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SAP ACE AWARD, 2018

Name of the organization: Saahaj Milk Producers Company Limited

Contact Person & Designation: Surendra Singh Jadon , IT Head.

Email: Surendra.jadon@saahajmilk.com,

Mobile No: +918392954656

Official Address: Cross Road Mall, Plot No. 5&6 , 2nd Floor, Sikandra Yojna Sikandra Bodla Road, U.P. ,Agra-282007 Nation Building through SAP solutions:

Dairy industry is of crucial importance to India. The country is the world’s largest

milk producer. It is the world’s largest consumer of dairy products, consuming almost

100% of its own milk production. Dairying has been considered as one of the

activities aimed at alleviating the poverty and unemployment especially in the rural

areas in the rain-fed and drought-prone regions.

A specific Indian phenomenon is the unorganized sector of milkmen, vendors who

collect the milk from local producers and sell the milk in both, urban and non-urban

areas, which handles around 65-70% of the national milk production. This leads to

exploitation of small marginal farmers by these middle men. Objective of Making

Producer Companies is to organize dairy sector in India and strengthen small

marginal farmers and providing fairness, transparency and empowering them to

become self-sustained.

A Producer Company combines the institutional and ideological strengths of

cooperatives (ownership limited to users; limited interest on shares; no trading of

shares; patronage is not capital-based) with the flexibility and autonomy available

under company law. In a Producer Company only milk producer can become member

and owned by user members.

About Company

Saahaj Milk Producer Company Ltd. a producer company incorporated under part IX-

A of the Companies Act, 1956 on 17th October 2014 in the state of Uttar Pradesh.

The Company commenced its commercial operations from 12th December 2014 and

with portfolio of Pouch packed milk of different variants and Butter Milk followed by

Saahaj curd to expand its portfolio.

The company has one of the most modern equipment’s for automating the entire

milk procurement and the payments to the producers processed through SAP

averaging Rs. 28 cr every 10 days payment cycle. Saahaj SSMPCL primarily operates

in Eastern UP regions of Uttar Pradesh covering 2924 villages, 371 Bulk Milk coolers

collection centre and 14 chilling centres handling more than 7.5 lakhs litres per day

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Objective

The Company is in the business of pooling, purchasing, processing of milk and milk

products primarily of the Members and of others, and marketing of the same.

Company is selling and marketing its milk and milk products under its own brand

“Saahaj” consisting of poly packed milk, buttermilk, Ghee (Buffalo & Cow) and curd

in different kinds of consumer packs etc. Our main objective is to create maximum

value for its shareholders, at the same time provide the best quality milk, and milk

products to the customers.

Business Operation

Saahaj has expanded its market to the regions from Agra and 10 District of entire

UP (Agra, Aligarh, Badaun, Etah, Etawah, Firozabad, Hathras, J P Nagar, Mainpuri,

and Moradabad) region in a short span of time. All endeavors are being made to

expand the presence of Saahaj products in other prominent states along with

enlarging the Company’s basket of products.

We are also the End Implementing Agency (EIA) for various projects implemented

by Government of India through National Dairy Development Board (NDDB) under

National Dairy Plan 1 (NDP 1). Through the projects we provide our milk producers

with integrated animal productivity enhancement services like Ration Balancing

Programme (RBP), need based doorstep AI delivery services; enabling convergence

of milk pooling, improved animal nutrition, higher conception rates and genetically

improved animals in the area to derive maximum benefits under National Dairy Plan

(NDP).

With these projects, we could also create a state of art facilities and infrastructure

for pooling of milk at the village level milk pooling points

Major technological initiative was deployment of GPRS based DPUs at 2924 MPPs for

transmit of real time data to SAP ERP and thus replaced traditional pen drives used

for data transmission. Instant messages for their milk pouring details.

Transparency in Business Operation

Automation in terms of issue of receipt giving details of milk poured quantity, FAT &

SNF and transfer of members’ payment directly in their Bank Account.

Saahaj invested considerable resources into Information Technology for better

transparency and efficiency in all the processes. Saahaj achieved a major milestone

on 1st August 2016 when SAP ERP went go live. The highly successful

implementation provided Saahaj Milk with an integrated and sustainable platform to

move forward.

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Milk and Milk Products:

Saahaj as a “Brand” in Milk and its Milk Products has been accepted and picking up

its market against other major and local players like Amul, paras , Saras etc. during

the last one year of its launch in Agra , Aligarh , Moradabad, Etawah , Fatehabad

and other adjoining towns.

The Company is constantly thriving to spread out its reach and product portfolio by

adding new products and facilities. In this direction, during the year, the Company

has recently successfully launched “Saahaj” Chai Special in 200 ML , Milk in 500ml

Polly pack , Dahi and Saahaj Ghee in 1 liter Jar packing in Uttar Pradesh region .

With this team effort, Company has achieved Sales turnover 496.07 Cr within a

period of just one year eight months of milk Sales although company has completed

2.5 years of operations.

Other new milk products like and Paneer, Matki Dahi , Butter are also proposed to

be launched shortly. The following chart depicts the three years journey of the

company in terms of its sales turnover.

End Implementing Agency (EIA): National Dairy Plan1

Saahaj is also the End Implementing Agency (EIA) for various projects implemented

by Government of India through National Dairy Development Board (NDDB) under

National Dairy Plan 1 (NDP 1). The objective of the Sub – Projects was:-

To help increase productivity of milk animals and thereby increase milk

production to meet the rapidly growing demand for milk.

To help provide rural milk producers with greater access to the organized milk-

processing sector.

These objectives would be pursued through adoption of focused scientific and

systematic processes in provision of technical inputs supported by appropriate policy

and regulatory measures for the following projects:-

A. Village Based Milk Procurement System (VBMPS)

B. Ration Balancing Programme (RBP)

Benefits accrued through SAP

Saahaj Milk has been formed with an objective of maximizing returns to its members

through professional management and by harnessing capital, markets and

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technology thus ensuring business growth without undermining the basic cooperative

character of democratic governance and autonomy.

Milk Pooling Point (MPP) Automation

Milk is procured at the Milk Pooling Point (MPP) in two shifts, morning and evening

where-in members / farmers pour the milk at MPP. All the data is saved in Data

Process Unit (DPU) which automatically captures Milk quantity from Weighing Scale

and Quality parameters (FAT/SNF) from milk analyzer thus preventing any

manipulation with data.

The milk procurement data is then securely transmitted to a middleware application

from DPU. The milk collected from each MPP is sent to nearest MCC (Milk Chilling

Centre) for further consolidation with Raw Milk Reception at Dock (RMRD).

MCC Automation

Weigh balance and Milk Analyzer at MCCs are interfaced together for milk weighing

and testing of member’s milk collection data and actual milk quantity, FAT and SNF

are recorded in a middleware application.

Data Integration in SAP

All the data in from central middleware application is automatically transferred to

SAP database through PI.

SAP system controls the master data and rate chart by sending it to middleware

application which signals each DPU at village level to pull updated data from

middleware application. DPUs at village level pull the updated information through

GPRS connectivity thus preventing manual intervention.

DPU sends the data through GPRS connectivity. RMRD

Process Integration

Middleware Application

Data is sent over secure VPN

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Payments and Recoveries

SAP system at Saahaj takes care of payments on Payment cycle to pay the milk bill

amount to members, which are due for the payment. While making the payment,

system automatically calculates and adjusts recoveries, incentives, and dividend for

Members.

Some of key features of payment module in SAP system:

Different rate masters are maintained based on the milk type (Buffalo, Cow &

Mixed Milk)

Rates are defined based on FAT & SNF Parameters in Rate chart

Rate Chart assigned to MPP.

Incentives are paid automatically based on the qualitative / quantitative

parameters to Members

Shareholding data is maintained and additional share amount is automatically

calculated for the members as per the milk poured

Payment to the members are automatically transferred to their respective

bank accounts

Recoveries and incentive of a Sahayak is calculated automatically from the

system

Producer Institution Building (PIB)

PIB– System facilitates to enter- 1) online registration of applicants for the

membership. 2) Convert application to members based on board approval 3) Share

Management which includes - allocation of shares, cancellation and transfer of shares

etc. 4) Member analysis – commitment , deductions, pouring pattern , lean & flush

analysis etc.

Logistics: inward and outward transporters manage the inward and outward

logistics in Saahaj. SAP system facilitates to capture all tanker movements between

MCCs and plant tanker sale and purchase along with its rate fixing and billing detail.

Users and management can see material balancing and variation reports on daily

basis from the system. Milk material cost / expense on logistic / transportations are

booked on inventory so Saahaj is getting clear picture of cost on raw milk and

processing of same.

Freight Vendors Payment

SAP system calculates the freight payment as per the vehicle rate assignments. And

all the Penalties/Recoveries against the materials and advances recoveries are also

considered by the system

Sales & Distribution

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Sales & Distribution of milk and milk products is done through a network of

distributors across Punjab. The system provides online facility of sales and

management of milk, cattle feed and milk products etc. Customer enquiries entered

in the SAP system to generate the quotations of milk products and further sales

order, material requirement planning, crates and credit is managed from the SAP

system.

Asset Management

Company’s assets are managed through SAP system i.e. purchase, tracking,

maintenance and periodic verification of the assets etc. The process of asset

purchase, tracking, maintenance and verification is a system dependent process for

which stock details are maintained at MCC level.

Accounts & Finance

Finance & Accounts system in Saahaj prepares and manages the milk payments to

the member, Sahayak / LRP commissions, computation of annual price incentive

payments to the vendors and other financial transactions. The member wise payment

data is directly integrated with finance module in SAP system which is further

processed to calculate all earning & deductions of members and sent to the Bank in

member’s account directly.

Quality

Milk quality data is recorded in the SAP system from the very first point of entering

milk at village level in the form of FAT, SNF , Quality and time , later when milk is

reached at MCC and plant various quality tests data , milk maintenance parameters

, monitoring process and analysis data is available in the system.

Productivity Enhancement Services (PES)

PES services such as feed service, cattle feed demand collection is recorded in the

system. The Animal Health module of Information Network for Animal Productivity &

Health (INAPH), designed by NDDB, captures the entire gamut of activities related

to health that is usually carried out on the animal. SAP system integrates the service

data and from INAPH and consolidates with ERP financial data to deliver reports from

one system.

HR

Human resource management would involve entire life cycle of an employee in the

organization starting with manpower planning, recruitment till full and final

settlement of employees.

Business Intelligence

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Saahaj is using Business Objects and Business Intelligence tool of SAP system to do

daily analysis of milk procurement data, members’ performance, their EMI detail,

milk logistics, product sale & profitability to stay competitive in market.

Saarthi is a unique system in the Dairy

Industry, specifically designed for

Producer Companies to accommodate

milk procurement requirement, and

calculates member’s payment in SAP

system, payments are automatically

transferred in member’s bank account.

Using SAP solutions we are able to

achieve the confidence in our producer

members who are also the

shareholders of our company that they

would come out of their present

situation to a better living condition.

Maintaining the records of 65000 plus member farmers and building their livelihood

is a perfect example of farmer’s empowerment in India and SAP is helping us record,

analyses and monitors the day-to-day operations for the nationwide achievement.

SAP had provided a solution for processing the milk bill to the farmers on time, which

was our biggest challenge in operations before SAP. The direct benefits are to the

members of the company as they are the shareholders and SAP is helping us to

provide 100% transparency in all the business related transactions. This will

eventually increase the patronage from the members, which would position the

company as one among the leading dairies in Uttar Pradesh

Award Category Selected: Public Sector, Award for Adopting Digital Initiatives in

Public Sector

Revenue/Budget of the Organisation: Turnover of Rs. 496.07 Cr in 2016-17.

Targeting 713.86 Cr in 2017-18

Number of Employees: 450+

Project Related Information:

SAP Solution(s) implemented: ECC6

Number of SAP users: 65

Project Go-live date: 01-08-2016

Project overview

Saahaj was part of central SAP implementation process; project was steered by

NDDB Dairy Services. Producer Companies followed the World Bank guidelines and

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selected “Zensar Technologies” as an SAP ERP (Saarthi) implementation partner for

all the Producer Companies. Project was funded by World Bank under National Dairy

Plan.

It was decided to implement ERP and BI solutions to have a seamless flow of

information between different departments and functions, better control of the

processes and for leveraging advances in IT systems for business gains for the

Saahaj.

It was expected that SAP ERP would enable Saahaj to manage their end-to-end

operations including Milk Procurement, Quality, Sales and Distribution,

Manufacturing, Procurement, Logistics and Supply chain, Finance, Asset and Human

Resource management. ERP application will allow the different units such as milk

pooling points, chilling canters and clusters centers to seamlessly share information

with each other and with the HO.

The ERP will also enable Producer/Member Institution Building and integrate with

existing applications such as Milk Procurement System. BI application will enable the

senior management to generate customized reports and analyze the business data

for decision support.

ERP RFP was prepared & Bidding was conducted through the National Competitive

Bidding (NCB) procedures agreed with World Bank. Through bidding process &

detailed analysis it was decided to implement SAP system in all Producer Companies.

Below was the Project Scope

1. Preparing Global Business Blueprint

2. Detailed hardware sizing and specifications for the proposed ERP and BI

3. Configuration & Customization of ERP & BI and development of Global ERP

Template

4. Customization of Global ERP Template for Producer Companies

5. Integration with existing and planned applications PCs

6. Application Testing and OEM Audit

7. Data digitization and migration for PCs

8. Roll out of the ERP and BI solutions at Cluster offices and Head Offices of PCs

9. Capacity building and change management

10.ERP application Maintenance

Over All Project Size

Total turnover of producer companies – more than 3000+ Crore

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Total milk collection per day – more than 30 lakh milk collection per day

Total villages to connect to ERP – more than 10000

Total Farmers – more than 3.5 Lakhs

Total Chilling Plant – More than 750

Total staff – More than 2000

Total payment to farmers – more than 250+ crore per month

More than 300 SAP users

One of the main objectives of IT initiative was to implement ERP solution for all

Producer Companies, however keeping the cost very low and meeting requirement

of all present and future Producer Companies. This was achieved by making a Global

Template by involving stakeholders across all Producer Companies, NDS, Consultant,

World Bank etc.

Earlier, Saahaj had distributed system with many legacy applications to work, making

reports and farmers payment was a big challenge. Management was convinced to

have single SAP system to fulfil all requirements under one umbrella.

SAP ERP System in Producer Companies is first its own kind of unique system in Dairy

Industry consolidates data from villages (2924 villages in Saahaj and 65000 farmers

pouring milk daily morning & evening. Paying together more than 30 crore payment

in a month with many complex formulas and rules inbuilt), single system takes care

complete requirement of Finance & Costing, Human Resource Management,

Production Planning, Material Management, Sales & Distribution, Project System,

Plant Maintenance, Quality Management , Customized module like – Milk

Procurement System & Producer Institution Building , integration with legacy

software’s etc.

SAP system at Saahaj takes care of payments on Payment cycle to pay the milk bill

amount to members, which are due for the payment. While making the payment,

system automatically calculates and adjusts recoveries, incentives, and dividend for

Members. Payments are deposited in farmer’s bank account to maintain transparency

and avoid any pilferage from commission agent. System allows to pour milk only

from registered members thus avoid any manipulation.

Saahaj successfully designed and implemented an end-to-end SAP Dairy Solution in

India and first ERP system approved by World Bank in India.

The project was successfully implemented in Saahaj on 1st August 2016 with in a

very strict period.

Project Highlight

Online Farmers Enrolment

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Portfolio and Performance of each farmers

Milk Procurement by connecting all the farmers in SAP

Online Payment to all the farmers from System

Route and Vehicle Management

Material Balancing tool build in SAP

Transparency and Traceability

Sales and Distribution

Crate and Empties Management

Saarthi became the first

ERP system approved

by World Bank in India

and successfully

implemented in Saahaj

and other Producer

Companies.

Key Project or technical challenges before implementing SAP solution

Saahaj SMPCL wanted a single platform for all business process integration and to

manage all operations more efficiently. To take effective business decisions we also

needed a centralized online data which could be accessed from any location. Milk Bill

processing was a big challenge and used to take 1 week to complete the payments

one of the biggest concern is addressed by SAP by reducing the time to 2 days

overcoming the issues with the legacy system.

Saahaj SMPCL needed a system that would help to manage the entire member

management including their shareholdings and regular payments. Improving the

Sales and Distribution process and mainly making payment to the vendor/members

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immediately on the due date. The business connects over 65000 farmers who are

the members of the company, spread across thousands of villages. The business

initiates better lively hood for the poor farmers so that they also grow along with

the organization.

Other technical challenges

Training to field staff

Integration with milk procurement data from villages

Single system to bring in milk procurement data to calculate farmers payment

Making Global template for multiple stakeholders

Customize modules and integration with legacy applications

Master data – from top to bottom i.e. SAP to village level

Milk Material balancing at different level

Calculating farmers/members payment with complex earning and deduction

for commission agents and logistic vendors

Creating PIB module and managing members shareholding & EMI deduction

detail

Key Organisational or Business or National challenges before implementing

SAP solution

This was a national project funded by World Bank so taking approval and following

World Bank guidelines was a big challenge. Producer Companies are a new concept

which has been experimented first time in India. Initially we didn’t find any suitable

product to fulfil Producer Companies requirement.

Other challenges:

Challenge in creating RFP

Challenge in finding out right product (ERP)

Connectivity in rural areas

Finding a dairy partner for SAP implementation

No bidding format initially with World Bank

Bid received almost double of budget kept for ERP implementation

Very strict time line

Managing PMO office for multiple stakeholders

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Change management

Data upload from chilling centres/ Bulk Milk - as end user do not understand

the importance of sending data to central server

Value Related Information:

List Short and long term impact / Benefit Achieved:

All the Business Process is on a single platform “ SAP “

Transparency across all the business process

3.5 Lacs Farmers target qualification and registration in the system, by

eliminating the paper work by 90%

Maintaining the portfolio and performance of all the farmers for Strategic

decision on to increase the cattle productivity.

Connected all the broken business process and network into SAP and with

SAP Orchestration to collect 30 Lakhs Litres connecting 10,000 + Village every

single day

All the payment of the farmers are calculated and release by SAP, this is a

unique solutions built in SAP to have a better control on the heavy volume

error free payment, this is reduced the cycle from 5 days to 5 hrs.

Daily regulars updates are sent, digitally through SMS to all the Farmers on

their performance status

“Shares Management” of all the farmers are maintained in SAP, which has

reduced the errors in multiple folds and formed a strong bonding between

Dairy and Farmer

Better Inventory control on Gain & Loss for each and every movement of the

milk, which was not possible before SAP, it from 0% control to 100% control

Faster sales cycle to customer and Farmers , for Milk and Cattle feed by 20%

respectively

Automating the milk collection from the 65000 members from 2924 villages and

paying them accurately with 100% transparency

Implementation Related Information:

As part of NDS initiative under NDP 1 (National Dairy Plan) to form Producer

Companies in five states i.e. Rajasthan, Gujarat, Andhra Pradesh, Utter Pradesh &

Punjab, NDS IT had a target to computerize all Producer Companies.

These Producer Companies are having together more than 10000+ villages, 700

chilling plants, 3.5 lakhs farmers, 2000 employees to connect. These companies are

large in milk procurement together more than 30 Lakhs litre per day and 300 to 1000

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crores turnover, paying together more than Rs 250+ crore in a month to their

farmers.

Objective of IT initiatives in Producer Companies was to bring transparency, fairness,

avoid pilferage in farmers pouring milk to the company by IT intervention, and give

Producer Companies robust IT infrastructure to support their business to remain

competitive in market, enable them to become world class companies in near future.

It was envisaged that Producer Companies should have latest technology in terms of

all IT hardware & software to run their business independently.

The global template was developed first at the NDDB-NDS and the further

implementation of the individual PC’s were like a roll-out. This has helped in reducing

the time actually taken for completing the implementation and Go-live.

It is the first time in India that a dairy solution is developed with complete data of its

member including the maintenance of the shares each member holds.

Feedback Related Information:

“SAP provides authentic, central, reliable and timely information, which enabled Top

Management to take timely key business decision and to formulate future strategic

planning.” [Rishi raj Singh, CEO- Saahaj, 7409440000, 15th Feb, 2018]

“SAP facilitated transparency in our business process and helped Saahaj to be proud

being part of Digital Revolution of the country.” – [Basant Choudhary , Dy. CEO-

Saahaj,7088240000, 15th Feb, 2018]

“SAP Implementation in Saahaj was instrumental in removing several decentralized

and legacy applications.” – [Surendra Singh Jadon, Head-IT, 8392954656, 17th Feb,

2018]

Steps Ahead is Digitalize “Cow to Customer”

1. Equip all the farmers with smart phone with App for all transaction

2. Handle all the sales process through Cloud by C4C and Sahayak on Service 4

cloud

3. Cattle Management on SAP

4. Replace proprietary Data Processing Units with Smart devices.

5. SAP S/4 HANA implementation.

6. Bring total control on the business process in terms of Vendor/customer

accounts and masters to reduce costs.

7. Being always online such that the top management can view day to day report

for being agile to take decisions.

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8. Getting transparency of data among different departments so that time and

money can be saved on available Inventory and procurement.

9. Getting in new technologies for monitoring and controlling to save time and

cost in business operation.

10.Implement the dash boards for the senior management for quick decision

making.

11.To bring down the transaction cost.

Enclosures/Attachments

Various activity done by Saahaj

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