The South African subsidiary of Procter and Gamble (P&G), one of the world's largest suppliers of branded consumer products - including skin and hair care products, baby care products, pet food, batteries, household cleaners, and laundry products - is assisting its tier 2, 3 and 4 distributors with the implementation of the enterprise resource planning (ERP) solution, Pastel Evolution.
“P&G is rolling out a global initiative to use independent distributors to reach markets that we have not conventionally served before,” says Cobus Terblanche, global business services leader for P&G, South East Africa. “And, although these distributors operate as entirely independent businesses, they are nonetheless an extension of the P&G logistics arm. So we collaborate closely with them to ensure that they are as effective as possible in serving their customers.
“As most of our six new South African distributors have already been working for some time with spazas, smaller supermarkets, and independent wholesalers in rural areas and the former townships, they have good paper-based systems in place. But, for us, they need to order, account for, and track buying trends for more than 600 stock-keeping units - and their old systems just can't stretch that far.
“So, we've recommended that they automate their systems in order for all of us to more efficiently track inventory and keep our replenishment activities relevant to what is, for P&G, a new customer base.”
“We wanted a solution that would be cost-effective for what are currently quite small businesses,” says Cameron Naidoo, P&G SA distributor team systems manager. “At the same time, we are expecting extremely rapid growth from them, so we needed a system that would scale easily. It also needed to be modular, so that distributors could plug and play only the functionality that they need at any given time.
“In addition, because P&G has a strategy of reapplying skills and information from one area of the business to another, we wanted a system that had a global footprint and could be used elsewhere in the P&G world.
“Lastly, we wanted a system that could be implemented quickly and would require a minimum of user training. Pastel Evolution fitted the bill on all counts.”
A pilot implementation, at Kopano Distributors, took 12 weeks. “That's a little longer than is usual for Pastel Evolution,” says Kopano managing director, Tlotlego Kau. “But we were starting from scratch off a paper-based system. And we took the opportunity to adjust our business processes to the best practice contained in Evolution - enabling us to streamline our operations.”
Roux Crafford, managing director of implementation partner, About IT, says even though each of the P&G distributors has its own approach to business, by standardising on the business rules within Evolution as well as the structure of the Evolution database in general and stock items in particular, “we've been able to ensure that each distributor's Evolution system delivers the same results. So P&G can compare apples with apples.
“Also, by carrying the intellectual capital of the Kopano project forward into all the others, we're able to keep implementation times to six weeks and costs to a minimum. Evolution's flexibility makes all of that possible.”
With go-live on 1 September 2008, Kau says: “We're already seeing customer buying trends, which positions us to visit customers on the days they're most likely to buy - with the stock that they're most likely to buy,” Kau says. “It also enables us to plan the routes for our vans more accurately and, thereby, save on fuel and other transport costs. And, we're able to be more efficient in our placement of orders on P&G.”
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