COATS SA on track with global IT integration drive

Bracing itself for the challenges and opportunities of globalisation, SA sewing thread manufacturer COATS SA is on track with its ICT integration drive, which started three years ago with the implementation of SAP.

"Due to prevailing global trends in the textile industry, especially the geographical dispersion of products, customers, suppliers and employees, we need to rethink the way in which we do business. We have maintained a competitive-edge by integrating our ICT and by outsourcing our non-core business," says Sanjay Dalvi, COATS SA financial director.

COATS SA is a subsidiary of the UK based multinational COATS PLC, the company which owns and manages about 70 independent businesses all over the world. Having all these disparate companies united on one system allows for much greater interaction and utilisation of best resources irrespective of the physical location.

"The major business benefits have been that we are able to reduce inventory and access accurate information about stock from all over the world, leading to dramatic efficiency improvements and cost savings," says Dalvi.

COATS SA is using leading ICT integrator and solutions provider Comparex Africa`s CDE division to manage the current SAP applications, as well as developing more functionality for its users.

COATS implementation partner PLAUT UK implemented SAP in 1999 and provided support until June last year. It made more business sense, especially in light of unfavourable exchange rates, to allow a local supporter to take over the contract. At the same time, COATS SA outsourced its ICT to Comparex Africa.

"As a result of Comparex Africa`s technical expertise, we have extended the life of the current version of SAP and continue to use version 4-01B, successfully," says Dalvi.

"There is a misconception about the efficiency and success of a SAP implementation. The true benefits of SAP can be achieved through paying attention to the training of users, careful analysis of existing business processes and therefore, a greater understanding of SAP`s impact on a business. It will be complex because you are working with an integrated system but therein lies SAP`s true value to an organisation," says Comparex Africa CDE division KZN regional manager, Ivan Wissing.

COATS SA is CDE`s first client in the small, micro and medium enterprise (SMME) market. Other KZN CDE clients utilising SAP are Toyota, Petronet, Richards Bay Coal Terminal and Inkosi Albert Luthuli Central Hospital.

"The challenge with a SMME client is that one has to work smart, because budgets are fairly tight. We changed our methodology to cater for this, and came up with a solution, which utilises experienced consultants, trained in the business and in SAP," says Wissing.

"With the SAP market now in a mature phase, and within the tight budget of a client such as this, a consulting company like CDE has to add a lot more value. The time has come for the real SAP consultant: the business consultant who understands SAP. We have to sell the return on investment before getting any work."

The SAP enterprise resource planning (ERP) market is estimated to be worth between R800 million and R900 million in consulting revenue in SA and growing at between 10% and 15% a year.

The largest SAP implementation players include Comparex Africa, Accenture, PricewaterhouseCoopers, Deloitte Consulting and AST. The newer components of the SAP offering include CRM, Web services, enterprise portal and e-business space.

Before World War II, the textile industry in SA was largely confined to the manufacture of blankets, rugs and sheeting. However, after the war, the sector developed rapidly and today the industry consists of around 300 manufacturers, based mainly in KwaZulu-Natal, the Western Cape, the Eastern Cape and Gauteng, although there is some activity in the Free State and Mpumalanga.