Oracle Customer Success — Suguna Foods Ltd.

Suguna Foods Ltd.

Suguna Foods Improves Control of Poultry Farm Production, Completes Month-End Closes 1.75x Faster, and Saves US$32,700 in Data Storage

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We chose Oracle E-Business Suite Release 12.1.3 because it offered a robust, easy-to-use, secure, scalable, and integrated enterprise resource planning platform that could modernize our poultry business and support future growth. Together with Oracle Database’s Advanced Compression option, we’ve reduced our cost-accounting time by three days, increased storage capacity by 60%, and cut storage costs by US$32,700 in the first year.

— S. Karunanithi, CIO, Suguna Foods Ltd.

Founded in 1984, Suguna Foods Ltd. is a leading producer of broiler chickens in India and is one of the top-10 poultry companies worldwide. With more than 60% of the country’s poultry produced through Suguna Foods’ contract-farming model, the company has helped to protect over 20,000 rural farmers from market risks, such as daily fluctuations in broiler pricing, to provide farmers with consistent incomes and improve their livelihoods.
 
Suguna Foods had used an older version of Oracle E-Business Suite at one location to manage enterprise resource planning (ERP) processes, including sales, procurement, production, inventory, and payroll. With up to 40% year-over-year business growth, Suguna Food needed a robust and integrated ERP platform across all business divisions, including its hatcheries, broiler farms, feed mills, poultry, and pharmaceutical units to improve operating efficiency and modernize business practices. Suguna Foods also needed to increase its storage capacity to accommodate significant data growth while reducing storage costs and improving system performance to support business expansion.
 
Suguna Food upgraded to Oracle E-Business Suite Release 12.1.3 to integrate business processes, such as sales, procurement, and inventory across 20,000 farms and to gain visibility across the enterprise. As a result, it has increased the accuracy in daily feeding volumes for each farm to 99%, improved production-cost control and efficiency, raised staff productivity, eliminated cash transactions, and reduced business risks. In conjunction with Oracle Advanced Compression, an Oracle Database option, it also reduced its month-end closing time by three days, increased storage capacity by 60%, and cut storage costs by US$32,700.
  • Captures Precise Batch-Feed Costs, Enhances Production Control, and Minimizes Waste
    Upgrading to Oracle E-Business Suite Release 12.1.3 enabled Suguna Foods to standardize its business processes, including sales, production, procurement, inventory, and poultry-health maintenance across 20,000 farms that are operated through 150 branches. The deployment provided an integrated ERP platform for all business divisions, such as hatcheries, feed mills, and breeding farms to gain enterprisewide data visibility and enhanced production control.
     
    For example, Suguna Foods used Oracle Process Manufacturing’s lot-costing functionality to accurately calculate and capture actual batch-feed costs, providing the right amounts of ingredients required to produce the correct feed recipe for specific poultry types throughout their lifecycles. It also allowed the company to perform detailed cost analyses, such as for comparing the standard and actual feed costs for each farm’s consumption to minimize waste.
     
    “Feed constitutes nearly 75% of our total product cost, so it was critical for us to determine the exact consumption requirements for each farm. Thanks to Oracle’s integrated ERP platform, we have improved the accuracy of daily feeding volumes to 99%, up from 80% accuracy with the legacy platform, enabling us to enhance control over poultry production and ensure on-time delivery of chickens to customers, including processors and retailers,” said S. Karunanithi, CIO, Suguna Foods.
     
    The integrated ERP platform also promoted staff accountability and more accurate data to support better decisions. “For example, feed-mill employees now receive updates on mortality rates for each farm, which is critical as this affects required feed volumes. It also helped the pharmaceutical unit to quickly determine the reason for mortality, based on the information provided by the feed mill, such as feed quantity, enabling faster action to minimize mortality rates,” Karunanithi said.
  • Automates Daily Pricing Updates, Minimizes Cash Transactions, and Reduces Risks
    Before implementing Oracle E-Business Suite Release 12.1.3, Suguna Foods paid farmers in cash for contract farming jobs, such as for rearing five batches of chickens every year. As a result, the company needed to transport large amounts of cash for payment to more than 20,000 farmers, which posed significant business risk. By integrating Oracle Financials with the company’s banking partners, the company automated the payment process and encouraged more farmers to use banking transactions rather than cash, minimizing risks. It also provided a centralized payment platform for suppliers based on the materials received, such as feed ingredients delivered to each location. This has helped to ensure on-time payments to suppliers improved on-time deliveries for retail and food-processing customers.
     
    With Oracle Order Management’s advanced pricing capabilities, the company can now automatically update pricing based on current market rates for broiler chickens and apply correct pricing and discounts to customer orders, based on predefined sales agreements. Suguna Foods can also automatically send order details, including correct prices and chicken quantities to customers through e-mail alerts and mobile messaging. As a result, the company has accelerated order entry and improved staff productivity. It also minimized order errors and enhanced customer satisfaction.
  • Reduces Storage Cost by US$32,700, Completes Monthly Close 1.75x Faster
    To sustain its leadership position and support business expansion, Suguna Foods needed to upgrade its IBM storage system to accommodate its rapidly growing financial data volume and improve system performance.
     
    Thanks to Oracle Advanced Compression’s automated data-optimization feature, Suguna Foods created compression and storage tiering policies for financial data, and reduced data size from 1200 GB to just 500 GB, thereby increasing storage capacity by 60%. Suguna Foods will be able to efficiently manage annual data growth requirements in the future and minimize capital expenditure and operating costs for the data center.
     
    “With Oracle Advanced Compression, we saved approximately US$32,700 in storage costs the first year. We plan to deploy Oracle Advanced Compression for other business processes, such as sales, inventory, and order management and expect to save more storage space and further reduce costs,” Karunanithi said.
    By implementing Oracle E-Business Suite Release 12.1.3 and Oracle Advanced Compression, Suguna foods has significantly improved system performance. It now completes month-end financial closes 1.75x faster—in four days instead of seven days—improving operating efficiency and supporting growth.
 
Challenges
  • Integrate business processes across 20,000 farms and improve operating efficiency across diverse business units, ranging from feed mills to pharmaceutical units
  • Gain the ability to calculate actual batch-feed costs and determine exact feeding requirements for each farm to improve production control and minimize waste
  • Increase data storage capacity and reduce costs to support the fast-growing poultry manufacturing and distribution business
Results
  • Increased data storage capacity by 60% and cut storage costs by US$32,700 by compressing 1,200 GB of financial data to 500 GB, enabling the company to postpone storage upgrades for two years
  • Gained the ability to complete month-end financial closes 1.75x faster—in four days instead of seven days
  • Minimized feed waste by using Oracle Process Manufacturing to accurately calculate actual batch-feed costs for each farm during the entire life cycle, enhancing control over poultry production and reducing costs
  • Increased accuracy of daily feeding volumes to 99%, up from 80%, enabling delivery of correct feed quantities to each farm
  • Promoted staff accountability by integrating business processes across all divisions and enabled faster and more informed decisions, for example: by determining causes of mortality
  • Minimized cash transactions and reduced business risk by using Oracle Financials to automate payments for contract-farming jobs
  • Improved deliveries to customers, such as processors and retailers, by using a centralized payment platform that that determines delivery schedules according to quantities of materials received at each location
  • Ensured on-time payments to suppliers
  • Automated daily broiler-chicken price updates and applied the correct pricing to customer orders based on predefined sales agreements, minimizing order errors and increasing staff productivity
  • Enhanced customer satisfaction by automating communication of order details through e-mail alerts and mobile messaging

Why Oracle

Suguna Foods upgraded to Oracle E-Business Suite Release 12.1.3 because the company had used an earlier version of Oracle’s ERP system for eight years, and it was confident that Oracle could support the fast-growing poultry business. 
 

We did not even consider any other vendors, as Oracle E-Business Suite Release 12.1.3 offered a robust, easy-to-use, secure, and scalable ERP platform, enabling us to use innovative technology and adopt best practices to modernize our poultry production facilities.

— S. Karunanithi, CIO, Suguna Foods Ltd.

Execution

Suguna Foods completed the upgrade to Oracle E-Business Suite Release 12.1.3 in eight months and then launched a proof of concept for Oracle Advanced Compression. After extensive research and evaluation, the company’s internal IT team implemented the compression technology for its financial system and completed the project in just four months, on time and within budget. 

About Suguna Foods Ltd.

Headquarters

 
Coimbatore, India

Employees

 
4,600
Published:  Mar 11, 2015