V.M.

PATEL COLLEGE OF MANAGEMENT STUDIES 1

The B.B.A programme is one type of graduate degree course. This is providing us professional
management which is universally applicable. It can be applied in business and non-business
activities.

For preparing the project report, I have visited the Dudhsagar Dairy, Mehsana, during the
suggested duration 27-10-2008 to 16-11-2008 to avail the necessary information. The blend of
learning and knowledge acquired during my practical studies at the Dudhsagar Dairy, Mehsana,
are presented in this project report.

The rationale behind visiting the company and preparing project report is to study the
“ERP System with respect to Finance and Accounts in Dudhsagar Dairy, Mehsana.”

The project report starts with company profile and covers Overview of ERP System, Various
modules of ERP System implemented at Dudhsagar Dairy, Various process cycle of ERP
system in Dudhsagar Dairy, Evolution of ERP System, Findings Regarding ERP system at
Dudhsagar Dairy, Mehsana.

The information presented in this Project Report is obtained from various sources like Company
Personnel, Company Internal Intra Websites, Other Websites, Company Reports, and other
literature.

NAME POOJA K. SONI

DIVISION ”C”
ROLL NO 188

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 2

 “SUCCESS CAN NEVER BE OBTAINED WITHOUT VALUABLE GUIDANCE”
“GURU BINA GYAN KAHA SE PAU”

The successful completion of a project requires active participation of many people from the
time of inception of an idea to its implementation, many brain works together and that only
provides fruitful results.

It's a great pleasure and privilege in presenting this Project Report to one and all concerned. My
deepest gratuity to DUDHSAGAR DAIRY, MEHSANA to undergo training at one of the most
reputed co-operative Organization.

First of all, I would like to thank Dr. Krishnaraj M Chudasma, Principal of V.M. Patel Collage of
Management Studies who has gave me the opportunity to undertake this type of research work
which will prove very important for me in future. I would also like to thank Prof, Haresh Oza for
giving me guidance well when required. I am highly indebted to Mr. Jaysukhbhai Solanki,
[Executive (Accounts-dudhsagar dairy)] for bestowing me his kind and gracious facilitation
during the training period. Without his prudent guidance and encouragement the project would
not have been possible.

I would also like to express my sincere thanks to other people at Dudhsagar Dairy, Mehsana for
their invaluable contribution and guidance in making this Project Report.

I also like to thank all those people who have knowingly and unknowingly contributed in one
way or other in making this Project a more completely one with their valuable tips and
suggestion.

I hope that the information incorporated in this project report would be appreciated as I have put
in may be efforts in leaving no stone unturned as I consider it to be true, fair and relevant in its
content and context to the best of my knowledge and ability.

NAME POOJA K. SONI

DIVISION ”C”
ROLL NO 188

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 3

Dudhsagar Dairy is a co-operative dairy. It works under Gujarat Co-operative Milk Marketing
Federation. Dudhsagar Dairy takes milk from many villages around Gujarat and pay for their
milk. Then Dudh Sagar Dairy processes it & pack in different packaging and after supply. Dudh
sagar Dairy’s plan is biggest in the all our Asia.

Dudhsagar dairy which manufactures milk and milk products under the brand name AMUL and
SAGAR has become the first dairy co-operative in the country to implemented enterprise
resource planning (ERP) solution across its establishment.

In this report I have done a research on "ERP SYSTEM WITH RESPECT TO FINANCE &
ACCOUNTS IN DUDHSAGAR DAIRY, MEHSANA”. For preparing the project report, I have
visited the Dudhsagar dairy for 21 days during the suggested duration from 27-10 2008 to 16-
11-2008, to avail the necessary information.
During my overall research work I have done analysis of the ERP SYSTEM implemented at
DUDH SAGAR DAIRY,MEHSANA and according to that some points of analysis are as under:

At DUDH SAGAR DAIRY with the help of ERP SYSTEM it is easier and faster to
get financial data from various departments, the preparation of valuable financial reports
accurately, requirement of HUMAN RESOURCE is reducing, increase in co-ordination among
employees in finance & accounts department, it is become very easier to checkout the past
accounts and their impact on present accounts, The chances of mistakes while preparing
valuable financial reports can be reduced, useful for saving time, eliminates the paper work
Planning and allocation of financial resources become efficient & accurate

Apart from such advantages there are certain limitations of ERP SYSTEM at DUDH SAGAR
DAIRY like The blurring of company boundaries can cause problems in accountability, lines of
responsibility, and employee morale, In FINANCE & ACCOUNTS DEPARTMENT ERP system may be too
complex measured against the actual needs of the DAIRY, ERP SYSTEM at DUDH SAGAR DAIRY is not
useful to record the collection of milk from various co-operative societies and the payment to co-
operative, A small mistake while recording the transaction will affect all other accounts badly which may
result in a very big mistake.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 4

Sr.no. Particulars Page no.

1. Preface 2

2. Acknowledgement 3

3. Executive summary 4

4. What is ERP? 7

5. Overview of ERP SYSTEM 10

6. Development of an ERP 11
system
7. Suppliers of ERP software 14

8. Selection of ERP 17

9. ERP life cycle 18

10. 21
Functional modules of ERP
software

11. 25
Various ERP Process Cycle

12. Technical specification for 39

implementation of ERP
system

13. Findings 40

14. Conclusion 44

15. Bibliography 46

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 5

 INTRODUCTION
 ERP SYSTEM AT DUDHSAGAR DAIRY

 Dudhsagar dairy which manufactures milk and milk products under the brand name
AMUL and SAGAR has become the first dairy co-operative in the country to
implemented enterprise resource planning (ERP) solution across its establishment.

 Dudhsagar dairy has implemented “ORACLE E-BUSINESS SUIT” (version-11.5.9) as

ERP software.

 The main server is implemented at Mehsana head office and it is connected with
different locations i.e. chilling centers Vihar, Kheralu, Harij, Kadi & Hansapur and cattle
feed factory Boriavi & Ubkhal. These all centers are connected through BSNL telephone
leas lines.

 The Dudhsagar dairy has completed 47 years of his success and it is in the northern
part of Gujarat. The dairy has completed task of creating a common integrated
management system under project “SAMANWAY” to create and derive the benefit of
modern technology to make the dairy operation more efficient, thus contributing in
improving the lives of hundreds and thousands of milk producers in the region.

 The “ERP - SAMANVAY” project has covered the implementation of Oracle Financials,
Oracle Purchasing, Oracle Process Manufacturing, Oracle Asset Management, Oracle
Inventory Management and Oracle Order Management modules Of Oracle-E-Business
Suits.

 There are numerous software programs that are being used at different locations
gathering information would often take days. With a uniform ERP solution across all
establishment and place, as expect a huge improvement in account statement by the
year-end as per management.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 6

 This ERP solution package was implemented in 11 month from 4 August 2003 to 2-July,
2004.

 The set up of ERP system is done by TCS “TATA CONSULTANCY SERVICES”, but it
took be few month for the employers to get accustomed to the new system and to
streamline all procedures.

 For each ERP users they have separate login knowing there confidential password for
ERP suits and also separate assessment for higher authorities. In each department one
ERP core team members has support to his staff members for day-to-day transactions.

 Now Dudhsagar Dairy, maintain two ERP instance

(1) Production Instance (SAGAR-8000) for live data
(2) Test Instance (TClone-8025) for old data and testing and training purpose

 Following other software programs are using by Dudhsagar Dairy.

MCBS – Milk Collection and Billing Systems
FoxPro – Transport Payment and accounting program
Tally 9 etc.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 7

 WHAT IS ERP?

ERP (Enterprise Resource planning) covers the technique and concepts employed for the
integrated management of business as a whole, from the viewpoint of the effectiveness use of
management resources, to improve the efficiency of an enterprise. ERP packages are
integrated software packages that support the ERP concepts.

An Enterprise Resource Planning (ERP) system is a software infrastructure embedded with

"best practices", thus providing the best ways to do business based on common business
practices or academic theory. The aim of an ERP is to improve the co-operation and interaction
between all departments in organizations (such as product planning, manufacturing,
purchasing, marketing and customer service department). ERP is a fine expression of the
inseparability of IT and business. As an enabling key technology, as well as being an effective
managerial tool, ERP systems allow companies to integrate at all levels and to utilize important
ERP applications such as supply-chain management, financial and accounting applications,
human resource management and customer relationship management. They represent large,
complex, computerized and integrated systems which can strongly influence long-term business
success.

Enterprise Resource Planning is the latest high end solution, information technology has lent to
business application. The ERP solutions seek to streamline and integrate operation processes
and information flows in the company to synergies the resources of an organization namely
men, material, money and machine through information. Initially implementation of an ERP
package was possible only for very large Multi National Companies and Infrastructure
Companies due to high cost involved. Today many companies in India have gone in for
implementation of ERP and it is expected in the near future that 60% of the companies will be
implementing one or the other ERP packages since this will become a must for gaining
competitive advantage.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 8

Integration is Key to ERP

Integration is an extremely important part to ERP's. ERP's main goal is to integrate data and
processes from all areas of an organization and unify it for easy access and work flow. ERP's
usually accomplish integration by creating one single database that employs multiple software
modules providing different areas of an organization with various business functions.

Although the ideal configuration would be one ERP system for an entire organization, many
larger organizations usually create and ERP system and then build upon the system and
external interface for other stand alone systems which might be more powerful and perform
better in fulfilling an organizations needs. Usually this type of configuration can be time
consuming and does require lots of labor hours.

 ORIGIN OF THE TERM

The initials ERP originated as an extension of MRP (material requirements planning then
manufacturing resource planning). ERP systems now attempt to cover all basic functions of an
enterprise, regardless of the organization’s business or charter. Non-manufacturing businesses,
non-profit organizations and governments now all utilize ERP systems.

To be considered an ERP system, a software package must provide the function of at least two
systems. For example, a software package that provides both payroll and accounting functions
could technically be considered an ERP software package.

However, the term is typically reserved for larger, more broadly based applications. The
introduction of an ERP system to replace two or more independent applications eliminates the
need for external interfaces previously required between systems, and provides additional
benefits that range from standardization and lower maintenance (one system instead of two or
more) to easier and/or greater reporting capabilities (as all data is typically kept in one
database).

Examples of modules in an ERP which formerly would have been stand-alone applications
include: Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM),
Human Resources, Warehouse Management and Decision Support System.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 9

  EVOLUTION OF ENTERPRISE RESOURCE PLANNING

In the ever growing business environment the following demands are placed on the industry:

 Aggressive Cost control initiatives

 Need to analyze costs / revenues on a product or customer basis
 Flexibility to respond to changing business requirements
 More informed management decision making
 Changes in ways of doing business

Difficulty in getting accurate data, timely information and improper interface of the complex
natured business functions have been identified as the hurdles in the growth of any business.
Time and again depending upon the velocity of the growing business needs, one or the other
applications and planning systems have been introduced into the business world for crossing
these hurdles and for achieving the required growth. They are:

 Management Information Systems (MIS)

 Integrated Information Systems (IIS)
 Executive Information Systems (EIS)
 Corporate Information Systems (CIS)
 Enterprise Wide Systems (EWS)
 Material Resource Planning (MRP)
 Manufacturing Resource Planning (MRP II)
 Money Resource Planning (MRP III)

The latest planning tool added to the above list is Enterprise Resource Planning.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 10

 OVERVIEW OF AN ERP SYSTEM

Some organizations — typically those with sufficient in-house IT skills to integrate multiple
software products — choose to implement only portions of an ERP system and develop an
external interface to other ERP or stand-alone systems for their other application needs. For
example, one may choose to use human resource management system from one vendor, and
the financial systems from another, and perform the integration between the systems
themselves.

This is very common in the retail sector[citation needed], where even a mid-sized retailer will
have a discrete Point-of-Sale (POS) product and financials application, then a series of
specialized applications to handle business requirements such as warehouse management,
staff roistering, merchandising and logistics.

Enterprise resource planning (ERP) systems attempt to integrate several data sources and
processes of an organization into a unified system. A typical ERP system will use multiple
components of computer software and hardware to achieve the integration. A key ingredient of
most ERP systems is the use of a unified database to store data for the various system
modules.

The two key components of an ERP system are a common database and a modular software
design. A common database is the system that allows every department of a company to store
and retrieve information in real-time. Using a common database allows information to be more
reliable, accessible, and easily shared. Furthermore, a modular software design is a variety of
programs that can be added on an individual basis to improve the efficiency of the business.
This improves the business by adding functionality, mixing and matching programs from
different vendors, and allowing the company to choose which modules to implement. These
modular software designs link into the common database, so that all of the information between
the departments is accessible and real-time.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 11

 DEVELOPMENT OF AN ERP SYSTEM

Enterprise Resource Planning is a term originally derived from manufacturing resource planning
(MRP II) that followed material requirements planning (MRP). MRP evolved into ERP when
“routings” became a major part of the software architecture and a company’s capacity planning
activity also became a part of the standard software activity.[citation needed] ERP systems
typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and
accounting for a company. Enterprise Resource Planning or ERP software can aid in the control
of many business activities, like sales, marketing, delivery, billing, production, inventory
management, quality management, and human resource management.

ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K problem in
their legacy systems. Many companies took this opportunity to replace their legacy information
systems with ERP systems. This rapid growth in sales was followed by a slump in 1999, at
which time most companies had already implemented their Y2K solution.

ERPs are often incorrectly called back office systems indicating that customers and the general
public are not directly involved.

This is contrasted with front office systems like customer relationship management (CRM)
systems that deal directly with the customers, or the e-Business systems such as e-Commerce,
e-Government, e-Telecom, and e-Finance, or supplier relationship management (SRM)
systems.

ERPs are cross-functional and enterprise wide. All functional departments that are involved in
operations or production are integrated in one system. In addition to manufacturing,
warehousing, logistics, and information technology, this would include accounting, human
resources, marketing, and strategic management.

ERP II means open ERP architecture of components. The older, monolithic ERP systems
became component oriented.[citation needed]

EAS — Enterprise Application Suite is a new name for formerly developed ERP systems which
include (almost) all segments of business, using ordinary Internet browsers as thin clients.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 12

  AIM OF ERP

The aim of ERP is to improve the co-operation and interaction between all departments in
organization (such as product planning, manufacturing, purchasing, marketing & customer
service department)

 NEED FOR ERP

Most organizations across the world have realized that in a rapidly changing environment, it is
impossible to create and maintain a custom designed software package which will cater to all
their requirements and also be completely up-to-date. Realizing the requirement of user
organizations some of the leading software companies have designed Enterprise Resource
Planning software which will offer an integrated software solution to all the functions of an
organization.

 FEATURES OF ERP

 ERP facilitates company-wide Integrated Information System covering all functional areas
like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts,
Human resources, Purchases etc.,
 ERP performs core corporate activities and increases customer service and thereby
augmenting the Corporate Image.
 ERP bridges the information gap across the organization.
 ERP provides for complete integration of Systems not only across the departments in a
company but also across the companies under the same management.
 ERP is the only solution for better Project Management.
 ERP allows automatic introduction of latest technologies like Electronic Fund Transfer
(EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video conferencing, E-
Commerce etc.
 ERP eliminates the most of the business problems like Material shortages, Productivity
enhancements, Customer service, Cash Management, Inventory problems, Quality
problems, Prompt delivery etc.,
 ERP provides business intelligence tools like Decision Support Systems (DSS), Executive
Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for
enabling people to make better decisions and thus improve their business processes

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 13

 SUPPLIERS OF ERP SOFTWARE

There are many numbers of ERP suppliers who are very active in the market. Some of the
companies offering renowned international ERP products include:

 SAP
 Baan
 Microsoft-Dynamic, Navision
 CODA
 D&B
 IBM
 JD Edwards
 Marcarn
 Oracle
 Peoplesoft
 Platinum
 Ramco
 SMI
 Software 2000

 THERE ARE TWO MAIN STUDY IN ERP SYSTEM

As-is study

Prior to the concept of ERP systems, it was not unusual for each department within an
organization to have its own customized computer system. For example, the human resources
(HR) department, the payroll department, and the financial department might all have their own
computer systems.

Typical difficulties involved integration of data from potentially different computer manufacturers
and systems. For example, the HR computer system (often called HRMS or HRIS) would
typically manage employee information while the payroll department would typically calculate
and store paycheck information for each employee, and the financial department would typically
store financial transactions for the organization. Each system would have to integrate using a
predefined set of common data which would be transferred between each computer system.
Any deviation from the data format or the integration schedule often resulted in problems.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 14

To-be study

ERP software, among other things, combined the data of formerly separate applications. This
simplified keeping data in synchronization across the enterprise, it simplified the computer
infrastructure within a large organization, and it standardized and reduced the number of
software specialties required within larger organizations.

 COMPONENTS OF ERP

To enable the easy handling of the system the ERP has been divided into the following Core
subsystems:

 Sales and Marketing

 Master Scheduling
 Material Requirement Planning
 Capacity Requirement Planning
 Bill of Materials
 Purchasing
 Shop floor control
 Accounts Payable/Receivable
 Logistics
 Asset Management
 Financial Accounting

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 15

 VARIOUS FUNCTIONS OF DIFFERENT SUBSYSTEM

 Sales

 SFA(Sales Force Automation)

 Enquiry/Quotations
 Sales order management
 Billing
 Stock transfer
 Exports

 Procurement

 Product/Services management
 Sub-contracting management
 Supplier management

 Materials

 Inventory
 Inventory control
 Warehousing
 Dispatch
 Stock reconciliation

 Financials

 GL(General Ledger)
 AP/AR(Accounts Payable and Receivables)
 Budgeting
 Vouchers and Day Books
 Trial Balance, Balance Sheet and other
 Financial reports

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 16

 Manufacturing

 Bill of material
 Machine allocation
 MRP
 Shop floor management
 Production Capacity planning
 Monthly Production schedules

 Fixed Assets and Costing

 Processing
 Asset Depreciation and Transactions
 Expenses allocation
 Budget/Forecast Analysis
 Multiple cost centres
 Product/Project costing

 Equipment Maintenance

 Maintenance Requisitions
 Service Order management
 Preventive and Breakdown Maintenance

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 17

 GENERALLY IN ERP CONSULTING THERE WILL BE 2 DIFFERENT ARES :

1. Technical
2. Functional

1. Technical consultants will take care about the Hardware, Hardware performance,
Hardware tuning, System administration, Data base, Administration and Development

2. Functional Consultants will involve the Business Process customization into ERP
application components. Here the consultants need the respective business process like
Finance, Controlling, Sales and Distribution, Materials Management, Production
Planning, etc. As per your profile you covered all the areas but, you should concentrate
one end to end business process of a department, or you
can go for a position Manager ERP where ERP implemented. You should
update all ERP modules overview.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 18

 SELECTION OF ERP SYSTEM

Once the BPR is completed the next task is to evaluate and select a suitable package for
implementation. Evaluation of the right ERP package is considered as more crucial step.
Evaluation and selection involves:

 checking whether all functional aspects of the Business are duly covered
 checking whether all the business functions and processes are fully integrated
 checking whether all the latest IT trends are covered
 checking whether the vendor has customizing and implementing capabilities
 checking whether the business can absorb the cost
 checking whether the ROI is optimum

 IMPLEMENTATION OF ERP SYSTEM

Implementing an ERP package has to be done on a phased manner. Step by step method of
implementing will yield a better result than big-bang introduction. The total time required for
successfully implementing an ERP package will be anything between 18 and 24 months

Because of their wide scope of application within a business, ERP software systems are
typically complex and usually impose significant changes on staff work practices. Implementing
ERP software is typically not an “in-house” skill, so even smaller projects are more cost effective
if specialist ERP implementation consultants are employed. The length of time to implement an
ERP system depends on the size of the business, the scope of the change and willingness of
the customer to take ownership for the project. A small project (e.g., a company of less than 100
staff) may be planned and delivered within 3-9 months; however, a large, multi-site or multi-
country implementation may take years.

To implement ERP systems, companies often seek the help of an ERP vendor or of third-party
consulting companies. These firms typically provide three areas of professional services:
consulting, customization and support, data migration is one of the most important activities in
determining the success of an ERP implementation. Since many decisions must be made

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 19

before migration, a significant amount of planning must occur. Unfortunately, data migration is
the last activity before the production phase of an ERP implementation, and therefore receives
minimal attention due to time constraints.

 ERP LIFE CYCLE

ERP lifecycle is in which highlights the different stages in implementation of An ERP.

There are different stages of the ERP implementation that are as give below:

Pre evaluation Screening

Evaluation Package

Project Planning

Gap Analysis

Re engineering

Team training

Testing

Post implementation
V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 20
1. Pre evaluation Screening

Once the company has decided to go for the ERP system, the search for the package must
start as there are hundreds of packages it is always better to do a through and detailed
evaluation of a small number of packages, than doing analysis of dozens of packages. This
stage will be useful in eliminating those packages that are not suitable for the business process.

2. Evaluation Package

This stage is considered an important phases of the ERP implementation, as the package that
one selects will decide the success or failure of the project. Implementation of an ERP involves
huge investments and it is not easy to switch between different packages, so the right thing is
‘do it right the first time’. Once the packages to be evaluated are identified, the company needs
to develop selection criteria that permit the evaluation of all the available packages on the same
scale.

3. Project Planning

This is the phase that designs the implementation process. It is in this phase that the details of
how to go about the implementation are decided. Time schedules deadlines, etc for the project
are arrived at. The plan is developed, roles are identified and responsibilities are assigned. It
will also decide when to begin the project, how to do it and it completion. A committee by the
team leaders of each implementation group usually does such a planning.

4. GAP analysis

This is considered the most crucial phase for the success of ERP implementation. This is the
process through which the companies create a complete model of where they are now, and in
which direction will they opt in the future. It has been estimated that even the best packages will
only meet 80% of the company’s requirements. The remaining 20% presents problematic issues
for the company’s reengineering.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 21

5. Reengineering

It is in this phase that human factors are taken into consideration. While every implementation is
going to involve a significant change in number of employees and their job responsibilities, as
the process becomes more automated and efficient, it is best to treat ERP as an investment as
well as cost cutting measure.

6. Team training

Training is also an important phase in the implementation, which takes place along with the
process of implementation. This is the phase where the company trains its employees to
implement and later, run the system. Thus, it is vital for the company to choose the right
employee who has the right attitude- people who are willing to change, learn new things and are
not afraid of technology and a good functional knowledge.

7. Testing

This is the phase where one tries to break the system. One has reached a point where the
company is testing the real case scenarios. The system is configured and now you must come
up with extreme cases like system overloads, multiple users logging on at the same time, users
entering invalid data, hackers trying to access restricted areas and so on. This phase is
performed to find the weak link so that it can be rectified before its implementation.

8. Post implementation

One the implementation is over, the vendor and the hired consultants will go. To reap the fruit of
the implementation it is very important that the system has wide acceptance. There should be
enough employees who are trained to handle problems those crops up time to time. The system
must be updated with the change in technology. The post implementation will need a different
set of roles and skills than those with less integrated kind of systems.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 22

However, an organization can get the maximum value of these inputs if it successfully adopts
and effectively uses the system.

 DUDH SAGAR DAIRY HAS IMPLEMENTED FOLLOWING MODULES OF

ORACLE E-BUSINESS SUIT VERSION 11.5.9

FUNCTIONAL MODULES OF ERP SOFTWARE

ERP software is made up of many software modules. Each ERP software module mimics a major
functional area of an organization. Common ERP modules include modules for product
planning, parts and material purchasing, inventory control, product distribution, order tracking,
finance, accounting, marketing, and HR. Organizations often selectively implement the ERP
modules that are both economically and technically feasible.

(1) Oracle Purchasing

(2) Oracle Inventory (Stock)
(3) Oracle Process Manufacturing (Production)
(4) Oracle Enterprise Asset Management (EAM) (for asset maintenance)
(5) Oracle Order Management (sales)
(6) Oracle Financial for Finance & Accounts

(a) General Ledger

(b) Account Payable (Creditors)
(c) Account Receivables (Debtors)
(d) Cash Management
(e) Fixed Assets

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 23

 (1) Oracle Purchasing

Oracle Purchase module streamlines procurement of required raw materials. It automates the
processes of identifying potential suppliers, negotiating price, awarding purchase order to the
supplier, and billing processes. Purchase module is tightly integrated with the inventory control
and production planning modules. Purchasing module is often integrated with supply chain
management software.

Oracle Purchase aims at making available the required materials of the right quality, in the right
quantity, at the right time and at the right price, for the smooth functioning of the organization. All
purchasing and subcontracting activities such as inviting quotations, supplier evaluation, placing
purchase order, order scheduling and billing are covered in this module. Order tracking is made
easy for the purchase department by the various reports and MIS that are available in Purchase
module. Import of goods is also handled by the system. Oracle Purchase is integrated with
Inventory, Finance & Production Planning.

(2) Oracle Inventory (Stock)

Oracle Inventory module facilitates processes of maintaining the appropriate level of stock in a
warehouse. The activities of inventory control involves in identifying inventory requirements,
setting targets, providing replenishment techniques and options, monitoring item usages,
reconciling the inventory balances, and reporting inventory status. Integration of inventory
control module with sales, purchase, finance modules allows ERP systems to generate vigilant
executive level reports.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 24

Oracle inventory covers all stock related functions of an organization. Stock management and
valuation activities, which form the backbone of any organization generally, take a lot of time
and resources. Inventory handles all the store activities of issues, dispatches, receipts and
quality control. The lot wise stock of each item is maintained and various MIS are provided for
tracking stock movement. Inventory is integrated with Sales, Purchase, Finance, Customer
Care, Equipment Maintenance, Production Planning and Production.

(3) Oracle Process Manufacturing (Production)

In the process of evolution of manufacturing requirements planning (MRP-II) into ERP, while
vendors have developed more robust software for production planning, consulting firms have
accumulated vast knowledge of implementing production planning module. Production planning
optimizes the utilization of manufacturing capacity, parts, components and material resources
using historical production data and sales forecasting.

Oracle Production Planning helps an organization plan production with the optimum utilization of
all available resources. Material Requirement Planning is done based on the production advice
generated by the sales department. Feasibility of production is evaluated using details like raw
material availability and procurement time, machine availability and capacity. A production
schedule is generated for all machines where the scheduling is done in an optimized fashion
based on the priorities of production. Production Planning is integrated with Sales, Inventory,
and Purchase & Production.

(4) Oracle Enterprise Asset Management (EAM)(Engineering)

Oracle Enterprise asset management helps in maintaining the fixed assets of an organization.
Contracts with service providers can be made after which service requisitions and job orders
are issued. The periodic as well as unscheduled maintenance details of machinery can be
recorded. Maintenance bills can also be generated. Equipment Maintenance provides reports,
which help in analyzing the data pertaining to maintenance activities of the machinery. Oracle
Equipment Maintenance is integrated with Assets, Inventory and Finance.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 25

 (5) Oracle Order Management (Sales)

Revenues from sales are live blood for commercial organizations. Oracle Sales module
implements functions of order placement, order scheduling, shipping and invoicing. Sales
module is closely integrated with organizations' ecommerce websites. Many ERP vendors offer
online storefront as part of the sales module.

Sales is the most important and essential function for the existence of an organization. Oracle
Sales handle all the activities for domestic and export sales of an organization. The customer
and product database is maintained. Sales Force Automation is an important feature of Oracle
Sales. Capturing enquiries, order placement, order scheduling and then dispatching and
invoicing form the broad steps of the sales cycle. Stock transfer between warehouses is also
covered. Besides all this, important analysis reports are provided to guide decision making and
strategy planning. Export documents are also generated. Oracle Sales is integrated with
Inventory, Production Planning and Finance.

(6) Oracle Financial for Finance & Accounts

a) General ledger
b) Account payable(creditors)
c) Account receivables(debtors)
d) Cash management
e) Fixed assets

Both for-profit organizations and non-profit organizations benefit from the implementation of
ERP financial module. The financial module is the core of many ERP software systems. It can

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 26

gather financial data from various functional departments, and generates valuable financial
reports such balance sheet, general ledger, trail balance, and quarterly financial statements.

Oracle Finance streamlines the financial operations of a company. Chart of groups and chart of
accounts are defined here. All vouchers related to journal entries, sales, purchase, receipt and
payment are recorded. Using Oracle Finance a company can generate balance sheet, general
ledger, trial balance, profit & loss statement and daybooks besides many other transactional
reports. Oracle Finance is integrated with Sales, Purchase, Inventory, Costing, Customer Care
and Equipment Maintenance.

 VARIOUS ERP PROCESS CYCLE

(1) Procure to pay

(2) Quote to cash

(3) Storage to distribution

(4) Plan to produce

(5) Works to pay

(6) Accounting to profit

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 27

(1) Procure to pay

Creation of PO

PO Approval as per authority

Printing of PO

Receipts entry

Inspection Entry

Acceptance / Rejection

Entry of supplier invoice

Match Invoice with receipt / PO

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 28

 Approval of payments

Payment - Cheque printing

Variance booking

STD cost updating

Closing of PO

FEATURES & HIGHLIGHTS:

 Highly parameterized – to reduce data entry

 Streamlines purchase and process cycles
 Detailed Supplier/Subcontractor/Service Provider database
 Capturing materials requirement
 Automatic firing of purchase requisitions based on MRS
 Quotations from various suppliers
 Quotation validity
 MIS for vendor evaluation based on quality, price & delivery time
 Subcontracting – generation of process orders
 Multiple indents for multiple items in a single PO
 Purchase order processing for
– Raw Materials
– Sub-contracted items
– Bought out items
– Non-inventory items

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 29

 – Fixed Assets
 Purchase order entry with item details and other details like taxes, discounts,
extra
Charges like freight, P&F, octroi etc.
 Flexibility to generate Purchase Order in domestic and foreign currency
 Recording Payment terms in PO
 Excise consideration in Purchase and Process Orders
 PO authorization
 PO amendments with complete amendment history
 Order cancellation and order closing
 Multiple delivery schedules
 Quality inspection of goods
 Advance adjustments
 Purchase bill with updation of GL and purchase book
 Service contracts, Service Bills, Service indents and PO
 Value based approval of indents
 Bill of Entry
 Complete import functionality with handling of custom details - Purchase Bill for
import, Excise consideration in imports
 Reports for Order tracking for complete control on the procurement cycle
 SCM integration through Internet – posting quotation on web by suppliers.
 Importing quotations into ERP after validations

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 30

(2) Quote to cash

Sales Quotations

Approval of quotations

Creation of Sales Order

Confirmation of Order

Printing of Order

Allocations as per the Stock

Picking list generation

Picking list printing

Stock delegations

Lot confirmations

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 31

 Delivery

Shipment advice

Invoice generations

Invoice printing

AR booking

Cheque entry

Sales booking

Revenue updations

Sales commission/bonus updations

Sales closing

Revenue updations

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 32

FEATURES & HIGHLIGHTS:

 Handles pre-sales and sales activities of the organization

 Complete stock-to-dock tracking of sales order processing cycle
 Sales Force Automation – Prospect tracking through various stages, detailed
Competitor products information location-wise, scheduling marketing executives’
Visits, tracking expenses
 Marketing surveys for estimating demand for various products to prepare an
Effective marketing strategy
 Detailed Customers/ Business Partners/ Dealers database including bank details,
TDS details, contact details and credit limit
 Target setting for executives
 Association of customers to Marketing Executives and Business Partners for
Tracking
 Flexibility to define customer-specific prices for products and reference to customer
Part no.
 Multiple dispatch location for customers/dealers
 Product Definition - up to 30 character user-defined product code, Product
Category, group and subgroup for classification of products
 Complete export documentation for export oriented companies
 Excise details (chapter no. associated with excisable products)
 Enquiries from potential and existing customers
 Quotations and amendments to quotations with complete history
 Analyzing lost jobs
 Different types of orders can be generated to suit varied needs of customers
 Order entry for direct/scheduled/open/D3/sample orders with details for Dealers,
Incentive % and competition
 Order calculation based on price offered, discounts (line and total), excise, taxes,
Freight etc.
 Letter of credit details for association with sales orders

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 33

 Order amendment history
 Authorization of orders and invoices
 Order scheduling over a period of time and tracking delivery schedule
 Order tracking through status and transaction reports
 Order closing/cancellation
 Generation of production advice to plan for production based on sales orders
 Order processing based on MRP
 Preparation of dispatch advice
 Multiple dispatches against single Sales Order
 Invoice generation with advance adjustments – sales voucher automatically
Generated in Finance
 Tracking sales returns
 Rejection invoice for rejections made against purchases with excise consideration
 MIS for analyzing sales trends to project and forecast sales
 Stock Transfer between warehouses for multi-locational companies
 Service invoice for services given to customers
 Variance reports
 Enables top view - consolidation of sales data for all child companies

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 34

(3)Storage to distribution

New receipt

Matching with purchase order

Receipt of inventory

Inspection

Accept/reject

Deliver (if rejected return to vendor)

OPM inventory

OPM inventory control

Transact process purchase order

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 35
 Manual lot allocate

Transact

Closing of storage to distribution

FEATURES & HIGHLIGHTS:

 Online status of item quantity in terms of on-hand, on-hand, available, reserved,

ordered, to order, rejected, defective and rework able quantities.
 Complete excise functionality and generation of excise registers
 Up to 30 Character alphanumeric stock code
 Multiple levels of classification of items
 Excisable items – Definition and Chapter allocation
 Multiple units of measurement
 Alternate items for Production Planning
 Handling of non-stock low value items like stationery
 Lot wise tracking of inventory at shop floor and main stores
 Stock Valuation – LIFO/FIFO/weighted average
 Material Requisition from different requirement areas
 Purchasing and subcontracting
 Receiving material against sales order processing, material requirement,

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 36

 Subcontracting, gate pass and production requisition
 Landed Rate of Items
 Quality Control based on QC parameters
 Handling Material Rejections
 Rejected Material dispatch to subcontractors
 Linking of GRN to PO and Invoice
 Gate pass – returnable/non returnable
 Cenvat claim for capital goods
 Analysis which help in maintaining optimum stock levels
 Physical verification of stock
 Reallocation of rework able stock
 Multiple warehouses/branches/regional offices
 Stock transfer – receipts from other warehouse
 Consolidation of all warehouses
 Consolidation at any level of company hierarchy

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 37

(4)Plan to produce

Creation of the Production Order

Approval of the production order

Release of the production order

Issue of the Raw materials

Receipt the Finished Goods

Complete the Production order

FEATURES & HIGHLIGHTS:

 Process definition with inputs, outputs, by-products and overheads

 Definition of Bill of Material for all products up to any number of levels
 Planning based on customer wise production advice and sales forecast

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 38

 Material requirement planning: MRP based on machine capacity and availability,
machine efficiency, raw material availability, lead time - giving feasible quantity
for production
 Production plan for machines with optimum utilization of all available resources
like raw materials and machines
 Option to revoke production plan to change input parameters/ production priority/
quantity using fresh production advice
 Generation of production schedule for machines detailing inputs and outputs
 Analysis of machine efficiency and utilization
 Automatic generation of MRS and purchase requisitions on finalization of plan
 Generation of process requisition for processes that have to be subcontracted
 Reserving quantity for production
 Automatic generation of job orders for production
 Option to make daily plans for production

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 39

(5)Work to pay

Log In Engineering

EAM > Work Order

Release Work Order

Work order transaction>material
transaction

12) WORK ORDER

TRANSACTION > MATERIAL
TRANSACTION

Resource Transaction

Work order completion

Close work order

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 40

 Make the invoice

Make the payment

FEATURES & HIGHLIGHTS:

 Database of service providers and contracts with them

 Recording of Maintenance requisitions
 Generation of job orders based on quotations sent by service providers
 Maintenance schedule for monthly and annual maintenance
 Generation of maintenance bill with updation in Finance
 Tracking of warranty activities, claims, equipment utilization and breakdown
maintenance
 Categorization of maintenance activities and assigning priority
 Unplanned maintenance work and besides schedule maintenance

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 41

(6)Accounting to profit

Define Accounting Policy

Define Chart of Accounts

Define fiscal calendar

and currency

currency

Define Process wise

document sequence

currency

Define Process wise

accounts mapping (Default
accounts)

currency

Define Inventory
Organizations
V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 42
and Inventory Locations

currency
 Monthly close sub-module

Import data in general ledger for the

month, post the data and generate trial
balance

FEATURES & HIGHLIGHTS:

 Caters to both national and international markets: user-defined formats for number,
currency and date
 Consolidated reports for any level of the company hierarchy
 Drill down reports to reach up to the voucher level
 Up to 7 levels of groups with up to 999 groups at each level
 28 system defined groups
 Entering pending voucher details at the time of accounts creation
 Definition of subsidiary ledgers
 User definable precision for amounts (no. of digits after decimal)
 Flexibility of Indian/American number system
 Printing of amount in words in any language
 Multi-branch accounting
 Allocation of income and expenses to cost centers
 Department wise budget allocation for all accounts
 Online and batch posting of vouchers by authorized users
 Defining narration for vouchers for ease of data entry
 Flexible voucher numbering – daily, weekly, monthly, yearly and carry forward
 Transaction limit for vouchers
 Up to 999 entries per voucher
 Transactions in multiple currencies

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 43

 Conversion rates on selling/buying price
 Adjustments of exchange fluctuations
 Fiscal year definition
 Enterable sales/purchase voucher till sales/purchase modules are live
 Receipt/Payment voucher
- Against invoice/bill
- On account
- New reference – against orders
- advance adjustments
 Complete TDS functionality
 TDS monitoring through integrated inputs from purchase and payments
 Debit notes/credit notes
- On account
- New reference – against order
- Against invoices/bills
 Book closing
 Period closing
 Financial year closing
- All accounts closing
- Bank and cash closing
- Transfer without closing – ability to work in 2 financial years
Simultaneously

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 44

 TECHNICAL SPECIFICATION FOR IMPLEMENTATION OF ERP SYSTEM AT
DUDHSAGAR DAIRY,MEHSANA

 Dudhsagar dairy has implemented ORACLE-E-BUSINESS SUIT(VERSION-

11.5.9) as ERP SOFTWARE.

 Dudhsagar dairy uses Linux operating system for ERP SOFTWARE.

 Dudhsagar dairy uses following hardware for ERP SOFTWARE.

IBM X445/X235

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 45

 ADVANTAGES OF ERP SYSTEM IN FINANCE & ACCOUNTS DEPARTMENT
OF DUDHSAGAR DAIRY..

 At DUDH SAGAR DAIRY with the help of ERP SYSTEM it is easier and faster to
get financial data from various departments like purchase department, sales
department, store department, production department and it generates valuable
financial reports such balance sheet, general ledger, trail balance, and quarterly
financial statements.

 With the help of ERP SYSTEM at DUDH SAGAR DAIRY, all vouchers related to
journal entries, sales, purchase, receipt and payment are recorded at finance &
accounts department.

 By using ERP SYSTEM at DUDH SAGAR DAIRY, the preparation of valuable

financial reports such balance sheet, general ledger, trail balance, and quarterly
financial statements become accurate.

 After implementation of ERP SYSTEM at DUDH SAGAR DAIRY, the requirement

of HUMAN RESOURCE is reducing.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 46

 Ex. Before implementation of ERP SYSTEM at DUDH SAGAR DAIRY there are
21 employees in internal audit department but after implementation of ERP
SYSTEM at DUDH SAGAR DAIRY, there are only 4 employees in internal audit
department.

 With the help of ERP SYSTEM at DUDH SAGAR DAIRY, there is increase in
co-ordination among employees in finance & accounts department.

 After implementation of ERP SYSTEM at DUDH SAGAR DAIRY, it is become

very easier to checkout the past accounts and their impact on present accounts.

 The chances of mistakes while preparing valuable financial reports such balance
sheet, general ledger, trail balance, and quarterly financial statements can be
reduced with the help of ERP SYSTEM at DUDH SAGAR DAIRY

 ERP SYSTEM at DUDH SAGAR DAIRY is very useful for saving time.

 The use of ERP SYSTEM at DUDH SAGAR DAIRY eliminates the paper work.

 Other departments of DUDH SAGAR DAIRY can share all information regarding
receipt & payment through the ERP SYSTEM.

 Planning and allocation of financial resources become efficient & accurate with
the help of ERP SYSTEM at DUDH SAGAR DAIRY

 With the help of ERP SYSTEM at DUDH SAGAR DAIRY TDS monitoring through
integrated inputs from purchase and payments become easier.

 ERP SYSTEM performs Other function involves taxation .i.e. income tax
payment, TDS, sales tax & other taxes. It also takes care of benefit schemes for
employees like PF, Gratuity and Insurance etc.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 47

 Department wise budget allocation for all accounts efficiently by using ERP
SYSTEM at DUDH SAGAR DAIRY

 Profitable Allocation of income and expenses to cost centers after

implementation of ERP SYSTEM at DUDH SAGAR DAIRY

 LIMITATIONS OF ERP SYSTEM IN FINANCE & ACCOUNTS DEPARTMENT

OF DUDHSAGAR DAIRY..

 As Once a ERP SYSTEM is established At DUDH SAGAR DAIRY, switching

costs are very high.(reducing flexibility and strategic control at the corporate
level).

 The blurring of company boundaries can cause problems in accountability,

lines of responsibility, and employee morale.

 At DUDH SAGAR DAIRY resistance in sharing sensitive internal information

between departments can reduce the effectiveness of the software.

 In FINANCE & ACCOUNTS DEPARTMENT ERP system may be too

complex measured against the actual needs of the DAIRY.

 ERP SYSTEM at DUDH SAGAR DAIRY is not useful to record the collection
of milk from various co-operative societies and the payment to co-operative
societies so DUDH SAGAR DAIRY has to use MCBS Software(Milk
Collection & billing system)

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 48

  ERP SYSTEM at DUDH SAGAR is not useful to maintain the accounts of
farmers of various co-operative societies, and DUDH SAGAR DAIRY has to
use TALLY Software.

 Though the employees from TCS provide training to employees of DUDH

SAGAR DAIRY regarding ERP SYSTEM for one year but still the employees
are not well aware about the uses of ERP SYSTEM and they are often take
help of their colleagues and take advice from their senior employees which
creates disturbance while recording various important transactions.

 A small mistake while recording the transaction will affect all other accounts
badly which may result in a very big mistake.

 DUDH SAGAR DAIRY spend about Rs. 4 crore for implementation of ERP
SYSTEM but it is not proved more beneficial for DUDH SAGAR DAIRY as
compare to cost.

 CERTAIN LIMITATIONS WHICH I HAVE TO FACE WHILE PREPARING THE

PROJECT REPORT

 The limiting factor of my research was the duration of the time; I could not
get over all information regarding the ERP SYSTEM implemented at
dudhsagar dairy within 21 days.

 Sometimes the employees are busy with their own work so they try to
avoid explaining the system and due to that I have to wait for longer time.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 49

 IMPLEMENTATION OF ERP SYSTEM AT DUDH SAGAR DAIRY

INTEGRATION OF PROCUREMENT, MANUFACTURING (DAIRY PLANT) AND

ORDER MANAGEMENT TO SIGNIFICANTLY REDUCE TIME TO MARKET AND
PRODUCTION CYCLE TIME TO MEET INCREASED DEMANDS.

BUSINESS DRIVERS BEST PRACTICES

MAJOR ACCOMPLISHMENTS
 Optimize Returns to  Big bang approach
 First ofstakeholders-farmer
its kind of implementation
families in an co-
 Proven implementation methodology
operative based dairy industry
 To be aligned with the industry
 Enabling change management across
 Successful
best integration
practices with business critical
the various layers in the organization
legacy applications for milk procurement and
 Easy
society availability of info across
transactions  Obtaining high level of commitment
the organization
from project sponsor
 Integration with customer application for RESULTS
order management
 Successful implementation of
 Implementation of oracle apps at main dairy oracle applications 11.5.9
plant, 5 remotely located chilling centers and covering oracle financials, order
2 cattle feed plants management, purchasing, OPM
V.M.PATEL COLLEGE OF MANAGEMENT 50
 Transformation of organization from low andSTUDIES
EAM with online interfaces
computer literacy to use of state-of –the art to business critical custom
technology applications
 The limiting factor of my visit was the duration of
the time; I could not get over all information regarding the firm. But
anyhow I have prepared the report on whatever the information I got.

It is a good experience to conduct such project and it will prove

beneficial for me in my future career and again I would like to thank all
the people who knowingly or unknowingly help me for complete the
research work regarding the study of ERP SYSTEM at DUDH SAGAR
DAIRY.

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 51

 WEBSITES

www.intrasagar.com

www.tcs.com

www.erpwire.com

www.management-hub.com

www.ebizframe.com

 MAGAZINE

Business Today

 BOOK

Getting more out of ERP

(By David Hendrickson)

 MATERIAL provided by DUDH SAGAR DAIRY

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 52

V.M.PATEL COLLEGE OF MANAGEMENT STUDIES 53