Petrow Food Ingredients (PFI), the South African division of global supplier of spices, herbs, nuts and related food products, CJ Petrow International, has implemented SAP Business One, the enterprise resource planning (ERP) solution for small businesses from software giant, SAP, to improve its management of stock.
PFI has one manufacturing facility, three administrative and sales branches, and 20 warehouses spread across all nine provinces in South Africa. SAP Business One replaced an accounting system that did not allow CPI to drill down to the costs of production or track products all the way from source through production to customer shelves.
"As a provider of food, we have to know exactly where our stock comes from and where it ends up so that, if there is a need to recall a given product, we can do it easily," says PFI financial manager, Riaan Vorster. "At the same time, it is essential that we know what any given product is costing us to produce so that we can refine efficiencies in the manufacturing process.
"We looked at a number of different software packages and the only one that promised the functionality we needed for managing stock in a way that suits a manufacturing environment was SAP Business One. We would have been happy if it had been merely good at that, but it has turned out, in practice, to be superb."
Martin Robinson of Bluekey Software Solutions, PFI's implementation partner, says that the reason for SAP Business One's superior stock management capabilities is that the software allows an organisation to see, in realtime, where stock is in the manufacturing process. "In PFI's previous solution, stock got stuck in work in progress. So invoicing was delayed because they do not know what stock was still in inventory and what was in finished goods. With SAP Business One they can now see that at the click of a button. Moreover, they can see which stock is in which warehouse and in which region."
"Also, accounting packages have a way of averaging out the cost of stock, which makes it difficult to see which are your more profitable lines," Vorster says. "With SAP Business One, I can see precisely what it is costing us to produce each product we take to market."
SAP Business One has also delivered business benefits through increased efficiencies at an administrative level, with inventory being managed now by only one person instead of the team of seven that used to be necessary.
"We are doing far more with less," Vorster says. "And, best of all, none of us are working any harder. In fact, we all go home on time now - and, for the first time in many years, I have got time to play golf! So, on many different levels, SAP Business One has paid for itself already."
Robinson says that, like PFI, all Bluekey's SAP Business One customers are finding that the enhanced access to information the solution gives them is enabling them not only to be more efficient internally but also provide better customer service. "SAP Business One is a growth tool, because, through its automation and integration capabilities, it reduces the resources a small business needs to run in an optimised way."