Super star Group

Driving the Transformation Agenda to manage Growth

April ‘ 2015
KPI Driven Process Transformation on SAP Platform
Agenda

01. Who we are

02. Our Understanding

03. Proposed Solution

04. Approach & Methodology

05. Solution Enablers

06. Scope and Timelines

07. Business Benefit

Page 2
 Who we are
And what we stand for

Page 3
 EY Global Services

$26b revenue | 150 countries | 190,000 professionals

Global
Advisory Assurance Tax Transaction

Ernst & Young Differentiators:

Commercial
and financial External ► Focused squarely on the business performance space
due diligence audit
Financial ► Rapid assessments of processes and benchmarks in identifying areas of improvement
accounting
Transactional advisory ► Innovative and collaborative facilitated environment to help design or improve processes
integration service
► Experienced resources to drive sustainable improvement
Transaction Assurance Fraud
investigation ► Multi-dimensional and multi-discipline approach in problem-solving
Valuation and dispute
services ► Process transformation to streamline end-to-end processes, leverage sources of competitive advantage, deliver sustainable
Client benefits and transfer the capability to self-improve/sustain
relationships
Business
and indirect Performance
improvement Strategy
tax services Tax Advisory Business
performance
International market
tax services
Risk
Transaction
tax Ernst & Young
Human IT risk
capital Advisory

Systems integration
and outsourcing market
Globally, the Advisory practice has 23,000
consultants and generates US$4.3 billion annually

Page 4
 EY India

MAKE
Overall winner –
(Most Admired #1 Financial
consultancy Chandigarh
Knowledge Advisor Delhi
rankings Gurgaon
Enterprise Award) Noida
Ahmedabad
Kolkata

Mumbai
Pune Hyderabad

Bengaluru
# 1 Professional Chennai
Excellence in Great Place to Kochi
Services firm in
Training Work
India
India presence
► Over 15,000 people
► Offshore delivery capability based out of Kolkata , Gurgaon, Mumbai, Bangalore

Page 5
 EY Advisory Services

► 4500+ Advisory professionals ►Received SAP Pinnacle Award 2014 for

► 50+ Partners
service transformations
► Our Differentiators
► We help drive business performance, manage risk, and sustain improvement through ►Ranked as #1 brand for Advisory Services in
-Our broad industry experience and sector-focused approach India for two consecutive editions of the
-Our deep subject matter knowledge biennial TNS Global Brand Survey 2013, 2011
-The latest insights from our work worldwide, plus established heritage
►Ranked #1 on excellent service quality and
► One business, one Advisory practice
-We operate as a single business across all geographical areas creating effective teams
-Our global integration facilitates decision-making and speed of execution ►Ranked #1 for relationships, people, technical
► Highly experienced people expertise and understanding of industry
-We attract and retain top talent across industries
-We’re structured to mobilize our people quickly ►Ranked #1 for global mind-set
► One methodology
-We have a single modular methodology
-Wherever we work, we deliver consistently

We can help you

► Drive growth and business performance
► Manage risks and opportunities Ranked amongst India’s Top 50 Great Places to
► Improve the effectiveness of your Finance and IT functions Work for 2011 and 2012 (1000+ employees) and
► Ensure operational effectiveness amongst the best in Professional Services
► Manage talent
*The numbers include personnel from all member firms of EY Global in India

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We’re recognized as a market leader by analysts and industry
professionals

We lead the market in our reputation for Advisory Services*

► Ranked #1 for brand awareness, favorability
► Ranked #1 on excellent service quality,creating effective teams
► Ranked #1 for relationships, people, technical expertise and understanding of
industry
► Ranked #1 for global mindset

India’s tier-one tax firm for the eleventh consecutive year – Euromoney
ITR, World Tax Guide 2013

Financial Advisor of the Year M&A Award – India, in 2011, 2009 and 2008
–by Financial Times & Merger market

Risk & business advisory relationship with 160 of the BSE300 companies

Ranked amongst India’s Top 50 Great Places to Work for 2011 and
2012 (1000+ employees) and amongst the best in Professional Services
*Source: Global Brand Survey 2013,
conducted by TNS Advisory Services

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We can help in three distinct areas

 Finance  Internal audit

 Supply chain &  Process
Architect and
1 optimize business 
Operations
Customer 
controls
Climate change
processes & sustainability

 IT  Enabling
Design and implement transformation technologies

2 the technologies that

drive performance
 Enterprise
Intelligence
 Technology risk
and security

 Program  Strategic
Achieve and sustain management direction
transformation
3 through collaboration
 People and
organization
 Risk
transformation
and discipline

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 Our Understanding

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Our Understanding

► SSG (Super Star Group) is a leading electrical and electronic conglomerate operating from the last two decades. Super Star brand has
become synonymous with lifestyle and household electrical products from lighting solution to electrical accessories, fans to
engineering products, and properties to renewable energy, substation to lift and generators. In addition, SSG is the exclusive
marketing partner for Kawamura – Japan, Federal – Turkey, Khaitan – India. The quality of Super Star products & services is
guaranteed and its durability is unquestionable. SSG also involved in a good number of CSR activities as a good corporate citizen and
maintain a very good credit rating. SSG striving for brighter future.

► SSG has 5 business units: SSG Pro Lighting; SSG Solar; SSG Engineering; SSG Lift & Generator; SSG Properties

► While SSG is striving for bright future, in this endeavor SSG need for
► A streamlined Process Management to manage Key Parameters like Brand, Style, product variants, market segments,
promotions management, customer service, effective delivery and inventory management
► This would also envisage a need for process standardization and process benchmarking with industry best practices
► Need for optimal synchronization among the Sales Planning ,Production Planning and Procurement Planning.
► Need for a robust ERP platform to implement business strategy, group policy and business controls
► Need for defining a KPI based MIS system to enable On Time Decision Making process

► In this direction SSG group is evaluating the benefits, challenges of business transformation on SAP platform.

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Executive Summary
Process Diagnostics
► Process Gap in seamless sales and operations planning, procurement planning, inventory management, uniform material code across
plants.
► Process Gap in identification of inventory level across locations due to lack of proper material codification; Hence, lacks inventory
optimization with complete transparency in line with corporate strategy
► Process Gap in seamless inventory reconciliation from Raw Material store to WIP at Production shop floor to finished goods stock to
adjustment in finished goods inventory level while invoicing the same to customers.
► Process Gap in inventory valuation at different stage of supply chain; Hence, difficulties in reconciliation with Books
► Need for regularization of service orders, service confirmation, appropriate cost allocation and / or capitalization as it may be
applicable.
► Need to have a proper payment policies for regularization of vendor payments, control of cash payments, meeting statutory
liabilities, monitoring of payment terms.
► Need to monitor utilization of Vehicles, tracking of delivery performance in terms of timeline, other supply chain performance and
tracking of customer complains.
► Tracking of salesmen’s performance and analyze the schemes to work out the eligibility of incentives.
► Capturing of secondary sales data and analyzing the same for more appropriate sales and operations planning
► Need proper material requirement planning in accordance with sales forecast, in consideration with policies related to minimum or
maximum stock level / safety stock level.
► Need to evaluate dealer performance, monitoring of sales commitment & market penetration, credit management
► Need to evaluate the performance of the campaigns, promotional offers.

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 Key Process KPIs (Indicative)

Manufacturing / Production
Sourcing/ Procurement Inventory Management Sales & Logistics Finance & Accounts
Planning
► Raw materials and services ► Supply and demand balancing ► Inventory Management ► Sales Order Mgmt. ► General Ledger Accounting
sourcing
► Production planning & ► Receipt of Raw Material from ► Customer Management ► Asset Accounting
Processes

► Supplier Management scheduling Supplier

► Customer Collections ► Bank & Cash Management
► Price Comparison and Purchasing ► Material Requirement Planning ► Storage of Raw material / Semi
Finished / Finished Good ► Stock Transfers ► Profitability reporting
► Service Management ► Production execution
► Inventory Issue ► Transportation ► Book Closure
► Inbound Logistics ► Finished Goods Inspection
► Periodic Review ► Statutory Compliance
► LC Management

► Compare Key Parameters of the ► OEE ► Average days between receipt ►% Sales forecasting accuracy ► Time taken for the monthly /
offers – Price, Delivery Schedule, and GRN creation Quarterly and yearly closing
Cycle Time ► Average Order Cycle
Quality, Tax Implication ►
►% of instances when material was ► Reduction in defaults in
Impact (KPIs)

Recycle/Rework & Waste % accepted without user inspection ►% of order lost

► % increase in discounts received ► statutory compliance
over previous year ► Average cases of orders over
Quality Score ► Number of stock outs in a year
►
validity date ► Product
profitability &
► % of item coverage under periodic management reporting
►% reduction in obsolete inventory
procurement plan ► Average debtors days
items

►% rejection in item supplies ► OTIF/ Lead Time to Deliver

Key Significant Impact Medium Impact Low Impact

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Proposed
Solution

Page 13
Integrated Operating Model Alignment cum ERP Enablement Solution
Need for Alignment
How are we today Components of
Reengineered Processes
• Duplication of tasks and efforts
• Normalized Process Flows as per industry
• Everyone is involved but no one is best practices
Functional Silos accountable
• Process Narratives
• No standard way of doing things
• Process KPIs and MIS
• Focus on functional / departmental
Ad-Hoc • Compliance and Controls List
efficiency rather than process
Processes excellence
Value Addition Through Process based transformation
Process driven
Transformation

• Focus on unaligned business processes

• Focus on realizing high value in those
How would we like to be areas/

Added value
• Standardized and efficient process Normal
design Transformation

• Compliant to operating policies and

internal control and performance Normal transformation result in low
requirements business alignment
• Clear definition of individual roles and
responsibility – Responsible;
Accountable; Consulted; Informed
Business alignment
• Customer-centric and output focused Key: Normal Transformation
Optimized processes Process Driven

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Operating Model Alignment Solution
Solution Framework

Business Process Structure Process Design Framework

Process Process Objectives

objectives Process owners
Key Inputs
Key Activities
Key inputs Key activities Key outputs Description
Activity flowcharts

Key Key Outputs

Performance
Measures KPIs

Modular, structured, drill-down design

Key Questions answered

What? When? Where? Who? How?
Description of the The trigger or the Where is the activity Details of the person Details of the policy/ guidelines
activity/ procedure frequency at which an performed- manually, in responsible for on the basis of which the activity
being performed activity is performed ERP etc performing the activity Is carried out

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 ERP Enablement Solution
Solution Framework
Solution: Functional Areas:
• SAP ECC 6.0 (EHP 7) • Sales & Distribution
• Production Planning & Quality Management
• Materials Management
• Finance & Controlling

Core Operations

Customer Incentive
Order Management Credit Management Dispatch Processing Billing Collections
Management Management
Requisition & PO
Budgetary Approvals Supplier Management Sourcing Execution Goods Receipts Invoice Processing Payments (AP)
Processing
Suppliers Material Requirement Production Stocking/
Buyers
Production Planning Quality Management Costing Stock Transfer
Planning Execution Warehousing

Budgetary Approvals Procurement Goods Receipt Good Issues Asset Capitalization Asset Depreciation Assets Retirement

Support Functions

Cash and Bank

Accounts Payable Accounts Receivables Taxation LC Management Profitability Analysis Period End Closing Product Costing Foreign Exchange
Management

MIS Reporting

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 Approach &
Methodology

Technology

Governance &
Control People, Process & Policy

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17
 Approach

Overall Approach & Principle

1Identify “Business Imperatives”

 Agree on benefits that are to be achieved
due to the process changes  Identify the key business imperatives based
on SSG Group’s strategic goals
 Assist in rolling-out changes across the
organization
for SSG  Identify critical processes that are needed to
achieve these goals
 Assist in change management as well as
resolution of any implementation issues

4 Guiding 2
Implement the Re-designed Re-design of Critical Processes
Principles for
Processes
EY’s Approach

 Assess deficiencies as well as critical

Implement the designed and agreed upon business needs that are not being addressed

3

processes in SAP by existing processes and systems

 Ensure that the process controls are
system managed
 Ensure that predefined MIS and KPI
reporting requirements are delivered by
SAP
 Redesign these critical processes to meet
SAP must reflect Business strategic goals along with requisite changes
in structure and technology enablement
Imperatives

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SAP Enablement Approach

Detailed Approach
Identify Diagnose, design and deliver Sustain

Phase 1: Current State Phase 2: Solution Phase 5:Project

Phase 3: Realization Phase 4: GO Live
assessment Design completion assessment
0 4 6 7 8
Key Stages

Stage 1 - Project Planning Stage 6 A: Solution

Stage 4: Delta SAP TO BE Stage 7A: Final Preparation
State configuration
1 8– Post
implementation
Stage 2 – TO- BE process
5 stabilization and
workshop
Support

Stage 5: BBP document Stage 6 B: Testing Training Stage 7B: GO Live

3
Stage 3 –KPI/MIS Workshop
9A 9B 9C 9D
BBP Review Configuration Review Pre Go Live Review Post Go Live Review

Program Management & Change Management

Process

Training Organiza-
Process and tional
Alignment
Governance
Comm.

Organizational Alignment Operational

Automation
Metrics effectiveness Controls
dimensions

Controls Metrics

Integration Automation Integration

Training & Communications
Governance

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How will our approach meet your needs Approach

Our approach is unique and effective because we: How does this make a difference to you

1
Use value stream approach as against functional
assessment ► Optimised processes rather than function in silos

2
Use participative workshop approach for identifying gaps
and ‘to be’ processes Greater implementation
►
► Buy-in of people who work on the ground
► Process and changes factor practical realities
► Cross-functional anomalies ironed out

3
Use RACI technique for process documentation (i..e who
► Know who is responsible for what
is responsible, accountable, consulted, informed)

4
Consolidate improvements into projects ► Measurable change

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Solution
Enablers

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 Training Enablers
Our Approach: Train the Trainer
► Provide overview training to the senior
management, process owners and leads (typical Internal Function User
2—3 day workshop)
► Train-the-trainer(TTT) program will be
instrumental in scaling the realization efforts Internal Function User
across organization Core team Trainers

► Define key core team who would lead and

conduct training to the power users and end Train-the-Trainer
Workshop
users
► ‘Trainers’ would consist of business process
leads and/or users who would function in Internal Function User
support team post go live
► Involve the ‘trainers’ during the Process
Alignment & System Design EY SAP Experts Train-the-Trainer
Workshop
Core team Trainers
► Provide education and training regarding key Internal Function User

processes and reporting procedures for day—

to—day functions
► Assist trainers to provide training for power
users and End users (typical 7—10 day
workshop for end users and 4—5 day
workshop for power users)

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Change Management Enablers
Understanding the change
Importance to
Level of
Change Challenge success of Response
Challenge
change

► Length of training may need to be considered and may need to be Very High
Medium
delivered more than once.. Significant Hand-holding may be ► Training requirements will be built into the change plan and training plan
needed

► Responding to high level of impact on job roles, across each of the Low ► These will be validated in more depth using Job impact assessments for
High
functional areas, in a coordinated and consistent way each phase

► The scale of managing the change approach for ERP

High ► Close alignment between implementation plans and change plans,
implementation across a number of functional areas with specific High facilitated by regular planning meetings
requirements

► Delivering effective and timely communications, in the right format, ► The comms strategy outlines the methods appropriate for the audience,
Medium Medium
to the right audience delivered in the comms plan

► Up-skilling prior to the project is required on many levels including

High Very High ► Project resources will be briefed and trained where necessary prior to
change management, communications and conducting job
project start dates
readiness assessments

► Setting up a Consistent Change Team working in the most ► The appropriate team will be considered against pre-defined role
effective way High High descriptions with agreed ways of working

► Some training material may need to be written in languages other Low High ► Appropriate translation resources will be identified. This time period will be
then English incorporated into the training plan

► Materials that will be prepared: training guides for participants and

► Finding appropriate candidates to fulfill train the trainer approach to High Very High Trainers, a training manual with practice scenarios and updated process
satisfy large numbers of end-users who will require training
flow charts

Very Low Low Medium High Very High

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Change Management Enablers
Our Approach
Training Name Objective of workshop Intended Audience Stage of Project

►Mobilize Leadership Team

►Review of vision for Project Leadership and
Senior Management Workshop ►Development of stakeholder, management plan. stakeholders
Project Preparation
► Create change management guidelines

►Align Core Team to overall design

Process Alignment &
Core Team Workshop ►Discuss landscape Change Management strategy Project Key Users
Solution Design
►Establish feedback mechanism

►Introduction and alignment of end-users with Project outcomes.

End-User Workshop ►Review of End-user training sufficiency
End-users Preparation for Go-Live

►Gauge multiple parameters like – adoptability, confidence in

Surveys solution, levels of understanding, review of training, etc End-users Post Go Live

►Monthly Updates
►Posters/ Standies/ Banners at High Visibility areas like Cafeteria,
Entrance, Reception
Throughout the project
Branding ►IT Enablement Screen Savers and Screen Savers on Portal All Employees
phase
Launch
►Recognition of core team member of the Month

Page 24
Data
Our Approach to Mitigate Data Migration Challenges
Key Challenges/Learnings
 What to migrate?
 Identification of relevant
data
 Disparate data sources
 Non harmonized data set
 Data quality
 Data ownership
 Historical data
 Non involvement of business
stakeholders
 Data integrity
 Training requirement for key
stakeholders responsible for
migration
Page 25
Enablers
The whole data migration track will be lead by EY data migration champion along with the support of SSG
core team
Our Approach
► Identify legacy source systems ► Define business rules
► Identify business processes which impact ► Define data quality and evaluation criterion
data ► Data cleansing, enrichment and
► Identify business stakeholders and training harmonization
requirement ► Reconciliation and business Sign-off
► Identify Risks and controls
Assess EY Data Plan
Champion
► Data completeness ► Define migration priority
► Verify data with same service level as the ► Define cut-over strategy
old system ► Migration readiness check
► Verify new system is stable ► Migrate test data
► Define exception rules
► Migrate legacy data
Confirm Migrate
 Risk Management Enablers

Our Approach
Implementation phases

Identify Diagnose Design Deliver Sustain

Implementation risks
Risk and control areas

Process integrity risks

Application security risks

Data migration & integrity risks

Infrastructure integrity risks

The risk of failure can be minimized by adequately monitoring and addressing risks and controls throughout the project

Page 26
 Scope & Timelines

Page 27
Scope Scope

KPI Driven Process Transformation on SAP Platform

Work steps SAP Modules in scope Geographical Scope

► Finance & Controlling (SAP FICO) ► Location

1 Project Planning
3 Business Blue Print
► Sales & Distribution (SAP SD)
► Materials Management (SAP MM)
► Production Planning (SAP PP)
► Quality Management (SAP QM)
► Corporate Head Office (CHO), Dhaka
► 2 Manufacturing Plants
► Legal Entities (SAP): 1No.
►

► Technical Scope: Timeline Scope

► SAP Basis & SAP ABAP
4 Realization

► Implementation:
► 5 Fin Final Preparation and Go Live
► 5 months

► Post Implementation Scope

► 2 month post Go-live Governance
► 6 Post Stabilization Support ► Overall Timeline
► 7 Months

Page 28
Business
Imperatives

Page 29
 Key Business Imperatives for SAP Transformation

Key Expectations Key Imperatives Key Objectives

►Process led transformation

for enablement of all key A system which provides accountability and
business processes onto SAP transparency in carrying out business operations Standardized Platform

►A system which improves

efficiency and reduces A system which has preventive and detective
manual work financial and process controls reducing chances of
errors Growth Enablement
►Process controls to avoid
chances of fraud and
malpractices Providing a communication platform to sales force in
order generate more revenue and improve customer
►A system where process connect
are mapped as such that they Margin Efficiency Improvement
are compliant to regulatory
norms
A system which facilitates business to generate
►Provide seamless period end statutory reports and close books on time
integrated flow of information
and incorporate the industry Strategic Alignment
leading practices
Cost optimizations across functions such as logistics,
►Standardize entire business procurement and operations.
functions and corporate
functions
►Comprehensive online MIS Process Harmonization
reporting for different level of Reduction in customer debt’s to improve liquidity
users using dashboards

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Project Benefit (Summary)
► Integrated Business Process documentation cutting across all the
business functions.
► Identification of Business KPIs for all the major processes
► Identification of Business Controls
► Measuring KPIs for MIS for management for timely decision
making.
► The SAP system will be mapped with all the above mentioned
integrated business processes for all the relevant business
transactions; the identified business controls will be configured in
the system for requisite business controls; all the identified KPIs
will be measured and reported as MIS for decision making
► The following business functions will be measured and monitored:
► Raw material planning based on sales forecast
► Monitoring of Raw Material Inventory at all the locations
► Reconciliation of Raw material consumption with Production,
waste and re-cycled materials.
► Monitoring of purchase requisitions of different materials ,
monitoring of procurements, monitoring of vendor
performance and vendor payables
► Codifications of all type of materials help in overall
movements of ,materials and help controlling Inventory
Page 31
► Recording of quality parameters of raw material and
subsequent analysis of quality results for consistency of
supplies.
► Monitoring of Production plan vs. actual
► Monitoring of Customer order status
► Efficient delivery against each customer orders, tracking
delivery confirmation in the system
► Monitoring of Finished goods stock at different locations
► Monitoring of Credit Limit for all the customers
► Monitoring performance of all the sales promotions
► Managing cash flow situation, forecasting based on
outflow commitments and inflow commitments
► Managing VAT, tax and other statutory requirements
► Management of Different type of LC, Forex
► As all the business functions are being transacted
through SAP system, all the operational analysis
including Ratio analysis for financial health check e.g.
Liquidity ratio, Turnover Ratio, etc.
► SAP system helps in tracking and monitoring closely the
working capital, improving the cost of working capital.
► Financial reporting at period end with P&L, Balance
Sheet
Business Benefit – Transformation Program
Production & Quality Procurement & Inventory
Production & Quality
► Long Term Production Plan as per Sales Forecast
► Planning of material, Capacity, delivery schedule as per orders
► Material components planned and blocked for each product
category and each order, hence avoid any material
unaccounted.
► Tracking of Waste, its source and analysis for necessary action
► Checking and analysis of quality parameters for input materials,
In-Process, Final product to avoid value loss.
► Analysis of OEE% and COPQ to enable action plan to improve
► Tracking of order status, improve OTIF%
► Finance & Control
► All the relevant GLs gets updated for any material movement
► Monthly book closing possible, TB on real time basis
► Easy handling of Forex relevant for Import and exports
► Product wise, order wise costing and profitability analysis
► Estimation of cash flow based on payments and receivables
schedules
► Cost analysis and budgeting to bring systematic control
► Analysis of payables and receivables with ageing; inventory
ageing with value
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Finance & Control MIS
Procurement & Inventory
► All the tracking of necessary procurement against order,
procurement against minimum & maximum stock level of all the
relevant items as per the policy
► Procurement against approved purchase order to control agreed
price and quantity; also tracking of all component of costs
► Inventories' all the cost components for appropriate cost of
production
► Control of inventory with stock norms, transparency of stock, avoid
unwanted purchase, control of ageing, expiry and shelf-life
► Reduction on overall inventory and its value
MIS
► Product wise, customer wise, market wise analysis of revenue and
profitability
► Control of non-moving materials, inventory ageing, analysis of
waste, quality issues and root cause analysis
► Order status to update customer for order fulfilment; reason of
delay; if any.
► Analysis of cost objects for necessary action
► Analysis of customer complain and its root cause.
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