ROOTS INDUSTRIES LTD.
ROOTS INDUSTRIES LTD. INTEGRATES BUSINESS
“Leveraging best in class enterprise
software solutions has enabled Roots
Industries Ltd. to become a trusted
ally of global auto giants. From
reduction in costs to process transfor-
mation, the SAP deployment has not
only resulted in cascading benefits
but more importantly, has enabled us
to harness our full potential.”
O.A. Balasubramaniam,
Vice President – IT, Roots Industries Ltd.
SAP ERP Success Story
Roots Industries Ltd.
PROCESSES AND RAMPS UP OPERATIONS TO
MEET GLOBAL STANDARDS WITH SAP ECC 5.0.
QUICK FACTS
Summary SAP Solutions and Services
n SAP ECC 5.0
n Name: Roots Industries Ltd.
n Location: Coimbatore
n Industry: Auto Ancillary Implementation Highlights
n Deployment of SAP ERP in eight
n Products & Services: Automotive Horns,
Head light lamps and Reverse sensors months from July 2005 to March 2006.
n Revenue: Rs. 90 crores n All base modules implemented including
n Employees: 625 SD, PP, MM, QM, FI and CO.
Website Benefits
n www.rootsindia.com Inventory reduction
n
Decreased administrative costs
n
Challenges and Opportunities n Company wide single information
n Inaccurate demand forecast and delays n Visible reduction in Order-to-Cash
in production cycle time
n Fluctuating Inventory levels n Implementation of global best practices
n Ineffectual fault tracking
n Lack of integration with partners Existing Environment
n Ineffective manpower utilization n Using stand-alone legacy systems
incapable of integration
Objectives n Rising complexity of operations with
n To invest in a world class ERP expansion of services
solution to optimize operations and
match standards with global players in Third Party Integration
the Auto Industry. n Implementation partner – Pricol
Why SAP
n Proven expertise in Automotive sector
n Stronger application portfolio than
competitors
n More customer references
n Clear industry leadership
n Numerous verticals will aid integration of
sister companies
ROOTS INDUSTRIES LTD.
ROOTS INDUSTRIES LTD. INTEGRATES BUSINESS
PROCESSES AND RAMPS UP OPERATIONS TO MEET
GLOBAL STANDARDS WITH SAP ECC 5.0.
Though Roots Industries Ltd. has been long established as a
leading exporter of horns, it felt challenged when Ford US came
looking for a low cost supplier around four years ago.
The organization not only needed to
scale up production by 30 to 40 per
cent, but also needed to maintain the
delicate balance of quality and cost. In
the absence of a sound IT foundation,
meeting the quality standards of global
Original Equipment Manufacturers
(OEM) was a challenge indeed. The
company chose to take the leap with
SAP ERP, confident that the expertise
in the vertical of Automobile Industry
would help it manifest its entire
potential.
Roots Industries Ltd. is a leading
manufacturer of automotive electric
horns in India with 60 per cent market
share. It is also the 11th largest
Horn Manufacturing Company in the
world, exporting horns to over 15
countries worldwide. Headquartered
in Coimbatore, Tamil Nadu, Roots has
also been a dominant player in the
manufacture of products like castings
and Industrial Cleaning Machines.
Since its establishment in 1970, Roots
Industries Limited has become a key
supplier to leading OEMs and after
market including Ford USA, Diamler
Chrysler, Volvo India, Skoda Auto India,
Piaggio, Ashok Leyland, Tata Motors,
Maruti, Hindustan Motors, Mahindra
and Mahindra and Caterpillar India.
A major share of the exports goes to
the USA, Japan, the Middle East and
South America. It is also the first horn
manufacturing company in the world to
get ISO/TS 16949 certification.
Though seemingly small, automobile
horns have their own share of
manufacturing complexities. Comprising
a number of components often sourced
from different suppliers, a horn is
susceptible to be discarded if even
one of the components is defective.
Therefore quality checks at each stage
of production become necessary.
Already established as a leading
manufacturer of horns in India, Roots
faced a bigger competition from China
in its quest to become the preferred
supplier of horns for the international
market. With the ‘low-cost-destination’
tag common to both, Roots needed
to differentiate itself on the basis of
superior quality. When the decision
came on quality obviously the choice
was only Roots because still it imports
its critical components and Raw
materials to maintain the quality.
While Roots was negotiating this tricky
balance with its existing stand-alone
legacy IT systems, Ford USA started
looking for a low-cost global sourcing
of automobile horns. Already a regular
supplier to Ford India, Roots Industries
Ltd. won the contract on the basis of
its strong credentials and the ‘cost
cum quality’ offering. However, the real
challenge followed thereafter.
Ford USA demanded a very high
volume of products and Roots needed
to ramp up its production capacity
by 30 to 40 per cent immediately.
Additionally, the company did not have
much experience in supplying such high
volumes to a single OEM. In this case,
with the client being Ford USA, the
standards were even tougher to match.
Errors are expensive and the stakes
were high.
Balasubramaniam sums up the
situation saying, “Dealing with 70
to 80 component suppliers, doing
quality checks for all components,
maintaining the inventory for each
component and tracking finances –
our mode of operations was already
quite complicated. To be successful
in the deal with Ford USA, we clearly
needed a radical transformation for our
business processes.”
Seamless SAP Implementation
with Pricol as Implementation
Partner:
A strategic review of business
operations revealed that in the face of
rapidly growing inbound and outbound
deliveries and increasing revenue, Roots
was in dire need of an efficient ERP
system. Integrating business processes,
gaining information visibility and smart
finance management was crucial in
Roots’ long term business vision.
“SAP ERP for Automotives, with its
customized best practices, seemed to
be the best fit for our requirements.
Customer references simply reinforced
our belief in SAP’s industry leadership.
In addition, SAP’s expertise in various
industry verticals reassured us that
rolling out the solution to the other
companies in the group in future won’t
be a concern”, says Balasubramaniam.
Between July 2005 and March 2006,
SAP ERP ECC 5.0 was deployed in
Roots Industries Ltd. using a Big Bang
approach. The software arm of Pricol
Ltd. acted as the implementation

partner. With light engineering
automotive component manufacturing
background from Coimbatore, Pricol
was the natural choice on basis of
common location, similar industry
background and knowledge &
experience in implementation of SAP to
similar companies.
“Change management turned out to
be a big challenge and it took time
to get habituated to the strictness of
procedures. People were used to the
traditional manner of operations and
transitioning to SAP’s streamlined
mode of working required a huge
attitudinal shift. A structured training
program and parallel run between
legacy and SAP aided the transitions
very smoothly. Pricol initially trained
six people who in turn trained others.
Regular training courses are in the
pipeline to keep the momentum going”,
says Balasubramaniam.
Benefit
“We were banking upon the SAP
deployment to help us scale our
operations to make the deal with Ford
USA (OEM) possible and running
smoothly. The implementation has
not only helped us achieve that,
but has also had a cascading effect
on all organizational operations”,
Balasubramaniam comments.
Inventory management has improved
the made-to-order pull process, with
inventory turns increasing from 8 to
10 times. Minimum delays and work
interruptions have resulted in increased
customer order fulfillment. There
has been a 60 per cent reduction in
unplanned tool changes in the shop
floor, around 55 percent reduction in
unplanned weekend shifts. Along with
reduction in the Order to Cash cycle
time, better inventory management
has even led to 20 per cent saving of
floor space.
“SAP ERP for Automotives, with its
customized best practices, seemed to
be the best fit for our requirements.
Customer references simply reinforced
our belief in SAP’s industry leadership.
In addition, SAP’s expertise in various
industry verticals reassured us that rolling
out the solution to the other companies in
the group in future won’t be a concern,”
O.A. Balasubramaniam,
Vice President – IT, Roots Industries Ltd.
“Disciplined practices like making
invoices only after stock arrival, and
doing quality checks before accepting
goods into storage has drastically
reduced the possibility of errors, be it
manufacturing or finances. Reduction
in Premium Freight and administrative
costs has only added to the immense
benefits brought by single information
visibility at all levels across the
organization”, he adds.
Highlight
Roots Industries’ engagement with
Ford USA hit a roadblock when the
latter made it mandatory to install
an Electronic Data Interchange (EDI)
system. As this technology was not
available in India at that time, arranging
for it from abroad would have costed
the company a one-time investment of
Rs 25 lakhs and yearly maintenance
fee of Rs 2.5 lakhs. However, the
organization was saved from making
the huge expense, as SAP solution
arranged for the EDI connectivity with
assistance from Pricol. From Oct 2006
onwards till date for the past 17 months,
Roots has saved around Rs 2.5 lakhs
every year, amounting to Rs 3.75 lakhs
till date on EDI automation through SAP
alone.
The way forward
In Balasubramaniam’s words, “Our
vision is to stand technologically
ahead of competition while delivering
world-class innovative products to our
customers and the SAP foundation
enables us to achieve just that, even
more faithfully. Future plans include
integrating our suppliers so as to make
the whole manufacturing process
seamless. We are also yet to implement
the HR modules. With the organization’s
rapid pace of growth, we will soon
have to implement the best in class
processes for our people as well”.