This article was originally published on The Edge Markets.
Recron (Malaysia) Sdn Bhd — which is part of Reliance Group, one of the world’s largest integrated polyester and textile companies — was not spared from the impact of the Covid-19 pandemic. While it had embarked on its digitalisation journey earlier, much like other businesses, the company had to accelerate its digitalisation efforts to ensure business continuity.
The transition to work-from-home (WFH)arrangements and sustenance of operations across its locations were done seamlessly, thanks to an efficient and responsive IT support team. The support provided by MITI, MIDA and other government agencies as well as shipping companies, port authorities, customs officials and trade associations during the pandemic also helped in ensuring limited disruptions to its exports operations. But the more complex processes required different solutions.
“We were attracted to Standard Chartered’s strong network in the countries that we export to. While its long history equipped it with intricate knowledge of the markets, it also impressed us with its digital awareness and capabilities.”
— Anil Kumar S Mungad,
chief financial officer of Recron Malaysia
“A significant portion of our revenue comes from our exports to various countries. The complexity of the processes and volume of documentation necessitated a solution that focuses on risk management, cash flow and digitalisation for quicker turnaround times, which would help improve our balance sheet and streamline our trade transactions,” says Anil Kumar S Mungad, chief financial officer of Recron.
“At the factory level, we invested heavily in the safety, health and well-being of the employees, where technology helped to address distinct needs, from disinfectant monitoring and temperature checks to WFH flexibilities.”
The company’s goal is to ensure that it has state-of-the-art plants that are fully automated, digitalised and technologically superior. This includes the use of digitalised supply chain planning to ensure efficient execution and improve service levels, as well as the use of best-in-class tools for secure digital operations.
“The first step is always the most difficult. We had to look inwards and carefully identify areas in our business and operations where improvements could be made. We also needed to identify the right solutions, which was another challenge, as they needed to meet specific and unique requirements,” says Anil.
Additionally, given Recron’s vast network and sprawling manufacturing facility, it had to ensure that digitalisation was implemented across the entire supply chain seamlessly.
Fortunately, the company was able to find the solutions it needed from Standard Chartered, says Anil.
“We were attracted to its strong network in the countries that we export to. While its long history equipped it with intricate knowledge of the markets, it also impressed us with its digital awareness and capabilities.”
Adapting to stay ahead
By utilising solutions from Standard Chartered, Recron managed to automate its export process and collaborate with trade partners, such as shipping lines, customs and other government agencies, through a digital trade platform.
The trade platform enables end-to-end online documentation for exports, and facilitates electronic presentations that remove the need to manually courier hard copy of documents between parties.
“This leads to greater operational efficiencies, lower costs and improved security. The faster receipt of trade documents also removed the need for shipping guarantees to release cargo prior to the documents’ arrival, which was the norm when things were done manually,” says Anil.
“The result is a shorter end-to-end turnaround time due to an accelerated payment process and earlier receipt of goods, improving the working capital cycle.”
Given its strong footprint in many countries that Recron exports to, Standard Chartered is able to help the company meet specific trade requirements of each market and rely on its network with local banks to provide quicker processing times and competitive rates. “The bank currently supports Recron’s trade transactions by performing letters of credit discounts and confirmation,” Anil adds.
By automating its processes and digitalising its supply chain, Recron also managed to enhance its decision-making process. For instance, real-time decision support and analytics are made available through its Business Command Centre dashboards.
Meanwhile, its Electronic Warehouse Management system, which utilises smart devices, simplifies complex logistical processes, and optimises inventory tracking, distribution operations, multi-channel fulfilment and other processes in real time, according to Anil.
“As a predictive strategy, we are planning to implement industrial Internet of Things as part of our manufacturing execution system to enhance data-driven smart operations,” he adds.
Additionally, Recron enhanced its customer experience by enabling collaborative planning through a Customer Relationship Management (CRM) platform, mobility apps and predictive analytics on demand forecast. The existing website was revamped and an E-room created for effective document collaboration with internal and external bodies, taking into consideration the WFH arrangements.
“We are planning to implement artificial intelligence and machine learning-powered solutions to detect the changing patterns of customer behaviour by analysing data in near real time, driving revenues and enhancing personalised experiences,” says Anil.
Recron is also looking at utilising Standard Chartered’s host-to-host implementation solution that is integrated with the company’s enterprise resource planning (ERP) system. This cuts down on the payment processing time and strengthens the security of the transactions.
“The solution allows for straight-through processing of payment instructions by automating the process, where transactions are encrypted and routed via a secure internet connection. It provides file acknowledgement and status update of the transactions to the ERP for an easy payment reconciliation process,” says Anil.
“By eliminating the need for manual intervention, it brings down the risk of human error.”
Banking on innovation
An increasing number of companies like Recron are looking for solutions to set up their supply chains for growth while staying resilient. Noting the demand from the industry, Standard Chartered has been helping corporations across Asia, Middle East and Africa manage their digital transformation to achieve those goals.
The bank has developed innovative solutions to meet the international trade, cash and custody needs of businesses and their supply chains.
These include its award-winning Straight2Bank suite of digital banking platforms to help businesses securely and effectively run their cash management, trade finance, foreign exchange and securities services. It has a simple user interface and acts as a single touch point for businesses’ digital banking needs.
Its Straight2Bank Next Gen platform uses the latest technologies to provide business intelligent analytics and intuitive web experiences, with high levels of customisation and security. To date, the bank has migrated more than 90% of its clients to this platform, says Wendy Ang, country head of transaction banking at Standard Chartered Malaysia.
“It is important that both business-to-business and business-to-consumer sellers invest in real-time insights about their buyers so they can constantly adapt and change,” she says.
The strength of Standard Chartered’s solutions lies in the fact that they are highly innovative, fully customisable and designed to meet the needs of businesses, observes Ang. The bank’s global network and deep knowledge of international markets also allows it to offer advice and services across a wide range of specialised areas.
“Technology has always been at the heart of our strategy as a leading bank in the digital space to drive efficiencies, increase automation, introduce global platforms, reduce manual errors and strengthen our defence against financial crime,” says Ang.
“We recognise that our clients are increasingly looking for new solutions to address their need for greater efficiency and security. Ultimately, our aspiration is to be the leading digital banking platform powering global trade, commerce and financial services to clients across our network.”
Additionally, Recron values the importance of sustainability in business and has put in place initiatives aligned to those values. For instance, it is optimising its energy source by using green energy, reducing carbon emissions and ensuring strong human rights policies are in place to protect its employees.
By acting as a partner, Standard Chartered is helping clients like Recron achieve their goals in the long run and embark on their sustainability agenda.
“The adoption of ESG practices is one of the key core initiatives of our group to ensure that we create a safe and resilient business model, and wield a positive impact on the environment and local communities,” says Anil.
Image via The Edge Markets
