The Indian paints industry is growing at a healthy CAGR of 12.7, for the decorative paints market, and a CAGR of 9.5 percent for industry paints market, says the Size & Future of Coating Industry report, of the Indian Paint Association. The industry is also witnessing a healthy competition between the existing players and a whole slew of new companies that are entering into the sector. The increased competition, from local as well as multinational paint companies, means companies have to get organized if they are to succeed in an increasingly competitive landscape. A good ERP solution goes a long way in helping paint companies get better at doing their job, especially as this industry faces some tricky challenges, including:
- Formula management: Paint formulas are the driving force of a paint company. An efficient ERP solution will record, maintain and retrieve the formulas as required.
- Regulatory compliance: This industry has to operate in a tough regulatory environment that is constantly evolving, mainly due to its impact on the environment. An efficient ERP solution helps ensure compliance with minimal effort.
- Multiple units of measure: A unique feature of this industry is the multiple units of measure in play. They range from bulk packaging requirements for industrial needs to small packs and tins for the Overt the Counter (OTC) products. Units of measurement can be both kilos and liters. An efficient ERP solution can support multiple Units of Measure (UOM) with automatic conversion from one UOM to another.
- Tracking Expiry dates: This is critical as paints and coatings have different expiration dates, based on their formulations. For example: oil based paints last longer than latex-based paints. The challenge is to keep track of inventories across the distribution channel along as also their expiry dates.
- Inventory management: The paint industry, more than most, is susceptible to changes in choice. What is a favorite color can quickly become excess inventory with the change of a season. The challenge also is to track every batch; every SKU to ensure the right product is with the right distributor. Keeping track of SKU’s till the point of customer contact, can also create opportunities, as the following case shows.
A paint distributor that imports its products from Italy. Being a new entrant in the paints business, the company was keen to get a foothold with contractors. These included architects, building contractors and painters basically anyone making the buying decision for paint products. To do so, they decided to come up with an incentive program…similar to frequent flyer miles. A contractor buying the product would scan the code on the product and get points against it. These points could be redeemed for gifts.
While the concept was great, its execution created a whole host of challenges. For one multiple units of weights and volumes are used in the paints industry. This means the SKUs for a single paint could run into three figures. Since the points were redeemable on the purchase of each SKU, the challenge was to ensure proper inventory management. The company had issues with its existing inventory management system, due to manual loading operations.
While loading a particular job order, the untrained staff on the warehouse would frequently load SKUs from the wrong batch numbers. This meant that when the contractor would try to redeem his points the system would reject it, as that particular SKU was not supposed to be in the region the contractor was scanning the code in. The problem was acute enough that the management wanted to look for a fool proof solution. Since they had just started operations keeping costs down was imperative.
The solution involved a combination of a Wi-Fi-enabled warehouse, labor force equipped with low-cost smartphones and an ERP solution that ran the end-to-end delivery system. The first part of the process involves creating a job order; this defines the product mix that has to go to a particular distributor. The job order is created with a bar code.
Each SKU has an individual code. This links back to the ERP solution that has all the details regarding the SKU. The loading team has been trained to scan each individual SKU while they are being packed into the boxes. This way each SKU is mapped to the job order. This does four things
- It is easy to know which batch goes to which distributor.
- The location of each SKU can be traced back easily.
- It ensures faultless loading, as a warning sign flashes in case the loader gets the wrong unit.
- Most important this ensures that a contractor can scan the SKU and get his points every time, therefore ensuring the company retains their loyalty.
An additional benefit of using this coding system was the huge amount of time involved in processing each job order. Without automation the process would take close to three hours as it involved validating and checking the batches, against the job order and then invoicing. At each stage of the process copious amounts of paper work was created, which needed to be diligently verified.
With the new system in place, the entire process was reduced to under a minute. Once the loading is done as per the job order the task is to simply generate the invoice. The details, right down to every single SKU, already exist in the system.
A simple cost-effective solution not only ensured the company gets its promotional activity right, it also made inventory management a painless process, while keeping costs at a bare minimum. That is the EPPS way. See how EPPS ERP solutions can benefit your organization