SAP Customer Success Story
Consumer Products – Apparel and Footwear
AT A GLANCE
Summary
Madura Garments, India’s leading
apparel company, has annual
sales over US$11 billion and a
yearly growth rate of over 20%.
To respond quickly to its dynamic
business needs, Madura
triggered a major IT reengineering
initiative, relying on the SAP®
Global Delivery model to replace
its outdated technologies and
becoming the first company in
India to deploy the SAP Apparel
and Footwear application.
Web Site
www.maduragarments.com
Key Challenges
•Lack of updated, real-time
information for decision making
and poor visibility into supply
chain due to nonintegrated
systems
•Difficulty in modifying systems
for new-product development
•Impending technology obsoles-
cence of legacy systems
•Need to respond quickly and
flexibly to business requirements
Project Objectives
• Facilitate integrated, company-
wide information system with
intranet to bridge enterprise
information gap
• Establish coordination between
demand, supply, and production
• Enable data warehousing for
consumer, design, and
competitor analyses
• Make IT platform available 24/7
Solutions and Services
•SAP Apparel and Footwear
(SAP AFS)
•SAP Global Delivery
•SAP Ramp-Up program
“In the SAP Global Delivery model we found an
excellent combination of adaptability, skills, and
links into the SAP Services ecosystem at a winning
price-benefit ratio.”
N.P. Singh, Vice President of Information Technology, Madura Garments
Why SAP Solutions and
MADURA GARMENTS
Services
India’s Leading Apparel Company Achieves
•Standard features and best
practices that meet functional Exceptional Results as First Retailer in India to
requirements, including SKU Implement SAP® Apparel and Footwear
definition flexibility and support
•A proven product from the
world’s largest enterprise Being first comes second nature to Madura Garments, a division
resource planning software of Aditya Birla Nuvo Limited – a flagship company of the Aditya
provider
•Flexibility, speed of deployment, Birla Group. The company’s spirit of leadership can be counted
and availability of experts, thanks in 3,500 retail outlets spanning the country, annual sales in excess
to global delivery services
of US$11 billion, and a spectacular growth rate of over 20% per
Implementation Highlights
• First installation of SAP AFS in year. And also counted among its assets is the ownership of inter-
India nationally recognized premier brands like Louis Philippe, Van
• Implementation primed by the
SAP Consulting organization and Heusen, Allen Solly, Allen Solly Women’s Wear, Peter England,
SAP India
and SF Jeans. Madura Garments has recently entered into a
• Successful big-bang go-live
approach licensing arrangement with international brand ESPRIT in India.
• Completion on time and within
budget with zero escalation
costs Taking Business to the Next Level
• Leveraging of skills and knowl-
edge provided by consultants After consolidating its market leadership within India and
from SAP Global Delivery
dominating the menswear category, Madura Garments made
Key Benefits incisive forays into global markets, and today is a preferred global
•Homogeneous system
environment supplier for such international brands as Marks & Spencer,
•Standardized processes Tommy Hilfiger, Polo, Ralph Lauren, s.Oliver, and other
•Integrated supply chain visibility
•Faster and smarter decision
making
discerning buyers. “With so many firsts,” says N.P. Singh, vice
•Quicker response to customers
president of information technology at Madura Garments, “it
•Strong foundation for the future is not surprising Madura won Images’ ‘Most Admired Apparel
Implementation Partners Company’ survey award in 2001, 2002, and 2004.”
SAP Consulting and PwC
(now IBM Business Consulting
Services)
In 2000, the acquisition of Madura by the Aditya Birla Group
Existing Environment
Multiple legacy systems
fueled new growth opportunities for the company. It was time to
supported by multiple platforms take Madura into the next level – moving into new product
Database, Hardware, and categories like women’s wear and accessories and expanding into
Operating System overseas markets like the Middle East. But to get there, a whole
Oracle; IBM and Sun; Microsoft
Windows NT, IBM AIX, and Sun host of challenges had to be overcome, including the reengineer-
Solaris ing of processes, and that led Madura Garments to add another
first – the SAP® Apparel and Footwear (SAP AFS) application.
First Things First: A Detailed Strategy to Tackle the
Challenges of Change
As Madura grew, so did its information systems, resulting in
a higher strain on its IT infrastructure. To meet its growth
objectives, a detailed study was undertaken to assess the needs
of internal customers, look at Madura’s business strategy for the
next decade, and then align both with a solution deployment
strategy.
The strategy and recommended solution had to consider a
multiplicity of business challenges, beginning with Madura’s
product-line complexity: volatile seasonal demand for hundreds
of SKUs that must be sold in four to six weeks to ensure
“By engaging the SAP Global Delivery
model, we had the opportunity to work
with solution experts day in and day out.
SAP’s personalized services ensure
delivery accountability and customized
solutions to fulfill our specific business
requirements.”
N.P. Singh, Vice President of Information Technology, Madura
Garments
freshness of products on the shelves in retail outlets. Since
Madura’s planning-to-sales cycles could be as long as six to nine
months, forecasting and attributes-based planning and
fulfillment had to be improved.
The strategy addressed Madura’s production challenges,
including multiple supply sources and increased outsourcing; its
distribution complexity, populated with multiple distribution
channels using different processes; and its financial requirements,
which included multiple countries, currencies, and taxation
requirements.
Finding a New Foundation for the Future
Madura’s legacy systems could no longer address these challenges
and requirements. “Users across functions identified operational
problems and absence of timely management information
systems as two major issues,” says Singh. Nonintegrated legacy
systems could not provide the updated, real-time information
that managers need for decision making. It was becoming
almost impossible to support information requirements for new-
product development, given the difficulty of modifying existing
software.
In addition, multiple legacy systems were being supported by
multiple technology platforms, making integration and
modification more complex and harder to accomplish. The
aging IT landscape was in danger of becoming obsolete, while
the cost of maintaining the IT infrastructure was increasing.
Nonintegrated systems could not provide the visibility into the
supply chain that Madura needed to enable more accurate
forecasting, efficient coordination between demand and
production, and seamless interfaces with its partners, such as
distributors and retailers.
Bridging the Information Gap
It became apparent that Madura Garments needed a powerful
enterprise resource planning (ERP) solution and other
applications to meet its needs. Madura Garments also required
an integrated, company-wide information system, including
Madura’s own intranet, to bridge the information gap that had
arisen across the organization and to provide critical MIS to
knowledge workers and decision makers. It would also require
the means to enable the efficient coordination of demand,
supply, and production, as well as data warehousing for analysis
of consumer trends, design performance, and competitive
analyses. And to increase profitability and product turnover,
Madura would need to raise its order fulfillment rates, reduce its
stock to a minimum, and shorten its throughput times by
automating its processes.
Madura considered solutions from a number of vendors, but
only one stood out: SAP. In addition to providing support for
a broad range of Madura’s business processes, SAP software was
a well-known, proven commodity, with more than 200 ERP
installations in India alone.
Meeting Madura’s Industry-Specific Needs
Madura Garment thoroughly evaluated the functional fit of SAP
Apparel and Footwear to Madura’s business requirements – and
became the first apparel company in India to select SAP AFS as
the application upon which to grow its future.
“One of the key points that influenced our choice of SAP AFS
for our ERP solution was its good coverage of our functional
requirements, supported by its standard features and built-in
industry best practices and industry-specific templates,” says
Singh.
SAP solutions have a reputation as enablers of improving
business performance, which was a deciding factor for Madura.
Furthermore, SAP AFS provided SKU definition flexibility and
support and enabled planning and execution to be conducted
over the entire supply chain based on product parameters.
Madura appreciated the solution’s thorough support for retailing,
with such features as multistore orders, fast-entry screens, and
the allocation and releasing of stock.
Although an ERP solution integrates all functions onto a single
platform, these solutions may not adequately support planning
and forecasting requirements for high-volume retailers like
Madura. Fortunately for Madura, SAP has two outstanding
“The big-bang go-live approach was a
big challenge, considering the complexi-
ties of our business and risk of business
disruption, particularly since ours was
the first site to go live on SAP AFS.
SAP Consulting made sure that we
were successful.”
N.P. Singh, Vice President of Information Technology, Madura
Garments
solutions: the SAP Advanced Planning & Optimization com-
ponent to support Madura’s planning and forecasting needs
and the SAP NetWeaver® Business Intelligence component to
satisfy the company’s data warehousing and decision-support
requirements.
By selecting the SAP NetWeaver Portal component, Madura could
add a Web-based customer interface on top of its ERP solution,
enabling the capture of data from external sources, such as
distributors, retailers, and suppliers, in addition to the collection
of ERP information from within the company.
Madura Selects SAP Consulting and the SAP Global
Delivery Model
For the initial solution implementation, Madura chose the
SAP Consulting organization, supported by its implementation
partner PwC (now IBM Business Consulting Services).
Subsequently, Madura looked to the SAP Global Delivery model
for advice and assistance in enhancing its system landscape.
With its global delivery model, SAP can deliver support and
services to Madura on a 24/7 basis from multiple locations,
including a global delivery center in Bangalore, India. Further-
more, with distributed sourcing and staffing, SAP Consulting
can speed up the identification and assignment of solution and
industry experts when and where they are needed.
SAP Global Delivery optimizes the correct mix of on-site,
onshore, nearshore, and offshore resources driven by cost, skills,
availability, risk mitigation, and service productization elements,
and it can deliver packaged services from any location in the SAP
world. The combination of speed of delivery and flexibility of
services is why SAP Global Delivery was a key factor in helping
Madura increase the speed of the implementation, gain control
over and lower the maintenance cost of its IT infrastructure, and
improve its return on investment.
According to Singh, “By engaging the SAP Global Delivery
model, we had the opportunity to work with solution experts
day in and day out. SAP’s personalized services ensure delivery
accountability and customized solutions to fulfill our specific
business requirements.” And Madura intends to continue
utilizing SAP Global Delivery to leverage emerging product and
service trends to meet its growing business needs.
A Big-Bang Go-Live with SAP Consulting and SAP
Ramp-Up
A core team of 30 members – comprised of 15 consultants and
15 Madura specialists primed by SAP Consulting – was initiated
to administer the implementation operations. Singh reports that
the implementation team helped solve major obstacles. “For
example,” says Singh, “prior to the implementation, the entry of
SKUs into our ERP system was manual and very cumbersome,
leading to errors and time delays.” Therefore, the implementa-
tion team developed a software module to collect and load data
automatically into SAP AFS from a bar code scanner.
 www.sap.com /contactsap

The team enabled the seamless integration of Madura’s existing Information islands are now solidly connected, a result of
Web-based ordering and point-of-sale systems in its franchisee functional transparency inherent in the SAP software. With up-
showrooms with SAP AFS. Now that agents, distributors, and
franchisees can place and check the status of orders and accounts
“One of the key points that influenced
online, Madura no longer accepts offline orders.
our choice of SAP AFS for our ERP
At the same time, the implementation team integrated MIS, solution was its good coverage of our
which supplies managers with back-end data, such as profitability functional requirements, supported by
information across brands and channels as well as sales data and its standard features and built-in
working capital. The quality of the data is much higher, and it is
industry best practices and industry-
available much faster than before.
specific templates.”
Because SAP AFS was available only for limited release, SAP N.P. Singh, Vice President of Information Technology, Madura
Ramp-Up processes were engaged for the implementation. Garments

Consultants from SAP India led the SAP Ramp-Up initiative,

thereby ensuring that the implementation would be completed to-the-minute information from internal and external sources
on time and within budget, with no escalation in cost related to immediately available, Madura’s managers are able to respond
the installation. Commenting on the implementation, Singh quickly and intelligently to market demands. Staying informed
says, “The big-bang go-live approach was a big challenge, about variances between budgeted and actual amounts enables
considering the complexities of our business and risk of business senior management to effectively manage top-line and bottom-
disruption, particularly since ours was the first site to go live on line growth. And because routine tasks have been automated,
SAP AFS. SAP Consulting made sure that we were successful.” managers can spend more time on value-add activities that
impact the bottom line.
Being First Reaps Impressive Results for Madura
By implementing SAP solutions and choosing SAP Consulting “Profitability assessments for each showroom, brand, and
and the SAP Global Delivery model, Madura is reaping the customer can be done in the system,” says Singh. Because
following rewards: functions are seamlessly integrated, the solution can suggest
• Following a highly efficient implementation supported by SAP replenishment based on these parameters and automatically
Global Delivery and SAP Ramp-Up, Madura is experiencing generate reports – all without manual intervention.
value enhancement through improved planning processes,
increased speed of response to changing fashion trends, The value of the software to Madura Garments is evident from
improved distribution channels, reduced lost sales, and the numbers:
immediate availability of core items. • Order fulfillment is up from 70% to 90%
• In the area of cash liberation, Madura has increased net • Order release-to-dispatch time is down from 22 days to 18
working-capital turns, including raw materials, finished • Inventory is down from 13% of sales to 11.7%
goods, and receivables and payables, as well as improved • Showroom deliverables have been reduced from 55 days to
forecasting models and early flushing of dormant stock. 40–45
• In addition to lower IT maintenance costs enabled by SAP
Global Delivery, Madura has improved the “hit rate” of its
designs to reduce dormancy, to lower material costs, to enable
better price checks for each raw material, and to improve
vendor evaluation.

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