A quick ERP
A quick shot of ERP
Advantec Coils Private Limited needed smoother operations
to sustain the companys growth curve. After much deliberation, the SME
implemented an ERP solution in 33 days and was pleasantly surprised by
the results. Delhi Bureau
Advantec Coils Private Limited (ACPL), a manufacturer of indoor units of split
air conditioners needed to scale up its operational efficiency to support its
growth targets. The goal was as ambitious as it was daunting. The company had
to manage five operational manufacturing units (sixth coming up) and was heavily
dependent on seasonal demand cycles.
Defying the traditional myth that ERP is only meant for large enterprises, ACPL
chose to implement an ERP solution. It deployed SSA Baan ERP IV in 33 days,
which helped in effective inventory management and allowed the company to cater
to seasonal spikes in demand.
Having already recovered almost Rs 8-10 lakh on its Rs 25 Lakh investment within
the first year of implementation, the company looks forward to more returns
in the future.
At the company
ACPL is an OEM supplier to vendors like Hitachi, Carrier, and Fedders, and has
its own brand of indoor air conditioning units called Azure. The company operates
in a highly competitive business environment, which is typified by seasonal
demand patterns and high requirements during festivals.
The onslaught of competition from low-priced Chinese products had further increased
the pressure to perform.
Issues with Tally
Prior to implementing an ERP, the company used Tally software for financial
accounting along with stand-alone software for automating the HR function.
However, according to Gurvinder Pal Singh, Director, ACPL, the level of automation
was not robust enough to take care of the highly dynamic and competitive environment
as well as the future growth requirements.
Further, maintaining data security as well as the accuracy of facts, accounts,
and inventory management was just not possible with Tally alone. Apart from
these issues, the solution resulted in pile-ups of surplus inventory.
Without an effective enterprise-wide system the company was inclined to keep
higher levels of goods in inventory, which were often not required, leaving
too much scope for revenue loss to the company. Due to the unavailability of
even the smallest of components like a sticker, production could get delayed
adversely impacting the time-to-market.
On the other hand, maintaining excess inventory levels could be an expensive
proposition considering the costs involved in holding the inventory.
What ACPL required was a solution that would help the company improve operations
while remaining competitive by performing the following functions:
- Effective allocation, planning and control of crucial
resources of men, machines and materials.
- Well-tuned production environment with good synchronization
among the various units to enable adaptation to the fluctuations in demand.
- Effective cost control to be able to deliver better
value to its customers.
- Inventory visibility among the various units and
inventory reduction across the supply chain.
- Availability of up-to-date and concise information
to the top management to allow better decision-making.
These requirements, the company understood, warranted an enterprise-wide automation
Why SSA Baan ERP
According to Singh, while the need for an ERP was imperative, one of the key
concerns was the time taken to adopt new information architecture and the disruptions
that could arise in the organization's operations. The fact that ERP has been
notorious for time and cost overruns was bound to create apprehensions and influence
the final decision. Especially so when ACPL had already deferred the decision
to implement an ERP system earlier.
Yet, one of the company's biggest compulsions was to plan production for the
coming season. It needed a solution that would allow smooth and quick adoption
of a new system without any compromise in its functionality.
After considering several ERP solutions, the decision was taken in favor of
SSA Baan ERP IV. According to Singh, the solution provided everything ACPL was
looking for: robustness, close fit with the business requirements, and cost-effectiveness.
Polaris was chosen for implementing the solution because of its vast experience
in SSA Baan ERP implementation and project management skills. Moreover, its
'Speed' framework promised to carry out the implementation in less than two
Polaris' 'Speed' framework used in-built templates and pre-configured business
processes, that helped ACPL deploy the ERP system in 33 working days, including
training the users.
ACPL's comprehensive background work in terms of requirement assessment, outlining
the needs and objectives, and the kind of solution required further helped speed
up the process. With Singh directly involved in day-to-day activities of the
implementation, the decision-taking cycle was considerably shortened, as there
was no time wasted in accessing the different hierarchies for the decision to
Keeping the ERP implementation in mind, the company procured two Intel validated
servers-SE7501BR2 powered by Intel Xeon 2.40 GHz CPUs and running Windows 2000.
The company also connected its different locations through VSAT. These locations
included all the four production plants in Bahadurgarh, Haryana, and the fifth
plant in Jammu.
A successful implementation
Besides 'Speed' some of the other reasons for successful implementation were:
- Short turn-around time for resolving issues as
regular meetings involving top management of ACPL were held to sort out contentious
- Effective project management and coordination ensured
completion of mapping and master data for remote sites like Jammu.
- Some of the activities were done in parallel like
data collection, which began at the initial phase with the involvement of
second line users.
- Proper documentation of processes was done for effective
- Non-standard practices and procedures were streamlined
and changed using SSA Baan ERP procedures, BPR, and change management techniques.
- Very effective and logical system-testing gave sufficient
confidence to the company to completely switch over to SSA Baan ERP rather
than following the normal practice of using the legacy system simultaneously.
This helped prevent duplication of data entries.
Modules of solutions
The company implemented the Manufacturing, Finance, and the Distribution modules
of SSA Baan ERP IV.
The Manufacturing module provides functionalities like Master Production Scheduler
(MPS), Material Requirement Planning (MRP), Shop Floor Control SFC), Production
Planning (PP) and Control, and Capacity Requirements (CCR).
Under the Finance module, the solution delivers functionalities like General
Ledger, Accounts Payable and Receivables, Costing, Budgeting, Fixed Receipts,
The distribution module includes Purchase Control, Inventory and Sales and Marketing
How ERP helped
The ERP implementation eliminated the information islands that were scattered
across ACPLs business units and replaced disparate systems with a single
One of the most prominent benefits of deploying ERP at ACPL
has been effective inventory control. The company is now able to maintain the
right inventory levels for all its product lines so as to avoid both over and
under availability of stock.
According to Singh, Rs 8-10 lakh of the Rs 25 lakh invested on the deployment
process has already been recovered within the first year of implementation itselfmostly
on account of proper management of inventory levels.
Inventory visibility across the various units has also helped make better-informed
decisions and commitments to end customers.
"Another key realization with ERP has been the inculcation
of a disciplined approach leading to more effective and efficient way of working.
The company is now able to meet its delivery deadlines well on time in order
to be able to take the lead over its competitors," said Singh.
What lies ahead
As the system stabilizes and once the required data is generated, the company
hopes to start utilizing the system for generating intelligent analysis reports
like understanding demand patterns in the market, and specific patterns of demands
from its OEM partners.