Unraveling the story of how ERPNext was implemented by Frappe partner Navari to help Meru Greens Horticulture leverage profits, make their operations smoother, and meet the explosive demands of their growing business.
No of Users: 109
Industry: Manufacturing and distribution of processed canned vegetables
Modules: Accounts, Stock, Buying, Agriculture, Manufacturing, Selling, and HR
Gold is precious, soil is gold
Meru Greens Horticulture is a private service provider company founded in 1996. Their sole objective is organizing smallholder farmers to produce and market fruits and vegetables. They do this in both the domestic and export markets. They believe that empowering smallholder farmers to produce fruits and vegetables responsibly would spur their own development and sustainable agriculture across the board. Hence, they focused on promoting initiatives that bring about food safety, improve quality, and volumes. These initiatives have brought employment and development to the horticulture community.
In the case of the vegetables they sell, eg: french beans, which is the focus of this implementation, the process begins by sourcing for an overseas market. The actual product (variant) to be delivered is agreed upon with the customer before its production. They follow a make-to-order manufacturing process. These products form the basis of the kind of seeds to be supplied to the farmers. Farms are organized by region, and further bifurcated into subregions. There is a team of Meru Greens Horticulture staff in each region and subregion to keep track of the crop (advising farmers, soil analysis, and plant analysis, etc.) and crop cycles. These teams are also responsible for recruiting new farmers, as well as receiving produce from farmers during harvest.
This produce is received at Meru Greens Horticulture EPZ (export processing zone), which is the packaging, quality control, and distribution center. The product (French Beans) undergoes a series of processes ranging from inspecting, washing, snipping, blanching, canning, sterilizing, to labeling/barcoding, packing, and storing before it’s shipped to the customer. The beans are packed in glass jars or tin cans depending on the requirements of the customer.
Horticulture success depends on much more than packaging
It might be one of the few vegetable packaging firms in Kenya, but that doesn’t make the production process any easier for Meru Greens Horticulture. Some operational bottlenecks they encountered with their legacy accounting system were:
- Non-centralized data of farmers
- Lack of centralized management of inputs advanced to farmers
- Lack of digitized capture and management of crop cycles
- Lack of an integrated, unified system to manage manufacturing and quality assurance/control processes
- Poor Management of multiple products
- Supply Chain complexities
- Stock Reconciliations and Stock Audit Issues
- No Real-time Reporting
- Non-Customizable Platform
Leveraging profits with ERPNext
ERPNext is built on a dynamic platform. It has flexibility, robustness, and is easily customizable due to its resident meta-data driven framework (modular nature). Managing farmer details, stock, packaging, and quality control was made easier and efficient for Meru Greens Horticulture by utilizing standard functionality, few custom fields, and workflows in ERPNext.
Managing farmers in ERPNext
Farmers are the master entities being managed in ERPNext for Meru Green Horticulture. A farmer is both a supplier and a customer. As a supplier, the farmer supplies farm produce to Meru Greens Horticulture, and as a Customer, he receives planting inputs from them. The lifecycle of a farmer in the ERPNext system starts from registration as a supplier. The robust framework of ERPNext makes it easily configurable via custom scripts. Using Custom Scripts, a customer record is automatically created for this farmer. The balance offsetting is achieved via Double Ledger Parties.
The second part is the farmer recruitment and checklist stage. At this stage, the farmer is associated with a particular crop cycle. Various checklist items and inputs to be issued to the farmer (based on land evaluation by the team in the various regions) are captured. The recruitment process is achieved by having custom fields dependent on Order Type ‘Planting’ in the Sales Order DocType.
Utilizing a Sales Order for farmer recruitment is similar to the normal sales process i.e. Sales Order -> Delivery Note followed by a sales invoice to the customer/farmer. This approach effectively helps in utilizing already existing reports, say, Sales analytics to analyze the quantity and value of inputs ordered, delivered, and to be invoiced per farmer/region/product.
Item Variants are essentially items based on a common item template, with differentiating attributes being color, size, shape. Meru Greens Horticulture distribute, plant, and package multiple variations of their french beans like Tiezo, Goal, Sagana, Source, Hawai, Samantha, and Goldplay. Maintaining an item master helped Meru Greens Horticulture record key stock information such as lead time, reorder quantity levels, pricing, BOM, etc. By storing this information in one place, they were able to configure a fully integrated inventory system with selling and buying modules respectively.
Supply Chain: Once farmers and item masters were in place then supplying inputs to farmers, and receiving harvest from individual farmers was easy in ERPNext. Every region/subregion is manned by field officers, who deliver inputs to farmers, as well as receive harvest from farmers. The system is accessed by the field staff via mobile devices. Farmers are categorized by region, and farmer type, which helps in the analysis of output per farmer, farmer type, and region.
Manufacturing was implemented by setting up a chain of Bill of Materials, operations, and workstations. It was possible to set up a manufacturing process that mirrors Meru Greens Horticulture packaging process, i.e. every operation in a particular workstation, yields a different product. The output of one operation is added as raw material for the next operation until there’s a packaged product. A manufacturing process begins with a customer sales order, which is created from an original Blanket Order. Based on the order, the manufacturing process begins for a particular item variant.
- Let’s go through a typical packaging process for an item. Raw Sagana Beans are washed, outputted.
- Washed sagana beans are then snipped, again outputted, and so on.
- Snipped beans are blanched, canned, steamed/cooked, labeled, and packed.
Throughout this process, there are lots of quality tests, the Quality Inspection feature in ERPNext for items and BOMs were utilized.
Stock Balance and Summary
The Stock Balance and Stock Summaryreport helped indicate the stock present at each warehouse. These reports leveraged analysis of inventory and helped Meru Greens Horticulture make informed decisions about their inventory storage or availability. Apart from this, since ERPNext is customizable, the team at Navari was able to set-up custom reports using the report builder feature. With the help of simple configuration, the users were able to set up multiple reports based on personal performance indicators with key variables that mattered to their departments.
HRMS: By utilizing the built-in formula based Salary Component and Salary Structure in ERPNext, it was easy to set up a Kenyan Payroll that works with no additional customizations. Furthermore, shift management was very handy for managing shifts in the factory of the organization.
Customizing on-the-fly: ERPNext supports dynamic customization capabilities, which opened doors of growth for Meru Greens Horticulture, and enabled extending the solution easily. Throughout their implementation, several custom fields have been added, especially to allow more data to be captured during farmer registration and recruitment. Several custom scripts were also incorporated for certain custom actions, such as creating a customer on creation of a supplier of type farmer, creation of a custom payroll report used by employees during tax returns to the Revenue Authority in Kenya, etc.
ERP implementation at Meru Greens Horticulture followed the Agile implementation approach in the following phases:
- Mapping Business Processes and Configurations
- Data Migration
- User Training Sessions
- User Acceptance Testing
- Go Live and Post Go-Live Support
Before any implementation project starts, an ERPNext Project Champion is identified who would be the key stakeholder or project manager at the customer’s organization to drive the process. This person is also the SPOC (Single Point of Contact) and helps coordinate with internal teams thereby keeping the change management from legacy systems hassle-free. Establishing an escalation matrix is the next thing to do! This was helpful in case you need to call out or escalate and seek the attention of the stakeholders in case the project is failing its timelines.
Navari team is the first ERPNext Partner from Kenya. With a collective experience of more than 10 years, they are highly-qualified industry leaders in providing IT solutions. They are the fastest growing IT company in Kenya and their focus has been providing IT solutions to small and mid-sized businesses in Kenya.
Having successfully deployed ERPNext for 6 enterprises they are actively working with the Frappe team to deploy ERPNext for organizations in Kenya. The collective vision is to enable and give access to mid-size corporations and enterprises the power that ERPNext beholds, backed by the Frappe framework