Godrej Soaps wanted to extract more value out of the well-formatted ERP data it had collected over the years. It implemented data warehousing and OLAP tools and applications to mine additional benefits and also paved the path for future e-commerce initiatives. by Soutiman Das Gupta

With the creation of this 'warehouse of possibilities' the company now can perform a number of contribution analyses, profit and loss analyses, and sales breakup analyses

In 1995 Godrej Soaps (now GCPL—Godrej Consumer Products Limited) decided to implement MFG/PRO an ERP package from QAD Inc. Since its complete roll-out, the company has experienced numerous benefits. Inventory levels have reduced, workflow processes are standardized, business processes are more disciplined, manpower is better planned, and product cost information can be viewed instantly.

Along with standardized workflow and disciplined business processes came data in a more or less consistent format. And this invaluable data was lying idle unless required for an ERP query or statistic. "We then decided to implement data warehousing applications and functions to help us extract the most out of the critical data", said Mani B. Mulki, General Manager, Information Systems, Godrej Industries Limited (GIL).

With the creation of this 'warehouse of possibilities' the company now can perform a number of contribution analyses, profit and loss analyses, and sales breakup analyses. These can help enhance product lines, build greater customization, and favorably impact the bottom line. This combination of ERP and data warehousing applications has also paved a future path for GCPL's B2B initiative.

ERP—A way of life
When Godrej Soaps decided to implement an ERP to manage its operations better, it invited Andersen Consulting (now Accenture) to guide it through the ERP selection and implementation process. "Together we evaluated SAP, Oracle Financials, and MFG/PRO. The decision to use MFG/PRO depended on factors like cost, installed base in India, and the amount of technical support available. And since Hindustan Lever Limited had already successfully implemented MFG/PRO we took a cue from it", informed Mani.

The entire ERP roll-out in 120 Godrej group companies and locations was complete in 25 months. The company received various tangible and intangible benefits from the ERP. There was substantial reduction in inventory, improvement in customer service levels, cost tracking was performed online, and workflow processes were disciplined.

GCPL's employees depend on the ERP for their daily operations. "The employees have got used to the disciplined workflow which they are compelled to follow in each department. Using the ERP system is like a large standardization exercise. Vital data is collected and collated and used to the company's benefit. This has increased our dependence on ERP to a level where we feel that it is vital to us like air and water. It's now a way of life for us", declared Mani.

The warehouse
Since there's a lot of formatted standardized data in the system, it makes good business sense to use it to the company's benefit. "The large amount of data was virtually jailed, and could have many potential productive uses", said Mani. GCPL decided to use data warehousing tools from Oracle to accomplish the task. The range of data warehousing products includes Oracle Express Server and the OLAP (OnLine Analytical Processing) client. The system serves as a decision support platform based on historical sales and cost pattern analysis.

An RDBMS from Progress Software was implemented at the backend to support the ERP functionality. The company evaluated Oracle as well as Progress and settled on Progress because it was a more robust solution at that time.

The ERP and warehousing applications are not linked online. Data is extracted from the ERP system with the help of extract routines and uploaded into an Oracle warehouse with the help of upload routines once at the end of every month. This creates a separate undisturbed database in the warehouse. This data is now routinely processed for a few days and results derived from it.

The OLAP draws from the collected database and performs analysis, calculation, and recalculation to support what-if scenarios and other strategy-setting aides. The Express Server uses a caching scheme to store, manage, and analyze relational data.

Warehouse benefits
Data warehousing implementation in GCPL is nearing completion. Data warehousing tools are not used for creating operational reports. It is mostly used for analysis and trends that allow the company to create short- and long-term strategies and business problem solutions.

To explain this let us look at an example. A particular product is manufactured in different factories of the company at different locations. Ordinary reports will give you the amount of sales that the product has made (product-wise contribution) and the amount of profit that a particular customer has generated for the company (customer-wise contribution). With data warehousing applications you can calculate the profit contribution of each factory for the same product and compare the efficiency of different factories. As a result you can perhaps divert more production activity to the better performing factory.

"You can view interesting trends in sales and costs. And if you like, you can integrate the findings from standard reports and the warehouse analyses to create strategic advances. The limit of the capabilities of a warehouse is bound by the creativity of the end-user", said Mani.

The company can load data like sales figures of goods from the factory to the distributors (primary sales), from distributors to retailers (secondary sales), and from retailers to end-users into a common database in the warehouse. The data warehouse can now allow you to derive sales and inventory trends.

Suppose primary sales have increased over a period of time and secondary sales have decreased. This can lead to 'dumping' or excess inventory. The trend analysis can thus help avoid a situation like this and maintain a consistent flow of inventory.

A perspective
"You can't just launch and immediately commission a data warehouse tool in an enterprise. You need to have a mature group of users who understand and appreciate the value of such tools. The habit has to be cultivated. ERP can be forcefully injected into a system and you cannot survive without it today. But data warehousing cannot be injected by force. It has to be accompanied with a lot of education to the end user. A user should have the capability to extract useful business intelligence from the warehouse. Thankfully, the personnel in my company are very IT-savy and have been able to embrace the warehouse initiative rather well", said Mani.

The company had started the warehouse implementation around three years ago. Its usage has recently picked up and may emerge as a driving factor for business in the near future. There are plans to allow access to the warehouse on the Web.

On the cards
In July 2001 the management at Godrej decided to implement an e-commerce solution to manage the supply chain better and an e-CRM package to foster better ties with its distributors. A detailed RFP (Request For Proposal) was made which clearly stated the business needs. After going though a long list of vendors and consultants, Godrej selected BroadVision as the provider and Satyam Infoway as the implementer.

With this initiative, GCPL expects to perform better collaborative planning and replenishment with its distributors. By doing this, the inventory can become more efficient at the distributors level.

"We will set up inventory norms for all the products at the distributor level and our systems will interact with systems at the distributor's end. We can extract figures like the closing stock and factory dispatch volumes. The system can make suggestions like the amount of inventory to order next week and the minimum inventory to maintain. The current level of inventory is between 40 to 45 days at the distributor level. In the first phase of e-commerce implementation, we hope to bring the level down by at least 50 percent”, said Mani.

The company will also implement an e-CRM package from BroadVision. It includes BroadVision One-To-One Enterprise, and its related modules like retail and finance.

The idea is to provide distributors/customers a large number of value added services over the Web. This will motivate the customer to stick to the company's services and not switch suppliers.

The customer can be proactively provided information regarding dispatch and quality of goods. He/she can key in complaints and suggestions. And based on purchasing history, the company can forecast orders, offer replacements in case of non-availability, cross sell, and up sell.

Centralizing the processes
“Unlike SAP, MFG/PRO does not demand a centralized database. SAP's centralized database architecture demands that all sites need to be online all the time with VSATs or any terrestrial link. MFG/PRO gives you the option to maintain separate databases at each location and centralize them periodically”, said Mani.

But in order to offer e-commerce solutions the data needs to be online and available on a real-time basis.

"We have started a parallel process of centralizing the distributed databases. Soon we will have a monolith MFG/PRO central database. All the different locations will handshake two or three times a day with this centralized database and allow relevant data to be extracted and uploaded. The e-commerce applications can now talk to the centralized database. When this operation becomes regular, in the next three years, we will go completely online. We can then do away with the separate databases at each location. And users will log in to a single centralized database", explained Mani.

Systems and costs
The 120 sites of Godrej companies are linked through VSAT. Leased lines and dial-ups function as backup links. Regional offices and factories use HP Unix servers and the ERP runs on Windows-based servers. The company uses Satyam Infoway for its IDC (Internet Data Center) needs. It will use the services of Reliance Infotech's IDC for the BroadVision and database centralization processes and plans to host seven new servers for the initiative.

GCPL is also likely to use enterprise storage systems in the near future.

The CRM initiative will go live in April 2002 and will cost around one and a half crore rupees. The data warehousing suite of products cost around 10 lakh rupees. And the ERP package for four associate Godrej companies cost 13 crore rupees. This includes consultancy fee, hardware costs, and implementation costs. This amount was spent over a period of four years.

There were no technology hurdles in implementing the system. The real hurdle was to change the cultural mindset of the users. Users had to be trained and motivated to use the solutions till they realized its actual benefits. And now the benefits are showing and the people are happy. “A good approach is to make IT projects more driven by users than IT Heads", suggested Mani.

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