Delhi Assam Roadways Corporation Limited (DARCL) is one of the largest private sector transport and logistics company in India. Operating and managing over 5,000 independently-owned trucks and trailers, in addition to its own fleet, DARCL provides end to end multimodal transportation services to its customers.

Facing unrelenting pressure to reduce costs and improve efficiency in the already low-margin transport and logistics industry (in India, logistics costs are nearly 14 percent of the GDP, compared to certain western countries, where they amount to around 8 percent of the GDP), DARCL decided to increase its speed of innovation and continuously assess and re-define its business model so as to maintain leadership. In addition to this, they were facing several issues like scalability, maintenance, inadequate capabilities to support tighter controls etc with their home-grown, Java-based ERP solution.

It is then that they decided to replace their existing solution with the SAP ERP Central Component (SAP ECC) 6.0 along with SAP NetWeaver CPU, SAP NetWeaver PI and SAP Payroll to successfully integrate all departments onto the SAP NetWeaver platform.

Why SAP?

Puneet Agarwal, director, DARCL, says, "The main reason why we went in for the SAP solution was that most of our customers too were using SAP solutions, so we clearly saw opportunities for integration with our customers’ systems, thus, allowing us to improve our value proposition to them and move higher up the value chain."

SAP also became a natural choice for them given its expertise and in-depth understanding of the ERP space.

DARCL did consider Oracle’s offerings also in addition to SAP, but experts at the company held the view that as Oracle has acquired multiple products lately and is still in the process of rationalising and standardising everything, it would be a relatively less complex IT landscape if they went ahead with SAP’s offering.

Benefits

DARCL has realised several benefits after integrating all its departments viz. finance, procurement, human resources, sales, business intelligence and logistics onto the SAP platform.

Some of them are:

 Tighter financial controls
 Online functionality with real-time visibility of transactional data
 Automatic triggering of approval workflows for exceptions
 Confidence in management to delegate better
 Ability to do better cost accounting and identify contracts/ regions incurring losses and more scientific provisioning of overheads in quotes
 Improvement in efficiencies in receivables through correct billing as per agreed contracts with customers
 Faster billing cycle and dunning processes
 Faster periodic closure of accounts statements

Agarwal puts forth an example to explain one of the benefits. He says, "We intend to automate our 'order capturing to vehicle engagement' process using SAP. For this, orders from customers will be captured at branches, which would then be analysed to plan shipments and then either company-owned vehicles would be assigned to execute those shipments or vehicles would be hired from the market. If a vehicle needs to be hired, then all the prospective vendors would be sent an SMS broadcast so that as many bids as possible can be received and the most cost-effective one could then be chosen. Also, the system would track the hired vehicles to see if they are within the approved range and if there is an exception, it will trigger an approval workflow".

The Road Ahead

As far as the future IT roadmap of DARCL is concerned, the company has plans to integrate many of the SAP solutions with the existing network. The adoption of SAP’s BPM solution for higher process automation is also in the pipeline. DARCL hopes this solution will help it to improve process efficiencies and customer satisfaction, thus enabling it to move towards higher process maturity and service levels.

"Besides this, we would like to leverage SAP’s Product Integration (PI) solution. This would not only help integration with customers’ systems but would also extend our application to allow access to the vendor ecosystem. Also, SAP Mobile Infrastructure would be used to empower field staff to enter transactions while on the move and to provide them with real-time support based upon information updated in our central system," concludes Agarwal.