sap ace award, 2017sapace.co.in/uploadfile/sap_ace_18_ baani mpc.pdf · · 2018-02-23its market...
TRANSCRIPT
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SAP ACE AWARD, 2017
Name of the organization: Baani Milk Producers Company Limited
Contact Person & Designation: Hitendra Sharma, Head-IT
Email: [email protected],
Mobile No: +919781703322
Official Address: SCO 37 & 38, First Floor, Urban Estate Phase –II, Rajpura Road, Patiala 147002
Punjab
Nation Building through SAP solutions:
Dairy industry is of great importance to India being a primary and subsistence
source of rural income in many states and secondary source in agricultural
dominates states like Punjab. The country is the world’s largest milk producer. It is
the world’s largest consumer of dairy products, consuming almost 100% of its own
milk production. Dairying has been considered as one of the activities aimed at
alleviating the poverty and unemployment especially in the rural areas in the rain-
fed and drought-prone regions.
A specific Indian phenomenon is the unorganized sector of milkmen, vendors who
collect the milk from local producers and sell the milk in both, urban and non-urban
areas, which handles around 65-70% of the national milk production. This leads to
exploitation of small marginal farmers by these middle men. Objective of Making
Producer Companies is to organize dairy sector in India and strengthen small
marginal farmers and providing fairness, transparency and empowering them to
become self-sustained.
A Producer Company combines the institutional and ideological strengths of
cooperatives (ownership limited to users; limited interest on shares; no trading of
shares; patronage is not capital-based) with the flexibility and autonomy available
under company law. In a Producer Company only milk producer can become
member and owned by user members.
About Company
Baani Milk Producer Company Limited (BAANI MPC) was incorporated on 11 August
2014 under the provisions of sub-section 2 of section 7 of the companies' act, 2013
with its head office located at Patiala in Punjab. Baani commenced its business
operations from 06 November 2014 and is currently operating in eight districts of
Punjab.
Over the span of just about two and half years, Baani has established itself as a
largest Milk Producer Company in Punjab. The Company is owned by the dairy
farmers of Punjab, who work hard to ensure that fresh and pure milk and milk
products are available to the consumers.
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Beyond the production of pure and hygienic milk and milk products, Baani Milk is
dedicated to promote a self-reliant dairy community. Baani Milk enables the proud
farmers to grow in this highly competitive dairy industry.
Objective
Baani with a key objective to create maximum value for its all stakeholders
including producer members by purchasing of milk, processing of milk and milk
products and marketing the same is constantly making endeavours to transform
lives of marginal and small dairy farmers by educating them on smarter methods of
milk production and also by providing them the opportunity to participate in a fair
and transparent dairy business.
Business Operation
Presently, the Company’s milk procurement operations continued in eight districts
of Punjab viz. Barnala, Bhatinda, Faridkot, Ferozepur, Mansa, Moga, Muktsar and
Sangrur. However, Baani extended its procurement operations to cover therein
active 1280 villages with active 1318 MPPs (Milk Pooling Points) under 13 MCCs
(Milk Chilling Centres) as on 31st March 2017. During the year, the Company has
procured 657.11 lakh kgs of raw milk with average collection of 1.80 lakh kgs per
day. At the end of the financial year 2016-17, Total of 40768 were approved
members which indicates high degree of loyalty and patronage toward the
functioning and principles of Baani as a Milk Producer Company.
The ethos of Transparency, Honesty and Timeliness of Company’s’ VMVs has built
confidence of the members in the working of the Company. Growth in membership
during the financial year 2016-17 was recorded at 30%.
Maximizing the productivity was of utmost importance, cost reduction measures
like reduce the logistics cost by instituting automated tracking system to optimizing
logistics efficiency, proper supervision, quality checks and logistic controls were
effectively instituted. Major technological initiative was deployment of GPRS based
DPUs at 660 MPPs for transmit of real time data to SAP ERP and thus replaced
traditional pen drives used for data transmission.
Transparency in Business Operation
Automation in terms of issue of receipt giving details of milk poured quantity, FAT &
SNF and transfer of members’ payment directly in their Bank Account.
Baani invested considerable resources into Information Technology for better
transparency and efficiency in all the processes. Baani achieved a major milestone
on 1st July 2016 when SAP ERP went go live. The highly successful
implementation provided Baani Milk with an integrated and sustainable platform to
move forward.
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MILE STONE: SAP GO LIVE ON 01 JULY 2016
Milk and Milk Products:
Baani as a “Brand” in Milk and its Milk Products has been accepted and picking up
its market against other major and local players like Verka, Amul, Super, Saras
etc. during the last one year of its launch in Patiala, Ludhiana, Bhatinda and other
adjoining towns.
In addition to existing 11 SKUs this year Baani has launched 6 more SKUs of
various products. These are 6 Litre PPM pack in FCM and Standard, 200ml DTM,
100gm Curd, Ghee 15 Kg tin and Spiced Lassi in pack of 200ml and 500ml.
Total sales during the year was 27.23 lakh litres of PPM, 1.31 lakh kgs Curd, 2.12
lakh litres Lassi and Ghee 39.61 metric ton. The Company foresees big potential in
marketing of Milk and Milk products, in near future in Punjab and adjoining states.
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End Implementing Agency (EIA): National Dairy Plan1
Baani is also the End Implementing Agency (EIA) for various projects implemented
by Government of India through National Dairy Development Board (NDDB) under
National Dairy Plan 1 (NDP 1). The objective of the Sub – Projects was:-
To help increase productivity of milch animals and thereby increase milk
production to meet the rapidly growing demand for milk.
To help provide rural milk producers with greater access to the organized
milk-processing sector.
These objectives would be pursued through adoption of focused scientific and
systematic processes in provision of technical inputs supported by appropriate
policy and regulatory measures for the following projects:-
A. Village Based Milk Procurement System (VBMPS)
B. Ration Balancing Programme (RBP)
Benefits accrued through SAP
Baani Milk has been formed with an objective of maximizing returns to its members
through professional management and by harnessing capital, markets and
technology thus ensuring business growth without undermining the basic
cooperative character of democratic governance and autonomy.
Milk Pooling Point (MPP) Automation
Milk is procured at the Milk Pooling Point (MPP) in two shifts, morning and evening
where-in members / farmers pour the milk at MPP. All the data is saved in Data
Process Unit (DPU) which automatically captures Milk quantity from Weighing Scale
and Quality parameters (FAT/SNF) from milk analyzer thus preventing any
manipulation with data.
The milk procurement data is then securely transmitted to a middleware application
from DPU. The milk collected from each MPP is sent to nearest MCC (Milk Chilling
Centre) for further consolidation with Raw Milk Reception at Dock (RMRD).
MCC Automation
Weigh balance and Milk Analyzer at MCCs are interfaced together for milk weighing
and testing of member’s milk collection data and actual milk quantity, FAT and SNF
are recorded in a middleware application.
Data Integration in SAP
All the data in from central middleware application is automatically transferred to
SAP database through PI.
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SAP system controls the master data and rate chart by sending it to middleware
application which signals each DPU at village level to pull updated data from
middleware application. DPUs at village level pull the updated information through
GPRS connectivity thus preventing manual intervention.
Payments and Recoveries
SAP system at Baani takes care of payments on Payment cycle to pay the milk bill
amount to members which are due for the payment. While making the payment,
system automatically calculates and adjusts recoveries, incentives and dividend for
Members.
Some of key features of payment module in SAP system:
Different rate masters are maintained based on the milk type (Buffalo, Cow
& Mixed Milk)
Rates are defined based on FAT & SNF Parameters in Rate chart
Rate Chart assigned to each MPP.
Incentives are paid automatically based on the qualitative / quantitative
parameters to Members
Shareholding data is maintained and additional share amount is
automatically calculated for the members as per the milk poured
Payment to the members are automatically transferred to their respective
bank accounts
DPU sends the data through GPRS connectivity. RMRD
Process Integration
Middleware Application
Data is sent over secure VPN
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Recoveries and incentive of a Sahayak is calculated automatically from the
system
Producer Institution Building (PIB)
PIB– System facilitates to enter
1. Online registration of applicants for the membership.
2. Convert application to members based on board approval
3. Share Management which includes - allocation of shares, cancellation and
transfer of shares etc.
4. Member analysis – commitment, deductions, pouring pattern, lean & flush
analysis etc.
Logistics: The inward and outward logistics in Baani is managed by inward and
outward transporters. SAP system facilitates to capture all tanker movements
between MCCs and plant tanker sale and purchase along with its rate fixing and
billing detail. Users and management can see material balancing and variation
reports on daily basis from the system. Milk material cost / expense on logistic /
transportations are booked on inventory so Baani is getting clear picture of cost on
raw milk and processing of same.
Freight Vendors Payment
SAP system calculates the freight payment as per the vehicle rate assignments.
And all the Penalties/Recoveries against the materials and advances recoveries are
also considered by the system
Sales & Distribution
Sales & Distribution of milk and milk products is done through a network of
distributors across Punjab. The system provides online facility of sales and
management of milk, cattle feed and milk products etc. Customer enquiries are
entered in the SAP system to generate the quotations of milk products and further
sales order, material requirement planning, crates and credit is managed from the
SAP system.
Asset Management
Company’s assets are managed through SAP system i.e. purchase, tracking,
maintenance and periodic verification of the assets etc. The process of asset
purchase, tracking, maintenance and verification is a system dependent process for
which stock details are maintained at MCC level.
Accounts & Finance
Finance & Accounts system in Baani prepares and manages the milk payments to
the member, Sahayak / LRP commissions, computation of annual price incentive
payments to the vendors and other financial transactions. The member wise
payment data is directly integrated with finance module in SAP system which is
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further processed to calculate all earning & deductions of members and sent to the
Bank in member’s account directly.
Quality
Milk quality data is recorded in the SAP system from the very first point of entering
milk at village level in the form of FAT, SNF , Quality and time , later when milk is
reached at MCC and plant various quality tests data , milk maintenance parameters
, monitoring process and analysis data is available in the system.
Productivity Enhancement Services (PES)
PES services such as feed service, cattle feed demand collection is recorded in the
system. The Animal Health module of Information Network for Animal Productivity
& Health (INAPH), designed by NDDB, captures the entire gamut of activities
related to health that is usually carried out on the animal. SAP system integrates
the service data and from INAPH and consolidates with ERP financial data to deliver
reports from one system.
HR
Human resource management would involve entire life cycle of an employee in the
organization starting with manpower planning, recruitment till full and final
settlement of employees.
Business Intelligence
Baani is using Business Objects and Business Intelligence tool of SAP system to do
daily analysis of milk procurement data, members’ performance, their EMI detail,
milk logistics, product sale & profitability to stay competitive in market.
Saarthi is a unique system
in the Dairy Industry,
specifically designed for
Producer Companies to
accommodate milk
procurement requirement,
and calculates member’s
payment in SAP system,
payments are automatically
transferred in member’s
bank account.
Using SAP solutions we are
able to achieve the
confidence in our producer
members who are also the shareholders of our company that they would come out
of their present situation to a better living condition.
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Maintaining the records of 45000 plus member farmers and building their livelihood
is a perfect example of farmer’s empowerment in India and SAP is helping us
record, analyses and monitors the day to day operations for the nationwide
achievement.
SAP had provided a solution for processing the milk bill to the farmers on time,
which was our biggest challenge in operations before SAP. The direct benefits are
to the members of the company as they are the shareholders and SAP is helping us
to provide 100% transparency in all the business related transactions. This will
eventually increase the patronage from the members which would position the
company as one among the leading dairies in Gujarat.
Award Category Selected: Public Sector, Award for Adopting Digital Initiatives in
Public Sector/Services
Revenue/Budget of the Organisation: Turnover of Rs. 258.26cr in 2016-17.
Targeting 350cr in 2017-18
Number of Employees: 200+
Project Related Information:
SAP Solution(s) implemented: ECC6
Number of SAP users: 35
Project Go-live date: 01-07-2016
Project overview
Baani was part of central SAP implementation project steered by NDDB Dairy
Services. Producer Companies followed the World Bank guidelines and selected
“Zensar Technologies” as an SAP ERP (Saarthi) implementation partner for all the
Producer Companies. Project was funded by World Bank under National Dairy Plan.
It was decided to implement ERP and BI solutions to have a seamless flow of
information between different departments and functions, better control of the
processes and for leveraging advances in IT systems for business gains for the
Baani.
It was expected that SAP ERP will enable Baani to manage their end to end
operations including Milk Procurement, Quality, Sales and Distribution,
Manufacturing, Procurement, Logistics and Supply chain, Finance, Asset and
Human Resource management. ERP application will allow the different units such as
milk pooling points, chilling centers and clusters centers to seamlessly share
information with each other and with the HO.
The ERP will also enable Producer/Member Institution Building and integrate with
existing applications such as Milk Procurement System. BI application will enable
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the senior management to generate customized reports and analyze the business
data for decision support.
ERP RFP was prepared & Bidding was conducted through the National Competitive
Bidding (NCB) procedures agreed with World Bank. Through bidding process &
detailed analysis it was decided to implement SAP system in all Producer
Companies.
Below was the Project Scope
1. Preparing Global Business Blueprint
2. Detailed hardware sizing and specifications for the proposed ERP and BI
3. Configuration & Customization of ERP & BI and development of Global ERP
Template
4. Customization of Global ERP Template for Producer Companies
5. Integration with existing and planned applications PCs
6. Application Testing and OEM Audit
7. Data digitization and migration for PCs
8. Roll out of the ERP and BI solutions at Cluster offices and Head Offices of PCs
9. Capacity building and change management
10.ERP application Maintenance
Over All Project Size
Total turnover of producer companies – more than 3000+ Crore
Total milk collection per day – more than 30 lakh milk collection per day
Total villages to connect to ERP – more than 10000
Total Farmers – more than 3.5 Lakhs
Total Chilling Plant – More than 750
Total staff – More than 2000
Total payment to farmers – more than 250+ crore per month
More than 300 SAP users
One of the main objectives of IT initiative was to implement ERP solution for all
Producer Companies, however keeping the cost very low and meeting requirement
of all present and future Producer Companies. This was achieved by making a
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Global Template by involving stakeholders across all Producer Companies, NDS,
Consultant, World Bank etc.
Earlier, Baani had distributed system with many legacy applications to work,
making reports and farmers payment was a big challenge. Management was
convinced to have single SAP system to fulfil all requirements under one umbrella.
SAP ERP System in Producer Companies is first its own kind of unique system in
Dairy Industry consolidates data from villages (1300 villages in Baani and 45000
farmers pouring milk daily morning & evening. Paying together more than 30 crore
payment in a month with many complex formulas and rules inbuilt), single system
takes care complete requirement of Finance & Costing, Human Resource
Management, Production Planning, Material Management, Sales & Distribution,
Project System, Plant Maintenance, Quality Management , Customized module like
– Milk Procurement System & Producer Institution Building , integration with legacy
software’s etc.
SAP system at Baani takes care of payments on Payment cycle to pay the milk bill
amount to members which are due for the payment. While making the payment,
system automatically calculates and adjusts recoveries, incentives, and dividend for
Members. Payments are deposited in farmer’s bank account to maintain
transparency and avoid any pilferage from commission agent. System allows to
pour milk only from registered members thus avoid any manipulation.
Baani successfully designed and implemented an end to end SAP Dairy Solution in
India and first ERP system approved by World Bank in India.
The project was successfully implemented in Baani on 1st July 2016 with in a very
strict time frame.
Project Highlight
Online Farmers Enrolment
Portfolio and Performance of each farmers
Milk Procurement by connecting all the farmers in SAP
Online Payment to all the farmers from System
Route and Vehicle Management
Material Balancing tool build in SAP
Transparency and Traceability
Sales and Distribution
Crate and Empties Management
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Saarthi became the first ERP
system approved by World Bank
in India and successfully
implemented in Baani and other
Producer Companies.
Key Project or technical
challenges before
implementing SAP solution
Baani MPCL wanted a single
platform for all business process
integration and to manage all
operations more efficiently. To
take effective business decisions
we also needed a centralized
online data which could be
accessed from any location. Milk Bill processing was a big challenge and used to
take 3-4 days to complete the payments one of the biggest concern is addressed
by SAP by reducing the time to one days overcoming the issues with the legacy
system.
Baani MPCL needed a system that would help to manage the entire member
management including their shareholdings and regular payments. Improving the
Sales and Distribution process and mainly making payment to the vendor/members
immediately on the due date. The business connects over 45000 farmers who are
the members of the company, spread across thousands of villages. The business
initiates better lively hood for the poor farmers so that they also grow along with
the organization.
Other technical challenges
Training to field staff
Integration with milk procurement data from villages
Single system to bring in milk procurement data to calculate farmers
payment
Making Global template for multiple stakeholders
Customize modules and integration with legacy applications
Master data – from top to bottom i.e. SAP to village level
Milk Material balancing at different level
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Calculating farmers/members payment with complex earning and deduction
for commission agents and logistic vendors
Creating PIB module and managing members shareholding & EMI deduction
detail
Key Organisational or Business or National challenges before
implementing SAP solution
This was a national project funded by World Bank so taking approval and following
World Bank guidelines was a big challenge. Producer Companies are a new concept
which has been experimented first time in India. Initially we didn’t find any suitable
product to fulfil Producer Companies requirement.
Other challenges:
Challenge in creating RFP
Challenge in finding out right product (ERP)
Connectivity in rural areas
Finding a dairy partner for SAP implementation
No bidding format initially with World Bank
Bid received almost double of budget kept for ERP implementation
Very strict time line
Managing PMO office for multiple stakeholders
Change management
Data upload from chilling centres - as end user do not understand the
importance of sending data to central server
Value Related Information:
List Short and long term impact / Benefit Achieved:
All the Business Process is on a single platform “ SAP “
Transparency across all the business process
3.5 Lacs Farmers target qualification and registration in the system, by
eliminating the paper work by 90%
Maintaining the portfolio and performance of all the farmers for Strategic
decision on to increase the cattle productivity.
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Connected all the broken business process and network into SAP and with
SAP Orchestration to collect 30 Lakhs Litres connecting 10,000 + Village
every single day
All the payment of the farmers are calculated and release by SAP, this is a
unique solutions built in SAP to have a better control on the heavy volume
error free payment, this is reduced the cycle from 5 days to 5 hrs.
Daily regulars updates are sent, digitally through SMS to all the Farmers on
their performance status
“Shares Management” of all the farmers are maintained in SAP, which has
reduced the errors in multiple folds and formed a strong bonding between
Dairy and Farmer
Better Inventory control on Gain & Loss for each and every movement of the
milk, which was not possible before SAP, it from 0% control to 100% control
Faster sales cycle to customer and Farmers , for Milk and Cattle feed by 20%
respectively
Automating the milk collection from the 45000 members from 1300 villages and
paying them accurately with 100% transparency.
Implementation Related Information:
As part of NDS initiative under NDP 1 (National Dairy Plan) to form Producer
Companies in five states i.e. Rajasthan, Gujarat, Andhra Pradesh, Utter Pradesh &
Punjab, NDS IT had a target to computerize all Producer Companies.
These Producer Companies are having together more than 10000+ villages, 700
chilling plants, 3.5 lakhs farmers, 2000 employees to connect. These companies are
large in milk procurement together more than 30 Lakhs litre per day and 300 to
1000 crores turnover, paying together more than Rs 250+ crore in a month to their
farmers.
Objective of IT initiatives in Producer Companies was to bring transparency,
fairness, avoid pilferage in farmers pouring milk to the company by IT intervention,
and give Producer Companies robust IT infrastructure to support their business to
remain competitive in market, enable them to become world class companies in
near future. It was envisaged that Producer Companies should have latest
technology in terms of all IT hardware & software to run their business
independently.
The global template was developed first at the NDDB-NDS and the further
implementation of the individual PC’s were like a roll-out. This has helped in
reducing the time actually taken for completing the implementation and Go-live.
It is the first time in India that a dairy solution is developed with complete data of
its member including the maintenance of the shares each member holds.
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Feedback Related Information:
“SAP provides authentic, central, reliable and timely information, which enabled
Top Management to take timely key business decision and to formulate future
strategic planning.” [Narinder Singh Bahga, CEO- Baani, 9872621263, 15th Feb,
2018]
“SAP facilitated transparency in our business process and helped Baani to be proud
being part of Digital Revolution of the country.” – [Kanwaljit Singh, CFO-Baani,
9592068090, 15th Feb, 2018]
“SAP Implementation in Baani was instrumental in removing several decentralized
and legacy applications.” – [Hitendra Sharma, Head-IT, 9781703322, 17th Feb,
2018]
Steps Ahead is Digitalize “Cow to Customer”
1. Equip all the farmers with smart phone App for all transaction.
2. Handle all the sales process through Cloud by C4C and Sahayak on Service 4
cloud
3. Cattle Management on SAP
4. Replace proprietary Data Processing Units with Smart devices.
5. SAP S/4 HANA implementation.
6. Bring total control on the business process in terms of Vendor/customer
accounts and masters to reduce costs.
7. Being always online such that the top management can view day to day
report for being agile to take decisions.
8. Getting transparency of data among different departments so that time and
money can be saved on available Inventory and procurement.
9. Getting in new technologies for monitoring and controlling to save time and
cost in business operation.
10.Implement the dash boards for the senior management for quick decision
making.
11.To bring down the per transaction cost.