules of the ERP. It partnered with IBM for implementation and consultancy. The hardware, software, and implementation costs amounted to US$ 80,000.

It was a slow transition to the ERP systems rather than a 'big bang' approach. The implementation was done in planned phases and the older systems were run in parallel till the ERP took over. "In the first phase of implementation we deployed the inventory module, followed by SCM and GL. The second phase started a month later where we deployed the other modules. We deployed all the modules within three months", prompts Dayama happily.

The benefits of ERP were felt immediately after implementation. "The ERP has centralized the entire operations processes. All data inputs are recorded in real-time and there is little scope for errors. Reports are received daily instead of monthly. Before implementation, several documents had to be shipped from remote areas and we had to spend a lot of money on logistics. Add to this the errors and recalculation of figures, consumed many man-hours and ultimately financial resources. With the ERP, there is a lot of discipline in operations and a substantial cut in costs", explains Dayama.

"Thanks to the support we had from IBM and our internal team, there weren't too many problems in setting up and firing the hardware. The hardware was shipped according to the technical specifications provided. The software platforms were pre-loaded and ready to run. There were a few hiccups initially, but it wasn't anything that our team couldn't handle", said Dayama.

The network (branches and leaves)
Monsanto's India network currently supports 350 users. It all started with the first office in Mumbai which had an Ethernet LAN. Soon, other offices that sprung up in Mumbai and various locations had their own LANs. The offices in Mumbai, New Delhi and the three manufacturing plants are connected using DAMA (Demand Assigned Multiple Access) VSAT (Very Small Aperture Terminal) links. Comsat Max is the VSAT service provider.

"We did not depend on leased lines very much. Bad experiences with leased lines in previous companies have made me wise. Bandwidth was usually 60 percent of the promised amount along with frequent downtime and outages. It's important that we have at least 99 percent uptime because the company's critical systems use the ERP. The users at remote locations and offices need to have access to the data all the time. When you lose network connection you lose the integrity of the data", Dayama pointed out.

The amount of bandwidth served by VSATs to the various locations depends on the kind of applications used in each location. Delhi only needs to log into the ERP data and can function with 16 Kbps. The manufacturing plants use the ERP along with various other databases and thus needs more bandwidth. So, the three plants are allotted 32 Kbps each. The regional customer service center in New Delhi uses 16 Kbps.

The R&D center in Bangalore is linked with a 128 Kbps VSAT link. Bangalore is also linked to the US office with a 384 Kbps Frame Relay link along with an ISDN backup. Monsanto's facility in Singapore serves as a disaster recovery site for India. In case of network failure,an ISDN link is established from an alternate location and the ERP servers in Singapore can take over.

Hardware systems and other applications
There are Cisco 2610 routers at every VSAT location. The VSAT link collapses to a switching architecture mainly comprising Cabletron SmartSwitch 2200 switches. The ERP runs in Mumbai which is the heart of the company's nationwide network. The ERP modules operate from an IBM AS/400 which has 80 GB storage. There are 5 HP LH series servers that run Unix and NT, and have 40 GB storage each.

DLT backup is taken daily and is separate for the AS/400 and other servers. A set of 10 cartridges is used and each cartridge backs up a day's data. The entire set is changed every week.

It's vital that the hardware infrastructure is able to support growth in terms of number of users and applications. "We kept organizational growth in mind and used that as a parameter to plan storage capacity, RAM, and processing power. There won't be any network communication problems and last minute addition of hardware and software elements just because a new location has to be hooked on to the network", promises Dayama.

The Monsanto team had to install a few small applications to facilitate operations, as these were not part of the ERP. They used off-the-shelf products to allow document management, small billing mechanisms, and library management.

Moving to greener pastures
In the next few years, does the company plan to migrate to a newer ERP package which perhaps offers newer functionalities. Or, does it plan to stay on with what it has? "We certainly don't need to use any other ERP solution. In fact, I see our ERP system getting bigger with added functionalities. We plan to move into e-business and extend our services to our customers over the Internet. Customers today can place orders at our customer service centers. Soon, our customers will have the option to place orders directly with us. We will ship the goods straight from our warehouses to the customer's premises. We will also use a

CRM (Customer Relationship Management) solution and customers can benefit from a call center. The USA office has already planned e-business and CRM strategies. And in early 2003, India and the other APAC countries will go live with it", said Dayama.

Soutiman Das Gupta can be reached at soutimand@networkmagazineindia.com

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