Why IT initiatives

to take the battle to its competitors

with an entry into the FMCG sector and believes IT to
be an
indispensable weapon in this war
The distribution network is the lifeline for an FMCG
company and is a greater value add in terms of IT
returns than manufacturing
For years, Dabur had been using Fox Pro based systems for
handling logistics.
By 2000,the company’s distribution network had grown, spanning
29 factories, 6 mother warehouses, 47 stocking points, 4 zonal
offices and over 10,000 stockists and dealers.
 In addition, about one hundred trucks were dispatched daily. With
distribution pressures rising, technology upgradation was
necessary.
The company therefore initiated automation of its outward
logistics system in April 2001 with its primary distribution system.
 Named ‘Project Synergy’, this involved implementation of the
MFG/PRO ERP system
Why MFG/PRO
 Dabur works on two ERP systems.
 For the outbound logistics it runs QAD ERP suite known as MFG/PRO. For
manufacturing locations, there's BaaN
 BaaN requires a central server. To fit so many locations many of them situated
in small and remote areas into a central processing system, Dabur needed a
VSAT (Very Small Aperture Terminal) network.
 As with most companies, sales at Dabur peak towards the last 4-5 days of the
month.
 If the company were to depend on this kind of a central server architecture,
which would be connected through VSATs, the network would be enormously
overburdened during every month-end.
 However, the company never wanted to make the network a critical component
in the automation of outbound logistics.
 The company decided to go for an ERP solution that was 'network
independent'.
 It found that MFG/PRO could be run on independent servers at each location it
was a good choice that suited its unique needs.
Implementation
 Once it was decided that MFG/PRO it will be to handle outbound
logistics, a core implementation team which comprised end users from
departments, like distribution and planning, finance, sales and IT was set
up.
 The deployment was made in four stages.
 The first included a requirement study where a model was developed.
Dabur has five SBUs (Strategic Business Units), each with diverse needs
in terms of the outbound logistics.
 Since it is a traditional FMCG company into family and healthcare
products, pharmaceutical products, food products, which is a perishable
products division,ayurvedic products for both the medicine and home
segments. All these divisions have diverse requirements.
 The core team had its job cut out: It had to develop a common business
model, which could cater to every segment at the same time..
Advantages of implementing
Improvement in sales dispatches to the CFA. The sales earlier were heavily
loaded towards the last week of the month with over 80 percent of sales
taking place during this time. This led to a number of problems such as sales
returns and cheque bouncing from ‘pushed’ sales to meet sales targets.
Improvement in collections. Collections have recorded an improvement of
about 6 days and are more evenly spread over the month. This leads to
considerable saving on working capital locked up in out-bound logistics.
Reduction in sales returns and unsold stock inventory. Stocks in CFAs are
visible to central distribution planners in saleable and un-saleable categories
leading to better management and distribution.
Central management of sales schemes. The schemes and free issues are now
managed centrally at the corporate office and the ERP system keeps a strong
check on schemes leading to reduction in misuse of schemes in the field.
Mfg Pro and BaaN
Use of Mfg Pro gives real-time information about the inventory and
sales situation of distributors and improves the accuracy of demand
forecasts.
These demand forecasts are then fed into the back-end system (Baan)
for materials planning and production scheduling. Integration of the two
systems is expected to significantly enhance their efficiency in 2003-04.
Mfg Pro is fully operational in the zonal offices, motherwarehouses and
CFAs and Baan is already live in five manufacturing locations.
A Secondary Sales System is also being implemented to provide
countrywide information on Secondary pipelines and sales by brand.
This new Secondary Sales System, by making focus on secondary sales
possible, has played an important role in tracking brand-wise sales, and
reducing pipeline inventories.
The improvement in area-wise and brand-wise inventory
management has scaled up the entire supply chain
management through better sales forecasts, production
scheduling, materials planning, vendor management and raw
material sourcing.
Company has implemented yet another new intiative of
Claims Settlement using an Intranet/ Extranet based system,
for systematic tracking and settlement of claims.
the Company also implemented another major initiative-
Employee Management System (EMS), an intranet based
HR-information system, including Payroll and PF
processing.
By 2005 Dabur started to feel the pinch of maintaining two
independent ERP systems. They were facing following issues:

There were still data redundancies and inconsistencies at times.

Considerable amount of rework was necessary in just data

format conversion between the two systems.

It still did not provide a holistic picture and thus posed
problems in formulating a strategy or taking business critical
decisions.
Maintenance costs climbed up because of the
above stated points.

Therefore, to realize not just the operational

excellence but also decision support infrastructure,
the idea of a single organization wide ERP
implementation was proposed in Dabur. So, With
Accenture’s help, Dabur implemented strategic and
operational changes – by implementation of
organization wide SAP core modules.
Major IT initiatives
 Migrated from standalone ERP systems - Baan and Mfg to
centralized SAP ERP system from 1st April, 2006 for all business
units (BUs).
 Implemented a country wide new WAN infrastructure for
running centralized ERP system.
 Setting up of new data center at KCO head office in Ghaziabad.
 Extension of Reach system to distributors for capturing
Secondary Sales Data to collect near real-time pipeline
information was done by 2004.
 Roll out of IT services to new plants.
Accenture-drivers of high performance
Competing on core competencies, while outsourcing non-core
functions to trusted third-party providers.
Viewing information technology (IT) as a strategic asset that
creates real value—not simply a cost to be managed.
Streamlining processes wherever possible
From an IT perspective, Accenture recommended a two-
pronged strategy:
o migration to a nimbler outsourcing model that would generate
o value through agility and support business initiatives and
maintenance of its SAP enterprise resource planning (ERP)
system.
Implementing a new sales and distribution strategy.
o to identify key customer segments in urban and rural
markets, customize sales programs for key accounts
and reorganize Dabur’s sales teams by one of four
trade channels (modern trade, rural,“mom-and-pop”
and drugstores).
o The Accenture and Dabur team optimized the
company’s internal logistics and distribution processes
for mega retail customers, and put metrics and
incentives in place to drive specific goals
Developing a new supply chain management capability
o focused on bringing a market-driven perspective to the
new supply chain and building collaboration skills
o Accenture helped Dabur create capabilities to facilitate the
launch of new initiatives, products and trade promotions
o instituted a plan to leverage SAP by automating Dabur’s
material resource planning processes across the complex
manufacturing arena
o The new approach allowed employees to shift their focus
from simple transactions to more strategic procurement
efforts such as cost management.
Optimizing Dabur’s ERP capabilities
o While Dabur had deployed a SAP ERP system to link its
corporate headquarters, 12 manufacturing plants and more
than 30 distribution centers, the company was not using the
system to its maximum potential. Accenture launched a
three-phase ERP improvement program that involved:
o Correcting the transactional and management information
systems.
o Conducting change management and synchronizing Dabur’s
business processes with realities in an ERP context.
o Developing value realization projects.
Leveraging IT for business initiatives
o Accenture designed a Web-based demand planning and trade
promotion forecasting tool, and installed point-of-sale software at
select retail and wholesale sites
o This latter initiative allowed Dabur to integrate key customers into
its IT network and gather real-time market information that would
drive better sales and distribution decisions
Outsourcing IT operations
o Accenture delivered industrialized and cost-effective skills that
would allow Dabur to remain at the leading edge of IT delivery.
Plus, Dabur gained the flexibility of being able to focus on its core
capabilities while realizing increased value and lower costs through
improved performance.
Future Challenges
 Forward integration of SAP with distributors and stockists.

 Backward integration of SAP with suppliers.

 Implementation of new Point of Sale (POS) system at stockist point and

integration with SAP ERP.

 Implementation of SAP HR and payroll.

 SAP roll out to Dabur Nepal Pvt. Ltd. (DNPL) and other businesses.
Thank you