You Never Chicken Out With IT

With IT, fighting the bird flu virus may be a tad easier!

Rather than being a great crisis management tool, IT can
actually come in handy at pre-empting its spread, rushing vaccines on time,
saving thousands of chickens and huge investments. Panicky poultry businesses
better take technology seriously, like Suguna did.

Suguna Poultry Farm spread across eight states in the
country, took IT seriously for 12 years. The benefits were in terms of
productivity increase, greater and better networking, sustained business growth,
and now, peace of mind.

MD, B Soundararajan, remains as cool as cucumber, even as
culling operations pick up speed elsewhere and chicken rates crash. He has
substantial business interest in Maharashtra, India's first bird flu affected
state. According to industry sources 30% market share and a farm located just
120 km from ground zero are reasons enough for concern. But IT has, to an extent
at least, alleviated all fears.

Here's how: The company's Oracle ERP system captures
everything from production rates to mortality figures. Mortality includes
natural deaths and Suguna has a percentage for that-for every 1000 chicks, one
death per day is okay-anything beyond 0.1% is warning bells. This is then
captured as a separate report and communicated back to the corporate office
where scientists analyze the reasons for the deaths and therefore, priorities
are set. In case of medication or vaccination requirements, the consignment
reaches the destination the very next morning of receiving the report.

The enormity of the task can be appreciated when one
considers Suguna's geographical spread-its last farm in the south of the country
is located at Kanyakumari; the furthest is at Siliguri in West Bengal. It has
11,000 farmers, 100 plus production centers and 2000 customers. Mining data from
everywhere would have been a logistical nightmare without technology aid. As a
routine now, all data and reports land up at the corporate office in Coimbatore
every evening at 7. So if a vaccination program is to be carried out and has
been ignored by farmers, the system shoots off an alert.

Soundararajan's investment of over a decade has therefore
led to greater customer satisfaction and building of trust, key elements in any
business, particularly the poultry industry now, torn as it is between bird flu
worries, government charges and industry counter charges.

It is also heartening to see a first generation
businessman, with only a school level education, believing in IT as an integral
part of his business strategy and growth. Started in 1984, Suguna Poultry had a
turnover that exceeded Rs 813 crore in 2004-05.  In the first half of 2005-06,
Suguna had sales of Rs 508 crore-an increase of 41% growth over the
corresponding period previous year. It has aggressive targets still. “By 2010,
we should have 30,000 farmers, around 8,000 employees (it has 3,000 now), and
5,000 customers. Our turnover is likely to reach Rs. 3,000 cr,” the MD says.

IT, he hopes, will help him here; lend a hand in reaching
his business goals. So from a homegrown ERP, the company has now switched to an
Oracle application last year. It had chosen IBM to implement Oracle e-Business
Suite, the implementation being based on IBM POWER 5 servers that is expected to
support Suguna's growth plans by driving business efficiencies, improving
employee productivity, and managing its growth.

IBM Business Consulting Services is implementing Oracle
applications at nine divisions at Suguna across seven states in India. The
implementation is likely to become the first of its kind in the Indian poultry
farming sector. Involving Suguna's corporate office, seven regional offices and
74 branch offices, six grandparent poultry farms, 126 breeder farms, 35
hatcheries, 10,000 broiler farms, 30 feed mills, and five transportation
offices. Modules being implemented include ERP, advanced pricing, enterprise
asset management, self-service work request, incentive compensation, advanced
supply chain planning, and constraint based optimization. On completion, the
solution will support Suguna's entire integrated poultry business, from the
management of the poultry breeding process right up to the packaging and
marketing of the end product.

Managing its processes at an uptime of more than 99% is
necessary because Suguna's offices run 24/7. “During the day, the chicken
production happens. At night, dispatch functions take place. There is therefore
just too much dependability on IT,” Soundararajan tells. Technology provides him
with a good network, as his 100 plus locations are now connected with V-Sat or
leased line. His IT department maintains all records of his 11,000 farmers, and
a team of 18 manages the database. It is again not an easy task to monitor
manually because every week, the feed and the chicks have to be dispatched; and
medication schedules are to be managed.

The MD's expectations in terms of productivity benefits
have also frutified, as the company has now been able to classify the best and
poor performers. Production performances are easy to monitor and the customer
accounts are managed deftly-the credit checks, sales analysis etc.-on a
day-to-day basis. “My expectation was in terms of cost control too. IT is
helping us by not allowing any expenditure or production cost deviation,” he
says.

Technology as a great employee control tool has also been
realized by the company, which is currently hiring at a pace of 700 hands every
year. And with the right push from the top, more and more employees are
leveraging IT. Around a thousand of Suguna's 3,000 employees now access IT to
run operations smoothly. A CRM deployment is likely to happen soon to strengthen
customer relationships even more and Soundararajan has no reservations about
putting his money in the right places for future needs. That will include an
innovative blend of streamlined business processes and enhanced technology
infrastructure.

Goutam Das, Bangalore


goutamd@cybermedia.co.in