Participate in Oracle Customer Programs
Established in 1994, Tanishq is the jewelry division of Titan Industries, a large manufacturer of jewelry, watches, sunglasses, and prescription eyewear, and a division of the global conglomerate Tata Group.
Since July 2005, Tanishq had used older versions of Oracle E-Business Suite to manage its financials, inventory, order management, purchasing, and manufacturing activities. In January 2012, the organization upgraded to Oracle E-Business Suite Release 12 to streamline financial management, reduce supply chain lead times, and cut manufacturing costs.
Tanishq reduced supply chain lead times by 30%, cut month-end accounting times from 10 days to 4 days, and streamlined manufacturing processes by improving the availability of online inventory. The organization also ensured that employees ordered from the right suppliers, that were selected based on sourcing history, and gained a clear view of the profitability of each piece of jewelry sold.
Tanishq is India’s fastest growing jewelry brand, selling gold, white gold, diamond earrings, chains, bracelets, and rings. These products are sold at around 150 retail stores throughout India and manufactured at Tanishq’s state-of-the-art facilities and by subcontractors at 100 locations. The company’s main jewelry production and research facility is in Hosur, in the Indian state of Tamil Nadu.
Before 2005, Tanishq used in-house-developed legacy applications to manage its jewelry manufacturing and distribution, inventory, asset management, and purchasing operations. However, as organization outgrew these applications by expanding its multiple manufacturing plants and processes, it took too long to produce jewelry.
“Tanishq has been growing by between 20% and 30% per year, and the absence of an automated system to manage our core operations was putting a strain on our business,” said C.S. Ramesh, CIO, Titan Industries Limited.
To address these issues, Tanishq deployed Oracle E-Business Suite Release 12, using Oracle Financials, Oracle Inventory Management, Oracle Order Management, Oracle Purchasing, and Oracle Process Manufacturing.
Oracle Inventory Management provides Tanishq with more visibility over its stock levels. This enabled easy identification of gold and jewelry that needs to be managed across the value chain. A product may be moved if it is not selling at a particular store or a customer requests that it be shipped to a certain location.
“We can manage and optimize our stock levels instantly to make jewelry available at any store, which improves customer service and satisfaction,” said Ramesh. “We are no longer spending an unnecessary amount of time identifying and tracking specific items of jewelry.”
“Oracle E-Business Suite has significantly improved the level of service we provide to customers by reducing the time it takes to process jewelry. Some customers were previously waiting three to four weeks to receive their jewelry, and we have reduced this to around two weeks.”
Oracle Financials has helped reduce the time it takes for Tanishq’s accounting staff to calculate monthly financial accounts. The automated system also enabled closing accounts in 4 days, compared to a week to 10 days previously.
This ensures senior managers are provided with relevant information to decide the types and quantities of jewelry to make, and the raw material—gold, diamonds, and other precious metals and stones—required.
Tanishq uses Oracle Purchasing and Oracle Order Management to buy raw materials, such as gold, silver, and copper to make jewelry. Raw materials and finished jewelry products are then sent to the network of subcontractors.
Tanishq can optimize inventory, because it’s available in real time and ordered from the right supplier, with the choice based on sourcing data.
Tanishq is using the lot-actual-costing function in Oracle Financials and Oracle Manufacturing to precisely calculate the cost of finished jewelry. Pricing for gold and other precious metals may vary greatly during the manufacturing and sales cycle. Prices are also based on the complexity of each design. Oracle Financials and Oracle Manufacturing helps Tanishq monitor and control the cost of each piece of jewelry.
This helps Tanishq track the gross profit margin for each product, based on the price of gold on a particular day. This provides Tanishq with a clear view of the profitability of each piece of jewelry sold. It also helps in calculating refunds when customers return or exchange jewelry, by tracing the purchase back to the lot number.
“The price of our finished goods, such as gold bangles and earrings, is based on the weight of each finished product,” said Ramesh. “Oracle E-Business Suite has enabled us to create around 600,000 stock keeping units (SKUs) for our products, and accurately reflect the variations in the weight of each piece of jewelry, even if for those that have the same SKU.”
The Oracle system has enabled Tanishq to cut the number of duplicate sales transactions by 60%, from 500,000 to 200,000 per month.
“This has reduced the time it takes to process sales transactions by 30%,” said Ramesh. “It also means that we can complete a more transactions.
“We expect to grow by up to 30% per annum over the next three years, and we now have an integrated, reliable system that will support business growth without impacting the time it takes to process transactions and our labor costs.”
Tanishq has used Oracle E-Business Release 12’s subinventory feature to reduce data growth by avoiding duplication in master files related to discrete and process manufacturing activities.
“Each time a new item is created, it is no longer being multiplied by the number of warehouses and item categories, which has helped us keep a lid on data growth,” said Ramesh.
“Before we deployed Oracle E-Business Suite Release 12, we were creating around 1,300 items for the same product SKU. We have reduced this to 105, and, as a result, we are managing 500GB of data rather than 3TB.
“This enables us to more easily manage our data and expand the business without having to worry about investing in additional hardware,” said Ramesh. “We currently have 150 showrooms across India, and we are planning to increase that number by 100 over the next three years.
“The migration to Oracle E-Business Suite Release 12 has been highly successful, and the business started reaping the benefits from day one,” he added.
Tanishq chose Oracle E-Business Suite Release 12 because it met the company’s unique requirements, such as robust lot costing and the ability to manage inventory items in two unrelated units of measure.
“Jewelry in India is sold by number and weight, which means that each SKU can be sold at a different price, based on the weight of the product,” said Ramesh. “The Oracle system tracks every SKU on the lot number, enabling us to accurately price and easily track our products.”
According to Ramesh, the initial implementation was a challenge because the jewelry industry is quite disorganized.
“We needed to introduce a lot of standardization and procedures to ensure best practices were implemented,” said Ramesh. “This is the first end-to-end enterprise resource planning implementation for such a large jewelry organization.
“Oracle provided the right amount of support to ensure this project succeeded, and we would experience a fast return on our investment,” added Ramesh.