When Mother Dairy was finding it difficult to coordinate the operations of all its sub-contractors who are involved in manufacture of ice-cream, it turned to Ramco for IT solutions that could streamline the system By Pupul Dutta
Set up in 1974 under the programme called Operation Flood, Mother Dairy is one of India’s most famous milk brands. With a wide variety of products in its kitty, the company today enjoys a significant market share in the areas of its operations.
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Mother Dairy has traditionally sub-contracted the production of its ice-creams. But as the sub-contractors were using disparate systems, it led to a situation where Mother Dairy was having very little control over the processes that the subcontractors used. The milk major found it increasingly difficult to manage and track operations of these subcontractors.
To safeguard the reputation of the brand, it was important that the ice-cream, which is mostly manufactured by sub-contractors, was carefully procured and distributed with strict quality control. The Mother Dairy management soon realised that this job could not be done without IT. But an IT setup with disparate systems can be equally nightmarish, as Mother Dairy soon found out. It was then that the company turned to Ramco for implementing an integrated system for connecting Mother Dairy’s ecosystem of sub-contractors with an end-to-end ERP for seamless flow of information.
The problem
Mother Dairy, a diversified food and beverage business group with multi-company setup, having manufacturing plants across regions, wanted to connect its sub-contractor network. Before the company adopted Ramco ERP on cloud, it faced issues with managing their in-ward quality,
in-process quality, multi-company production, standard versus actual cost, MRP for advance rolling plan, dairy specific utility, etc. Secondly, Mother Dairy also wanted an application that could integrate with their existing parent application, SAP,says Annie Mathew, CIO, Mother Dairy Fruit & Vegetable.
Also, the company found it increasingly difficult to track and manage raw materials lying with the subcontractors, finished goods inventory at the subcontractor’s end, expected date of delivery of finished goods, non-standard production processes, and subcontractor database and billing.
The sub-contractors too were having a tough time in tracking and managing raw materials, and the customer outstanding, etc. Since there were independent systems being used by all the sub-contractors, they often could not sync their own systems with that of Mother Dairy. This led to lot of challenges. ’
“Therefore, in order to overcome the challenges faced by the company and the sub-contractors, Mother Dairy wanted to implement an ERP solution to standardise and track the masters and production activities of different sub-contractors. The company also wanted to monitor the purchases by sub-contractors in order to maintain the quality, adds Mathew.
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The answer
To deal with the ongoing crisis, Mother Dairy selected Ramco to implement its ERP solution.
Ramco helped Mother Dairy improve the efficiency of its multi-company setup by the implementation of enhanced quality inspection and traceability, MRP, and few other solutions. The initial implementation includes 10+ subcontractors. During the five-year contract, it is expected to scale up and cover all 30+ subcontractors, says Ramesh Babu K M, Chief Delivery Officer & Business Head ERP on Cloud, Ramco Systems.
The solution that Ramco offered to Mother Dairy had detailed quality module spanning Inward as well as In-process. Then there was a multi-company setup, with each vendor being regarded as a separate company. Also, a separate production process in each company was set up.
Ramco also helped Mother Dairy by implementing Manufacturing Resource Planning (MRP) and a homogeneous Bill of Materials (BOM) across all the vendors. SAP was brought in for better control.
“One interesting aspect of the implementation is its neat coexistence with the existing SAP module. Ramco system generates an Advance Shipping Note (ASN) at the time of invoicing, which creates an Inbound Delivery Note (IDN) in the SAP module, thereby reducing manual intervention in Finished Batch entry,notes Babu.
According to Mathew, the phase one of the implementation process was completed in 90 days. The implementation was carried under the supervision and the guidance of the in-house staff and Ramco’s consultants, she says.
On the subject of issues faced during the implementation of the process, Mathew says, ?he greatest challenge faced during the implementation was the acceptance of the change. We overcame this by involving vendor? shop floor staff and other appropriate authorities, to ensure there were no challenges of acceptance.
Babu on the other hand while explaining the various challenges that they faced during implementation says, the biggest roadblock for us was to prove the ability of the solution and its functionalities as the scope of customisation was minimal. Secondly, educating the Mother Dairy vendors about the features and benefits of the offering was again quite a task. Lastly, Mother Dairy is the first user of our new module Time Quality. Hence, the testing and implementation of a new module as a part of the offering was challenging.
Moving on
Ramco managed to implement most of the solutions during the winter season when the demand for ice creams is much lower. With the timely execution of the project, Mother Dairy was in position to offer the best ice-cream during the next summer season.
Some of the benefits that the dairy major immediately noticed was reduction in manual interventions. Greater transparency and accountability was achieved in the processes by which the company interacts with its subcontractors. Mother Dairy now has complete visibility of the work that the subcontractors are doing. Better monitoring and control using dashboards/ MIS reports has been achieved. Also, now the company is in a position to maintain online financial reports in excel, and it has full control over manufacturing costs.
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