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Enterprise-wide applications

Transforming tobacco collection

ITC's Project Dhanush combines ERP implementation with remote handheld terminals to bring substantial benefits to the company and tobacco farmers in Andhra Pradesh and Karnataka

ITC’s India Leaf Tobacco Development (ILTD) Division operates in a rural setting while catering to international customers. Every bale of tobacco leaves ILTD buys must be trackable to its point of origin should there be a problem in the end-product, or the need for repeat orders.

To this end, ITC implemented an ERP system that is updated using handheld terminals from 70 rural locations in Andhra Pradesh and Karnataka. “1.3 million units per annum are involved in this process,” says V V R Babu, CIO of ITC.

Track that Bale

ITC deployed Oracle e-Business Suite 11.5.9 which captured all the transactions at a Stock Keeping Unit (SKU) level for ILTD. The ERP system was suitable for inventory management and a few other areas of business, but there were gaps.

The central database of the ERP system is at Bangalore. It is accessed through a 150 Mbps VPN connecting 384 locations across the country.

Tobacco leaves are collected in rural AP and Karnataka. Downstream, ILTD buys bales of tobacco from auction platforms. Before the ERP implementation, the head clerk at the aggregating godown had to enter over 3,000 records a day covering every bale. The data entry process would be repeated at every checkpoint. Not only was this tedious, it was also prone to stock reconciliation errors.

Extend IT

Most collection points were not connected even by telephone. ITC then opted to go wireless. They gave their field staff custom-built handheld terminals (HHT) with in-built barcode scanners and Wi-Fi 802.11b support running Palm OS. The data synchronising application was developed using AppForge.

At the point of purchase a person puts a unique barcode on each bale. Then at every checkpoint attendants scan the code and feed in incremental information that captures every transaction at the SKU level. The data is sent to a remote PC connected to the Wi-Fi access points placed at the auction platform, the aggregation godowns, the threshing plants and the redrying units.

This PC uses a Ku-band VSAT to route the updated information to the Oracle 11.5.9 database that converts SKU level to an inventory record of the processing the bale has undergone.

The Blueprint

The project began in November 2002 when the ILTD Division laid down its blueprint before the Corporate IT Strategy Committee of ITC. Then came vendor evaluation, product evaluation, proof-of-concept and onsite visits. At the user level, the team achieved buy-in by means of effective communication and focussed meetings that made users conscious of the impact the implementation would have on the company and its goals.

Convincing the management required a demonstration of the team’s commitment to the project. “To prove that, the department pulled together talented people in a cross-functional full-time project implementation team,” says Murali Ganesan, ILTD’s Finance Controller.

However, much credit goes to the company’s training efforts that familiarised unskilled staff and locals assisting at checkpoints with the functioning of HHTs. ITC put in 25,000 man-hours in the training process that enabled the support staff to optimally use HHTs. Most of this data entry work is now outsourced.

Pros and Cons

The obvious advantages are that it is much easier to trace products, and information is readily available for decision-making. Lags, gaps and information mismatches have been eliminated for the greater part.

The scalability of the new system is substantial, and it adds an R&D and crop development module that will help the company grow in the long term. The system is available any time, anywhere because it is Web-enabled.

Rural communities in areas where Dhanush has been deployed are better connected as ITC has set up its own Wi-Fi network and transmitting towers. It has brought in a certain level of awareness, and finally, by means of information dissemination, empowered local farmers to maximise returns on what they grow.

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Indian Express - Business Publications Division

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