Integration helps logistics company wield tighter control and plug revenue leakages Standalone systems for different operations hindered GatewayRail, a logistics solution provider, from getting an end-to-end view of the business. Lack of real time data availability not only created process inefficiencies, time and productivity loss, but also made it difficult to plan ahead and drive future growth. Moving to Microsoft Dynamics, the company is now empowered with data to better control operations, leading to 100 percent increase in customer satisfaction. The customer GatewayRail provides multi-modal logistics solutions across its various operational areas ─ rail, road, terminals and Inland Container Depots (ICD). It owns and operates a fleet of 21 trains and over 235 road trailers at its rail linked terminals. The company’s business success and growth is a factor of the visibility it has across its operations. The customers’ inventory on the move at any given point of time is huge, both in volumes and value, and usually involves services rendered by more than one area of the company’s operations. This warrants an integrated approach. Transitioning from a distributed IT set-up to a centralized system and powered with real time data, GatewayRail not only ups customer satisfaction 100 percent but also gives management better control over the operations. Challenges GatewayRail was dependent on standalone customized applications, either developed in-house or procured from local vendors for its different areas of operations. These operations were not integrated across the different locations and some processes, like Gate Permit, were manual. Working in silos inhibited a seamless flow of data across the organization, resulting in lack of data availability. This, in turn, meant less control over the operations, revenue leakages, and inability to plan ahead, proving to be a bottleneck in driving future growth. “Having separate software for the different operations effectively meant that there was no unified view or integrated data available from the starting point to the last mile delivery, making tracking and future planning difficult,” recollects Atul Bansal, GM ─ IT, GatewayRail. The company’s finance application, Tally, was again not integrated with the operations systems, and led to delays in raising invoices and consequently late payments. “As we were raising invoices 15 days late we were realizing payments in 50 days. Besides, which ever bills were generated had to be manually punched into the financial system, wasting precious time,” explains BK Sahoo, CFO, GatewayRail. Time is of the essence in the logistics business. Ensuring on-time delivery is a crucial parameter for customer satisfaction and repeat business. This required plugging the possible sources of delay, including gate operations. “During the time between 8pm to 2am around 250 trailers pass the gate. As the gate permits were issued manually, it took approximately 3─5 minutes per vehicle to exit,” says BK Sahoo. The total time taken for all the trailers indicates an immense productivity loss. Inventory management too was a challenge owing to the non-integrated approach. In a yard of over 90 acres locating a customer’s container can be like locating a needle in the haystack, and could take as long as 1─2 days, informs Bansal. RFID would have been a viable solution for tracking, but that required first having a centralized system like an ERP in place for it to integrate with. Hunt for right ERP To counter these challenges GatewayRail required a solution that was not only integrated, but also flexible and scalable to meet future requirements. The company decided on Mircosoft Dynamics NAV 2009 6.1 to meet this goal. However, while on the look-out for an integrated solution Bansal realized there was no robust ERP available in the market to cater to the specific requirements of a logistics company and incorporate an understanding of the domain processes. During this phase of searching for the right solution the company also burnt its fingers trying to implement a solution from Oracle. “Before going in for Microsoft Dynamics NAV, we tried to implement Oracle and struggled with it for about a year, but could not eventually implement it as it was not very user friendly,” explains Bansal. The company then decided to choose between SAP and Microsoft Dynamics. Eventually, owing to its user friendliness and flexibility for customization Dynamics held an edge over SAP. The ability to customize was a key deciding factor as GatewayRail wanted to incorporate the process knowledge into the solution to align it to the requirements of the logistics industry. “We realized that SAP was more difficult to customize as compared to Dynamics,” says Bansal. The Microsoft Dynamics NAV solution comprises the following key modules: Finance, Sales and Purchase, Sales Contract Module, Terminal Module, Rail Module and Road Module. Among these the operations specific modules were customized and specifically developed for the solution. Phased implementation for smooth transition For the implementation, GatewayRail partnered with Trident Information Systems, a Microsoft partner. Along the way it also sought the services of a logistics consultant, Logesys, for domain expertise. Both Trident and Logesys worked in tandem to tailor the solution to specific logistics industry processes. The implementation was carried out in a phased manner to ensure a smooth transition. The finance module went live in April 2012 followed by the different operations modules in April 2013. “During implementation three rounds of User Acceptance Testing were conducted, wherein a user worked on the system every two months rectifying all problems,” says Braj Bhushan, Delivery Head, Trident Information Systems. Change management was also a key element during the early usage. Benefits of integration The customer is the real barometer of an organization’s health. To that effect, the company conducted a survey among its customers post Dynamics implementation. The results showed 100 percent increase in customer satisfaction levels. Some of the other impact areas include: Better Control with Real Time Data Availability Data availability across the different functions on a real time basis has ensured a unified, accurate and current view of the business, helping the management take timely and informed decisions. “Powered with data insights we now have a tighter control over our operations. Sitting here in the head office the top management can get a comprehensive view of all the locations,” says Bansal. Plugging Revenue Leakage For a CFO across any business vertical, revenue leakage is one of the biggest concerns. The ability to plug such leakage by addressing issues like delays and inaccuracies in invoicing has been one of the major advantages of moving to an integrated environment with ERP. Process Visibility Helps Keep Track Seamless integration across the company’s different operations and locations with Dynamics has enabled complete visibility into each process– from the initial booking to first pick up for road transportation to movement and clearance of containers from ICD to final delivery to the port through the rail movement. With all the depots integrated, one can now see the exact location of a container, and how its next movement can be effectively planned . Cross-visibility helps ensure the processes don’t go off track, and if they do, timely corrective measures are taken. Ability to Plan Ahead With accurate data available at a click, GatewayRail now gets insights into various elements on the operations side. For instance, the number of containers moving in a week or a month, where is the company losing revenues, how can it improve revenues, which segment needs more focus, and so on. This can help the management plan ahead better for faster growth. Time and Cost Savings, Improving Productivity Improved efficiencies brought in by Dynamics have helped significantly save on time and costs on various fronts. Here are a few indicators: Monthly reporting closes on the 3rd of every month as opposed to the 10th to 12th of the month earlier. Invoices are raised in advance as opposed to 15 days’ delay before ERP. No manual entries and elimination of duplication frees time for more productive work. With the gate operations becoming automated, the time taken for a trailer to exit the gate has come down from 3─5 minutes to 1─2 minutes. With RFID integrated with ERP, the time taken to locate containers in the yard has come down from 1─2 days to a few minutes. The operations team which would usually work till late into the night now leaves office timely owing to improved productivity. Single solution desk. Single application means reduction in operational time, and also cheaper and simpler maintenance.