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Why Traditional ERP Systems Fail in India?

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Veerendra Jamdade discusses why traditional ERP systems are failing to meet the demands of modern cement manufacturing and how intelligent, cloud-based, and industry-specific ERP solutions can drive operational efficiency, supply chain visibility and data-driven decision-making.

The slow-paced manufacturing realm has ceased to be a part of India’s cement sector. Due to new, large-scale infrastructure developments currently being realised, massive urban growth, increasing housing demand and increasingly strict delivery timeframes; India’s cement industry is now undergoing rapid change and has developed into a very dynamic ecosystem characterised by a need for speed, coordination and operational visibility. Widening chasm between current operational requirements and outdated enterprise resource planning (ERP) craftsmanship is rapidly becoming evident across the entire industry. In today’s cement industry, where organisations operate complex networks of plants, depots, logistics partners, distributors and field teams, it is also observed that traditional legacy-based enterprise systems are increasingly struggling to support the size, agility and timeliness of decision-making necessary to manage these operations efficiently. Given that even a small bottleneck in process can have numerous implications on profit margins for a variety of companies in the cement industry.

Lack of real-time visibility across plants and depots
To maintain a successful cement business, it is necessary to coordinate the efforts of all the different parties involved in the business. Coordination is essential for production units, grinding units (or plants), warehouses, depots, dealers and transport teams; they all must work together effectively to keep operations flowing smoothly. A major issue facing the cement sector is that, because traditional ERP systems were not designed to provide real-time visibility through the supply chain (a very large network), they cannot adequately meet this need.
Most legacy ERP systems still operate on delayed reporting cycles, where operational data is updated several hours after they occur, instead of being reported in real-time, making it impossible for decision-makers to receive the live information they need to manage inventory levels; dispatching, scheduling, and fluctuations in the areas they service. With transportation making up a significant portion of the cost of doing business in cement, delayed visibility directly affects profitability. Therefore, a modern cement company needs immediate access to the operational data they require to support their business, rather than reports that provide that information after having made the necessary decision.

Poor integration with supply chain and logistics
Logistics play a crucial role in the success of many organisations; the cement industry is one of those industries that relies much on logistics. From the movement of raw materials to the delivery of finished products, the efficiency with which transportation is utilised is critical to the company’s profitability. Unfortunately, most traditional enterprise resource planning systems are still designed and used as stand-alone systems and don’t connect properly with the logistics networks and processes of a company. This means companies rely on phone calls, spreadsheets, and manual coordination to manage deliveries and vehicles during their transit.
As a result of this condition, tracking delays is much more difficult, route optimisation is less effective and vehicle turnaround time increases. In short, the modern cement supply chain needs seamless digital connections between manufacturing, warehousing, transportation, and dealer networks in order to be efficient, transparent, and respond faster to customer demands than those companies that do not have an integrated supply chain.

Continued dependency on manual processes
One of the most significant ironies within numerous cement companies is that, although the companies have invested in ERP systems, they still require several manual operations to support their daily operations. Workers still rely on spreadsheets, hard copy documents, emails, and non-electronic approvals, all of which are time-consuming and increase the likelihood of errors. Failure to properly enter dispatch records may result in incorrect inventory information, which may lead to billing errors that create operational confusion at the company’s scale of operations.
Manual processes also reduce productivity because employees must spend an inordinate amount of time keeping the various systems updated and very little time involved in analysing the data or improving the execution of their work. A further complication related to using technology is the diminishing ease of use. Technology was designed to improve the efficiency of operations and have a net result of reducing complexity. If workers require multiple manual operations to perform basic operational activities, the ERP system has not met its intended objective.

Weak analytics and forecasting capabilities
The cement industry has a market that is constantly in flux, due to factors such as infrastructure investment, seasonality of demand, fuel costs, building activity by region and general economic cycles; therefore, having accurate forecasts is very important in this type of market. Traditional ERP systems are primarily data repositories with limited analytic functionality; thus, they capture transactional and operational information but generally lack advanced analytical capabilities for converting captured data into actionable information. This affects everything from demand forecasting and inventory planning through procurement and production scheduling.
Companies frequently struggle to predict when regional demand will surge, identify slow-moving inventory items, or optimise their production capacity in a manner that is effective. Without the benefit of predictive intelligence, companies find themselves having to react to issues rather than preparing to address them. With today’s increased competition in the marketplace, relying on reactive decision-making is no longer a viable option.

The future of ERP in the cement industry
In the world of enterprise resource planning (ERP), intelligence, automation, and predictive decision-making are the future. The use of artificial intelligence and machine learning in today’s ERP systems allows them to provide far more than simply documenting operational data. These intelligent systems can model demand patterns, predicting maintenance needs, managing purchasing and inventory levels, assisting with dispatching and scheduling, and identifying inefficiencies prior to becoming a significant issue.
Cement manufacturers will see reductions in downtime, improved cost control, increased inventory productivity, and quicker decision-making through all areas of their operation due to the use of an intelligent ERP system. An intelligent ERP system enables you to turn data into a source of competitive advantage vs. simply providing you with a report.

Greater adoption of cloud-based ERP
Cloud ERP systems are increasingly becoming a necessity for businesses operating across multiple locations. Cloud ERP is far more flexible and scalable than the flagships on-premise systems. For cement companies operating under remotely distributed conditions, cloud technology allows the teams to access real-time information from anywhere. Management teams can monitor plant performance via remote access, while field teams and depot managers can coordinate more effectively. Additionally, cloud-based systems facilitate upgrades, lessening the reliance on IT organisations, while allowing for operational scaling with no major infrastructure investment. In a fast-moving industry, agility matters and cloud ERP delivers just that.

Industry-specific ERP solutions
Generic enterprise solutions form the basis for many traditional ERP platforms. However, numerous sectors today require detailed and very specialised operating requirements. For example, in the cement sector, there are areas of importance such as freight optimisation, clinker tracking and bulk dispatch management, along with dealer incentive structures, and multi-location production planning that can require sector-specific workflows and functionality.
Consequently, sector-specific ERP models are rapidly gaining favour. Because quasi-customised approaches can be costly, difficult to maintain, and may not provide a suitable product for the user’s needs, more companies are choosing an ERP that comprises industry-specific functionality and is designed specifically for their operation; reducing the need for tremendous amounts of customisation while providing an enhanced level of usability and a better fit to what the way their business operates versus a generic enterprise process. When users find an ERP model that provides them with functionality that can be built into their workflow, they are much more likely to accept the use of the system than if the ERP model were generic in nature.

Integrated logistics and supply chain ecosystems
For the ERP systems of the future to be truly effective as a fully integrated operational ecosystem, there must be a common digital backbone connecting all participants in the supply chain manufacturers, distribution centres, carriers, retailers, purchasing departments and consumers. In doing so, businesses will achieve much greater operational performance by implementing elements like real-time truck tracking, automated route planning, digital proof-of-delivery and integrated communication with their suppliers. A complete supplier chain will lead to reduced supply chain delays, as well as lower transportation costs and greater customer satisfaction through increased visibility of delivery status and quicker response times.

E-mobile and user-friendly systems
Today, employees want their technology to be efficient, easy to use, and portable, but many of the older-style enterprise resource planning systems don’t provide employees with anything but a dated interface and therefore make it hard for them to adopt them. Today’s ERP systems need to give importance to usability and accessibility. Mobile-first systems will allow the employee to approve shipments, view the inventory, track the progress of deliveries, and get production data all on their smartphone or tablet. This enables much quicker responses to employees’ needs, aiding in user adoption of the application, and allowing for faster data entry from the field. The more user-friendly an ERP application is, the greater the operational value it brings to the company.
As a result, the legacy systems used to provide basic operational support are now out-dated and can no longer handle the main challenges of operating a modern cement company. The future of the industry will require sophisticated ERP systems that are developed via cloud technologies that provide functionality like real time visibility into your business; integrated logistics solutions supplier, customer, and internal logistics, predictive data analytics; and user-friendly interfaces. For cement manufacturers, upgrading ERP Systems is not just a technology decision but rather it is a Business Imperative. The cement companies that implement better digital systems will be positioned to improve operational efficiencies, lower costs, create stronger supply chains and compete more effectively in the future.

About the author
Veerendra Jamdade, CEO and Founder, Vritti Solutions,
is an award-winning technology leader with over 33 years of experience driving digital transformation across manufacturing and enterprise ecosystems through ERP, CRM and WMS solutions.

Concrete

Cement Makers’ Margins To Fall Rs 50-75 Per Tonne Amid West Asia Conflict

Crisil Sees Margins Easing Despite Steady Demand

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Crisil said operating margins of Indian cement manufacturers are expected to decline by Rs 50-75 per tonne (t) this fiscal to Rs 925-950 per t due to higher input costs triggered by the West Asia conflict. The analysis covered 18 cement companies accounting for nearly 90 per cent of India’s domestic cement capacity and noted margins had improved sharply to around Rs 1,000 per t in fiscal 2026.

Crisil noted that the reduction would be driven mainly by higher power and fuel costs, which account for about 30 per cent of total costs, as petcoke and imported coal prices have surged amid geopolitical uncertainties. Freight costs, which account for about a quarter of total costs, are also expected to remain elevated because of higher diesel prices. The impact on profitability is likely to be more pronounced in the first half of the fiscal year before easing commodity prices moderate cost pressures later.

The rating agency said steady domestic demand and strong balance sheets should keep credit profiles stable despite the moderation in margins. Green energy currently accounts for 35-40 per cent of the sector’s total electricity consumption and is expected to partly cushion higher energy costs. Operating cash flows are likely to remain resilient, supported by projected 6-7 per cent growth in cement demand this fiscal.

Crisil highlighted that demand growth will be driven primarily by infrastructure spending, which meets about one-third of sector consumption, and by a nearly 18 per cent higher budgetary allocation for core ministries that should support project execution. Weaker rural housing demand amid pressure on agricultural incomes from a possible below-average monsoon may be offset by improved urban housing demand supported by favourable home-loan rates and a strong pipeline of Pradhan Mantri Awas Yojana-Urban projects. Ongoing capacity additions will keep capital expenditure elevated and may lift net debt to EBITDA to between 1.2 and 1.4 times from around 1.0 time last fiscal, though ratios are expected to remain healthy.

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Concrete

UltraTech Board Approves Rs 50 bn Fundraise Via NCDs

Company to issue half a million debentures for expansion plan

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UltraTech Cement’s board of directors has approved raising Rs 5,000 crore (Rs 50 bn) through non?convertible debentures issued in rupees.

The finance committee cleared a proposal to issue up to 500,000 fully paid, unsecured, listed, rated, redeemable, rupee?denominated, non?convertible, non?cumulative debentures of Rs 1 lakh each (Rs 0.1 mn each), aggregating to the Rs 5,000 crore programme.

As of June 2026 the firm reported net debt of Rs 15,875 crore (Rs 158.75 bn) and said its capacity expansion projects under execution are backed by capital expenditure of about Rs 17,000 crore (Rs 170 bn) over the next two to two?and?a?half years.

UltraTech spent Rs 9,500 crore (Rs 95 bn) on capital expenditure in financial year 2026 and in April the group crossed 200.1 mn tonnes per annum of domestic grey cement capacity and 205.5 mn tonnes per annum of global capacity.

The chief financial officer indicated the company would take consolidated capacity beyond 242 mn tonnes per annum, with grey cement capacity reaching 212.7 mn tonnes per annum by the end of financial year 2027. He noted the net debt?to?earnings before interest, taxes, depreciation and amortisation ratio stood at 0.87 times as of June 2026 and the company was confident of ending financial year 2027 with the ratio below one time.

In the first quarter of financial year 2026?27 UltraTech’s net profit attributable to owners rose 16.8 per cent year?on?year to Rs 2,599.3 crore (Rs 25.993 bn) and revenue from operations increased 15.9 per cent to Rs 24,648.20 crore (Rs 246.482 bn). The board approval is expected to complement internal cash flows as the company advances its expansion programme.

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Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

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Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.

Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.

He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.

The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.

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