September 8, 2017
Supply Chain Management through Tally.ERP9
CUSTOMER OVERVIEW
Keventer Fresh Limited (KFL) is a company promoted by the Rs. 12 Billion Keventer Group. With an investment of over Rs. 300 Million, it has set up a Post Harvest Processing and Packaging Center for Horticulture produce with state of the art technology for sorting, grading and packaging of fruits and vegetables and various other food items.
This facility has started operations from January, 2008, and includes:
- Collection and pre-cooling of fresh produce from the farms
- Processing (cleaning, sorting, grading and storage under controlled atmosphere)
- Fruits Ripening Chambers (specially for bananas)
- Packaging in various formats to ensure freshness of the produce
- Transportation of fresh horticulture / agricultural produce to the Distribution Centers / Stores
KFL caters to institutional segments, super markets and retail chains by providing specialized facilities in its Packaging Centre including supply of good quality fruits and vegetables. Being GMP certified, the processing unit follows strict adherence to quality standards. It is also proposed to obtain certification under the Eurogap for supplies to retail chains in Europe in the future.
Keventer Fresh has set up a pilot project to study different factors affecting fresh produce and the technological interventions to handle these, in order to preserve freshness and to create a win-win situation for both farmers and the consumers.
BUSINESS CHALLENGE
KFL’s product mix, comprising of more than 200 SKUs, includes fruits and vegetables which have a short shelf life. This requires the supply chain to be agile and responsive to the needs of KFL’s customers and, in some cases, suppliers. They, therefore, needed a simple but quick indenting, purchase, supply and sales recording system.
KFL has multiple procurement points and handles over 60 supply / stocking points with daily supply, booking of losses and sales with an average of 40-50 SKUs per supply / stocking point. This results into a average transaction volume of 15,000 SKU-transactions per day. Most of the despatches happened between 1AM to 6AM. This required a simple system so that semi-qualified supervisors be able to use it with minimal training.
Fruits and vegetables are subject to a high percentage of losses due to over-ripening, damage, etc. (known as dump) and moisture loss (known as shrink). Without proper tracking of dump and shrink, KFL would not be able to track leakages and losses and improve net margins.
KFL also needed real-time flexible reporting and analyses across the stocking points and SKUs according to user-defined time periods, customer groups, item groups and categories. It required reports on net realization, landed cost analysis, average stock losses per stocking and supply point, channel profitability, comparative rate analysis, debtors analysis, etc.
THE SOLUTION
KFL chose Tally.ERP9 to meets its supply chain management requirements. KFL chose a partner of Tally, Orchid Technical Consultancy P Ltd, to:
- Design and optimize business processes for the various channels
- Implement Tally.ERP9 compliant with the designed business processes with minimal customization
- Provide reporting solutions using their Tally.ERP9 add-on, Orqubit Business Intelligence
Organisation Stucture
Tally.ERP9 allows godowns to be created in a hierarchical fashion. The channels in which KFL operates were organized into this hierarchy. This allows KFL to report on its channels, viz. Store-In-Store, Wet Market, Trading, Organised and Home Delivery at any level.
The SKUs similarly were organized into a hierarchy using the multi-level stock grouping feature. This allowed KFL to look at Sales, Purchase, Stock and Losses at different levels. Using the Stock Category feature
of Tally.ERP9, SKUs were further organized into Domestic, Imported and Exotic, which allows KFL to track its supply chain operations using these parameters as well.
Automation of Indenting and Despatch
Excel based indent and despatch forms were developed with automation and which automatically interfaced with Tally.ERP9 using Tally.ERP9 powerful integration capabilities. Employees of KFL were training in modifying these excel forms so that they could add or remove stocking points and SKUs. This resulted in the following advantages to KFL:
- Reducing the time to market from 3 days to 1 day
- Reducing manual data entry efforts by 80%
- Remote use capability
- Minimal training to new employees
- Minimal dependence on IT for business changes
Integration with Sales Point of Sales (POS) System
Prior to implementation of Tally.ERP9, KFL used to record sales on a weekly basis due to data entry issues. The implementation partner designed an interface with Sales POS systems which allows KFL to record sales in Tally.ERP9 on a daily basis. This allows KFL to
- Monitor the current stock and supply chain requirements
- Get a realistic depiction of debtors on a daily basis
- Reduce errors and reconciliation efforts
Tracking of Losses
Processes were put in place in Tally.ERP9 to capture dump and shrink using excel based data entry forms to give an accurate picture of losses occurring at different points thus providing the management with a true picture of profitability. The excel forms allows all stocking points to report data in a standard format and eliminated duplication of data entry and errors.
MIS Reports
With the standard reports of Orqubit Business Intelligence the users and management is able to generate flexible analyses across channels, SKU groups and categories and customers. Some of the key reports used are:
- Average purchase (landed cost) and sales rate based on user defined time periods
- Sales comparisons across time periods, channels and customers
- Losses compared to sales volume at different points in the supply chain
- Debtors movement and performance
Enhanced Decision Making through Dashboards
Drill-down Dashboards on Sales, Purchase, etc. from Orqubit Business Intelligence provide managers and C-suite executives with an online and ready overview of business operations enabling them to take decisions in real time.
Mr.Abinash Gupta, CEO at KFL, claims “the implementation of Tally.ERP9 and Orqubit Business Intelligence has helped us to avail real-time information and make informed business decisions.”