V-Guard Industries Ltd. generates greater efficiency with IBM and SAP

Published on 09-Jan-2013

"The IBM and SAP solution makes validated, accurate information available more rapidly than ever before. Even as our company grows at a breakneck rate of 40 percent annually, the solution is designed to keep pace, helping V-Guard to reach its ambitious expansion targets." - Robin Joy, CIO and General Manager, V-Guard Industries Ltd

Customer:
V-Guard Industries Ltd.

Industry:
Electronics

Deployment country:
India

Solution:
Business Integration, Enterprise Resource Planning, High Availability , Information Integration, Information Management Foundation

IBM Business Partner:
SAP

Overview

Founded in 1977 as a small manufacturing unit, V-Guard Industries Ltd. (V-Guard) has grown to become one of the largest electrical appliance manufacturers in India. The company reported revenues of more than $126 million for the 2010 to 2011 financial year, and a 43 percent increase in net sales during the same period.

Business need:
V-Guard is growing organically and by acquisition within India, and is looking to expand internationally. The sheer volume of information that its operations generate on materials, production, sales and finance threatened to overwhelm the company. Add to the mix the need for product traceability and higher quality standards, and combine it with pressure to report on product costing, financial performance and credit management: the consequence was that V-Guard needed to find a way to enable growth without creating an unsustainable administration workload.

Solution:
V-Guard selected integrated SAP ERP software as its strategic business management solution, deploying the SAP applications to replace its former systems in a step-by-step program. The company also implemented SAP NetWeaver Business Warehouse, SAP NetWeaver Portal, SAP BusinessObjects, SAP Solution Manager for Documentation and Project Management. The IBM team assisted with architecture design, configuration and deployment for the SAP solution, and the major business transformation program associated with transferring from isolated applications to a centralized platform.

Benefits:
Integrated SAP solutions help V-Guard to generate month-end closing figures 70 percent more rapidly and enable it to produce quarterly reports 58 percent faster than before.Reduced staffing needs by 85 percent: 20 people were previously involved in generating month-end closing figures. Now just three people can produce the figures in a fraction of the time. Enabled the company to quickly and accurately identify and assess true product costs.

Case Study

Founded in 1977 as a small manufacturing unit, V-Guard Industries Ltd. (V-Guard) has grown to become one of the largest electrical appliance manufacturers in India. The company reported revenues of more than $126 million for the 2010 to 2011 financial year, and a 43 percent increase in net sales during the same period.

V-Guard manufactures electrical products, including voltage stabilizers, wiring cables, pumps, motors, solar water heaters and electric fans. The company employs more than 1,700 people, operates some 200 distribution and service centers, and partners with around 9,500 retailers to deliver its products to a client base of approximately 50 million people.

Major business transformation
V-Guard is growing organically and by acquisition within India, and is looking to expand internationally. As business booms, the sheer volume of information generated by its operations on materials, production, sales and finance threaten to overwhelm the company.

Robin Joy, CIO and General Manager of V-Guard Industries Ltd, explains, “Our existing IT systems had been developed in-house and had supported us well in the past, but gaps began to emerge as the business expanded. We relied on a number of different applications for inventory management, production, product costing and financial accounting, and the lack of integration between these systems was really starting to impact operational visibility and efficiency as we continued to grow.”

Recognizing that its existing information management systems were not sophisticated enough to cope with the changing needs of the business, V-Guard sought a robust solution that would promote enhanced information and process control, and provide a stable foundation for continued enterprise growth.

Selecting IBM Global Business Services
After considering a number of options, the company selected integrated SAP® ERP software as its strategic business management solution and then looked for a partner to manage the implementation.

“We evaluated a number of companies as potential partners and ultimately chose to work with IBM® Global Business Services®,” remarks Robin Joy. “As an SAP implementer, IBM’s credentials are well known and established by the countless number of SAP implementations that they have successfully completed.”

Along with providing SAP implementation management, IBM Global Business Services also offered SAP software license reselling services. V-Guard was able to negotiate a competitive price for the combination of SAP software licenses, implementation and infrastructure components as a single, known project cost.

Meeting strict deadlines
V-Guard established a tight six-month timeframe for the first stage of its SAP implementation. In response, IBM Global Business Services prepared a plan for a fast-track deployment based on the Ascendant SAP method.

Subsequently, V-Guard worked with IBM to design and configure a comprehensive SAP solution that met the company’s requirements. The architecture is designed to enable V-Guard to expand the solution by adding new SAP application components as the need arises, based on a standardized, virtualized IT infrastructure.

To meet the challenge of tight project deadlines, and to reduce the overall risk exposure during V-Guard’s sales season, IBM Global Business Services split the implementation project into two phases. During the first phase, V-Guard worked with IBM to deploy SAP ERP 6.0 and modules for Sales and Distribution, Materials Management, Production Planning, Quality Management, and Finance and Controlling. Additional SAP ERP modules, including Plant Maintenance and Human Capital Management, as well as SAP BusinessObjects™ Business Intelligence and SAP NetWeaver® Business Warehouse, were implemented over the course of two months during the second project phase.

The IBM Global Business Services team was confronted with a number of obstacles in bringing the business on board with the transformation effort. V-Guard’s legacy systems were strongly entrenched in the company’s operational culture, and moving from these systems and aligning the business to standardized SAP processes without buy-in from most users required a significant change management effort. It was also vital that the project conformed to complex statutory and legal requirements.

IBM Global Business Services rose to these challenges, providing dedicated project management and working closely with V-Guard to deliver the project a month ahead of schedule.

“The entire implementation was brilliantly planned and executed: we kicked off in September 2011 and the first project track went live in February 2012, beating our deadline by almost a month,” says Robin Joy. “There were no delays, and timelines were rigorously followed.”

Based on the excellent outcomes achieved with the SAP solution implementation, V-Guard has awarded IBM with a three year Application Maintenance Services contract. IBM Application Management Services will work closely with V-Guard to provide functional and technical expertise, and enable system and process improvements, helping the company to take its business to the next level.

Harmonizing business processes
V-Guard has successfully completed a major business transformation program, consolidating a disjointed system landscape on to a single, centralized SAP ERP platform.

Important business processes have been integrated, creating a streamlined supply chain, stretching from procurement and inventory management to sales and distribution, product costing and financials. The company has cut complexity and introduced a high degree of business process automation. It is possible for V-Guard to track products at every stage from materials to final delivery, ensuring that when customers demand specific information, V-Guard can meet the need rapidly and easily.

Improved visibility at every level
The new solution provides V-Guard with much enhanced visibility into operations, offering a real-time view of all its manufacturing locations and distribution centers. Integration of manufacturing and logistics with financials and costing also enables the company to quickly and accurately identify and assess true product costs. Where necessary, V-Guard can adjust pricing to ensure that margin is maintained, helping to drive total profitability by product, business unit and enterprise.

On the sales front, SAP applications provide an availability check, which considers the stock-in-transit and stock-in-purchasing along with the stock-on-hand when predicting availability. Robin Joy explains: “This feature indirectly helps us to identify our constraints in supply chain and efficiencies. By proper monitoring it should be possible to improve our inventory cycle time and enable better servicing of orders.”

Enhanced analysis and reporting
IBM Global Business Services also built an analytics dashboard using the SAP BusinessObjects Business Intelligence (BI) platform, which presents previously unavailable business data to senior managers. For example, executives are able to see current sales and purchase orders, track the number, value and progress of contracts, and use the information to obtain better prices, terms or delivery schedules from suppliers. Similarly, the dashboard shows immediate profitability analysis by product, which enables executives to identify and correct business challenges early and improve company performance.

V-Guard is using SAP NetWeaver Portal to provide a single point of access to reports and dashboards created using SAP BusinessObjects BI, as well as to employee self-service applications.

IBM is also working on newer initiatives to develop a new set of Key Performance Indicators (KPIs) and develop extensive SAP Business Objects BI reports. The SAP solution will allow users to generate more accurate reports that support better performance analysis and management, helping to drive smarter decision-making.

Better business control
V-Guard can manage its business in ways that were simply not possible before, and grow within India and internationally without a corresponding rise in administration costs.

For example, more than 20 people were previously involved in generating month-end closing figures that took more than ten days to deliver. Now just three people can produce the figures in less than three days, a 70 percent improvement and a productivity gain of 85 percent.

Moreover, V-Guard is listed on the Indian Stock Exchange, which requires quarterly reports. Previously these reports took up to 12 days to create, whereas the new solution generates them in five days, a 58 percent improvement

Robin Joy concludes: “The IBM and SAP solution makes validated, accurate information available more rapidly than ever before. Even as our company grows at a breakneck rate of 40 percent annually, the solution is designed to keep pace, helping V-Guard to reach its ambitious expansion targets.”

Products and services used

IBM products and services that were used in this case study.

Service:
GBS ISV Community: SAP, GBS Strategy and Change: Business Strategy, GBS Strategy and Change: Technology Strategy, GBS Technology Strategy, IBM-SAP Alliance

Legal Information

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