Case Study: M. J. Patel ( India) Ltd.
M. J. Patel Group is one of the leading manufacturer, supplier and exporters of pipes, tubes & boiler components.
The group is one of the leading manufacturer, supplier and exporters of seamless carbon/alloy steel pipes and tubes, ERW boiler tubes, Air Pre-heater tubes including Carbon steel tubes, Steam pipes and fittings, Boiler components like Superheater coils, Economiser coils, Steam generating bent to shape tubes, panels, heaters, pipework for steam, feed waterline etc. M. J. Patel has a manufacturing unit at Taloja & Sewree in Mumbai & Head Office in Mumbai. The company is known for it professional management, employee welfare & quality.
Superior quality, strategic positioning, timely delivery have traditionally given
MJPIL an edge over local as well as global competition. However, the aggressive entry of other small entrants resulted in the need for MJPIL to be more competitive in the marketplace. MJPIL strongly felt the need to go for an ERP Solution through which it expected to significantly improve its response to the changing market trends. Integration of information, better control of inventory, and working capital management were some of the benefits that MJPIL was looking for from its ERP system. Besides, MJPIL was confident of reducing operating costs and utilizing its resources more effectively with the various analyses possible using an ERP system, such as item-wise profitability, market segment wise profitability and so on.
Having decided to deploy an ERP solution, MJPIL went about evaluating various ERP solutions. SAP being a big brand was also evaluated . However, MJPIL found SAP to be very rigid and complex. MJPIL also got excellent feedback from other users of Ramco.
From its evaluation of Ramco, MJPIL identified the following highlights:
Availability of the entire suite of applications from a single vendor, including modules like Cash Flow, Letter of Credit.
Ramco Flextendibility Tools such as Report Writer, DCUBE and EDK, which would be very useful for MJPIL to extend the solution to take care of future requirements.
Good support infrastructure available from Mumbai.
Low Total Cost of Ownership (TCO).
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Extensive product knowledge.
Better understanding of the user requirements.
Ability of carry out a smooth implementation.
Good support infrastructure.
Deployment & Implementation
MJPIL has implemented Ramco at its head office (HO) at Mumbai as well as at its factory. The Ramco Server is located at Mumbai and remote users from factory access the server through leased lines
The Mumbai HO has the following functions:
The Factories have the following functions:
One of the key challenges Ramco faced was to fulfill the unique requirements of the Steel Pipe & Tubes industry such as:
The need to respond dynamically to customers’ requirement for a specific product.
Inventory control on Item Attributes.
Flexible & extensive quotation functionality.
Ramco’s flexible and extendible architecture, combined with its tried and tested RSPRINT implementation methodology and the presence of its dedicated implementation personnel at MJPIL’s site, helped MJPIL implement Ramco to address its unique requirements successfully.
Ramco and MJPIL did a thorough analysis of the fitment and gap areas between Ramco and MJPIL’s unique requirements. RSPRINT helped monitor the entire process of implementation, document and sign-off key milestones to mutual satisfaction. Says MJPIL’s Managing director, Mr. V. D Joshi, "We had complete faith that Ramco’s implementation team will take care of MJPIL’s interests and never felt the need to engage third-party consultants."
Pipes & Tubes are the key raw material for boiler components optimizing its consumption is vital for profitable operations. Inventories of specialized Pipes & Tubes are to optimized in a situation where the demands projected for various types of items keep changing. Arriving at delivery schedule of the finished goods to customers on a daily basis is very complex. It will have to consider what routes a truck is going to touch as well as realization of full truck load configuration. This had been addressed by Ramco by suitable use of its Flextendibility Tools.
Implementation commenced concurrently for all applications at HO locations. The first of the applications to be completely implemented were Inventory, Purchasing, Sales, Finance. The Ramco Logistics application, comprising Inventory and Purchase modules, became live in Dec 2000.
About 20000 item/variant parts are maintained in stock to meet the requirements of the production & trading Activities. The sales & consumption pattern for these items is ever changing. Therefore, freezing the re-order level is fraught with problems – under-stock situation is risky, whereas over-stock situation leads to additional cost. Ramco has addressed this with its dynamic ROL updation functionality, which dynamically updates re-order levels, based on a moving-average consumption during the previous 12 months.
Day-to-day sales orders are raised. Depending on the attributes values of the item, the allocations were made reservation is made. Planning type disposition helped us to make better commitments to customers resulting in higher satisfaction.
The lead times for items vary from two weeks in case of locally procured items to as high as two months in case of manufactured items. Optimizing inventory levels was a challenge in order to be competitive vis-ŕ-vis prices of finished goods, the market for which is highly price-sensitive. This was addressed by the Ramco Inventory application.
The implementation of Ramco Financials applications was happening in parallel and went live after the Logistics and Sales modules were live and in use. General Ledger and Accounts Payable modules were live by Feb 2001.
With the Ramco Sales & Purchase modules viz. Purchase order management, Sales Forecasting & Analysis, Shipping, joining the list of modules successfully implemented, the commercials suite of Ramco is live.
Reduced operating costs and improved resource utilization, thanks to the various analysis reports like item-wise profitability, market segment wise profitability and shop floor wastage generated from Ramco
Drop in inventory, due to an ability to respond quickly to changes in market demand pattern.
Improvement in productivity, because duplicate data entry into multiple systems is eliminated
Speedier customer complaint redressal arising out of an ability to pinpoint internal responsibility centers and take quick corrective action.
Speedier Receivables from customer resulting in effective finance management.