EXPRESS COMPUTER | APRIL, 2017
16 | CASE STUDY
How Shree Cement accelerated its procure-to-pay cycle TO SUSTAIN its position in the industry, Shree Cement decided to upgrade its ERP system to minimize downtime Rashi Varshney rashi.varshney@expressindia.com
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rowing from a single manufacturing plant with a 2 million metric ton production capacity per annum, Shree Cement now sells 25.6 million metric tons cement per annum and operates 10 manufacturing plants across North and East India and more than 50 regional sales offices. The company aims to build more new plants in South India and invest in new technology to ensure timely delivery and enhance customer satisfaction.
Due to rapid year-on-year business growth, the firm’s legacy ERP platform could not support the increased transaction volume, such as processing cement orders across multiple locations. It also needed to shut down the ERP system for monthly patches updates, negatively affecting manufacturing operations. The unsupported legacy system also posed a significant risk to the business. Since 2008, Shree Cement used legacy Oracle Database and Oracle e-Business Suite for its ERP system. With 20% growth in cement production and 30% growth in power generation annually, the company
HIGHLIGHTS
◗ Reduced planned downtime to less than 10 minutes instead of 4 hours ◗ Accelerated procure-to-pay cycle by 69x by automating the process ◗ 40% faster management reports ◗ Reduced truck weighing cycle time by 70%
experienced performance issues with its legacy ERP system due to exponential growth in transaction volume and additional loads on the server. To overcome these challenges, Shree Cement decided to upgrade its ERP system to Oracle Database 12c and Oracle e-Business Suite Release 12.2.4. Reduced planned system downtime The upgrade has helped Shree Cement gain real-time visibility into its ERP processes, and reduce planned downtime. It has helped the company in accelerating its procureto-pay cycle time by a factor of 69x and enabled faster dispatching time. Managers can create reports 40% faster with the added advantage of improved inventory planning. Previously, the company used to ask users to log off and shut down the system for up to two hours to apply monthly patches updates and reboot the server during the month-end period. It caused disruption to manufacturing operations, such as dispatching cement materials to customers. With Oracle's online patching feature, the company can now apply patches and upgrades to a cloned database and copy it to the production database without requiring users to log off the system. This has helped the company in dramatically reducing planned downtime to less than 10 minutes instead of up to 4 hours previously. “We can support the demands required for our rapidly growing business and improve customer service. The multitenant architecture also allows us to easily migrate to Oracle Sourcing Cloud Service
and other cloud services in the future,” says Manoranjan Kumar, CIO, Shree Cement.
Truck drivers can create goods receipts at a remote depot even without access to the Internet
Faster procure-to-pay cycle Shree Cement uses outsourced trucks for dispatching cement materials to customers. Previously, it could take up to three to four days to process payment for transporters after delivery. By automating its procure-to-pay process with Oracle Purchasing and Oracle Financials, Shree Cement can now rapidly calculate and create invoices as soon as transporters deliver the goods to a depot. The integrated ERP system also automates bank payment instructions based on pre-defined business rules, such as delivery cost, with registered suppliers, and sends invoices to transporters via email and text message. As a result, the firm accelerated the procure-to-pay cycle by 69x. Oracle Financials also enables the company to easily adopt changes in local accounting and regulatory requirements across different states in India. “We use online bidding for procuring all our raw materials or manufacturing equipment. We have streamlined purchasing processes and ensured best practices. Our buyers can focus on negotiations with suppliers rather than paperwork and increase saving opportunities,” says Kumar.
weight, empty weight, and gross weight. Truck drivers also had to wait for the weighing system to generate an invoice and collect it at the plant gate. The entire process took seven to eight hours and affected dispatching turnaround time. By capturing vehicle master information and integrating logistics management system with Oracle, Shree Cement now inputs the truck information directly in the ERP system and automatically prints an invoice as soon as the driver completes the gross weight. It has greatly reduced the truck weighing cycle time by up to 70% and re-allocated all the operating staff resources to more valuable tasks. “With the automation, we have increased the number of trucks coming through on our weighbridges. This turned into faster dispatching turnaround time and higher production volume, supporting business growth,” Kumar says.
Online Truck Management Previously, the company needed to allocate 4 staff across 11 weighbridges in each plant to manually gather truck weighing information— including truck number, driver name, truck capacity, truck
Improved inventory planning There was no integration capability with mobile applications. Shree needed to manually copy data from the mobile application to a non-Oracle technology platform and then bring back the updated data
into the ERP system. It created data integrity issues across all the plants and offices. By integrating the mobile application with Oracle e-Business Suite, the company gained real-time visibility of ERP processes, such as inventory management and purchasing, and improved operating efficiency. For example, truck drivers can create goods receipts at a remote depot even without the Internet. The integrated mobile platform then automatically synchronizes the updated inventory in the ERP system once an Internet connection is available. “The mobile capability allowed our regional offices to
We can support the demands required for our rapidly growing business and improve customer service. The multitenant architecture also allows us to easily migrate to Oracle Sourcing Cloud Service and other cloud services in the future Manoranjan Kumar CIO, Shree cement
instantly view accurate cement inventory status for each depot and start selling right away. It also improved our inventory planning and reduced stock lifecycle,” says Kumar. Productivity and asset utilization With 10 manufacturing plants across multiple locations, it was imperative for Shree Cement to track and manage equipment lifecycle, such as the maintenance history of grinding units, to minimize machine downtime and ensure smooth manufacturing operations. By using Oracle Enterprise Asset Management, Shree Cement gained a complete view of asset life cycle in each plant and enabled the staff to efficiently plan and schedule preventative maintenance control. It increased asset utilization and reduced impact on production activities. Shree Cement also deployed Oracle Human Resources to capture employee records across the enterprise, providing insight for managers to monitor employee performance and identify training needs, such as machinery operations. Furthermore, employees can view and update personal information, such as changing contact details, via self-service functionality, reducing the burden on the HR team. By using configurable workflow and approval feature, managers can also access and approve requests from employees, such as annual leave, without relying on an individual supervisor. This helped the company to improve productivity and enhance employee satisfaction.