Case Studies

Serving National Foods with Smart Solutions

NFL-Case-Study

Starting operations in 1971 from humble beginnings in Dinar Chambers, National Foods Limited today stands as Pakistan’s largest single brand multi-category company with 14 other related categories of food and spices, holding almost 350 SKUs in its portfolio.

More than 80,000 outlets and 350 towns nation-wide only, it is no surprise that NFL’s revenues for the outgoing Financial Year were Rs.6 billion, aiming to top it with revenues of Rs. 7.1 billion for the current FY. Year on Year annual sales exceeding 3 billion units for the outgoing year, National Foods has set itself some aggressive sales targets. The SAP implementation was critical to ensure that this pace not only be achieved, but maintained. For NFL, the technology implementation wasn’t just about achieving greater efficiency – it was about consolidating all its data points and knowing every part of its business.

National Foods CEO, Abrar Hasan explains, “The only yardstick for measuring success is how each person manages his own growth – only then will you have everyone moving in the same direction.” Restated, it is an increase in output per man that bottom-lines all organizational efficiency, which in turn makes possible attaining sustainable growth. In other words, it is the CEO’s belief that NFL grows efficiently maintaining a symbiotic relationship with Expert Systems that makes it possible for NFL to retain an operational efficiency particularly in Supply Chain and Getting-to-Market at the right time.

Abrar continues, “The technology has to be in sync with our business management processes.” A legacy ERP solution already deployed had helped achieving efficiency in the supply chain and production. The legacy ERP had been implemented 7 years ago allowing the organization to benefit from the growing demand of a decision support mechanism to suit NFL’s size and performance. From Epico’s SCALA, NFL went through a 6-month accelerated deployment lifecycle of SAP ERP and Business Objects, which was completed in June 2010 with the help of SAP partners, Abacus Consultancy. Proceeding with the implementation, it was often the case when the deadline for implementation appeared too ambitious. Against all odds, Abrar Hasan remained persistent on the deadline for deployment of SAP organization-wide knowing SAP’s capability-level and NFL’s business restrictions. One such restriction was to minimize the downtime to zero from going offline from SCALA and online with SAP, for maintaining cost-effectiveness.

Other than the challenges faced during the implementation process, it was more so a learning curve for both Abacus and NFL. The core determinant for moving onto SAP was conflict riddance sought from handling production schedules for the domestic and international markets off a single Decision Support System. Production cycles in domestic market follow historic trends where predictive powers of MRP and related, is used to schedule procurement, production and distribution for periods ahead. International markets on the contrary, follow an order-based approach similar to JIT that posed a problem for NFL to schedule future demand of orders placed from the International markets due to a lack of sophistication of the ERP System in place previously.

Noting the disparity, Abrar Hasan got the team of Abacus Consulting to proceed with the deployment of SAP ERP and Business Objects post evaluation of its foot-print, experience and success rate in the local market next to its competitors. Another hallmark of success for NFL is that it is the only local national company that has gone ahead with an implementation of SAP in partnership with a local consultancy, and local resource base.

Energizing Efficiency through the Organizational Machinery
Whether be Financial Management, Human Capital Management, Supply Chain Management, Sales & Forecasting or any other divisional facet of an organization, NFL monitors quality performance at every level of the organizational machinery. Reinforced by the top management, it is only efficiency like such existing at departmental levels that make energizing possible as it is ‘output of one department that becomes input for another’.

Looked up to as the first-mover by other players in the Industry including MNCs as well with no scarcity of resource availability off-shored to Pakistan, a translation of SAP Implementation on National Foods’ productivity and therefore sales, is being awaited by many.

According to CEO, NFL is now able to run virtual warehouses all over world sitting in Pakistan, maintain real-time reporting from anywhere in the world, and transact in foreign currency well-set on its way to becoming an MNC.

The Business and IT Alignment
Preferring the usage of tech jargon in his speech to emphasize business benefits that can be reaped from inculcating technology not only for infrastructural support but also decision support, Abrar explained significance of IT to its impact on the ROI. As the CapEx for adopting an IT-centered business approach is quite high already, NFL is able to outperform is competitors by outsmarting its competitors in the usage of technology not only in software but also manufacturing.

Put otherwise, it was a business move complemented by SAP’s diversity in aligning IT with the business needs of NFL that has enabled it to internationalize its operations.
Establishing the Partner Connection
Post culmination of the required due diligence, opting for SAP Implementation was carried forward with the team of NFL sitting together with Abacus for conflict-resolution that resulted out of Abacus’s inexperience with dynamics of the local food industry. Deployment of SAP at NFL has been indeed a benchmark of success and a learning experience for both Abacus and NFL.

A particular challenge that is ever-present at all times is migration of the Human Resource. With a constant recruitment process carried it out Abacus, it didn’t become a bottleneck for completing deployment on schedule. As NFL has been the largest project for Abacus to date, it has become a benchmark for future projects of Abacus giving the client company is as evolving as NFL.

The Road Ahead
As a pioneer of Business Objects implementation along-side an ERP implementation, Abrar is optimistic of a business environment at NFL where DSS tools like BEx Analyzer will be on the fingertips of all managers and not only IT and Finance Department Heads, facilitating an organization-wide utilization of Business Intelligence(BI) tools. Implementing Business Objects has been a challenge for NFL requiring it to realign BI, to ensure that it is understood by and useful to all managers moving from a transactional usage of ERP and Business Objects to an information-extraction usage.

Simplifying complex database, NFL expects to gain tremendous efficiency in all its business process on the road ahead. With Business Objects in place, a transition to such a state where operational efficiency is optimum vis-à-vis a sustainable growth is fastened recognition and elimination of inefficient processes. With a possibility of information-extraction over the internet, a realigned BI at NFL is expected to facilitate decision-making by managers on virtual workstations.

As Abrar comments, “Every business decision carries a risk, and is pursued with when the value-return guaranteed is commendable. It is always the business’s existing knowledge-base that should be drawn upon along with a gut feeling to go ahead with the decision or not. In the case of NFL, business processes in place were already streamlined for ERP which is why, a move onto SAP was chosen for the value-gain desired in pursuit of its business objectives.’

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