MiNet and MIDAS, the golden touch
Marico Industries Ltd.
The IT and business team at Marico Industries Limited joined
hands to develop two homegrown solutionsMIDAS and MiNet, which made it
the winner of the Computer Associates Intelligent Enterprise Award in the Retail
and Consumer Goods category. by Deepali Gupta
Project: Optimizing sales and supply chain processes
Date Started: June, 2000
Date Completed: April, 2002
Project Cost: Rs 1200 lakh
Project Objective: To deploy an integrated enterprise system across
all functions of the organization, and extend that system to distributors.
Benefits Accrued: Improvement in processes, accurate forecasts,
reduction in supply chain costs, and reduced claims turnaround time.
Innovation: De-linked supply chain and sales functions, creation
of trade marketing role for analysis of trade marketing spends, and special
focus on the predictive indicators.
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
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.
ITC Limited for 'Project Dhanush'- An integrated handheld terminals-based
data capturing system for leaf management in ITC's Indian Leaf Tobacco
Division (ILTD), because it:
- Uses Wi-Fi to automate workforce that facilitates movement of data
in near real-time from the field to the corporate IT infrastructure.
- The solution overcomes the challenge of lack of education and computer
illiteracy amongst the operating workforce in rural areas.
Godrej Consumer Products for a Supply Chain
Management initiative called SAMPARK because it uses:
- GIS for route mapping and tracking.
- Handhelds for sales staff to log in inventory details online in real
- State-of-the-art Business Intelligence system for forecasting.
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.
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,"
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.
|"We feel proud of winning the IEA award.
MIL has always been business-focussed in its all IT initiatives. We take
this as a recognition of our business focussed approach and our firm commitment
on an ROI-led IT investments approach."
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
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
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
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
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.
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
- E-Claims: MiNets 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: firstname.lastname@example.org