The Premier Group, one of South Africa`s largest food companies, is going live across the country with its implementation of SSA`s BPCS 6.0.0.4. This is the largest of the more than 60 BPCS installations in South Africa to date, and one of the largest in the world. As a consequence of the implementation, Premier is positioned to both weather the Year 2000 issue and to tackle its new role in a deregulated world. MIS director Alan Robson says that until the early `90s Premier, like all large food producers, had operated in a tightly regulated and sharply proscribed market. The collapse of apartheid, the 1994 elections and a new democratic government saw the end of control boards, the end of price control and the opening up of the market to many new competitors, some of them foreign. "Overnight the market became amazingly competitive," Robson recalls. "Our existing systems were difficult to change, so clearly they had to be either rewritten or replaced." At the time, in 1994, Premier Foods was running Cobol-based production systems on IBM mainframes. They were more than 15 years old, and back then already Premier identified the absolute need to have its systems Year 2000-compliant; the mainframe systems were palpably not. "Had we chosen to rewrite our systems on the same platform, they would have been 20-year-old compliant systems, not giving us the flexibility to react to changing market conditions," Robson says. "Everything pointed to our replacing our existing systems with a market-leading ERP solution." So began the search for a Year 2000-compliant ERP solution. Whichever package Premier Foods was to choose would have to meet very stringent criteria and have to be scalable in the extreme. Among Premier MIS`s specifications: * For economies of scale, Premier MIS provides IS services not only for Premier Foods, but also for Teltron and Bonnita, two sister Premier Group companies. Together these companies have turnover of between R6bn and R7bn and constitute 120 business units. * These business units comprise dairies, bakeries, maize and wheat mills, general food manufacturing plants and distribution depots and, in the case of Teltron, an electronic goods distributor. In other words, the ERP software had to be flexible and easily customisable and to have best business practices encapsulated for these industries. * Premier`s business units are distributed across South Africa`s nine provinces; as such, any ERP solution would have to be configurable in a highly distributed manner. * Premier MIS has a very low cost of computing, measured as a percentage of sales turnover. Against a Top 200 average of 2,5%, a wholesale distribution average of 1,5%, and ,7% for food manufacturing, Premier MIS has a cost of computing of less than ,5%. Premier`s ERP choice had to fit into this low-cost scenario. * Scalability: At the extreme, Premier anticipates having 1 500 users online, operating in realtime. That meant Premier`s ERP application had to be utterly scalable and reliable. The shortlist Eight ERP applications were on the initial shortlist: Baan, Oracle, SmartStream, SAP R/3, JBA, Marcam, MFG Pro and BPCS. The final shortlist came down to SAP R/3, JBA and SSA; BPCS won out for a number of reasons, says Robson. "It was evident that SSA was committed to a client-server architecture, which was our chosen direction. As we were the first in the country to implement Version 6, we got an opportunity to leap ahead and stay ahead of the market. "SSA`s commitment to object orientation meant BPCS fitted in ideally with our distributed architecture. And while we had initially considered a Unix-based version of BPCS, the plummeting cost of AS/400s made a compelling business case; and at the end of the day, our BPCS decision was based on business reasons rather than technical considerations." Premier`s architecture BPCS fits into Premier`s architecture, which Robson describes as "one of the best in the country". All business units nationwide are linked on an open frame relay network which ensures seamless connectivity to Internet, intranet and e-mail services. "Connectivity among 120 business units is already so strategic as to be contributing to the bottom line," Robson says. "We have standardised on the desktop with Microsoft Office, which BPCS dovetails with." Premier has chosen the client/server mode of operation for BPCS. In implementing the client-server mode, Premier opted for a two- rather than three-tier mode. "Because we have such a widely distributed operation, bandwidth prevents our separating the application layer from the database," says Robson. Still running alongside the AS/400-based systems are the mainframes, but these must switched off by end of December 1999 as they are not and cannot easily be made Year 2000-compliant. Laying the foundation Good discipline is the essence of a successful ERP implementation, Robson emphasises. For that reason, a team of eight Premier people spent nine months in the design phase, creating data models (as-is, future and gap analysis) and interviewing business to generate user requirements. This allowed them to standardise on business processes throughout the group. With the help of key user personnel, auditors and two SSA consultants, the team identified and applied best business practices where required. "This was a small team for a project of this size and complexity," says Premier business systems manager Zeta Zaayman. "The complexity comes from the wide distribution of businesses and from the wide diversity of requirements at each site," Zaayman adds. Spending 60% of the time upfront not only made for a more efficient implementation overall, says Zaayman, but also allowed Premier to embed and perpetuate knowledge of the new system`s processes and functionality. Premier has achieved a high level of standardisation across the businesses, with most of the customisation taking place at customer interface level. "We have tried to avoid customisation unless absolutely necessary," says Zaayman. Cost of implementation will run at R2 to each rand of software, a low cost relative to other ERP implementations, but still high by Premier`s standards. "This was inevitable due to our geographical dispersion," comments Robson. Benefits Implementation of BPCS has given Premier Foods many advantages, Robson says. "Firstly, we`ll still have a business to run after the Year 2000. We`ve gained the flexibility to adapt to changing market conditions, which is critical in such a volatile market. "We have more flexible reporting, and access to better information. In fact, BPCS is so rich in functionality that it will allow us to address areas in our business we have ignored to date. These include sales, forecasting, procurement and manufacturing, areas which have really been the stepchildren of the business. "We also expect to save large amounts of money through improved inventory, and, in time, to move into real-world inventory management," Robson adds. The rollout The Premier team, under the direction of Zaayman, has gone live at the Kokstad distribution depot and Pietermaritzburg maize mill. There will be no parallel period, with the sites cutting over from the mainframe systems to BPCS as soon as the clients are configured and testing is done. With these two sites complete, rollout will proceed rapidly, Zaayman asserts, with the team able to implement between five and eight sites in parallel. "Because we modelled our systems so well upfront, we don`t have to redo modelling every time," she adds. "We have standard processes, which means the data resulting from those processes will be comparable, giving management improved, common data which is quick to extract, and accurate." Zaayman expects implementation to be finished by June 1999, although the end-of-year cut-off provides a six-month safety buffer. Commitment No ERP solution is without its challenges, and Premier was stretched at times to cope with those provided by its environment and a new, object-oriented release in BPCS 6.0.0.4. But the "commitment shown by Reg Mitchell and his team" at SSA SA had played a key role in the ultimate success of the implementation, Robson concludes.
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