Erp Implementation at Mtr Foods Pvt Ltd
MTR Foods has been able to simplify its supply chain and increase its bottom-line growth. A
MTR Foods has been grappling with the intricacies of managing its supply chain to generate a profitable rate of growth. Among the top-five processed food manufacturing companies in the country, the company has seven diverse businesses—ready-to-eat foods, instant foods, ice-cream, meal accompaniments, frozen foods, spices & masalas, and vermicelli—and 200 products in all. The company also exports its products to the US, Canada, Europe and Australia. The raw material required for each plant is unique. Maintaining quality while managing such a complex supply chain that involves everything from the selection of products to sending out the finished products was difficult.
For instant food, we have 600 raw materials to source. As the company is in the processed foods industry, it cannot buy the raw materials that are required in bulk in advance. In the pre-SAP period we used to buy 65 percent of our annual raw material requirement in the agricultural season to get the best of the yield, which would lead to our working capital getting locked up. Some percentage of this raw material used to spoil, and had to be discounted leading to a clear input cost loss. Similarly, for our vermicelli production, we used to source 12,000 tonnes of ‘chiroti suji’ from 40 different suppliers as far away as Uttar Pradesh, Madhya Pradesh and Haryana. The first challenge was to ensure a steady and transparent supply chain since inefficiencies and delays in supplies are common and natural in agricultural commodity markets, leading to spiralling costs.
Everything was done in Excel. From the bill of material onwards, the issuing of bills, input/output entry and cost analysis were compiled manually. Since data entry was done lot-by-lot and batch-by-batch, it was a time-consuming task and the process was prone to errors. Because of the manual paper-based entry system, a lot of paper bills used to
MTR Foods has been grappling with the intricacies of managing its supply chain to generate a profitable rate of growth. Among the top-five processed food manufacturing companies in the country, the company has seven diverse businesses—ready-to-eat foods, instant foods, ice-cream, meal accompaniments, frozen foods, spices & masalas, and vermicelli—and 200 products in all. The company also exports its products to the US, Canada, Europe and Australia. The raw material required for each plant is unique. Maintaining quality while managing such a complex supply chain that involves everything from the selection of products to sending out the finished products was difficult.
For instant food, we have 600 raw materials to source. As the company is in the processed foods industry, it cannot buy the raw materials that are required in bulk in advance. In the pre-SAP period we used to buy 65 percent of our annual raw material requirement in the agricultural season to get the best of the yield, which would lead to our working capital getting locked up. Some percentage of this raw material used to spoil, and had to be discounted leading to a clear input cost loss. Similarly, for our vermicelli production, we used to source 12,000 tonnes of ‘chiroti suji’ from 40 different suppliers as far away as Uttar Pradesh, Madhya Pradesh and Haryana. The first challenge was to ensure a steady and transparent supply chain since inefficiencies and delays in supplies are common and natural in agricultural commodity markets, leading to spiralling costs.
Everything was done in Excel. From the bill of material onwards, the issuing of bills, input/output entry and cost analysis were compiled manually. Since data entry was done lot-by-lot and batch-by-batch, it was a time-consuming task and the process was prone to errors. Because of the manual paper-based entry system, a lot of paper bills used to