NEW YORK -- A new release of SAP's R/3 software recently implemented by Colgate-Palmolive Co. here is enabling the consumer products marketer to improve customer service and streamline internal functions.
The new R/3 version 3.0 is designed by SAP, Waldorf, Germany. Colgate has implemented it with the assistance of Andersen Consulting, Chicago, as the first-ever installation of a version 3.0.
Ed Toben, vice president of information systems at Colgate-Palmolive North America here, told Brand Marketing that SAP R/3 has cut in half the time needed to replenish orders from retail customers.
"From a business standpoint, we determined what we needed to re-engineer our supply chain, with the objective being to improve our customer service to our retail customers to really take the time out of the supply chain," Toben said.
He said Colgate chose SAP because it does a better job of providing integrated systems than its competitors.
"With this system, you are viewing the supply chain, in this case as one integrated system or, more importantly, as one integrated information flow," Toben explained.
He said the program has been implemented across all product lines and covers sales and distribution, manufacturing, materials from Colgate's suppliers and financial aspects of the company. Toben finds the new system helping Colgate in its growth.
"A major objective is to reduce our cost to reinvest in our product line and to grow the business. Everything integrates together. This has allowed us to free more funds for our research and development, advertising and general marketing," he said.
Colgate converted to SAP R/3 in February, rolling it out to most of its domestic operations.
Rick Simon, an associate partner with Andersen Consulting, said Colgate is planning on introducing the program to its other divisions around the world. A similar plan for Europe is under way, with a rollout scheduled for later this year. A rollout is being planned for the Asia-Pacific region and a Latin America introduction is planned for 1997.
"The scope of this program includes customer service, manufacturing, production planning, materials management, forecasting, distribution, transportation and logistics, and financial management, including general ledger, cost accounting, etc.," he said.
Simon said SAP R/3 is allowing Colgate to take full advantage of Efficient Consumer Response benefits and is creating closer relationships with customers through vendor/management replenishment, electronic data interchange and other programs.
Andersen assisted in the training of Colgate's employees, along with teaching them the technological aspects of the program.
"Colgate looked to Andersen to bring in some SAP configuration skills. They were looking for people who had deep SAP skills and skills within their industry. They needed to have configuration skills in order to deal with some of the complexities of a food and consumer packaged goods manufacturer," he said.
SAP R/3 has brought major benefits to Colgate, Simon stated.
"The power of the system is that Colgate now has a significant amount of information about their business in a real time, consistent format that they never had before. That enables them to analyze the business, not only historically, but in real time and then make adjustments accordingly," he said.
While this program was custom-tailored for Colgate's needs, the general premise of the program can be applied to other consumer services companies. Andersen has helped in the development of similar programs for H.J. Heinz, Johnson & Johnson and Volkswagen, among other firms, Simon noted.
"We're seeing a significant amount of our customers in the food and packaged goods industry moving to SAP, even though there are other alternatives available." Companies with less than $500 million in annual sales also are considering an SAP solution adapted for other companies.
In addition to providing software for the food and packaged goods industry, Simon noted that within consumer products, SAP has announced it is developing a solution for retailers.