ERP for rural development

Samir Somaiya, Managing Director, Godavari Sugar Mills, shares how he managed and organised his company’s first major IT initiative. He also discusses the various challenges faced in deploying IT in a rural setting

Samir Somaiya

Godavari Sugar Mills was founded in 1939, and is our group’s flagship company. We produce sugar, ethanol, chemicals and electricity from sugarcane, and have a turnover of about Rs 500 crore. Our company has five manufacturing locations in rural Karnataka and Maharashtra.

The sugar industry has always needed critical real-time information, especially in the cane department. This is because sugarcane has to be crushed soon after it has been harvested. The time delay between harvest and inventory in the yard (for sugarcane to be crushed) cannot be more than 6-8 hours. Anything beyond that can lead to a stock-out, and will lead to spoilage of our sugar. This results in a reduction of sugar yield from the cane. Further, the complexity increases since cane is harvested continuously from a few hundred centres across various remote locations.

A rocket engine on a bullock cart

Earlier, IT deployment in various departments of our sugar mill was limited to a few meagre applications. There was no enterprise-class integration apart from using an accounting package for financial accounting. Unlike the cane department, where the information was available in real-time, and used for a feed-forward system of control, the rest of the company lagged and made use of a delayed feedback loop system.

I often used an analogy: the cane software systems compared to those of the rest of the company were like a rocket engine put up on a bullock cart. This is why I felt it was high time that the operational systems and business processes change. In this way the change would reflect on the rest of the company as well. But this could only be achieved through the introduction of real-time information systems.

The consultant’s feasibility report advised us to go in for a phased deployment. Contrary to the advice, we decided otherwise and went ahead with a single-phase full-fledged IT deployment across remote locations. It was also an excuse for me to re-examine the various procedures and processes employed by us in the company, compare it to the best-in-class of the industry, and modify it further wherever necessary.

Systems for sugarcane

The ERP deployment was started during 2000. We were probably also the first sugar company in South Asia to implement SAP. The cane department’s criticality and its crucial real-time information needs meant that it was the first to go in for computerisation.

The implementation was done on an Oracle database system with a self-developed real-time application management system running at data centres located in Mumbai. The implementation’s objective was to help track farm transactions in real-time. The ERP implementation created a real-time culture with transparent and consistent performance throughout the organisation.

Farmers are rated on their performance, and the ratings are used to predict sugarcane availability during the forthcoming year. Rural connectivity for the same was established using VSATs.

We also implemented GIS (geographic information systems) and remote sensing, and introduced handhelds for faster data updates to the central database. This helped cane inspectors to be more efficient. Further, we have also launched multi-lingual Farmer’s Information System kiosks (in English, Kannada, Hindi and Marathi).

My concerns were well-handled, and I was satisfied with the full-scale one-time deployment. The introduction of IT throughout helped in better decision-making capability. IT implementation has changed various processes followed by us since inception, and simplified them further.

A slew of benefits

Now farm-land record with agronomy practices, and details and history of land holding can be maintained. Factory experts can put across suggestions to farmers about planting by examining the soil and water availability of a particular plot; this has resulted in staggered plantation.

Staggered plantation has in turn helped the factory to crush throughout the crushing season, thereby giving better yield and recovery. Information about the supply of cane has become organised after our systems went online.

At any given point of time, the payment and recovery account details of a particular area can be analysed. Today, there is just a minor deviation between planning, budgeting and achievements. The reduction in manpower was also a major change.

Re-invent and Re-examine

My objective is to continuously re-invent and re-examine our performance with an agile view to maintain, improve and provide consistent real-time information to farmers in the remotest villages that our group serves.

In this context, a farmer’s portal, Kisan Khazana, is under development. The challenge here is to make the content and service delivery relevant and convenient to the farmers through a local language GUI. We have also started implementation of a Wi-Fi mesh network in these villages.