In a South African first, Barloworld Equipment, a division of leading international brand management company Barloworld, has upgraded its supply chain management (SCM) software to SAP SCM 4.0.
This move will benefit Barloworld Equipment's customers and suppliers by supporting existing efforts to improve the value chain around maintenance and repair of Caterpillar earthmoving equipment.
Says Gordon Bussicott, Barloworld Equipment project manager, new developments: "Downtime on the large machines used by our mining customers can run into millions of rands. As their repair and maintenance partner, we want to limit downtime, regardless of the customer size, by accurately predicting what parts will be required for specific service or repair interventions. Using SAP SCM to support their equipment management systems, just-in-time inventory will become even more of a reality in the lives of our customers."
Barloworld Equipment, now in its third year as a SAP Business Suite user, has used SAP's Advanced Planner and Optimiser (APO) - which gave the company 'global available to promise' functionality. The company's move to the full SAP SCM solution, of which APO is only one module, gives it the ability to exploit demand planning and collaborative forecasting and replenishment well ahead of its competitors.
"Barloworld's approach is not to acquire technology for its own sake but to ensure that it precisely serves the needs of a given business process, which must in turn serve our corporate strategy," says Barloworld APO team leader, Glenn van Rooyen. "So we've overhauled our parts management processes to extract maximum value from upgrading to the more sophisticated SCM functionality."
With 800 000 parts numbers on file, 50 branches throughout SA, Swaziland, Lesotho, Botswana and Namibia carrying stock and suppliers like Caterpillar constantly upgrading parts for its machines, the complexity of Barloworld parts management is compounded by the considerable expense of individual items.
As Van Rooyen points out: "With the extensive range and an estimated stock holding of more than R350 million, an obvious priority is for us to hold only the absolutely necessary stock and cut costs. But this should not compromise customer service levels, which currently stand at 98% availability within 24 hours. Even so, there's room for improvement and the whole focus of our move to SAP SCM is to find ways to improve not just our own performance but also to help our customers manage turn-around times."
To achieve this, Barloworld Equipment will focus on SAP SCM's demand planning, supply network planning, event management and collaborative planning functionality. "We want to leverage the trust and partnerships we've built with our customers over many years by working with them to predict their needs and take the knee-jerk reaction out of maintenance and repair," Bussicott says. "Our goal is to have parts on site, just-in-time to meet the customer's needs and, even in emergencies, to prevent any delays in the sourcing of relevant materials.
"A critical requirement that led to the upgrade of SCM was the need to collaborate on planning with Caterpillar and other suppliers to minimise the build-up of dead and surplus stock while reducing the incidence of emergency imports and consequent repair delays."
mySAP SCM solution manager, Doug Hunter, says Barloworld Equipment taking the first step on SAP SCM in SA is a fundamental shift for heavy industry in this country. "Barloworld has the rare strategic insight to deliberately use technology as a competitive-edge. That's a bold approach in a sector whose preferred style is to wait and see."
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