South African electricity provider, Eskom has implemented a Continuous Business Improvement (CBI) strategy from South African IT consultant and SAP specialist, Spearhead, in an effort to optimise its supply chain management (SCM) processes and systems usage.
Spearhead`s CBI strategy will be used to identify SAP systems` value and improve return on investment, operational level efficiencies and utilisation of IT and business.
The CBI strategy will also be used to improve the management of Eskom`s inventory processes - specifically procurement - as well as to determine whether its SAP system is being utilised to its full potential.
Niel Malan, materials manager: distribution, central region at Eskom, says the utility company took the decision to examine the reasons for the possible under-utilisation of its SAP system. As part of this process it required an analysis of the current state of its data flows and how they could be optimised.
"In addition, we had to determine whether our employees needed additional training and if we should go `back to basics` from an SCM point of view," he says.
Celia Haupt, director of Spearhead, comments: "Our main goal was to identify the problems that were putting strain on Eskom`s operational efficiencies and how its system could be optimised to address these problems.
After a two-week analysis of Eskom`s SCM and other processes at its Simmerpan inventory department and procurement division in Braamfontein, Spearhead made key recommendations to the managerial team.
Spearhead determined that Eskom was indeed not taking full advantage of its SAP system`s functionalities. The provider`s procurement processes were, for example, being compromised due to a non-consistent approach to management of materials.
"During our analysis we found that their processes were hampered by critical elements such as poor visibility of inventory, statuses and material groups, invalid materials, and materials not being assigned to specific people," explains Haupt.
"Subsequently, we recommended that critical stock and materials must be classified and flagged and that a responsible person must validate all the planning materials."
Spearhead also found that there were critical issues around the planning of spare stock and these problems had to be resolved interdepartmentally.
Following Spearhead`s analysis and recommendations, Eskom has undertaken to implement the company`s value propositions internally, which is currently in progress.
These include simpler and more efficient day-to-day processing of requirements, responsiveness to changes in demand and inventory policy, improved management of critical stock and dealing with data inconsistencies more frequently.
"Our value propositions, for example, also entails the setup and execution of an education and training plan to ensure sustained changes in business processes as well addressing analysis gaps," says Haupt.
Concludes Malan: "Implementing Spearhead`s CBI strategy has proven to be a valuable exercise. It has contributed significantly towards the visibility of our problem areas and provided us with relevant and achievable recommendations."
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