Ugar Sugar Works streamlined its plant and inventory management on the back of a plant maintenance system. By Mehak Chawla
Back in 2007 the management of Ugar Sugar Works, one of South India’s largest sugar manufacturers, contemplated deploying an ERP application. The company faced a multitude of purchasing problems as the function was handled by regional teams leading to a lack of accountability and a huge amount of data duplication. The purpose of the ERP deployment was to bring about efficiencies in purchasing and do away with delays in financial reporting.
In December 2008, Ugar Sugar Works went live with SAP ERP with Wipro as its system integration partner.
The ERP deployment was just phase one of the company’s IT road map including as it did primary functions like finance, production planning, sales and distribution, quality management and procurement. Phase two flagged off towards the end of 2011.
Off season woes
Sugar production is a ‘five months in a year’ game. Consequently, there is a huge off season gap that sugar manufacturers go through every year. This gap comes with its own problems of plant maintenance and inventory management etc.
Niraj Shirgaokar, Joint Managing Director, Ugar Sugar Works, said, “Off season maintenance of both plant and machinery posed a big challenge for us as we have a long off season that spans over half a year. We lacked a structure to drill down to the cost of maintenance of a particular machine and could not do our cost analysis for this reason.”
Since, maintaining the plant during the off season was having a significant impact on the bottom line, Ugar Sugar Works decided to implement a plant maintenance system. The implementation started in November 2011 and the go live occurred in March 2012. Since the deployment happened mostly during the off season, it could proceed at a leisurely pace. “Although it was only a single module, plant maintenance proved to be a tougher one to deploy because of the complexities of scale,” said Shirgaokar.
Ugar Sugar Works has two manufacturing plants, both located in Karnataka, along with five regional offices. The procurement, sales and distribution as well as costing during the off season was happening at separate levels for these plants and offices.
The biggest hurdle in implementing the plant maintenance system lay in the first step of data collection. “Plant maintenance is a tougher module because you need to get the master data up to the board level. Each machine and every small part of the plant has to be accounted for and fed into a master database. Collecting that information accurately and then feeding it into the system proved to be a big challenge for us,” remarked Shirgaokar.
Data collection and accumulation proved to be time consuming since the implementation team had to account for every workshop. Then there was the task of integrating phase two with phase one. The plant maintenance system had to be integrated with the core ERP system, which had been implemented over two years back and was still scaling up.
“We had islands of applications on different systems and they were all running on low-end servers. None of these were well integrated and that’s the reason as to why we thought of implementing SAP in the first place,” said Shirgaokar.
The handover from Wipro to the in-house IT team proved to be a smooth transition and there are close to 80 users of the ERP and Plant Maintenance systems today.
Calculating RoI
Real time and online availability of information has been one of the key takeaways from the plant maintenance project. The fact that the top management has a single view of the plants, inventories and procurement across locations has greatly helped standardize processes and avoid duplication of information and effort.
Thanks to this project, the financial closing and reporting is happening on in-time. Procurement and delivery have also been streamlined, and the benefits, in terms of time and costs saved, are enormous.
The project has also fulfilled its basic promise. “The cost of plant maintenance during the off season has taken a downward plunge and the inventory requirements have gone down significantly,” revealed Shirgaokar.
Once the plant maintenance system is stable, Shirgaokar has other plans for IT investments in Ugar Sugar. “We are contemplating a mobility program, deploying the HR module of SAP ERP and data warehousing from BusinessObjects. We would eventually make the move to the Cloud,” he mentioned.
