Transforming the Supply Chain for the Digital Economy

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You read about companies undergoing “digital transformation” all the time. Mostly this means that companies are taking digital applications from the back office to the front lines and using digitized processes in marketing, sales, procurement, and other functions to gain competitive advantage.

For Glory Global Solutions, the digital transformation that it is now underway is the real thing. The company is undergoing what we at Tata Consultancy Services, its technology partner, believe is one of the most complex and sweeping transformation of any company we have served. When the transformation is complete, dozens of systems and processes will have been automated and the company will have consolidated multiple supply chain systems on to a single enterprise resource planning (ERP) system of this magnitude and the transformation of functional and operating unit processes.

For most of its life, Glory Ltd, a maker of cash management solutions (financial back-office technology such as cash counting and sorting machines as well as other equipment used in banking, gaming, and retail), had concentrated on its home market in Japan. Starting in the 1990s, with the purchase of a German subsidiary, Glory Ltd began to pursue a global strategy. There followed deals for subsidiaries in Italy and the Philippines and in 2012 Glory Global Solutions was formed to focus on non-domestic markets. Glory Global now has offices in more than 25 countries, with sales operations in more than 150 countries.

Supply chain complexity grew dramatically as the business expanded. Each subsidiary had its own suppliers, warehouses, and supply chain methods—plus different manufacturing, sales, HR, and accounting systems. Many of the systems were essentially manual—based on spreadsheets. This tower of babel was literally making it difficult for the company to operate effectively. The company even faced challenges rolling up its monthly numbers.

Glory Global decided to move aggressively to modernize and consolidate supply chain management and other critical systems. When the project is complete—in 2018—the entire IT operation will be on cloud services, shifting all of IT from a capital expense to an operating expense and reducing overall legacy IT costs by 50 percent.

TCS is helping Glory Global manage a hybrid cloud system—with some in-house systems and, increasingly, cloud-based resources. TCS and Glory Global laid out a 27-month roadmap to completely digitize the supply chain function. As a first step, supply chain processes are being harmonized in-house and will then transfer to a public cloud. Existing systems will be consolidated and manual processes will be digitized, creating a unified supply chain ecosystem. When the transition is complete, Glory Global will have uniform supply chain management processes across the organization, enabling the company to pursue greater efficiency across all operations. The entire supply chain system will be based on Oracle’s Supply Chain Management Cloud.

Across the company, most legacy applications including finance, transportation management, customer relationship, sales management --as well as the all-important field services system—are being moved to cloud services. The field services team is getting new call dispatch and mobile-based applications to increase responsiveness and efficiency of the team. All of these functions will be based on a mixture of SaaS (Software as a Service) and IaaS (Infrastructure as a Service) hosted applications. Altogether the company plans on moving more than 30 different processes to the cloud, many of which will be automated for the first time.

The expected payoff includes shorter procurement and logistics cycles. The company expects to reduce purchase cycle time by 45 percent and cut the time between lead generation and sale by 51 percent. Glory Global predicts that it will be able to reduce the time to close monthly books from six days to three and, for the first time, have an effective forecasting platform. Now, the company will be able to operate as one single entity. Supply chain benefits will include reduced stockouts, lower direct labor costs, reduced material and distribution spend, and the opportunity to reduce the physical assets (warehouses and trucks, for example) owned by the company.

Biggest Lessons Learned

The biggest lesson learned during “Future Enterprise” —what we call the effort—is that we could never do this without cloud-based applications and services. The cloud is allowing us to move rapidly and to gain access to functionality that Glory Global or other customers could not build in-house in a reasonable time or at a reasonable cost. The faster a company can move critical business applications to the cloud, the sooner they can gain greater competitive advantage and the greater the benefits will be.

To be sure, cloud adoption remains a complex challenge, especially for large enterprises like Glory Global Solutions. The payoff, however, is worth it. At the end of the transformation, Glory Global will be a unified agile enterprise and can respond intelligently to unexpected challenges and opportunities. With cloud-based IT services, whenever the company needs to change direction or jump on a new opportunity, it knows that it can find the digital resources to support the new strategy or initiative.

Through this work with Glory Global, TCS has developed highly effective strategies for speeding transitions to cloud and overcoming the potential pitfalls to success. First, we learned more about plugging functionality gaps. Even the best prefabricated SaaS solutions can’t anticipate every business’s needs. To fill these holes, we turn to PaaS (platform as a service) options that can smooth cloud deployments. Our PaaS vendor, Oracle, enables systems integrators like us to seamlessly plug in functions as needed, making it appear as a single system to both the IT department and the end user business.

We are also learning more about the power of automation tools to speed transformation. TCS has built proprietary frameworks and tools such as TCS Orbit to help migrate Glory Global’s legacy applications. Orbit allows us to quickly standardize processes in manufacturing, finance, planning, etc. Another tool, TCS eMpowerbiz allows us to monitor critical change management activities within IT. To speed up the transition of legacy applications, Global Glory is using TCS pre-built adapters, as well.

Sunder Singh is Global Head of TCS’ Oracle Practice, and Alex Rammal is CIO, Glory Global Solutions

 

 

 

 

 

 

 

 

 

 

 

 

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