Kara Marketing shares digital recipe for success
By Dzof Azmi March 29, 2021
- Credits 64% growth during pandemic to existing digital infrastructure
- Is encouraging distributors to connect to its systems for smoother operations
Kara Marketing Malaysia (KMM), an SME that specialises in coconut milk products managed to record growth in 2020. What was their recipe for success during the pandemic? Digitalisation.
Susanto Lee (pic below), its managing director explains that they have been gradually incorporating digitalisation over the last decade and half. Now, they are expanding their digital footprint beyond their own organization, and hope to get other companies involved as well.
Susanto left Indonesia to look for opportunities abroad, and in 1999 was appointed the director of KMM. Since then, the company's headcount has grown a hundred-fold, and as running the business became more complex, he began looking at how IT could help.
In 2007, the company began by implementing an SAP system, and have since then progressively added to it. To date, Susanto says they have invested "millions of ringgit" in various systems, with varying degrees of success.
In 2014 they incorporated Electronic Staff Records (ESR), then a year later an e-invoice and an Electronic Management Planning (EMP) system. Now they are implementing among others, a Warehouse Management System (WMS), an Advanced Planner and Optimizer (APO), Business Intelligence, a Document Management System (DMS), and a Transport Management System (TMS).
Susanto admits that implementation is not always smooth. Even systems that were "good" weren't necessarily suitable, simply because they weren't a good fit for the organization. To find this fit, he likes to ask staff a basic question. "Are we working for the system or is the system working for us?"
It's about the processes
Serene Neo (pic), Accenture managing director and NewsPage lead, observes that KMM is not unique among Malaysian SMEs who start digitalisation by first implementing back-end systems, and eventually moving to a public facing front-end.
She notes that it's crucial for companies to face forward and consider how they get their products to market. "How do you reach your retailer, (and) how do you help your retailer reach the consumer?"
NewsPage, the unit she leads, is an integrated sales platform specifically for the consumer goods industry, and represents KMM's attempt to extend their reach to incorporate stakeholders outside of the company.
Although one challenge is how to integrate back and front-end seamlessly, Neo is not too worried, saying, "technology is something that you'll always be able to make work".
She is more concerned about whether SMEs understand the need for a more holistic view than just the technology solution. In particular, some SMEs feel that a solution should work right out the box. "But I've I got to tell them, sorry, they have to change as well. It's not about one solution. It's also about your change management, your people, your talent, it's also about your processes."
This idea is not particularly new or novel. But Neo believes that it's a message that bears repeating. "If you still want to do things the old way, then digitalization will not help you,” she warns.
Persuading others to join
What happens if the process extends beyond the company's borders? This is precisely the challenge KMM has at the moment.
"Today we are getting data from our distributors, but it's too slow," says Ooi Say Keong (pic), KMM deputy general manager. The distributor will send over their data at the end of the month (sometimes in an Excel sheet), and then that needs to be inputted into KMM's system. As a result, the data is out of date, and it's difficult to make timely decisions. "That is the very challenging thing that we are looking at today."
When business processes extend outside the company, then it is vital that those parties are invited to join in as well - but it's not necessarily an easy sell.
Ooi points out that many of these companies have their own systems already in place. "They will ask us, ‘Why do you want to implement your DMS when I have my own system running in my business?"
Despite the sceptics, It is those who understand the benefits of digitalisation that will also appreciate the opportunities - and profits - that are available.
Susanto even notes that KMM has been approached by some distributors who want to integrate with their system. For those that ship tens of thousands of SKUs per month, savings of even a few percent translates to something significant.
For those who are hesitant, the success of those adopting digitalization and integrating with KMM, paints the bigger picture. "We explain the whole scope to them, end-to-end," explains Ooi. "Once they use our system, they become very happy. It improves their business!"
"Accept this new era of digitalisation"
Certainly Susanto is determined to continue on this journey. When the pandemic hit last year, he took the opportunity to launch Karta Supermall to sell directly to the consumer. Beyond the obvious coconut-related products, it also sells other groceries, as well as health and beauty products, all served from an 8,000 pallet warehouse dedicated to e-commerce.
When they began they fulfilled only one or two orders a day, but now they process more than 300. Susanto says he has had to hire more people just to pack the shipments, adding, "I believe that five years from now, Karta Supermall will be in the top ten in Malaysia. This is my dream."
Neo maintains SMEs should take this as a positive example. "If they don't go for digitalisation, they will just be at that (same) level," she says. The cost of getting on board is cheaper than ever, while the new generation of SME owners are more digital savvy.
She admits that infrastructure still could be improved in some parts of the country (she estimates in perhaps 5% of Malaysia). She has seen companies whose attempts at digitalising their B2B processes were thwarted by problems as simple as being unable to download an app.
But SMEs should not use this as a reason to not begin. "They have to change their minds and accept this new era of digitalisation," she urges. "If you want to wait to be 100% ready before adopting, then you are too late."