Taking an error-free route

Nilkamal Ltd. is one of the leading manufacturers of plastic crates and moulded furniture with pan-India operations. It has six manufacturing plants across the country and in Sri Lanka and Bangladesh as well. @Home was conceived in the year 2004 as a complete home solutions retail store and the first store was opened in Pune, India in July 2005. The vast stores of @Home offer integrated lifestyle solutions and interior planning services for homes as well as institutional services. Currently, there are 16 stores in 7 different cities with over 500 employees and an annual turnover of Rs 180 crore. By the year 2014, @Home plans to expand to 38 company-owned stores across India with an annual turnover of Rs 500 crore.

Objectives

With such rapid expansion plans, @Home wanted an industry specific software for their company which would integrate all business processes including merchandising, inventory management and in-store POS transactions. “Our goal is to become India’s largest retailers in the home segment and have a 10% market share in the ready-to-assemble furniture category. We had rapidly growing retail square feet and to successfully manage it was a challenge,” says Manish V. Parikh, Director, Nilkamal Ltd. Since most business is done through bookings, real-time inventory information is critical to its success. Reduction in cost of inventory management with a better turnaround time was another factor. “We have a mother warehouse which is 150,000 sq ft big and needed a full-fleged warehouse management system too,” says Parikh. Effective transport management was necessary for internal cross-functional relationships and externally for better order fulfillment and price control. One of the major requirements was the complete integration of the in-store POS with the ERP system which was already in place. Thus, the requirement was for a robust IT solution, which was capable of handling the entire business while providing complete data security and process control. It also needed to have improved quality management system and aid in supply chain and logistics.

Implementation

After careful consideration of other vendors, @Home finally decided to opt for the SAP Netweaver Process Integration (Exchange Infrastructure). Nilkamal Ltd was already running

SAP R/3 for the past three years and they had already realised the benefits of implementing SAP. SAP supported the latest benchmark practices of the industry. A major benefit of SAP was that the finance and accounts modules had been configured to comply with the Indian standards and legal rules.

The project was started on November 20th 2006 and went live on 1st May 2007. Several modules like FI, CO, MM, SD and PM were implemented simultaneously. “There was absolutely no parallel running of the legacy system and the SAP solution. The day we went live, we switched off our old systems. The warehouse system, supply chain and all stores across the organisation were integrated and switched on in a single day,” says Abdullah Fatiya, Head - IT, Nilkamal @ Home

Benefits

SAP has given @Home a fully integrated system across the organisation, a single platform from where reliable and online information is accessible.

Earlier, @Home had a distributed database and the sales figures for each store were consolidated manually. Also the in-store POS was being used only for billing purposes and booking of orders was done manually. But now, as inventory levels across the organisation can be seen in a single view online, it is easier to commit accurate delivery dates to customers. “This has really helped us to reach out to our customers better and customer relationship has vastly improved. In fact, we have realised the benefits of SAP right from day one itself,” says Parikh. Post-sales support like customer queries after delivery is also answered online now. The replenishment planning and the order-booking processes were being done manually earlier. Now, they have adopted the system best practices while being done online. “Most activities are now process driven, rather than people driven. This has reduced human error to a great extent,” says Mr. Parikh.

There have been tremendous savings in the costs of inventory management as well as the turnover time in the supply chain. Purchasing costs have been reduced as well.

There is now better analysis and interpretation of data across the organisation as inventory and demand information is available in a single view. One of the major benefits has been the visibility of finance and cash flow in the business. Also business line-wise visibility for sales and profit figures has been made possible. There is faster communication between the strategic team to the stores regarding information about promotions and markdowns. This helps them to respond to the customer needs much more rapidly.

Future Plans

@Home plans to implement the BI module shortly. The existing R/3 data will be integrated with the ECC data to come up with business-wise strategic reports. Plans are already on to implement the CRM module in the company to help them maintain their large customer base. They are also considering integration of the HR module into the current solution.

The SAP XI Solution has thus enabled @Home to achieve business integration and large productivity gains, thus making successful inroads in the retail sector.