The first implementation of such size in the corporation
So far the units of the Italian sweets potentate have used SAP solutions in a limited scope, mainly in finance management.
At the beginning of 2004 the corporation decided to start SAP implementation in Poland in much wider functional scope, covering not only finance (FI – financial accounting; FI-AA – fixed assets; TR – treasury), but also logistics (MM – materials management and SD – sales and distribution).
An important element in preparing the implementation were interfaces that would connect SAP with other important systems used by Ferrero. The corporation decided on SAP Exchange Infrastructure technology (SAP XI), a component of SAP NetWeaver integrating environment.
“The management of our headquarters in Italy all the time closely monitored the project. The experience from implementation of the integration platform, created on the basis of SAP XI, and from SAP implementation in logistics, were supposed to be a starting point for creating a SAP model for Ferrero units in other countries. The project was vital for all the corporation. We could feel like pioneers in a sense, especially because solutions such as SAP XI had never been used by Ferrero before", explains Henryk Nowak, IT Director, who managed the project for Ferrero Polska.
Six partners from two countries
SAP implementation in Ferrero Polska started in May 2004. The importance of the project for the corporation was reflected in the choice of partners.
Besides employees of the Polish Ferrero unit as well as managers and IT specialists from Italian headquarters the project involved Atos Origin (a company cooperating with the concern in SAP implementations) and BGP (specialists in TR area corporate solutions), and Bain & Company Inc., an American corporation managing change and optimizing processes.
BCC offered comprehensive implementation support for the Polish part. BCC consultants co-created the concept of the target solution so that it would comply both with corporate business standards and meet the needs of the Polish unit, also in terms of Polish law.
On the basis of solutions created in the concept, configuration works were executed by IT employees from Ferrero Italy and Atos Origin consultants. Tests were carried out by Ferrero employees and BCC prepared test cases and test result documentation.
End user training was carried out by BCC. Its consultants provided wide support during and after the system productive start, which took place last March.
The factors of implementation success
The project scale, its importance for the Polish unit and the whole corporation as well as the number of parties involved made it necessary, when organizing the project, to take into account a number of factors that could affect the final implementation success.
“Creating an overall vision of the company’s operations based on SAP system was vital when planning a detailed scope of the implementation. That is why we committed considerable time first to training and then to analyzing SAP system possibilities in particular areas”, recollects Henryk Nowak.
As the solution was created as a basis for SAP corporate model, the employees had to work out a concept by monitoring the differences in conducting business in various countries of Ferrero group.
At the same time the concept took into account the specificity of Polish conditions in terms of law, accounting and tax.
The choice of Ferrero Polska employees was important, as it guaranteed a proper project course. In terms of organization the project involved work teams responsible for creating a consistent model of application functioning. A substantial challenge for the financial team was introducing a new accounts structure. The materials management team sorted out the indexes master data and introduced them into the system. The number of indexes in Ferrero exceeds 21,000.
A close relation of an IT project with business was particularly evident in the works of the team responsible for the so-called change management, i.e. introducing organizational changes.
All work teams were supported by Atos Origin and BCC consultants.
Henryk Nowak comments on further course of the project:
“During subsequent phases of the implementation we paid close attention to the human and organizational factor. We created a detailed documentation of concept works, which showed
our expectations of the target solution. At the phase of creating the system prototype and tests, the work efficiency was influenced by commitment of the implementation teams cooperating with us. During tests we focused on following business processes in the new IT reality”.
In March Ferrero employees started using SAP system. The project management monitored appropriate use of data directly introduced into SAP and coming from other systems connected with SAP.
“The productive start support phase took a few weeks. During that time, with BCC and Atos Origin assistance, we systematically solved problems which always occur in IT and business projects on such scale. Starting the work with SAP system we in fact started a number of new organizational mechanisms”, says Henryk Nowak.
The system provides a comprehensive support for Ferrero Polska operations. In terms of experience gained, the area of integration by means of SAP XI is particularly vital for the concern.
SAP XI-based integration
SAP Exchange Infrastructure (SAP XI) technology was used by Ferrero to connect SAP system with other solutions used by the company and business partners’ solutions.
A starting point for preparing interfaces was business knowledge possessed by Ferrero employees. BCC and Atos Origin consultants passed expert knowledge on technical opportunities offered by SAP XI platform and supported Ferrero employees in preparing integration concept. Technical execution was the task for the Italian party (Ferrero Italia and Atos Origin), while tests were carried out with participation of all four parties.
Both in Poland and in other countries Ferrero uses PRISM, an IT system dedicated for production planning and control. Interfaces started in the Polish implementation are now a model solution to connect PRISM with SAP.
SAP was also integrated with a system, used by sales representatives to check stocks and customers’ payments status. Thanks to mutual communication the orders introduced by mobile employees are immediately introduced into SAP.
A particularly important solution created with SAP XI technology is for Ferrero Polska integration with external logistic operators that provide services for the company. SAP XI is a means of communication between SAP Ferrero and Qguar and MLS warehouse solutions, used by the operators.
Logistics under control
Cooperation with logistic operators (Fresh Logistics – Raben group and Partners company) is for Ferrero a key link in the logistic chain, as it greatly influences the efficiency of product distribution and punctual service to the company’s customers.
Logistic partners are responsible for supplying cus-tomers with Ferrero products; these are trade chains and wholesale clients. The number of deliveries handles in this way is about 3,000 per month. On the basis of SAP-generated information on planned sales the partners collect and store Ferrero goods in their logistic centers.
Thanks to communication provided by interfaces Ferrero managers know stock levels in particular operators’ locations. An order registered in SAP is sent to the logistic operator, who prepares dispatch and delivery to the customer.
“Managing the so-called decentralized warehouse through SAP system allows us to optimize logistic costs without the risk of losing control over stock and at the same time maintain a high level of customer service”, evaluates Henryk Nowak.
Solution for Poland and corporation
The result of many months of project, which involved in total more than 80 people from six companies and two countries, is firstly an IT system that manages a modified, more efficient model of Ferrero Polska operations. Secondly, we worked out solutions and gained experience, which even now is used by the corporation in planning other SAP projects in other countries.
“A wide range of the project, its innovation on the scale of the concern, close deadlines, the necessity to overcome cultural differences between Poland and Italy – all this added up to sometimes heated atmosphere during SAP implementation. Thanks to great commitment of all the teams, with committed cooperation of Atos Origin and BCC, we worked out new management support standards by IT tools, valuable for the whole Ferrero group”, sums up Henryk Nowak.
Ferrero is an Italy-based European leader in sweets manufacturing. Ferrero goods bear brands such as: Nutella, Raffaello, Kinder Bueno, Tic Tac, Mon Cheri. The company has branches in more than 30 countries and employs over 16,000 people. Its Polish headquarters are in Warsaw. The unit employs 1,200 people and has invested in Poland EUR 150m in fixed assets and plant development. The Ferrero plant in Belsk Duży near Grójec, built from scratch, is considered to be one of the most modern in the corporation.