Marico Industries

MiNet and MIDAS, the golden touch

Vinit Thakur Head IT Marico Industries Ltd.

The IT and business team at Marico Industries Limited joined hands to develop two homegrown solutions—MIDAS and MiNet, which made it the winner of the Computer Associates Intelligent Enterprise Award in the Retail and Consumer Goods category. by Deepali Gupta

Since the integration between the systems of various departments at Marico Industries Limited (MIL) was low, a large part of the managers' time was spent in data validation. The available technology was becoming a hindrance rather than an asset. At that point the organization felt it necessary to deploy an integrated enterprise system across all functions of the organization, and extend that system to distributors.

The IT team at MIL therefore implemented SAP R/3, APO and BIW, and MIDAS. And in order to further the initiative it developed a B2B portal MiNet to reach out to distributors. One of the reasons the implementation of the project was so successful was that it was owned by the business managers rather than being an individual IT effort.

"In fact business managers drove the entire project while IT was playing a supportive role," Vinit Thakur, Head IT, MIL compliments his business supporters.

Pioneers

What really tipped the Computer Associates Intelligent Enterprise Award in favor of MIL was the development and implementation of MiNet. Backed by an MS-SQL Server, MiNet connects the distributors' systems to that of the company. It has been developed in ASP and VB.

What's Innovative

Of course MiNet is not a stand-alone project. Its grandeur is heightened by the sum total of the implementation that includes SAP R/3 ERP, SAP APO for supply chain planning, and SAP BIW for data analysis & reporting as well as the deployment of standard software at the distributor locations (MIDAS).

Not only did Thakur and his team complete the entire SAP implementation in just nine months, MIDAS is already implemented at over 330 distributors' systems. That covers 75 percent of the combined turnover of Marico's distributors. Marico likes to call this the 'big bang' approach where they completely uprooted the old system and put a new one in place in very little time.

The system has de-linked the supply chain from the sales function to ensure shipment and availability of stock in the market and a hassle-free sales force for brand building. It led to the creation of the Trade Marketing role for analysis of trade marketing spends. Plus this system gives a special focus to the predictive indicators of performance in addition to the lagging indicators.

Thorough Thinking

The success of this initiative can also be attributed to the thorough planning that backed the project at the time of implementation. The first step was to involve the channel partners from the start.

"The channel partners and the entire organization had active roles in defining the functionality of the solution. Concerns raised by partners were addressed and much of the functionality desired by them were included in the solution," explains Thakur.

Next came allocation of adequate resources for the project. The core team consisted of line managers as well as members of the systems team. They were freed from their regular roles to concentrate on the deliverables of the project. To increase the focus of the team on the task at hand, a separate office was created for the duration of the project separate from the head office.

Finally, a thorough analysis of all the risk factors was carried out as part of the planning process for the implementation. Clear mitigation plans were developed and deployed for each of the risk factors.

Business Case

The business case for the project was co-created by business functions in association with the systems team in MIL. Projected benefits were derived through extensive interaction with the users across functions and locations. The benefits projected were critiqued and owned by the business leaders across the organization.

To ensure top management mind-share and commitment, this project was 'sponsored' by one member of the top management at the company. This person was involved at all stages of the project from inception to delivery. The management was also involved in aligning the project vision to the long term organizational vision.

Action Reaction

The benefits of the initiative were manifold. The system has led to:

An improvement in processes: Pipeline inventories have been reduced freeing up working capital. Marico's pipeline inventory (factory + depot + in transit) has reduced from 29 to 22 days.

Accurate forecasts: The use of consensus planning has improved the accuracy of sales forecasts to 82 percent from 76 percent.

Reduction in supply chain costs: The monthly sales are distributed through the month rather than in the last ten days. Late deliveries have reduced by 37.5 percent.

Better stocking: Lost sales and mal-distribution of stock has been eliminated using the replenishment mode of delivering stocks to the distributors. Distributor stock-outs have reduced to 15 percent from 30 percent.

Reduced claims turnaround time: It has reduced to 15 days from 28 days, and the lead-time required to reimburse partner claims has reduced to 15 days from 28 days.

Money matters

The company spent Rs 1200 lakh on the project, and its revenue has increased by Rs 2200 lakh. The initiative has impacted all the employees of MIL and a significant number of distributors.

Speculation would suggest that as far as reaping the benefits from the implementation is concerned MIL is still at the tip of the iceberg. The newfound intelligence the business personnel now wield at its fingertips will lead to quicker decisions and thus profit opportunities.

Hurdle at Hand

The key challenge in this project was change management. People must accept the new modus operandi for any IT implementation to take effect.

The company started with comprehensive training programs for each user well before the go-live day. These users were brought into the project office and guided through the new system. Even employees of the company's distribution partners were trained.

The more system-savvy individuals were identified from each function. They would then play the role of influencers among their peers as well as provide first level support to users facing any issues.

In order to ensure usage of the new systems and processes, the users were not given access to the old system even though it was maintained as back-up.

Future Roadmap

Vinit Thakur and his team see the project evolving on three fronts in the near future. Here's the plan of action:

• MiNet rollout for Bangladesh operations: The ERP system (SAP R/3) has been deployed for the Bangladesh operations of MIL. The process of deploying the MIDAS software and the MiNet portal to its Bangladesh operations has already been initiated.
• E-Claims: MiNet’s functionality is being enhanced to provide online verification of partner claims and reimbursement of the amounts.
• Workflow: Workflow functionality is being developed to automate the process of authorization for sales force.

Deepali Gupta can be reached at: deepali@networkmagazineindia.com