Case Study Two

The client

 A renowned manufacturing Group founded in 1929, as a coal mining company which has grown into one of India’s leading business conglomerates with interests in sectors ranging from coal and real estate to aquaculture & manufacturing.

The company transports between 60-70 million metric tons of coal annually across the country by road, rail and sea. ICD (Imported Coal Division) provides services to thermal power stations, paper mills, cement plants and other industrial customers both in the public and private sectors.

A company of this group is an original equipment manufacturer of multi-function containers, material handling systems and coal mining equipment with an emphasis on quality and customization. It prides itself on being a bespoke high-end engineering solutions provider.

Business need

  • Online stock visibility
  • Few custom solutions to cater import activity.
  • Sales Plan, Production Plan, Procurement Plan all are in silos.
  • Lead time of imported raw material consideration in planning
  • A large number of satellite systems were being used that were not integrated with the host system
  • Lack of synchronization between multiple departments.
  • The Conacent team had to integrate the new system with the satellite systems and put all new processes in place through integration or customization

Challenges

  1. LC in Purchase: – LC Opening depends on the purchase agreement. LC can be amended after purchase agreement or before receiving of material. Credit terms will be as per the date of transfer of ownership as specified in the terms & conditions in the contract.
  2. Quotation Comparison Chart: – Item specification is required at the time of Requisition, Quotation, and Purchase Agreement. Payment amount is decided based on the quality of item specification.
  3. Purchased rate changed at the time of receiving due to item specification: – Item specification mentioned in the quotation or purchase agreement does not match with the specifications of received items. At the time of inspection in receiving stage the item specification may vary. So Item specification wise purchase rate and quantity also may vary. So rate calculation is needed.
  4. Vessel wise costing: – Vessel wise costing is required as it is the basis for deriving the sale price.
  5. Vessel wise Profitability: – Vessel wise profitability is unique requirement as same coal is imported multiple times.
  6. Lay time calculation: – If vessel stayed at port more than allotted time for loading or unloading the demurrage needs to be paid.
  7. For high sea sales actual delivery is made after sales of coal although logical sales are done when the material is on sea.

Our solution

Equipped with its proprietary OUM methodology, strong Oracle Applications consulting and a unique global delivery model, Conacent set about to integrate best-in-class Oracle ERP with Custom applications to help the client improve their business processes. As part of this mandate, Conacent undertook the following:

  • Evaluation and implementation GL, AP, AR, CM, FA, INV, DISCRETE, OM along with few custom Bolton implemented like LC management, Item specification, Plot Rent Calculation and Lay time calculation
  • Conacent was involved in business process definition, program management, project management, package evaluation, package implementation, key user training, and post-production support
  1. LC in Purchase: – We developed custom forms for capturing the total LC requirement which was integrated with base apps P2P flow.
  2. Quotation Comparison Chart: – Custom form and report created to compare purchase quotation considering multiple charges for import.
  3. Purchased rate changed at the time of receiving due to item specification: –In the system some customized screen was developed to meet the requirement of the client. Screens are as follows:
    • Item specification Parameter Master
    • Formula Master
    • Purchase Order tagging with Formula
    • Rate calculation
  4. Vessel wise costing: – A custom report was created to get the cost including landed cost.
  5. Vessel wise Profitability: – To get the vessel wise cost, Conacent suggested to create Vessel wise new item code, and maintain item wise different revenue and COGS account code, to get the proper profitability
  6. Lay time calculation: – Custom forms were created to calculate the charges of Lay time.
  7. For high sea sales actual delivery is made after sales of coal: – We developed a custom report.

Strategy

Leveraging the implementation, a team of 12 experts from Conacent decided on the methodology and approach to implement the Oracle Application R12.1.3 to achieve process efficiencies. Conacent, using Oracle solutions, streamlined the distribution, procurement financial accounting and manufacturing processes of the client thus standardizing performance metrics across the organization and streamlining the client’s internal processes.

Benefits

  • The implementation imparted high visibility to the supply chain and improved demand planning and execution.
  • There was a significant improvement in cash flow due to real-time processes. A large number of processes have been automated, which has increased the efficiency and reduced overhead costs.
  • Timely delivery and proper order booking increase due to online on-hand availability.
  • The client witnessed significant improvement in its on-time delivery record due to the processes and applications implemented by Conacent.
  • Single source of MIS.
  • Authentic data from single system.
  • Reduce reconciliation activity.
  • Online BS/PL.
  • A large number of manual practices have been systemized. and automated.
  • Excel dependency reduced to a great extent.
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