SAP software gives Nestle sweet returns

Food giant Nestle UK has recouped the money spent on a 6000-user enterprise resource planning system in only two years.

Food giant Nestle UK has recouped the money spent on a 6000-user enterprise resource planning (ERP) system in only two years.

The SAP R/3 software will have paid for itself by the end of the year, says Nigel Pells, information systems director at Nestle UK. He wouldn't say how much the company had spent, but said significant savings had been made.

"We have reduced inventory levels across our entire supply chain. We have much tighter control and are more disciplined in our business processes."

In some areas, Nestle UK now holds less than half the stock it did pre-ERP. General improvements in efficiency across the company have had a big impact, too, said Pells.

The changes in working practices introduced in the project contributed to the swift payback. "We now have more of a 'right first time' culture. Before, it was very functional. We have taken a lot of the things that were wrong out of the organisation," Pells added.

The ERP system was installed over a period of five years in 18 UK manufacturing sites. Pells said the biggest challenge was not the software, but managing the change in how employees work.

"Getting people to agree on processes, training them, and using the processes effectively takes longer than anticipated," Pells said.