The textile industry is one of the largest employment generators in India, and yet remains a low-margin business. The only way to thrive in this highly competitive industry, filled with process inefficiencies, is to do things differently. This is exactly what House of Pearl Fashions demonstrated with its ERP implementation.

House of Pearl Fashions is a Rs 1,850 crore apparel manufacturing conglomerate that helps bring many of the world’s leading clothing brands to market. The company has operations across six continents and plays a dominant role in the supply chain for brands including GAP, J.C Penney, Next, Liz Claiborne, and Esprit.

Since 2005, House of Pearl has expanded rapidly after a series of acquisitions that bought it manufacturing, sourcing, and distribution facilities around the world. Its growth enables the company to produce more than 4,000 styles every year and warehouse and distribute 5 million pieces of apparel annually in the UK and the U.S.

Good IT or God
Riding on the back of acquisitions, the company was growing at 30 percent, while the industry was growing at 4-5 percent.

“With growing business, you need lots of controls in place,” says House of Pearl Fashions, Group CIO, M Srivenkatesa. “If you have a business that goes beyond line of sight, then you need either God or good IT systems to manage it.”

Srivenkatesa, who gave up the top job as CEO at another company to become House of Pearl Fashions’ CIO, had been looking for “some tool to get that control” from 2006 itself. The company had huge operations in geographies including India, the U.S., UK, Germany and Hong Kong.

“As we got more business, new channels came into being and we came to a situation where nobody knew what’s happening about annual reporting and so on," the CIO recalls.

Then there was the headache of dealing with disparate platforms. The company had a UNIX platform for shipping and commercial business, Oracle for production, and some homemade tools for merchandising, sales and procurement.

“None of these talked to each other. We had a situation where the left hand didn’t know what the right hand was doing,” Srivenkatesa says.

From being a CEO of a 300 crore rupee company, Srivenkatesa was getting into the CIO’s shoes to drive the ERP implementation for House of Pearl. Having worked on SAP earlier, he knew exactly what the solution could do for the apparel maker. With little IT experience, but formidable business domain expertise, Srivenkatesa embarked on a journey that required not just process re-engineering but also a massive change management initiative.

Selling SAP
Not that change management was an easy thing to do with the deployment of this scale, the task at hand for Srivenkatesa was also to make people shift from paper registers to computers. However, the biggest challenge for them was to ensure that business managers started using SAP.

For starters, the company went with an open stream approach wherein there were no checks (audit check, accounting check, compliance check etc) put into the system to see how the users responded to the system.

“We got a lukewarm response initially but we felt it was still better than what we would’ve had if we forced the system on people,” avers Srivenkatesa.

The company decided to go slow and took about two years to have the entire organisation use the solution.

“We ran an internal marketing campaign for SAP, creating positive vibes about SAP in the organisation. We also sent messages saying that people who started using it would have better career opportunities and their market value would improve. That worked fairly well for us,” Srivenkatesa says.

Optimising Order Fulfillment Processes
House of Pearl has been able to improve overall planning and forecasting to achieve greater cost and process efficiency. Centralised data collection has resulted in greater data integrity and accessibility to support strategic decisions and speedy monthly financial closings.

Perhaps the greatest gains have been through improved global supply chain management and collaboration. Before, with orders taken in the UK or the U.S. and the corresponding goods purchased where they were most cost competitive, the processes were prone to gaps in communication or execution.

“Our distribution and logistics entities were entirely dependent on worksheets and manual follow-up at every stage,” Srivenkatesa says. “But orders can now be tracked in real time for better visibility and control. Plus, we’re electronically integrated with many of our U.S. customers to reduce our order management lead times.”

With SAP software, House of Pearl has gained a higher degree of adaptability so it can react more quickly to changes in demand and opportunities for growth.