‘Midas touch’ set to turn around loss-making PSUs

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For more than a year, the yellow fever vaccine has not been manufactured because a freezer-drier to preserve the vaccine has been out of order

Patralekha Chatterjee [1]

Thiruvananthapuram: The industries department has decided to impart what it hopes is the ‘Midas touch’ of SAP Enterprise Resource Planning solutions to its 30-odd loss-making public sector manufacturing units. The department has been inspired by the SAP-induced transformation of Malabar Cements, the only state-run PSU to implement SAP.
SAP ERP is one of the most preferred software solutions worldwide for the efficient management of operations and customer relations. Public sector Restructuring and Internal Audit Board (RIAB) secretary Padmakumar said that SAP was an ideal solution for the kind of problems plaguing loss-making units.
The major issues that riddle PSUs are: high cost of operations (Warehousing Corporation, Cashew Development Corporation), low income generation (Warehousing Corporation), poor sales performance (Handloom Development Corporation), high rate of rejection (Autokast), insufficient value addition (Autokast) and high rate of procurement (KMML, Cashew Development Corporation).
SAP will provide primarily three types of services: financial, human capital management and operations. Each of these three solutions will have further components. For instance, financial will have components like accounts payable, accounts receivable and risk management. Further, there will also be modules like field service, product design and development, accounting, marketing and sales.
“What all this means is that a PSU will always have up-to-date information on daily variables like productivity, output, raw material consumption, loading and unloading,” Mr Padmakumar said. In short, all the functions that have a direct bearing on profitability will always be visible.