Su-Kam Supports Business Growth with Integrated Enterprise Resource Planning System
"We experienced a dramatic improvement in inventory management, and expect similar benefits when we begin using the financial, purchasing, and order management modules in earnest. Information sharing has been greatly enhanced and there are fewer misunderstandings between departments." - Shashi Kumar, Deputy General Manager, Information Technology, Su-Kam Power Systems
Founded in 1992, Su-Kam Power Systems Limited is India's biggest supplier of power inverters. The company manufactures a range of power supply products, including inverters, uninterruptible power supply (UPS) systems, batteries, and solar products. These products are distributed through a network of 400 distributors and 5,000 dealers around the world.
As its business expanded, Su-Kam realized it could no longer rely on its aging accounting system for financial management. The company also lacked systems to manage inventory, purchasing, customer orders, and manufacturing schedules, leading to miscommunication between departments and inefficient workflows.
In 2006, Su-Kam engaged Oracle Certified Partner Sonata Information Technology to implement a new enterprise resource planning system based on a range of Oracle E-Business Suite applications. The new system integrates every aspect of Su-Kam's operations for the first time in its history, ensuring a smooth flow of information across the organization.
"We experienced a dramatic improvement in inventory management, and expect similar benefits when we begin using the financial, purchasing, and order management modules in earnest," said Shashi Kumar, deputy general manager of information technology, Su-Kam Power Systems. "Information sharing has been greatly enhanced and there are fewer misunderstandings between departments."
Improved Information Sharing
Sharing information across the organization was one of the biggest challenges facing Su-Kam prior to implementing Oracle. The company used Microsoft Excel spreadsheets to record inventory, purchase orders, customer orders, and other business information. This made it extremely difficult for staff in different departments to access the data they needed to complete their jobs. Vital information often went missing, jeopardizing Su-Kam's ability to provide optimum service.
The integrated Oracle system ensures data entered at one point is available across the organization, eliminating the need for multiple data entry and minimizing inaccuracies. Automated workflows ensure a customer or purchase order is routed to the right department for immediate attention.
"Our finance group is one division that will benefit immensely from the Oracle system," said Kumar. "At the moment, they do not have easy access to the information they need to make accurate, on-time payments.
"Once procurement staff begin entering purchase orders into the Oracle system, the data will be available to our accounts payable staff, helping them organize prompt payments.
"This will streamline procurement processes and ensure vendors are paid on time," he said.
Better Inventory Control
Su-Kam has three warehouses across India to store the components it uses to build its products. Previously, it was difficult to find out the number and type of components held at each warehouse, as the company relied on Excel spreadsheets and its basic accounting system to track inventory.
When Su-Kam completed a physical inventory count as part of the migration to Oracle, it discovered a 25% discrepancy between what was actually in the warehouses and what the accounting system and spreadsheets recorded. "We counted our inventory three times and each time we found items that had not been recorded," said Kumar.
Oracle Inventory provides Su-Kam with an accurate way to track stock at each of its warehouses. As new components arrive from suppliers, the details are entered into the system. The information is accessible online to staff at the head office and all warehouses.
"We can now see what parts we have, where they are held, and how many there are of a certain type," said Kumar. "More careful inventory management will help us reduce costs and waste."
As a company operating in a fast-changing industry, Su-Kam is constantly innovating and introducing new products to the market. Components used in older products became redundant and accumulated in the company's warehouses. According to Kumar, Su-Kam did not have the time or resources to deal with the old stock.
"Most of the time we didn't even know that this stock existed," he said. "The parts were of no use to us, but we could still sell them for 75% of their original purchase price. In future, the Oracle system will help us to identify stock we no longer need so we can offer it for sale."
Enhanced Order Management
In the past, Su-Kam used Excel spreadsheets to record customer orders. The spreadsheets would be faxed or e-mailed to the head office, where the vice president of sales would approve the order and route it to the manufacturing division. This manual, paper-based method was risky as orders could go missing or become lost in a flood of requests.
Customer orders are now entered into the Oracle system, allowing the vice president of sales to monitor them in real time. Once approved, the order is automatically routed to the production department, where staff can check if there are enough products on hand to meet the order, or if they have to raise a production request.
"The most obvious benefit of streamlined order management is improved customer service," said Kumar. "We can ensure all orders are met and brief clients on the status of their order when they ask. We are now a more efficient, customer-focused organization."
Future Plans
Once the system is bedded down and users become more familiar with it, Su-Kam will begin using Oracle Discrete Manufacturing to manage production schedules and Oracle Advanced Pricing to track discount schemes and institutional pricing models. It is also considering upgrading its human resources and payroll systems.
Why Oracle?
Su-Kam was searching for an ERP package that was widely used and highly regarded by the manufacturing sector. The final choice came down to Oracle and SAP.
"The Oracle and SAP solutions offered similar functionality, but Oracle was head and shoulders above SAP when it came to service," said Kumar. "When we asked for a meeting, Oracle came to us. When we asked for a demonstration, the company organized for us to see the product in action.
"The initial response and ongoing support from Oracle has been excellent," he said. "The Oracle team has been very accommodating throughout the project."
Why Sonata Information Technology?
This was the first Su-Kam had installed an ERP system and it decided to engage an implementation partner to manage the project and provide strategic advice. The company evaluated a number of systems integrators based on their experience, business understanding, and geographical reach. It selected Oracle Certified Partner Sonata Information Technology to oversee the implementation.
"Sonata had completed a large number of ERP projects so we were confident the company had the skills to install our system quickly," said Kumar. "It also has offices throughout India, ensuring our 30 branches across India can access support quickly.
"We also received good feedback about the company from Oracle," he added. "Sonata was highly responsive and guided us properly through the project. We were pleased with the results."
Implementation Process
Su-Kam established a core project team consisting of Sonata technicians and representatives from each department. Feedback from each representative was incorporated into the system design. The customization, installation, and testing was completed by Sonata. The implementation kicked off in May 2006 and was completed six months later, enabling Su-Kam to go live in November.
According to Kumar, the biggest challenge was convincing certain staff members to adopt the new system. "Some employees were used to doing things a certain way, whether it is using a register or Excel spreadsheets to record information," he explained. "We ran an extensive training program to help them transition to Oracle."
A core user from each department was responsible for training one member of their staff, usually a person who had demonstrated a quick understanding of the system. This person, called a 'functionality champion', was then given the task of training their colleagues.
"Response to the system has been positive, even among those who were initially resistant to the change," said Kumar. "Staff are now starting to see the benefits of the Oracle solution."
Advice from Su-Kam Power Systems
" Ensure the entire company understands how an ERP system works. Many users may be resistant to change, and educating them on the benefits of the system will help promote faster acceptance.
" Incorporate user feedback into the final system design. This ensures the system will deliver the functionality they require to do their jobs.
Su-Kam Power Systems Limited manufactures a range of power supply products, including inverters, uninterruptible power supply (UPS) systems, batteries, and solar products. It has a global network of 400 distributors and 5,000 dealers.
