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IT Cements Madras Cements' Success: Dharmakrishnan A.V.

Anup Varier | May 17, 2013
Madras Cements isn't your typical manufacturing company.It took to IT in 1984 at a time when even contemporary enterprises weren't tech-savvy. Its current CEO, Dharmakrishnan A.V., is a self-confessed tech enthusiast. And that makes him stand out among CEOs of old-economy companies.

Also, our sales representatives have been provided with devices that give them real-time information. It helps them assess their business in terms of dealer performance and responsiveness, understand their stocks, and help sales managers take stock of their team's performance.

Our dealers can book orders online. A dealer who uses the online system to book orders is bound to have a healthy stock and is assured of timely payments. This also helps gauge his performance on pre-decided parameters.

Today, I expect my IT department to train people to use our IT systems. Our entire operation depends on IT products developed with the help of Ramco systems. The IT team should consistently demonstrate the advantage of using IT and drive adoption.

CIO: Does it also help you track the performance of your facilities and avoid downtime?

Dharmakrishnan A.V.: Initially, the process of tracking downtime was manual and relied on someone's assumptions. Today, we have an excellent IT system that gives us clarity on the equipments that are running and provides us with details like their speed and consistency.

If there is any variation from the standard deviation of 0.5-0.6 percent--from the set parameters--the response teams are alerted and can enquire the reasons for it. If the variation is high despite these efforts, then an alert is sent to senior people at the location and also to the corporate headquarters, allowing us to take immediate action.

CIO: And does IT play a role in solving logistics problems?
Dharmakrishnan A.V.: Cement is a high-volume and low-value commodity. So, at times, the distribution cost may be higher than the manufacturing cost. Even in terms of freight, cement manufacturers draw competition from unusual aspects like a sugar factory in the vicinity which would transport sugar in 50kg bags--each bag worth Rs 5,000-6,000. Whereas, a similar 50kg bag of cement will only have a value close to Rs 300. So, while the sugar guys can afford to pay close to Rs 1,000 per bag for freight, the cement players can barely manage to pay Rs 20-30 per bag. We have to compete with them during peak demand.

We decided to get dedicated trucks that run exclusively for us by financing some of them and giving out interest free loans. Also, since Madras Cements is handling multi-location plants with distinct manufacturing costs, we figured out the total costs for select destinations with the help of our information systems. The dispatches then take place based on that information.

CIO: How does IT help you meet customer expectations?
Dharmakrishnan A.V.: The quality of cement and service to our dealers are the most important factors in our business. In that context, IT helped us realize that we were de-growing in an area where we are traditionally very strong. Our systems helped us identify the dealers who were de-growing and the rate at which this was occurring.


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