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Headquartered in Karur, Tamil Nadu, the VNC Group is an excellent example to emulate for all those companies that may be small today but aspire to make it big!
Technology Helps VNC Sustain Continuous Growth
and to systematically organise the
industrial products sector, which
was a highly unorganised sector in
the early 1980s.
Gokul recapitulates a few
decisions that were instrumental
in adding momentum to the
growth story of the group, “The
strategic moves that helped the
company accelerate its pace of
growth mainly comprise its entry
into steel wire manufacture and
its association with Tata Steel
and Lincoln Electric for the
distribution of their products.”
timely adoption of technology and
uncompromising focus on product
quality, the VNC Group has grown
into a dynamic multi-business
company, reveals B Gokul, chief
manager, Strategy and Performance
Improvement, VNC Group.
The turning pointThe journey of the VNC Group
began with the foundation of the
flagship company, VNC Electrodes
by V N Chokkalingam. The founder’s
vision was to provide high quality
industrial products to customers,
“The only way to do
business is to grow,
grow, and grow even
more…” It is this philosophy that
steered the VNC Group from a
modest 6 x 6 sq m room in Karur in
1983, to becoming a Rs 450 crore
group that includes VNC Electrodes,
VNC Steels, VNC Steel Distributors
and VNC Investments, with 12
offices across south India.
The group manufactures general
purpose manual wielding electrodes,
binding wire, and fencing products.
Because of its prudent strategies,
Management
www.consultbenefit.com • BenefIT • September 2011• 45
Vandana Sharma | BenefIT Bureau
Recently, the company won the
'Best Distributor of Tata Tiscon in
Retail’ award for the financial year
2010-11 by Tata Steel Limited.
Technology: The key ally!For the VNC Group, the timely
adoption of technology tools
has always been of paramount
importance. Technology has been one
of the key factors that has propelled
the group forward, reports Gokul.
Underlining the relevance of
technology adoption for growing
businesses, he further adds: “Gone
are the days when one questioned the
necessity of technology. We are in an
age when it is only relevant to ask how
effectively we can use technology to
grow. Besides, it has always been the
group’s ambitious growth plans that
have prompted it to adopt relevant
technology solutions.”
Therefore, at the VNC Group, the
emphasis is not only on investing
in technology but also putting it to
effective and optimum use. Apart
from the ERP system implemented
across its companies and units to
integrate its production, supply
chain and management processes,
the group has also recently
deployed a customer relationship
management solution. A few
servers have been deployed to run
these business applications. The
group also has a search engine
optimised website.
VNC has a 5-member IT
team, which develops tools to
render support to the existing IT
infrastructure.
The leap towards ERPOne of the notable IT
implementations for the group has
been its ERP suite, which integrates
all the group companies.
The group wanted to achieve
operational transparency and
efficiency across the board and
also tightly integrate the disparate
operations of its various companies.
Hence, the company decided to
switch to the Ramco OnDemand
ERP (RODE) solution. The
implementation started in November
2009 and VNC went live with the
RODE solution in January 2010. The
implementation process took eight
weeks, reports Mahaboob Ahmed N,
manager, Projects, Ramco Systems.
The decision to opt for the
Ramco ERP solution was taken after
exercising due diligence, says Gokul.
“We explored solutions from the likes
of SAP, Kennovation, Oracle and a few
others. RODE was chosen because of
the minimal customisation required
when compared to other solutions,
and the value for money that the
solution offered.”
The company opted for an
on-premise ERP model, where the
organisational data captured is
stored in the company's own servers.
The decision to opt for this model
was made due to the huge volume of
transactions, informs Gokul.
We are in an age when it is only relevant to ask how effectively we can use technology to grow.
The group flourishes with the timely adoption of technology
A server that runs the ERP solution
Management
46 • September 2011 • BenefIT • www.consultbenefit.com
“Because of prudent strategies, timely
adoption of technology and uncompromising
focus on product quality, our Group has grown into a
dynamic multi-business company.”
B Gokul, Chief manager,
Strategy & Performance Improvement, VNC Group
Making an ERP implementation effective Talking about the best practices that
were adopted before and after the
ERP implementation, Gokul says:
“The pre- and post-implementation
stages require two different attitudes
towards ERP. While efficiency has
to be the most important aspect in
mapping the business processes
during the pre-implementation
phase, using the new system
effectively needs to be the focal
point post-implementation. In other
words, the ERP solution needs to be
structured with respect to the vision
that the organisation has for its
operations in the future, and not in
accordance with its current practices.
This in itself serves as the foundation
to translate the vision into reality.”
To achieve this, extensive training
was given to all the end users to
make them independent and help
them to use the system with ease,
informs Ahmed.
The benefits derivedAhmed shares his observations
related to the pre- and post-
implementation scenario in the VNC
Group: “Earlier, each company of the
group was operating individually. But
with the implementation of the ERP
solution, all the group companies got
integrated into one entity. The RODE
solution has also addressed the
group’s need to capture its purchase,
production, sales and finance
functions in a single application so
that the end-to-end business related
MIS (management information
system) reports can be viewed by
the management. It also provides
consolidated inventory and financial
statements at the group level.”
Ahmed illustrates a few more
benefits that the ERP solution is
delivering to the company: “Earlier,
in the legacy system, each sales office
(branch) was configured as a separate
finance book and then consolidation
was done. But now, all offices are
grouped under a single organisational
unit. Hence, the tracking of stock has
become easy. By using the production
module of the ERP system, they are
able to track the stock at each stage
of production, and also establish
controlled quality check measures.
The system has made it possible
to establish effective controls over
processes by enabling SMS alerts.”
The system can also generate
consolidated MIS reports at the
click of a mouse. These reports
are used comprehensively by the
VNC Group for strategic as well as
operational decision making and
future strategic planning.
The RoIAssessing the return on investment
that the company has got from the
ERP implementation, Gokul says:
“The tangible ROI that the group is
enjoying is by virtue of its integrated
operations as we have brought all
the group companies onto the same
platform. Every process and function
is now tightly controlled, systematic,
and has defined standards.”
Another important return
is the easy access to data that is
essential for any kind of analysis.
The organisation now possesses the
strategic advantage to launch any
new initiatives or functions, which
will be part of its intangible ROI,
affirms Gokul.
What does the future hold?Going forward, on the IT
infrastructure front, the company
plans to continue with its strategy to
focus on leveraging the most out of
its ERP and CRM implementations
by building sub-systems (such as
customised MIS reporting) over the
next few years.
At the organisation level, the
VNC Group is already proactively
exploring diverse interests such
as manufacturing, distribution,
agriculture, mining, wind power and
logistics—exploring new vistas to
continue growing consistently and
rapidly. And, in this pursuit, we wish
the group all the very best!
“With the implementation of
the ERP solution, all the group companies
got integrated into one entity.”
Mahaboob Ahmed N Manager, Projects Ramco Systems
Management
www.consultbenefit.com • BenefIT • September 2011• 47