Case Study Special: Godrej’s Data Warehousing Initiative
A warehouse of value

Godrej Consumer Products Limited 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

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

The use of the ERP also ensured that data was generated in a consistent and structured format which could be easily archived. This invaluable data was lying idle unless required for an ERP query or statistic. "We devised a way to extract the most out of this critical data. We decided to implement data warehousing applications and functions," said Mani B. Mulki, General Manager, Information Systems, Godrej Industries Limited.

After the creation of the data warehouse the company has been able to reap a number of benefits. It performs jobs like contribution analyses, profit and loss analyses, and sales breakup analyses. These 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 e-commerce initiative.

The warehouse is born
The entire ERP roll-out in 120 Godrej group companies and locations was complete in 25 months. And GCPL's employees now depend heavily on the ERP for their daily operations. Vital data is collected and collated to the company's benefit. 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. The data warehousing suite of products cost around Rs 10 lakh.

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 tools are 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.

E-commerce initiative
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. After going though a long list of vendors and consultants, Godrej selected BroadVision as the provider and Satyam Infoway as the implementer of the solutions.

"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. This will allow us to extract figures like the closing stock and factory dispatch volumes. The system can now make suggestions like the amount of inventory to order next week and the minimum inventory to maintain," said Mani.

The CIO perspective
"You need to have a mature group of users who understand and appreciate the value of warehousing 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-savvy 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.

The mindset hurdle
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