Atul Completes Annual Cost Accounting Two Months Earlier, Generates Monthly Reports 60% Faster with Upgraded Enterprise Applications
 
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Atul Completes Annual Cost Accounting Two Months Earlier, Generates Monthly Reports 60% Faster with Upgraded Enterprise Applications

  • Oracle Customer:  Atul Ltd.
    Location:  Atul, India
    Industry:  Chemicals
    Employees:  2,700
    Annual Revenue:  Under $100 Million

Incorporated in 1947, Atul Ltd. is a member of Lalbhai Group, one of the oldest companies in India. Atul operates in the textiles and chemicals industries and manages one of Asia’s largest integrated chemical manufacturing complexes. The company has six business divisions: agrochemicals, aromatics, bulk chemicals, dyes, pharmaceuticals, and polymers.

Atul has grown rapidly in the last 10 years. Its colors business division is the largest supplier of dye products in India. It manufactures a vast array of dyes for the textile, leather, paper, wool, and silk industries and exports nearly 40% of its products to more than 40 countries. Atul is also a world-leading manufacturer of the antibacterial product Datone. It exports its expanding range of agrochemicals to more than 35 countries, including Australia and Spain.

With manufacturing divisions expanding significantly and most divisions using separate systems to record their manufacturing, inventory, sales, and financial information, it was becoming harder to effectively manage and consolidate financial and inventory data and processes, such as cost sheets and inventory counts.

The company needed to integrate business-critical information regarding accounts, purchasing, manufacturing, and inventory, so it could better record and manage data, for examples, regarding the proportion and weights of ingredients required to produce a certain chemical, and to generate consolidated related reports, such as statutory reports required by the Indian government. It also wanted to reduce time-consuming manual data entry, so the company decided to implement Oracle E-Business Suite Release 12.

“We have been growing significantly and expanding our capacity and product portfolio on a domestic and international level,” said Rajat Sharma, president of IT, Atul Ltd. “To do this, we needed a robust, scalable, and sustainable enterprise resource planning (ERP) system, as we were finding it difficult to meet the organization’s goals and requirements with our legacy, hybrid, ERP systems.”

“Upgrading to Oracle E-Business Suite Release 12 has streamlined critical business processes in our manufacturing divisions and changed the roles of staff and managers, who can now use their time to more efficiently perform and manage manufacturing and sales activities, rather than having to constantly prepare statements and reports,” Sharma said.

 
Recorded Dual Measurement Data

A word from Atul Ltd.

  • “Oracle E-Business Suite Release 12 streamlined critical business processes in our manufacturing divisions and enhanced staff and management’s functions, as they can now use their time to more efficiently perform and manage manufacturing and sales activities, rather than having to constantly prepare statements and reports.” – Rajat Sharma, President – IT, Atul Ltd.

Atul manufactures more than 60 types of agricultural, pharmaceutical, industrial, and dye-related products, such as herbicides, epoxy resins, and chloride, under its six manufacturing divisions. Each product has a complex list of chemical ingredients, and most of the ingredients and finished chemicals, dyes, or medicines need to be measured by chemical solution strength, as well as by volume or weight.

“The processes involved in manufacturing these chemicals are long and complex and require an intricately balanced combination of chemical and procedural equations,” Sharma said. “We must measure ingredients and finished goods by chemical weight as well as actual weight and record both units of measure to help us maintain stock levels and continually improve our chemical recipes.”

Oracle E-Business Suite Release 12 has enabled Atul to record and manage this dual-unit measurement data from across its six manufacturing divisions in a central, integrated database, rather than on disparate Excel spreadsheets.

“We have more than 300 inventory categories organized by process and around 4,000 finished chemical products,” Sharma said. “In the past, we could not record this level of detail in our legacy systems and had to rely on manual spreadsheets. As a result, we could not run regular reports showing the cost of chemicals and actual volume of the ingredients used to produce pesticides or a certain type of plastic. Now we can see the exact item cost for each finished product after allocating for overheads, such as manufacturing wages and other expenses.”

 
Generated Monthly Cost Reports

 
Faster Year-End Reports

 
Met Statutory Reporting Requirements

 
Produced Monthly External Cost Reports

 
Improved Chemical Recipes

 
Customized 800 Forms and Reports

 
Informed Sales and Marketing Strategies

 
Immediate Sales Reports

 
Reclaimed Product Tax

 
 

 
 

Challenges

A word from Atul Ltd.

  • “Oracle E-Business Suite Release 12 streamlined critical business processes in our manufacturing divisions and enhanced staff and management’s functions, as they can now use their time to more efficiently perform and manage manufacturing and sales activities, rather than having to constantly prepare statements and reports.” – Rajat Sharma, President – IT, Atul Ltd.

  • Consolidate financial and inventory data and processes, such as cost sheets and inventory counts from six expanding chemical manufacturing divisions
  • Integrate business-critical information regarding accounts, purchasing, manufacturing, and inventory, to better record and manage information, such as the proportion and weights of ingredients required to produce a certain chemical
  • Improve access and visibility into timely business information, such as sales, inventory, and profitability to improve operational efficiency
  • Standardize and automate core business processes to boost productivity and data quality and reduce costs

Solutions

  • Generated monthly reports showing balance and overall profits broken down by product or division 60% faster
  • Published company accounts at the end of every financial year two months faster, which improves customer relationships and makes stocks and shares more attractive by showing the company is efficient and transparent
  • Met the Indian Government’s statutory reporting requirements in a more timely and efficient manner, up to three months faster in some cases
  • Gained timely insight into the costs of external processes—in days instead of months
  • Redeployed staff who previously spent time manually compiling and entering financial, manufacturing, and inventory data, supporting the company’s expansion without needing to hire new staff
  • Recorded detailed, daily shift-by-shift information about the exact quantities of ingredients used to produce each chemical in the integrated system rather than on separate spreadsheets, to ensure the company isn’t purchasing more ingredients than necessary
  • Created a monthly profit margin report to help sales managers deliver improved pricing and marketing strategies for the coming month and better appraise their sales staff
  • Sent overdue payment, e-mail alerts to customers and corresponding sales staff every week, rather than relying on monthly cost sheets to pick up on late payments—driving faster payment
  • Allowed the company to reclaim US$19.8 million in product taxes—adding up to US$665,000 to its working capital daily—and greatly improved accounting efficiency, by using multifunctional integrated electronic scanning devices to record inventory receipts and inland revenue tags
  • Improved data security by only authorizing certain users to enter and access business-critical data, such as chemical recipes

Why Oracle

Atul was already using Oracle Financials 11.5, so when the company decided to implement an integrated ERP system, Oracle E-Business Suite Release 12 seemed the natural choice.

“We didn’t look at any other solutions because we already trusted Oracle to provide the best financial system for us,” Sharma said. “We could see that Oracle E-Business Suite Release 12 would offer the best integration between ERP modules and were impressed by the reputation Oracle has in offering ongoing implementation advice and support.”

Implementation Process

With the help of Atul Infotech Private Limited, it took Atul 12 months to implement Oracle E-Business Suite Release 12. The implementation began in February 2008, and after engaging Atul Infotech Private Limited in March 2008, the applications went live in February 2009.

Atul took a big-bang approach to the implementation, rolling out all five Oracle E-Business Suite modules at once.