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Aakits implemenation of SAP ERP for a Manufacturing Company
1. SAP ERP Success Story
KLR INDUSTRIES LIMITED
Summary
n Name: KLR Industries Limited
n Location: Hyderabad
n Industry: Manufacturing
n Products: Drilling Equipment and its
Accessories
n Employees: 300+
Website
n www.klruniversal.com
Key Challenges
n Inflexible and inefficient IT infrastructure
n Streamline communication
and processes throughout the company
n Access to up-to-date information to
accelerate decision making
n Enhance relationships with suppliers,
vendors, customers Improve
competitive edge
Project Objectives
n Create an IT backbone that could meet
demands due to company’s growth and
dynamic market scenario
n Higher visibility of operations to improve
productivity
n Unify people and information under
a common framework for business
processes
Solutions and Services
SAP® ERP
Implementation Highlights
n Time-frame: 8 months
n Implementation Partner: Aakit
Technologies Private Limited
n Involvement of Top Management
n Comprehensive change management
Why SAP solution
n Fully integrated solution, scalable to
support enhancement and growth
Functions and features
n Support for complex manufacturing
activities
n SAP’s track-record
n Assured support in the future
Key Benefits
n Availability of reliable information on
real-time basis leading to improved
decision-making and control
n Increased employee satisfaction with
simple and central access to information
and applications
n Increased organizational efficiency
n Improved visibility of business
processes across different business
functions
n Improved, disciplined approach to
accounting, procurement, and financial
systems
n Improved ability to compete though
strategic use of new platform
Existing Environment
n Focus software with limited usage, only
in the finance area
n Hardware: Hewlett Packard
n Operating System: Microsoft
Windows 2003
n Database: SQL Server 2005
“SAP stands for – Solves All Problems.
To run a business effectively, just run
it on SAP,”
Geetha V.Nair, Chief Operating Officer,
KLR Industries Limited
QUICK FACTS
KLR INDUSTRIES LIMITED
SAP ERP INTEGRATES BUSINESS
PROCESSES AT KLR INDUSTRIES LIMITED
2. The company was founded by K. Laxma
Reddy, Chairman & Managing Director,
as a small-scale venture in 1984, with
a vision to provide water to villages in
rural areas and develop the agricultural
sector. He has been a role model, while
successfully guiding KLR’s destiny and
keeping pace with the latest state-of-the-
art technology.
The company has its semi automated
manufacturing facilities in Hyderabad and
Dubai, United Arab Emirates. KLR is an
ISO 9001:2000 certified company and
a well established name, with a global
presence in more than 35 countries
around the world.
The Need for an Integrated Solution
KLR is doing well and has plans to go for
an IPO by 2009. It aims to achieve INR
500 Crore by 2009 and INR 1000 Crore
by 2010. However, the IT infrastructure in
the company did not support its growth
strategy. Manual-based processes
were resulting in inefficiencies and data
inaccuracies across the organization. The
company lacked a structured information
system to manage its growing business
effectively. This lack of integration and
real-time information forced the company
to look at their options.
“There were immediate needs – to run
the business effectively with proper
systems, enhance efficiency, reduce
inventory through better planning, improve
performance of our personnel, strengthen
customer service, and increase
profitability,” says Geetha V.Nair, Chief
Operating Officer, KLR Industries Limited.
The company looked for integration
across all business functions, faster
information availability, and better control
of operations.
KLR INDUSTRIES LIMITED
SAP® ERP INTEGRATES BUSINESS
PROCESSES AT KLR INDUSTRIES LIMITED
“Our products are complicated and
made up of nearly 1000 components. We
wanted a clear picture of the availability
of stock in the company,” adds S.Giridhar
Reddy, Senior Manager, Quality Systems.
To stay ahead in the global marketplace,
the company needed to replace its legacy
IT systems with a world-class solution
capable of managing its increasingly
complex business activities and growth
requirements. Moreover, it was KLR’s
quest for excellence which made the
company think of SAP.
KLR reviewed different products in the
market and eventually narrowed the
field down to three possibilities, one of
which was SAP ERP. The company was
impressed with the solution’s enhanced
features.
“SAP provides the required integration
between different business processes.
The solution can handle any complicated
business scenario. Further, SAP has a
large network and provides huge support
options,” says Nair. The company felt
assured of a strong support system from
SAP in the future.
Implementation
Aakit Technologies was chosen as the
implementation partner for the project
since they had the requisite experience
in the field. The implementation which
was started in January 2007 took around
eight months to be completed. There
were around 12 members from KLR and
6 members from Aakit involved in the
project. SAP ASAP Focus Methodology
was followed in implementing the SAP
ERP solution.
The implementation of the Production
Planning (PP) module was a difficult
process, as the company handles
different situations in production:
• Sub-contracting and External
Processing
• Variant Configuration
• Make to order and make to stock
“The project had its share of challenges
and complexities. However, all said
and done, it has been a very good
implementation,” says Nair.
The modules implemented include
Financials & Controlling (FI/CO), Materials
Management (MM), Production Planning
(PP), Sales & Distribution (SD), and
Quality Inspection (QI). The solution has
been implemented at the company’s
Head Office and in three divisions of
its manufacturing facility in Hyderabad.
Today, there are 15 users in the company
who have taken the implementation well.
Benefits
With SAP ERP, KLR has standardized
many core activities across the
company’s operations. The users can
now count on easy access to accurate,
complete, and up-to-the minute
information, thanks to centralized,
integrated data. Duplication of work has
been eliminated at all levels across the
organization. Employees now spend their
time analyzing data rather than searching
for information and validating the data,
leading to enhanced productivity.
With improved information flow and
enhanced visibility, the management can
track the status of its business as and
when it wants. The company is in a better
position to identify business pain points
easily. The implementation of SAP ERP
has led to a faster and more pro-active
decision-making process,
KLR Industries Limited is a leading manufacturer of
multipurpose Drilling Equipment and Accessories under
the brand name “KLR” used for water well, mining and
construction purposes.
3. as the management now has access to
accurate real-time data. With SAP ERP,
the company is seeing a tremendous
improvement in control and data
management across the organization.
KLR has been able to transform its
business operation management from
time consuming and inflexible to real-time
and adaptable.
Inventory levels are reduced significantly
and problems in operational processes
can be prevented in time, boosting
productivity levels. The company now
enjoys full visibility into stock that can
result in optimized inventory and improved
replenishment planning. Information on
the availability of materials or stock can
be communicated in real-time.
“Earlier, we did not know the availability of
stock in the company. We would purchase
the same items again even though they
were in stock. Now, the system gives a
clear picture of the availability of stock
at KLR, leading to improved inventory
management and better planning,”
says Nair.
With improved stock control, the company
can now forecast stock ordering as well
as forecast when and which stock will
expire. KLR has complete and accurate
knowledge of the stock at its warehouse
and inventory control has greatly
improved post implementation.
The company can now effectively
monitor its vast amount of inventory. The
enhanced ability to manage inventory
gives a good platform for informed
decision-making and reduces dependency
on the employees to provide the data as
and when required.
Purchase orders can be created in a
few easy steps. The system takes care
of the processing of purchase orders,
while reducing the scope for errors and
eliminating data redundancies, leading
to significant time savings. Also, there is
better coordination with vendors.
The company finds it easier to manage
and maintain vendor contracts and
transactions, including issuing purchase
orders, updating in-stock numbers,
handling returns and credits, and
processing payments.
The company is committed to ensuring
that its products meet the very highest
quality standards. “Now, SAP ERP
ensures that the product can move out
of the factory only if it is checked and
cleared by the Quality Department,”
confirms Reddy.
As a result, KLR now gets products to
market more quickly than before, because
the staff does not have to take the time
to manually check and double-check the
data. KLR’s customers and employees are
assured of continuing, top-level product
quality – which is extremely important for
the company.
Management control on various business
functions and operations has improved
allowing decisions to be based on current
data and information. As decision-making
is quicker, the company has an advantage
in being able to react to customer needs
appropriately. Employees can quickly
and accurately respond to customer
inquires regarding product status and
delivery dates, which enhances business
relationships.
“Before SAP, we were facing a major
problem in controlling the credit limits
of our customers and dealers,” says
Nair. Now, the system gives alerts to the
company when the credit limits provided
to its customers and dealers are reached.
It can quickly generate reports such as
Aging Analysis for Debtors and Creditors.
KLR’s customers and dealers can be
informed well in advance when payments
are due from them. This way, the inflow
of payments due to the company has
improved.
SAP ERP has enhanced the company’s
image and strengthened its relationships
with clients and suppliers.
“Our business is increasingly focusing
on exports and spread across multi-
locations. For our overseas customers,
it makes a world of difference when they
know that we have SAP. Using SAP ERP
will enhance our reputation for good
work and increase customer confidence.
In fact, they are enquiring if they can
communicate their requirements through
the system,”
says Nair.
Future Plans
To summarize, in deploying SAP ERP
to replace a legacy system strained
by the company’s expansion, KLR has
dramatically reduced data errors, gained
greater visibility into all aspects of
company operations, improved inventory
management, and benefited from IT
solutions that support the company’s
growth.
Today, the company is in a better position
to recognize and leverage its inherent
resources, strengths and capabilities.
SAP has enabled real-time management
and the company can develop better
business strategies in a timely and
effective manner. SAP has prepared
KLR fully to face new challenges in the
future and meet opportunities in the
competitive marketplace. Being a satisfied
SAP customer, the company has plans
for additional projects with SAP in the
pipeline.
“We are planning to roll over SAP ERP
in our Dubai plant in the coming year.
We may need to enhance our customer
support by going for the SAP Customer
Relationship Management (SAP CRM)
application, in the near future.
SAP stands for – Solves All Problems.
To run a business effectively, just run it on
SAP,” concludes Nair.
“SAP provides the required integration
between different business processes.
The solution can handle any
complicated business scenario.
Further, SAP has a large network and
provides huge support options”.
Geetha V.Nair, Chief Operating Officer,
KLR Industries Limited
