Detailed Project Report
On
Arvind Mills Ltd.: Enterprise
Systems in Fashion
By
Group No. 5
Ankul Sharma 2019MBA003
Lakshay Kumar 2019MBA019
Sumit Kumar Raut 2019MBA042
Sarbani Sahu 2019MBA035
Ruchi Jangid 2019MBA033
Under the Guidance of
Professor:
Dr. Mahadeo Jaiswal
MIS
INDIAN INSTITUTE OF MANAGEMENT, SAMBALUR
YEAR: 2019
1
TABLE OF CONTENTS
Titles Page No
1. Need Analysis
2. Functional Scope
3. Project Schedule
4. BPR and Best Practices
5. ROI
6. Feasibility Analysis
7. Change Management
2
NEED ANALYSIS
The present system was not able to meet the demand of the emerging market. They wanted to
provide their national as well as international customers a system that is convenient and
comfortable to work with. They were also planning for expansion into fashion retail and also
acquiring many retail brands in future
1. Existing Market information system inefficiency :
Legacy Island System had no interface between themselves
No modification and updates possible
Retirement of in-house software engineer
2. Modernizing the production process:Due to the set up of an ultra modern plant in
Santej the company had to underdo major modifications.
3. Difficulty in integration of various legacy Island systems
4. There was an urgent requirement of customer resource management because this
would facilitate the managers regarding the status for their order and the time required
to process and receive the product which in turn would increase their efficiency.
5. Improved Forecasting by adopting state of art system
6. Coordinating the supply of inventory build up in the raw material stores would
facilitate better supply chain management
7. As most of the production is made to order ,ERP packages could help in coordinating
and stream lining the process with other departments for maximum capacity
utilization
8. Tamper Proofing the system by giving data inputs in each and every process and
using primary keys to identify the data
3
FUNCTIONAL SCOPE
1. As they decided to implement a better Enterprise Resource Planning package, they
decided to higher a consultant for which they seleted PWHC
2. They wanted to implement a solution that was renowned worldwide in order to get the
advantage of functionality and recognition in the global industry
3. Softwares that were considered were SAPR/3, PEOPLE SOFT,ORACLE, and
RAMCO
4. SAP R/3 was selected because
It was suitable for Arvind Mills business
Worked across the functionality finalized by the board
Suitable for processing industry
It has a good track record for success
It is the best seller ERP package
Strong Business process reengineering and follows the best Business
Practices
It is regarded as the best quality software among the customers
Different functions that were chosen to be implemented were:
Finance and Control
Plant Maintainance
Sales and Distribution
Warehouse Management
CRM
SCM
Advanced Planner and Optimizer
Production planning
Material Management
4
PROJECT SCHEDULE
Phase-1
Time Period- October 1997 to April 1998
Functions configured-
Finance and Control
Production Planning
Material Management
Plant Maintenances
Sales and Distribution
Quality management
Progress and Shortfalls:
Little progress in the implementation process
Lack of availability of dedicated core team
Lack of business knowledge of the PWHC Consultants
SAP R/3 could not be implemented for all configurations except quality management
and production planning
Not flexible foe AML customization
Anuj Prasad used ASAP methodology to create structured project management
methodology
Project got extended for 5 months due to problem in understanding of implementation
partner and weakness of partner
Phase-2
Time Period- October 1998- February 1999
Functions configured
Marketing
CRM
Progress and Shortfalls
5
More challenging than Phase-1
Given the non-standard and inherently complex nature the customer rebate
percentages, product combinations ,customer-product-order volume was different for
different customers as one customer sometimes had multiple accounts to get rebate
PWHC was replaced with Accenture Business consulting
Contractual problem with Accenture due to replacement of some configuration in
Phase 1
Overall restructuring of Change management
Phase 3
Time Period: May 1999 to August 1999
Functions Configured:
Commissioning of SAP supply chain management module of Arvind Mills which
lacked the intelligence to generate optimal solution
Progress and Shortfalls
Added new APO module for data analysis and combination of R/3 ‘s SOP and APO
modules to answer SOP requirements
But Phase 3 was implemented after implementing Phase 4
Phase-4
Time Period: September 1999-2001
Functions Configured:
Translating the information collection into decision making that was used in data
warehousing data mining
Progress and Shortfalls
Phase was completely blank
Digitization of text and non-text data that too without error
6
BRP AND BEST PRACTICES
Arvind Mills could have used BRP in the following manner:
Daily Documentation of the tasks accomplished
Measure the progress based on customer demand
Measure the result and then identify improvement opportunities
Measure the performance of new Project
New technological implementation lead to improvement in business practices
Restructing all the processes so that they become transparent
Radically improving the performance of business
Change Management in the form of education, /training, communicating to all the
shareholders, employees and stakeholders and giving away rewards and reinforcement
Applying organized and unorganized methodology
ROI
ROI = Net Profit/Total Assets
According to the balance sheet in the case
The ROI has changed from 30% in 1996-97 to 58% in 1997-98 ,33% in 1998-99,38% in
1999-2000 ,25%in 2000-01.
So the implementation of Phase 1 has successful in terms of ROI but it fell down drastically
during Phase 2 .As Phase 3 could not be implemented without Phase 4 so it declined again
drastically in the year 2000-01.
7
FEASIBILITY ANALYSIS
SAP R/3 was successful in the following ways:
Reduction in workforce due to better resource and time management due to
centralization of the entire process
Plant resource module was automatically updated
Quality management made the status of product processing trackable
Monitoring of the entire process of manufacturing
Easy material management
Excellent sales and distribution module
Became customer centric related to reliability
Warehouse Module helped in predefining all the roles of textile
Efficient working of internal customers
Better assurance about the availability of the product as they could easily find where
is the product in the entire value chain
SAP R/3 implementation will influence international customers to prefer Arvind Mills
from other players
But there are certain problems it faced such as:
• Selection of consultant
• Did not conduct independent feasibility analysis
• Absence of strong internal core team
• Implementation of new work practices through SAP rather than SAP
• Did not implement PLM,MES which could have been suitable for finance,marketing,
sales and HR.
• Employee hierarchy issue
8
CHANGE MANAGEMENT
In phase 2 the problems faces regarding change management was a follows:
Technological change is accompanied by change in work culture
Led to change in attitude and job roles of some employees
Difficult to handle expectations
Should have concentrated on how the employees should do their own job during the
system
BPR requires change in the ways of working in the process that is from a drastic and
painful change to an adjusting and manipulating approach
Proper communication to the employees regarding the implementation of new
technology to maintain employee retention
Proper knowledge transfer and training to the employees regarding new industry
specific solution implementation like MES, PLM
Rewards and Reinforcement to the employees
Appointing a good management consultant organization and assign the this project