TRUST Asian Paints to be different. In the early eighties, Indian companies
had just discovered the joys of dealing with the faster, more reliable courier companies and had begun giving the Indian Postal
Department the cold shoulder. Soon, important business documents were being ferried across the country by the ubiquitous courier
delivery boy. Asian Paints also took the courier route but with a difference. Instead of plain typewritten sheets, the company
was exchanging computer floppies between its various plants and depots.
of the pioneering paint companies in this part of the world, Asian Paints was, as usual, one step ahead of the competition.
In a small way, it was building on the lead it had established by becoming one of the first Indian companies to go in for
computerisation. In 1971, when the companys turnover was just Rs. 30 million (it is Rs. 8.83 billion today) its then chairman,
Champaklal Choksey, had decided to go in for a mainframe. The ICL 1901 A cost Rs. 5 million, a princely sum in those days.
The decision was based on a gut feeling, backed by the knowledge that investment in new technology always pays off. On hindsight,
it was simply a visionary move. By 1978, all the account functions of Asian Paints had been transferred to this new machine.
From 1981 onwards Asian Paints decided to do things differently and went in for CP/M machines,
highly proprietory systems, manufactured by Zenith Computers, PSI Data Bull and IDM Computers. "We went in for the computerisation
of our branches. The new machines handled functions like customer billing and dealers requirements. It paid us very rich dividends
with two days work being reduced to half a day," says S.A. Marathe, Systems Manager, Asian Paints.
At Asian Paints, every department presents a three year perspective plan to the top management.
At the 1983 meeting, the management decided to extend computerisation to the shop floor. The company was thus able to track
the output of every machine on the floor shop at the companys oldest plant at Bhandup in north Mumbai. Asian Paints also became
the first Indian company to use Unix on the shop floor. "It immediately began to help. The worker would key in the data and
the system would tell him things like which depot the loaded truck had to be despatched to," says Marathe.
All this computerisation brought about direct changes in two areas. The companys clerical staff
strength has not gone up much even though other staff requirement like salesmen has increased as the company grew over the
years. For example, there were 20 despatch clerks earlier, now there is only one. Similarly, a single excise clerk is now
doing the work of the five earlier. In addition to data entry and report generation, the clerical staff also query the system
to extract data and take system backups. In Asian Paints, the data is owned by the users and not by the systems.
Computerisation also helped the company tackle competition in a more effective manner. Asian
Paints had been set up in 1942 by four Indian entrepreneurs who sold their products initially on bicycles. The Indian paint
market then and right up to the early seventies was dominated by MNCs like Berger Paints and ICI who had a stranglehold on
the wholesalers and the urban market. The fledgling Indian company decided it would grow by spreading to smaller towns. This
it could do by providing better service and also a wider range of stock to the retailers. It had therefore to do two things
spread its geographical reach and increase its product range.
All this meant that the company started selling paints in more number of colours, shades and
can sizes than the competition to a larger dealer network. This is when the companys top management had its second "attack"
of vision in 1982. "Can we not use computers for planning?" the big bosses asked. So between 1982 and 1984, the company developed
its first Manufacturing Resource Planning (MRP) application. The paint maker immediately found that it could provide much
better service to its customers. By 1984, Asian Paints had developed a robust material planning system which is working well
even today. About 25 of its branches were servicing 3000 dealers. Today the figure has gone up to 73 branches and 14,000 dealers
one of the largest networks in India. The company sells 2000 shades and pack types in decorative paints and another 1500 in
Branch computerisation has reached to such an extent that Mayur Toshniwal, Branch Manager of
Asian Paints Dadar branch in central Mumbai declares, "Today we cannot think of working without computers. My branch will
have to down shutters if the computers here break down." The Dadar branch, which clocks in annual sales of Rs. 400 million,
carries about 350 tonnes of stock on any given day. Most of the work at Toshniwals branch the receipt and despatch of material,
bank accountancy, invoicing, statutory requirements, inter-office corespondence, maintaining sales tax forms, among other
functions, is through the computer.
Six Regional Distribution Centres (RDCs), each in one zone of the country, receive the previous
days stock position from each of the companys 73 branches. Since each branch is dealing on an average with 300-odd dealers,
there is an enormous amount of data being generated. A high level of computerisation comes in handy here too. "The data crunching
is done by the salesman, sales supervisor or the branch manager, according to his requirement. We look at all the data very
closely. At the most basic level, for example, it can give us a very good idea of which dealer is giving us what kind of business,
" informs Toshniwal.
"We went in for VSATs again on a business hunch. Our reasoning was that in tomorrows business
world, we had to have access to information very fast. The existing communication means (telephone lines) then were very unreliable,"
informs Marathe. In 1994, Asian Paints installed VSATs in three plants and 16 branches. Today a total of 49 VSATs, installed
at a cost of Rs. 30 million, link six factories and 43 depots. VSATs are now taking care of the accounts, balance sheet and
planning. It took about six months to stabilise the system.
Back then, installing VSATs was an expensive option (it still is for many Indian companies).
"But it was not a cost-benefit decision. In IT you cannot do cost benefit analysis," says Marathe. "It was imperative for
us to act fast. We had a 10-year lead over our competitors as far as distribution systems was concerned but the lead was narrowing.
We knew that we would need data later for a weekly planning cycle and after that, for a daily planning cycle. All we needed
was to build on the good network system which we already have."
Around the same time as Asian Paints was installing its first lot of VSATs, it decided to make
its environment more dynamic and get into databases. The paint giant chose to install a Supply Chain Management System (SCMS).
"We went in for a SCMS and not ERP because in 1994 there was no support in India for ERP. And we are convinced that any new
technology gives benefits only three years later. We have developed IT infrastructure which gives us a very good idea of our
sales growth and right product mix," says Marathe. SCMS is still in the process of being installed at the company and will
be fully functional only by mid-2000.
Marathe gives other reasons for bucking the trend. "We did not go in for ERP because it became
fully implemented in India only by 1996. And by then we had already redesigned our systems. True, we had been evaluating ERP
but we found that SCMS allowed us to plan and re-plan much more easily." According to Marathe, ERPs are good for organisational
processes but their implementation takes much longer. He explains: ERP touches every operation of the company, it being the
transaction layer. That means almost every person in the organisation has to be trained. Also, the ERP needs to be customised
for the organisations needs or the organisation may have to adapt to the ERPs process logic. Either of these changes are big
and take a long time. In SCMS implementation also some processes will have to change but since SCMS touches lesser number
of people and takes data from the transaction system, it takes lesser time."
Asian Paints, SCMS takes care of the planning system, corporate office, users (at the plants), among other functions. Marathe
also feels that SCMS gives better paybacks. Thats because it makes the core business of the company efficient which is the
supply chain for a manufacturing or marketing company. It allows us to have shorter planning cycles, and among other things,
can determine proper inventory levels based on demand and supply variability. Since it takes the core processes to a higher
level, it cuts out a lot of fat in the supply chain and gives faster returns."
SCMS will reduce sales forecasting by the depots from the present 15 days to one week to 1 day.
The company will know exactly how much stock each depot will require, and when. "With increasing competition, there is every
possibility that if we are stocked out, we may lose out on a sale," says Marathe. There are other compelling reasons. "Branch
managers keep on changing. Once we have SCMS in place, we will be able to track the various promotion schemes adopted by a
branch manager as well as his predecessor." The full installation of SCMS will lead to a shorter planning system. For example,
if earlier only 100 cans were being despatched, now the company will need to send only 20 so that it is not supplying more
"The reaction from the plants and depots will be much faster. Suppose the Chennai plant is overselling
a paint in Sky Blue colour, we can then ask the Ankleshwar plant to step up production of Sky Blue. SCMS will be able to tell
me whether it makes more sense to switch production schedules at a particular plant or whether it will be more cheaper to
transport it from a depot, says Marathe. Inventory will be less. "We will be able to shift goods from one depot to another
much more quickly in case of need. As it is, we already have production flexibility. You can have flexibility only when you
have large capacities and we have that already.
"We will go in for ERP but only later, say after two years after all, there is a limit to what
you can chew. We can afford to wait for ERP because at present the ERP paradigm is shifting. Right now, if one were to implement
the entire SAP package, he would require the services of 45 experts. Later, we will get ERP packages much more cheaper. Different
packages like SAP and PeopleSoft will even be able to talk directly to one another."
Marathe feels that it was only companies which didnt have any experience of good IT functions
that went in straight away for ERP. "But we have a very rich in-house IT culture. Right now we have 60 programmers on board."
Asian Paints ropes in computer training institutes like NIIT to teach packages like Sybase. "We not only teach skill-based
training but also non-skill based training. We dont look at our people as just coders. They also undergo other skills like
team building and presentation skills." Asian Paints recruits raw MBAs for executives and BEs (Bachelor of Engineering) for
programming functions. In a year, on an average, the company spends about 10 mandays on each person for training.
Still, in spite of the company investing so much into its programmers, even Asian Paints is
plagued by that scourge affecting many Indian companies IT professionals leaving for better pastures, particularly the United
States. Marathe is candid in admitting, "On an average, a programmer stays with us for about two years. If he leaves for a
much better paying job abroad, I dont mind. For, as a result of the rupee-dollar exchange rate, I'll never be able to match
the salary offered to him abroad."
Adds Marathe, "We have noticed that in the time that they are with us, our programmers give
us their best. Most of them end up in enhancing our existing systems." Which is perhaps why, unlike other Indian companies,
Asian Paints does not even ask its programmers to sign contracts which prohibit them from jumping the ship before a pre-determined
Once again, Asian Paints dares to be different.