Overview of the Business
- Client is a focused engineering company to offer highly rewarding automation Textile industrysolutions for Textile industry.
- Client’s entire portfolio of business moves towards finding and providing a solution that will yield direct
- profits to our customers.
- It has a dedicated R&D Team working seamlessly with a world-class manufacturing facility to provide high- quality products in the field of Textile Machinery, Automatic Car Parking, Automatic Storage and Material Handling Systems.
- Turn over of company is around 250 cr+
Focused Departments
Client side Impact areas:
Procurement:
- Clear accountability being allocated to the buyer for any issues related to the category of items
- Addresses the risk of missing out on releasing PO or follow-up for the timely receipt of inventory
- Reduced the manual purchase planning by systematic inventory management and purchase planning, ensuring that the stock was maintained at an optimum level
- Increased internal control over the purchase quote approval and price master updation, Ensure that the rate different from the approved RFQ is not allowed in PO
- Increased control and visibility over the approval of PO and consumables consumption.
- Brought internal control to not use the item that is not QC cleared to be used from the system. Items of these defects are addressed and closed on time by return PO tracking and stock in a quarantine location
Impact areas:
Subcontracting:
- Prevented miscommunication and improved efficiency in subcontracting process flow
- Internal control implemented in the system transacts only the items in BOM and any excess/shortage material sent to the subcontractor location is found during inventory verification and the warehouse incharge is held responsible for any difference found
- Increased efficiency of on-time delivery and ensure the production and delivery schedule did not gets affected
Accounts and Finance:
- Product profitability analysis: Management can able to see the profitability of individual products by considering their specific costs incurred for product( through COGS – FG/DSQ) and selling price of such product.
- Brought better visibility in ledger and grouping.
- Ensure there are no errors in mapping document for smooth implementation of software for accounts module
Key problems and solutions – Procurement:
Key Problems
- Multiple persons involved in procuring one Item group will create miscommunication with the supplier and also result in work duplication.
- Purchase planning was taken care by the purchase head itself
- The purchase planning was done in excel for each project manually. The inventory in the system was not available and hence manual inventory report is considered while raising purchase request which may lead to excess and short of material in stock
- Manually managing RFQs lead to consume more time on administrative tasks like data entry and comparison rather than strategic tasks or focus on negotiations.
- No tracking between the Item required and Item ordered
- No reference of SO while releasing the purchase order
- There were no mechanism for evaluating the vendors
- Improper communication with the logistics team will result in sending the wrong material/ wrong length to the supplier. And also within the production team, no overview of action to be taken on the items came from sub contracting location
- Followup with the vendor for the timely delivery of the Item is not done. If the vendor didn’t deliver the Item within the committed date, Customer delivery got affected
- There were no link between the purchase return – inventory movement transaction and the debit note
- No Specific Ledgers are available to capture the Cost of goods sold (material + labour + OH) due to this no information or proper reports are available for management
- Configuration of the chart of accounts and ledger mapping as per the requirement to achieve the intended reporting requirements
Key Solutions
- Categorized the items into buckets and allocated the roles and responsibility to the respective buyer and brought the user access controls onto the ERP as well.
- Advised that only the PPC team to run the MRP and purchase team shall be responsible only to execute the PO released by the PPC team.
- MRP engine will suggest the Qty to be ordered. Manual intervention will be reduced. For ROL items, Automatic PR should be raised for the purchase Qty defined at the Inventory levels.
- RFQ and Price approval work flow to be go through ERP for immediate approval
- Develop reports or dashboards that provide visibility into the status of each planned item, including whether it has been ordered, received, or is pending
- Discussed with the vendor to bring this SO reference onto the MRP engine
- Drafted the vendor rating mechanism based on multiple factors to operate more efficient vendors
- The sub-con process to be brought into the ERP and ensured the notification and information is communicated to respective persons involved in the process on time. The Sub-Con delivery challan and picking list will be only printed with the childparts as per BOM
- This is being decided to be covered in vendor portal where the dashboard will be visible to the vendors for the list of PO and status against the same. Also the delivery performance of vendor is tracked in the portal
- At the time of raising the debit note to the customer, the inventory movement entry will be linked . The deviation report can be generated and acted upon
- Included Cost of Goods sold grouping with break up of following ledgers in new chart of accounts, COGS – FG , COGS – Customer return, COGS – Site return, COGS – DSQ, COGS – Components, COGS – FOC
- Prepared the Chart of accounts to give the better visibility of the finance performance in the ledger level itself.
