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Studying The Erp System Problems

Hindustan Unilever Small is India's major fast paced consumer goods company. The common HUL brands include Kwality Wall's icecream, Knorr soups and food makers, Lifebuoy, Lux, Pears, Breeze, Sunsilk and Dove shampoo's, Vim dishwash, Lakme cosmetics etc.

Problems confronted by the company before ERP implementation:

There was an appearance of modern trade in India. Its business infrastructure and various legacy systems were unable to meet the requirement for transactions and process capacities of the present day trade. A legacy system means the computer has been in operation for a bit longer and so its functions. Hindustan Unilever was not able to streamline its business procedure. There was a need of a lot more smooth move of information. HUL was facing a task of guaranteeing the optimization of business to possess solutions to changing market needs. Company was also facing the task of reducing its stock replenishment circuit.

Need for ERP execution:

To enhance business process and simplify IT management.

2. Consolidation of process is essential. This must be achieved internally as well as over the value string.

3. For the preservation of investment related to legacy inventory and cash-to-order management system. Cash to order management system is for the business associates.

4. Integrate with business companions' IT infrastructure quickly and seamlessly.

5. To improve information posting with lovers even if they're not using SAP's solution.

6. Increasing Resource String efficiency through process centric cooperation over the enterprise-internally and externally.

7. Enhancing the value of legacy system.

8. ERP system was also had a need to ensure the distribution of goods at the right time at right places

In this era of modern trade one must deliver something level that is higher than the particular industry provides right now and their supply chain needs to be so that it is superior to its rivals.

Their older version of ERP system was such that it was not in a position to meet these needs. Hence these were searching for a system which would help in catering like achieving future deals of modern trade.

HUL also realized that good communication skills and limited communication links was essential for the optimization of its business and attaining higher efficiency of the supply chain. However, making sure good connection between HUL's IT system using its distributors was not a straightforward.

Earlier the company was using an e-business system which was developed inhouse. This was to manage the processes of replenishment and order fulfilment. This was done by exchanging inventory and sales data between itself and their marketers. Synchronization was also necessary. But because their customers acquired multiple, different systems of their own, integrating their system with those customers to and ensuring easy data exchange was a challenging task for these people. Furthermore, the module of the E-Business system was tailored. . So as their business experienced expansion, there were problems managing themselves with changing business needs.

HUL has developed a typical distributor management system in a sent out basic trade environment. If one wishes the extended supply string to be protected, the functions of the distributor needs to be integrated firmly with its inner Enterprise learning resource planning solutions. The system is performing quite good, Hindustan Unilever Limited wishes to its investment t be maintained in this field. Therefore the new ERP request must be able to incorporate itself with this back-office program, so the company can continue steadily to use its borrowed money well or leverage and maximise this in to the future.


It was at 2004 when HUL decided to refurbish its IT system with SAP. By utilizing SAP as their professional of standard IT alternatives, utilizing its organization which is packed with different features, solutions and it fine experience in the buyer goods industry, thy will be able to do their global transformation strategy. This plan was aimed at streamlining and standardising the business procedures across all its operations including global businesses. It had been to accelerate their change of business and simplify their IT team.

The package for HUL was SAP NetWeaver Process Integration (SAP NetWeaver PI) which empowered process-centric collaboration internally and across HUL's prolonged value chain.

SAP NetWeaver PI facilitated communication and an copy of info between different applications jointly or multiple applications irrespective of whether it is an SAP or non-SAP solution.

Why SAP implementation?

It supported huge range of integrated Advanced Business Program Programmiing(ABAP) and SAP applications which derive from Java

used throughout Hindustan Unilever

Provided opportunity to drive new enhanced change and transportation system functionality of SAP Solution Manager

Phase 1 of HUL's SAP implementation

It is at Sept 2007. It had been marked with the finish of its legacy ERP and its e-business systems. The solutions that have been deployed included SAP ERP Central Aspect (SAP ECC), SAP NetWeaver PI, SAP NetWeaver Business Cleverness (SAP NetWeaver BI), SAP NetWeaverComposition Environment (SAP NetWeaver CE), SAP NetWeaver Portal, SAP Solution Administrator and SAP Supply String Management (SAP SCM).

The most important thing to them is the fact by implementing SAP NetWeaver program, these are fit to combine and exchange data which is critical for business across their inner processes and also externally with the partners, their various suppliers and different companions too. For eg, HUL is now able to keep or restrain its investment in Central Unify and Unify which is also their target. It is possible credited to SAP NetWeaver PI.

It is due to this software that integration of the the legacy inventory and order-to-cash management system is now possible with all of those other SAP-based system. SAP NetWeaver Website is another SAP NetWeaver component that HUL is most impressed with, which is right now used for customer cooperation. Integration of HUL's IT system with its

distributors' IT systems is now possible by exchanging its e-business system with this website. This therefore results the replenishment and order fulfilment process. With SAP NetWeaver PI, we have finally streamlining, progress and integration of these process capability hs finally become possible for their SAP NetWeaver PI. This also has led to the enlargement of HUL's ability in achieving modern trade's demand.

Phase 2 of SAP execution:

Includes implementation of SAP Customer Marriage Management, SAP Travelling Planning and Vehicle Arranging, SAP Advanced Planning & Optimisation Development Planning and Complete Scheduling.

Manufacturing/Production software:

The Distribution Module of MFG / PRO offers users Operation in the regions of Purchase, Inventory, Sales and Distribution, Configured Products and SCM can be found in the Syndication Component of MFG/Expert.

MFG/PRO Distribution

This software is useful in the following areas :

˜ Purchase

˜ Quotations of sales

˜ Requests of sales and Invoices

˜ Inventory & Physical Inventory

˜ Analysis of sales

˜ Configured Products

˜ Enterprise Material Transfer and Enterprise Operations Plan

MFG/PRO Financial Services

It includes Basic Ledger, Accounts Receivable, Accounts Payable, Multiple Currency, CostManagement, Cash Management, Fixed Possessions, Global Taxes Management

Benefits of MFG/PRO

1. You can find highly qualified team members with advanced technical skills and they also own international exposure.

2. Team scalability is really as per the business requirements

3. For making certain the expectations are met on time and within budget, a tactical methodology is used.

4. Fluctuation in manpower is low.

5. Customer satis and nightfaction level is at its peak as the helpdesk is available for the whole night and day.

6. Cost-effective Benefits are substantial.

MFG-PRO Process :


The first step gets the order.

a. One has got the order online.

b. All purchases are consolidated from website to stand out sheet

c. The excel sheet is then send to the Procedures Department

d. Material Necessity Planning is then done in MFG/PRO

Calculation how much inventory is in the stock & how much inventory is required will be achieved by MFG/PRO

Step -2 :

Step 2 includes management of organic materials

Supplier is prepared about the number of raw materials to be supplied ordering is performed here)

Raw material is then received from dealer.

Goods Receipt Statement(GRR) is then made by MFG/PRO.

Step 3

Qulity Control is done here

Material is then used in the product quality Control Team:

Different periods are

(1) Q. C. Pending (2) Q. C. Accepted (3) Q. C. Rejected

The one that is accepted is used in warehouse. One that is turned down is repaid to suppliers. MFG/PRO does indeed the accounting access than it.

Step - 4 :

Also called creation stage

Raw Materials is Transferred to Production product.

MFG/PRO prepares Development Report is prepared by MFG/PRO -

Daily Creation is recorded

Step - 5 :

The process gets to the dispatch stage

Guidiance how much to dispatch will be done by MFG/Expert.

The Remaining is stored in warehouse.

3. A mail to the customer will be delivered by MFG/Expert.

Step - 6 :

Payment to the distributor is done here :

A Concept to the central team is delivered by MFG/PRO, after 1 week of receipt of material & payment will be achieved centrally. The accessibility of it'll be done by MFG/Expert when the repayment is performed. .

Payment from Customer:

After the 3 weeks of dispatch of the completed goods to customer, central department will be messaged by MFG/Expert to ask for payment from the client. Admittance will be automatically done by MFG/PRO when the customer does payment.

Waste checking

Manual method is implemented for capturing the throw away.

MFG/PRO will compare Materials reduced & Finished Stock Increased and theri difference would be determined as waste material.

Profit Calculation

Profit Assertion will be prepared by MFG/PRO on a monthly basis.

There will be evaluations of previous earnings statements.

PAY GINI Software

Used usually for HR department

Various services provided by this Software:


Calculation of salary

Provident Fuud Calculations

Accounts of most Employees

Customer Marriage Management:

It is done through CRM software that manages various techniques that the business always uses for tracking and organising its contacts using its current and future or prospective customers. Hindustan Unilever uses it to control front end functions, backend businesses, various business interactions, analysis and operational CRM.

The growing information needs have to be met and the business practices need to be standardised. For HUL integrated Secondary Sales Force Automation (SSFA) Software across its redistribution stockists. Computer Manufacturing Company (CMC) has already put in place the Dealership Management Request Software for HUL vendors as part of earlier engagement. Connection between the redistribution stockists with the

central database occurs through Internet-based network for online interaction on orders,

information writing, dispatches and monitoring.

Company's Existing Situation :

Their existing environment consists of

SAP ERP software, SAP NetWeaver Exchange Infrastructure Part, SAP NetWeaver Business Brains Component, SAP NetWeaver Site component, SAP Dealer Relationship Management Application, SAP Customer Relationship Management


The company now enjoys

--70% speedier transports for non-ABAP (Advanced Business Application Coding) software

--Greater degree of automation and accuracy

-- Elimination of disruptions and problems almost completely in ABAP and non-ABAP change transports

--Reduction in costs through reduced dependency on specialists which have specialist skills

Third-Party Integration

Databases: Oracle

Hardware: IBM

HUL Before ERP

There were 1, 000 suppliers and 7, 000 stockiest in over one million shops. HUL has 100 factories, 121 warehouse depots, 13 deal branches and 93 third-party developing sites. It offers 23 central offices, two research centers. C&F realtors used to Planning of syndication was done by C&F realtors predicated on the demand that was brought up by stockists. 60-90 times credit for the goods received to C & F agets and stockists.

In 1995, 44% was the HUL's online current belongings as a share of capital applied, and

inventory was 20% of divisional turnover for detergent and for personal products it was 24% divisional turnover.

HUL after ERP

HLL previously experienced a stock replenishment routine time of two weeks after ERP implementation, it came up down by three and half days, which translates into substantial savings in inventory costs. After ERP current possessions as a percentage of capital used was down to 8 percent, and inventory in key divisions was down to 5-6% of turnover.

In the case of detergent, the stock level reduced to less than 3 weeks of sale from 6 weeks of sales. Finish goods stock level at syndication lowered from three weeks to 1 week. The stockists of HUL who had been habituated to get 60-90 times of credit from HUL are actually offered a particular discount if the repayment is beforehand. Because of this, orders are put by stockists limited to those stocks that may be replenished quickly. The channel inventory has considerably reduced in the whole network.

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