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Case Study: How This Women-Owned Milk Producer Company Enabled A Smoother Payment Process With SAP-ERP

Case Study: How This Women-Owned Milk Producer Company Enabled A Smoother Payment Process With SAP-ERP

Case Study: How This Women-Owned Milk Producer Company Enabled A Smoother Payment Process With SAP-ERP

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An all-women milk producer company with Head Office in Tirupati, Shreeja Mahila Milk Producer Company (Shreeja MMPCL), is a cooperative company with a membership of more than 75,000 female milk producers and revenue of approximately $59 million. The company’s key objective is to procure, process and market best quality milk and milk products, and provide the same to its customer, alongside creating maximum value for its shareholders.

Currently, Shreeja MMPCL’s operation is spread over several districts in Andhra Pradesh and bordering villages of Karnataka and Tamil Nadu. The company also plans to grow its current membership base to 85,000 by 2020-21 and to around ₹700 crores by the end of 2021. 



Shreeja MMPCL has been formed to maximize returns to its members through professional management and by harnessing capital, markets and technology, thus ensuring business growth without undermining the basic Cooperative principles of democratic governance and autonomy.

The Challenges

Shreeja MMPCL has been routing its operations across 2,500 milk pooling points, which is spread over three states, and manages to procure approximately 4.5 lakh litres of milk per day. 

However, the company was dealing with multiple complicated processes that are interdependent. This included the procurement of raw milk, dairy production planning, dairy process control, quality management, sales order processing, and distribution. And with the intervention of humans as the middlemen, Shreeja MMPCL was actively facing issues with payments to farmers, members, and Palamitras. Considering there was no proper systems or software in place to calculate the payments correctly, the manual process was taking 8 to 10 days based on the data for the milk supplied. Furthermore, distributing the money to the agents and Palamitras for payments was also not running under a proper channel. 

Due to issues of proper payments to farmers, it resulted in less patronage from members and increase in non-pourers of milk. This was a massive issue for Shreeja MMPCL due to which the business was getting a hit, and the competitors were taking away the market share. And therefore, the company desired to re-engineer its operations and transform the entire business process by onboarding new application management processes and methodologies to bring automation and innovation.

There was a strong need to have new methodologies to maximise the business opportunities, starting from the member management to payment processes, the tightly integrated SAP-enabled process required a massive reduction in the processing time, along with the effective cost of operations. Hence, Shreeja MMPCL was looking for a reliable and efficient SAP Application Management Services to re-engineer its dairy journey, while integrating all third-party systems into SAP. It was also aiming to centralise the data and acquire the right information for accurate and better decision-making.


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The Solution

Shreeja MMPCL was in urgent need of a solution to tackle its farmer payment issues, and SAP along with their implementation partner helped with their business transition and up-gradation of processes. To address the problems, SAP was conceptualised as a solution for processing the data and making the payments to individual member’s bank accounts so that the intervention of the middlemen would be eliminated. This was further initiated to help in building trust among members.

The SAP ERP modules, which were specifically tailored around the requirements of the company’s processes, included management of finances, sales and distribution, plant maintenance, milk production and procurement and quality management. The application management system made use of the tangible ERP, which helps in enabling a system for accurate payment for both producer and transport service providers. It streamlined the raw milk collection process in compliance with quality standards. Additionally, the entire customer order process – which includes variable pricing, delivery, invoicing, and payments – were also being managed along with accounting and controlling insights.

Further JK Technosoft’s scalable support processes revitalized the decision-making process across the landscape. The up-gradation of multiple business processes focused on gaining control over business operations and helped the client manage different processes. This improved their business agility and eliminated business process inefficiencies.

There were several complex and fragmented process flows which were addressed through ticketing support via SAP solution manager. JKTs’ SAP Certified Help Desk helped the company manage the application lifecycle and provided them with functionalities like integrated content, tools, and methodologies to monitor and support the SAP solution.

Explaining the process further — Sajeesh ER, the IT Head of Shreeja MMPCL said, “From 3,000 odd locations, milk is collected with equipment which records the individual pourer data. This is further brought to 100 odd chilling centres to retain its quality. This is where the milk is tested again, and details of the characteristics of the milk are recorded. And implementing SAP software in all these locations would have huge cost implications. Hence an intermediary solution was planned and implemented.”

He further added, “The recorded data would be further sent to SAP for processing the data for payments every fortnightly. The SAP servers were deployed in a data centre, and the data was sent from the head office to the SAP server.”

It was a significant challenge for the company to deploy over 2,000 equipment in so many locations, implementing software in 100+ chilling centres, and implementing SAP within two months, however, “we overcame this by successfully implementing the entire system,” said Sajeesh.

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According to Durgesh Verma, Vice President of JK Technosoft, the approach of the company was Design Thinking with 100% innovation that has been followed while keeping the objectives of Shreeja Mahila Milk Producer Company Limited in line. Presently JK Technosoft Ltd. is managing and supporting the complete SAP ERP applications for Shreeja MMPCL.

Verma said, “Dairy” is a game of speed, working 24×7, 365 days on a highly perishable material supply chain — milk. And, therefore, it needs 100% attention by our SAP-certified Help Desk Team, which is part of our Dairy Vertical.

JK Technosoft Ltd (JKT) is a software solutions company and an active SAP services partner. JKT with its Global Delivery Centres (GDCs ) at Noida, Bangalore, Hyderabad, and presence in Mumbai in India has its international reach in the US, UK and Netherlands.

Benefits

Currently, Shreeja MMPCL is running on SAP to execute all its business processes. The digital transformation has benefitted them in real-time data and reporting, which in turn, resulted in a faster sales cycle and 100% traceability and tracking.

Post the implementation of the solution, the timing for releasing payment to members, workers and farmers have reduced from ten days to two days, enabling timely payments to farmers. Also, with the smoother process, 14 crore payments were made to milk producer members every fortnightly without any hurdles — 100% payments are now made in individual bank accounts, without any human intervention. There was seamless membership management of all its 73,000 members/vendors.

The implementation of the solution was done in two months within budget, which not only automated the entire milk procurement process but also having a proper ERP (SAP) solution in place helped the workers record all business transactions. This, in turn, has reduced the inventory cost by increasing data transparency and traceability. The solution effectively monitors and controls the plant maintenance and transportation activities, which, in turn, improves decision-making as the real-time data is now available anytime. There was an enhanced end customer experience in day-to-day business activities and a 95% standardisation of business processes.

“With SAP, we have the flexibility to connect across all the business locations, manage IT General Controls (ITGC), maintain the policies, run the processes and also meet the organisational requirements,” said Sajeesh. The company now aims to reach a milk procurement of about 4.81 lakh kg per day in FY 2020-21.

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