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Senthil Kumar, Managing Partner of DSP Knitting Company in Tirupur, inherited the business from his father and uncle. They had started the venture in the late 80s, when Tirupur was beginning to show signs of emerging as a global hosiery hub.

Back then, the company introduced garments from the DSP stable in the domestic market and routed exports through merchant exporters. It was a ‘sellers market’. The going was good and the promoters were content. After his uncle’s demise, Kumar took over the reins in 2003.

But by now, the business scenario had changed completely and Kumar had no clue about the process intricacies or export commitments. Burning the midnight oil did not help. A last-minute rush to honour export commitments and the consequent compulsion to take recourse to airfreight to meet deadlines resulted in cost escalation. In turn, a delayed shipment led to cancellation of orders.

DSP had no system to track the consignment. “We used Tally software, but there was no ERP solution combined with finance. Each of the solutions that we came across was a standalone one. It was just terrible,” recalls Kumar, capturing the experience of many others like him.

“It has never been easy. The industry is fragmented and the available solutions did not help improve the profitability of cluster members. With no customised ERP solution to cater to the peculiar needs of the industry in this region, it has been a futile exercise all through. The solution providers too did not give the service support. Units that had spent huge sums on ERP regretted the investment,” says Sakthivel, President, Tirupur Exporters Association (TEA).

All this could now become history with the formal launch of the Government-mooted Project Vikas next month.

TEA and Microsoft signed an MoU in December 2006 to implement the initiative, which aims to enhance the competitiveness of SMEs through the use of information and communication technologies (ICTs).

Apex Cluster Development Services, which has expertise in cluster development, was roped in as the implementation partner.

Microsoft engaged PwC (PricewaterhouseCoopers) to study the industry’s pain points. The findings revealed that the industry was highly fragmented with no single solution to improve the profitability of the cluster members. PwC also spotted an indeterminate gap in the manufacturing process and lack of control over the production cycle. It recommended implementation of an end-to-end ERP solution as an effective tool.

“The industry here has a peculiar corrector,” says K S Vaidyanathan, Cluster Development Manager, Apex Cluster Development Services.

According to Vaidyanathan, a uniform solution would help take care of the churn in the industry.

“Due to the complex nature of the processes and approvals at various stages, there is inherent delay in shipments. The system also lacks visibility.

An end-to-end ERP solution would help in effective planning, scheduling, procuring and manufacture of products. Further, the attrition rate is very high today. The industry will have to become system-dependent and not person-dependent to survive in the global race.”

Under the Project Vikas umbrella, a ‘National Manufacturing Portal’ has been created by the National Manufacturing Competitiveness Council with support from Microsoft to link clusters across India.

At Tirupur, the existing TEA portal is being re-developed and linked to the National portal of NMCC and this is expected to enable the SMEs here to reach out to global markets, customers and suppliers, directly.

“Tirupur is a dynamic market. In such a market, the products are extremely vibrant. Take clothing, for instance.

Earlier, the style and fashion were linked to the four seasons — Summer, Winter, Autumn, Spring. Today, the change is happening on a month-on-month basis. Every player should be geared to adapt to this rapid change, to survive,” says the CEO of TEA e-readiness centre (ERC), Sanjay Kr Gupta.

The ERC will provide accessibility to the SMEs to such ICT services. “The ERC has been conceived to make the transition easy and provide continued support to the cluster for such information and linkages,’ says Gupta. TEA has provided the basic infrastructure and Microsoft has extended support by providing the hardware and solutions.

All these developments have come as a blessing in disguise for Kumar.

He, like many other small entrepreneurs, was worried about investing huge sums on ERP solutions. Under this project, since the focus is on SMEs, the ERP is being offered as a hosted model (Saas — Software as a Service).

“It is affordable, user-friendly and transparent,” beams Kumar. (DSP Knitwear is among the 40-odd units that has opted for the solution in the pilot stage.)

How good does it appear to be?

“Till recently, I used to worry whenever I went out of town or country about consignment despatch and commitments. Now, I am able to track all this with my mobile. I am able to concentrate on marketing, on taking DSP Knitwear to greater heights,” says Kumar.

lnr@thehindu.co.in

More Stories on : Enterprise Resource Planning | Knitwear & Hosiery

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