Technology: Inside India's Most Wired Company [Pg. 2]

[Contn.]
Inside India's Most Wired Company

Look Mama, Fully Wired

By using technology to manage information flows SEIIT has built a low-cost operation
Vivek Prakash, GM, SEIIT and J.S. Jong, Executive Director, SEIIT: wiring together

The frontline may have witnessed the fiercest action in Samsung's battles against Seagate, LG, and Creative, but it was the information back-end the company created that helped it put one over its competitors in most of the segments in which it operates (See Information Flows In India's Samsung).

It was in 1998 that SEIIT started work on a rudimentary software that could facilitate and manage transactions between it and its five distributors in India. Techies call this OLTP (On-Line Transaction Processing), and it essentially enabled Samsung capture each transaction, sorted by customers, and products, at the level of the distributor. That helped, admits M.S. Bhalla, the company's country product manager in charge of storage: ''It was easier to understand demand-patterns and modify sales strategies accordingly.''

But it wasn't enough. To cut inventory costs and to ensure that a product was available where it was needed, SEIIT felt the need to built a network that captured information at the level of the resellers. Since its OLTP couldn't do this, in 2000 Samsung invested in a software that could help it extract and view data from different perspectives (the techies call this OLAP or On-Line Analytical Processing). With this, the company could access data on how much distributors bought from it, how much they sold, and how much they stocked-or PSI, Purchase, Sales, and Inventory. SEIIT could also access the same data with respect to resellers.

For those interested in the finer details, the entire network is built over the internet; a reseller logs in using a unique password and can view only PSI data relating to his transactions with the concerned distributor; a distributor does the same and can access information pertaining to all resellers who buy from him; and managers at SEIIT can access it all.

For instance, in the course of the third meeting this correspondent had with Vivek Prakash he received a call from a distributor who complained about low offtake in the Chennai region. Prakash logged on to the network, culled out reseller-data over a period of time, called up resellers whose purchases had plummeted, and exhorted them to buy more.

Still better, the information flows seamlessly into Samsung's production and shipping processes. ''We can use this information to plan the production or ship inventory, keeping market trends in mind,'' explains Sonal Anand, Country Product Manager, Colour Monitors. Since this information network became fully functional last year, Anand has seen the inventory carrying period for colour monitors fall from 15 days to 8. The saving in rupee terms? Rs 12 crore a month at current monitor sale levels. The total investment in the infotech infrastructure? Less than 10 per cent of the total annual saving.

Powered By Information

It isn't just a hi-tech network that makes SEIIT a wired corporation. Nor is it just the company's efforts to increase demand for its products by creating two websites buildurpc.com (targeted at end users) and SEIIT.net (targeted at resellers), that list Samsung's offerings and direct interested buyers to the nearest SASI (Samsung Authorised System Integrators) in the first case, and distributors in the second. What does is SEIIT's mindset as far as information is concerned.

The company uses that precious commodity to improve its business proesses and as a basis for marketing and sales efforts. Says N.Y. Prasad, CEO, Ingram Micro India, one of Samsung's five distributors in the country: ''A combination of good end-user identity, street-smart policies, and good business practices has made Samsung a well-managed company.''

What makes SEIIT a truly wired entity is also the company's approach to business: all non-critical functions, including the grunt work involved in logistics, are outsourced. It is perhaps this low-cost and super-efficient sales and marketing front-end that convinced SEIIT to invest $10 million (Rs 47 crore) in the colour monitor plant at Noida near Delhi, which will produce an output of one million units in the first year.

With the company's Korean parent deciding that India is to be a regional hub for manufacturing, Prakash and his executive director J.S. Jong can look forward to scaling up their information network to include partners (read distributors and resellers) in other parts of the region.

That shouldn't be too much of a catch. As a wag once said about the net, ''there's one network and it's global'', and SEIIT's information infrastructure happens to be built around this network.

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