NFIL to gain flexibility through SAP


Navin Fluorine International (NFIL) is a leader in India’s fluoro chemicals industry. To gain operational efficiencies and better decision-support tools, NFIL upgraded to the SAP ERP application and added a business intelligence solution. The new software enabled proactive monitoring of day-to-day business operations through dashboards and automated reports. As a result, business processes are controlled and closes are faster.

“SAP software has enhanced NFIL’s ability to serve its customers better by providing internal controls on business operations. Equally important, all levels of management now have the data they need to make business and strategic decisions,” said Satish Kakade, managing director, Navin Fluorine International.

Part of the Arvind Mafatlal Group in India, Navin Fluorine International (NFIL) produces refrigeration gases, chemicals and bulk fluorides, and specialty organofluorines and conducts contract research and manufacturing. It operates the largest integrated fluorochemicals complex in India.

NFIL went live on SAP R/3 software in April 2004. However, subsequent changes in business processes and a lack of thorough training resulted in a shortage of in-house expertise and a decline in the effective use of the software. NFIL was using the application merely as a transactional system, rather than to provide a real-time view of business operations.

“We wanted to make SAP software the only IT system for supporting operations and hence we embarked on the journey of upgrade to achieve that vision,” said Seshadri V, general manager of IT.

Setting the Stage for the Upgrade

Knowing that an upgrade would require tremendous support from employees, senior management exhibited an unflinching commitment that helped build employee trust and support. NFIL formed a core team and organized fully fledged training for more than 150 employees. Trainers administered tests and exercises to ensure dissemination of knowledge across the company.

Aligning SAP Applications with Business Requirements

With the upgrade to the SAP ERP application – specifically the SAP ERP Central Component component, NFIL completely aligned its SAP software–based system with its business operations, leading to visibility and transparency. The biggest beneficiary was senior management, who can now manage the day-to-day business operations through dashboards generated using the SAP Business Objects BI package and automated reports. Managers can easily monitor daily sales, compare them with last year’s sales, and view a detailed breakdown of sales by customer or product. The integration of export sales with SAP ERP reduced manual efforts, as the software now generates all the exports documentation that used to be produced manually. In addition the dashboards offer views of export sales data, updated daily. Credit control management, tracking of returnable’s, and execution of rebate agreements through the software have streamlined operations. The SAP ERP upgrade also resulted in mapping the entire material flow including ordering, receipts, storage, and release. Use of gate entry functionality to track all incoming materials resulted in better control. Consolidation of multiple raw materials into a single code through split valuation not only consolidated the bill of materials but also improved physical stock accuracy. Plant maintenance uses SAP ERP to track and schedule preventive maintenance on all mechanical, electrical, and instrumentation equipment. The new general ledger functionality was an instant hit by aligning the trial balance with financial results in an auditable format. The finance department performs the quarterly and year-end reconciliations in one-third the time it used to. Year-end closing requires half as much time as before. Creation of a business unit structure helped to achieve better cost and profitability reporting. An assessment cycle automatically distributes common costs to business units. The new payroll application installed as part of the SAP ERP Human Capital Management solution not only improved efficiency but also provided accuracy, security, and confidentiality.

Looking Ahead

NFIL plans to extract more from its SAP landscape by using the SAP Business Objects Planning and Consolidation application, version for SAP NetWeaver. As the company expands into contract research and manufacturing, it is looking at the SAP Customer Relationship Management application to manage increasing customer interactions.

Implementation Partner

Bristlecone is a leader in helping clients maximize the strategic value of their supply chains and offers a full range of services including strategy and process consulting, systems implementation, systems management, and outsourced business services.

Key Challenges

• Create a robust, organization-wide management information system

• Improve executive decision making tools

• Analyze profitability by product, business unit, and location

• Reduce payroll processing efforts

• Integrate export sales processing

• Improve bill-of-materials accuracy and consolidate material flow in 1 system

Implementation Best Practices

• Management support during implementation

• Extensive training of core team members, users, and senior management

• Creation of training materials throughout the implementation for future reference

• Involvement of key stakeholders from the previous implementation of SAP R/3 software.

Financial and Strategic Benefits

• Achieved day-to-day visibility into domestic sales and exports rather than waiting until month end

• Improved productivity of sales employees

• Enhanced visibility into employee cost, leading to better profitability analysis

• Improved accounting as trial balances are now aligned to the auditable format

Why SAP Was Selected

• 1-stop solution for transaction processing and reporting

• Comprehensive integration of business processes

• Strong product road map and focus on R & D

• SAP’s long-term plans and investment in India

Low Total Cost of Ownership

• Completed the implementation in 7 months

• Eliminated manual export documentation

• Created 136 business intelligence (BI) reports and 25 dashboards for use by senior management, covering raw material costs, production costs, sales, collections, and more

• Standardized transactions using a single, common SAP software–based system

Operational Benefits Key Performance Indicator Impact

Time needed for quarterly and -67%year-end reconciliation of stock, sales, and orders

Time spent on export-related  -30% documentation work

Number of manual documents for -100% processing export sales

Effort required for year-end  -50% financial closing

Productivity of sales representatives +25%

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