Brewing Up a Tea Storm - Automating 150+ years old Tea Industry with odoo™ ERP
Name of Company: RTS Group (Pvt) Limited holding company for Avissawella Tea Factory and Hidellana Tea Factory
Country: Sri Lanka
Number of Odoo Users: 30 Active Users
Industry: Tea Manufacturing
Company Size: Mid
Name of Implementation Partner: Centrics Business Solutions (Pvt) Limited
Services Offered: Sales, Purchase, Invoicing, Inventory, Accounting, Manufacturing, Quality, Fleet Management, Employees, Employee Payroll, Leave Management, Tailored Supplier Payroll and Tailored Bough Leaf Module and Related Tea Leaf Collection Mobile Apps
RTS Group - Delivering Bliss in Every Sip of Tea
It’s said that tea is just not a drink. It’s a ritual. It’s an emotion. It’s an experience. A cup of tea solves everything. Perhaps, that’s why tea is the most consumed beverage in the world after water!
Sri Lanka, the fourth-largest tea producer in the world, has been connecting people, places and cultures across the globe with every cup of tea. Sri Lankan tea industry sowed its seeds in the early 1820s and has grown exponentially since then. Today, its homegrown produce ‘Ceylon Tea’ is among the most coveted brands among the tea aficionados.
RTS Group, a leading producer and supplier of Ceylon tea, has been a key contributor to the progress of the tea industry in Sri Lanka for more than three decades. It is known for its finest range of tea in both domestic and international markets. It also has diversified interests across engineering, construction, trading, hospitality and leisure.
RTS Group runs its tea operations at its two factories - Avissawella and Hidellana. Both these factories are state-of-art facilities equipped with modern machinery and follow the 5S system of productivity management. They have a combined processing capacity of 42,000 green leaves per day.
Supply Chain Inefficiency – A Roadblock to Optimal Growth
Currently, the Sri Lankan tea industry is highly dependent on the rural community in the central and southern provinces of the country. A majority of stakeholders in the supply chain still use traditional and manual practices that have existed for more than a century. The industry is also witnessing inefficiencies related to transparency in communication, quality of leaves, integration of operational systems, work ethics, transport management, and food and safety standards.
RTS Group has been facing similar challenges in the operations of its tea factories. The management team realized that it had to strengthen its supply chain to keep its tea business sustainable and competitive in the global market. It needed to adopt automation to streamline its supply chain covering upstream (tea leaf suppliers) and downstream (auction and buyers). However, RTS Group management also wanted to ensure that automation didn’t compromise the livelihood of people and the goodwill of the brand.
The company needed an automation partner who could create a win-win situation for all supply chain stakeholders.
Odoo Comes to the Rescue
RTS Group reached out to Centrics Business Solutions for assistance. Centrics Business Solutions conducted an elaborate business need analysis for the company and recommended a range of automation features from the Odoo solution suite. It didn’t take long for RTS Group to give a nod of approval after learning that Odoo’s diverse business application can take care of end-to-end supply chain processes.
Supplier and Leaf Collector Mobile App
Most of the tea leaf suppliers in Sri Lanka operate solo and belong to the rural community. Given that there are 5000+ tea leaf suppliers per tea factory, it often created the demand-supply gap for RTS Group. It had to run its factories under capacity due to an inadequate supply of tea leaves. Moreover, the company had to depend on the leaf collectors to understand ground-level problems and manage the expectations of the suppliers. Due to communication gaps, it was also becoming tough for RTS Group to retain the suppliers.
Centrics Business Solutions developed a supplier and leaf collector mobile app leveraging Odoo software. This app enabled RTS Group to establish and direct communication with the suppliers. The company could quickly add new suppliers; and also approve their requests for fertilizers, cash advances and other plantation needs. This app also tracks supplier-wise gross weight, deductions and net weight details.
The app was a great success for the company. It not only streamlined the communication but also enhanced the effectiveness of the leaf collecting process. The satisfaction level of the suppliers grew with smooth and fast processing of their requests. RTS Group is now acquiring new suppliers every month and has also seen improvement in its supplier loyalty and retention rate.
RFID Tagging of Tea Leaves
The quality of tea leaves varies according to climate, altitude, seasonality and many other factors. However, at times, the leaf suppliers tamper with the quality on purpose for better profit margins. This adversely impacted the quality of finished tea product at RTS Group.
Odoo’s RFID tagging solution was instrumental in addressing this challenge. It helped RTS Group to monitor the quality of tea leaves and track it to the suppliers electronically. RFID transmits digital data to the company’s internal system. In case of any quality loopholes as reported from RFID data, the company immediately contacts the suppliers. This technology has made the suppliers more vigilant. RTS Group now receives better leaf quality.
Payment Integration with Banks
Earlier, the suppliers would come to the factory to collect their payments. RTS Group spent considerable time in this manual process.
After Odoo implementation, the company was able to integrate its supplier payment process with banks. All it has to do now is to send a file listing details of suppliers, their payroll amount and bank account numbers to the bank. The bank processes this file and auto credit the payments to the suppliers. The fully automated process has cut down the administration cost and efforts for RTS Group while ensuring timely payments to the suppliers.
Transport Fleet Management and Route Planning
Upstream supply chain logistics is a costly affair in the tea industry. The lack of coordination between the suppliers and tea factories often results in mismanagement of the transport system for the pick of tea leaves.
Centrics Business Solutions developed transport fleet management and route planning solution for RTS Group. When the suppliers inform the company of the quantity of tea leaves ready for dispatch on a particular day, RTS Group effectively plans how many vehicles to send and whether there any other pickups on the route. RTS Group has registered a 20% reduction in its transport cost after the implementation of this solution.
Automated Audit Mechanism
The Sri Lankan tea industry is highly vulnerable to malpractices at both supplier and leaf collector levels. For example, suppliers pour water on the tea leaves to alter their weight and increase their profit margin. Tea leaf collectors are known to create dummy supplier accounts and siphon off unjustified money from tea factories.
Odoo’s ERP software has a monitoring mechanism that helped RTS Group overcame these delinquencies. The company has been to implement checkpoints at various stages of the supply chain cycle. It can capture geolocations of the leaf collectors as well as record the leaf quantity received from the suppliers. This kind of audit barely now leaves any room for malpractices.
The automation of audit workflow has also improved the company’s ‘anytime audit readiness’ competence, and ensure timely compliance with food and safety standards.
Smarter and More Efficient Backoffice Operations
The conventional and manual backoffice workflow at RTS Group posed challenges such as duplication of data and erroneous entries. The company also had surplus backoffice staff on payroll due to the sheer volume of data management activities.
Odoo’s office automation tool has resulted in faster and efficient data management without any risk of human errors. It also helps to capture real-time information at all data points. RTS Group has been able to reduce its backoffice staff strength by 15% after automation.
Agile and Accurate Decision Making
Due to the lack of availability of timely and actionable data, RTS Group management often found itself at crossroads to take timely decisions. It also made it difficult to track the performance of suppliers and collection officers at input and output levels.
Odoo’s management dashboard feature now allows the management team to access critical data and make accurate decisions in real-time. They can also monitor the KPIs of both suppliers and collection officers, and analyze daily collection based on the demand.
The company has reported a 15 % reduction in wastage and inefficiencies along with increased profit margins with the help of the management dashboard feature.
Since the Sri Lankan tea industry still runs on traditional work processes, it found itself struggling to survive and grow during the COVID-19 pandemic. The new normal suddenly pushed the industry into adopting technology and new ways of doing business.
Fortunately, RTS Group has always been open-minded about leveraging technology since its inception. The well-timed implementation of Odoo helped it immensely to brave the pandemic challenges. The hosted cloud solution gives anytime, anywhere access to document repositories across downstream supply chain partners. It also has upward supply chain integration points with brokers and auction platforms. So, despite the pandemic snags, RTS Group can ensure business continuity and stay ahead of its competitors.
Odoo has given a unique value proposition to RTS Group with its single, affordable and modular solution. With ERP implementation, RTS Group has secured an early mover business advantage in the Sri Lankan tea market.
About RTS Group
RTS Group is a reputed business leader in Sri Lanka with diversification in tea, construction, engineering, trading, hospitality and leisure ventures. Visit www.rtstea.com to know more.
About Centrics Business Solutions
Centrics Business Solutions is a Sri-Lanka based implementation partner of Odoo. It has helped several organizations grow and scale their businesses with Odoo’s customer-centric solution suite. Visit www.centrics.cloud to know more.