Africa: East African Breweries invests Sh1.3bn in cut cost system

East African Breweries has spent Sh1.3 billion ($18 million) to upgrade its information system in a bid to increase efficiency as it seeks to tap into new markets in the Great Lakes region, Africa Business Daily published June 15.

Dubbed Systems, Applications and Products (or SAP), the platform enables integration of operations across the group’s business units in Kenya and Uganda helping management keep tabs on what is happening at each unit.

Despite having trained 500 heads for the switch, EABL admits its establishment will be up to speed in using the new system in a year’s time. Presently, the units employ different systems with various linkages.

“The point is to improve efficiency as we grow. The current system cannot help us grow and operate efficiently,” said the group commercial director, Chris Caldwell, during an interview.

He notes, for example, that the system has helped the company grow its product reach with the flagship Tusker Lager now on shelves in the US and UK and set for launch in Australia.

The SAP platform is also being used by other organisations such as British American Tobacco (BAT), Mabati Rolling Mills and Bidco Oil refineries. In October lasy year, BAT implemented SAP as a resource planning tool for a cluster comprising of BAT in Kenya, Uganda, Rwanda, Burundi and eastern Congo.
According to project manager, Peter Muiruri, SAP will enable BAT to be managed as a single enterprise whilst enabling the company to have strategic initiatives on areas like finance, supply chain, shared services and global leaf (BAT-speak for the tobacco-growing side of the business).

However, there have been companies which installed enterprise resource planning systems such as SAP but failed to reap the benefits. The well-known case is that of Uchumi Supermarkets which installed the system in 2000 but failed to deliver on procurement controls.

SAP enables consumers, sellers and managers to have information at the time they need to use it. “For example, one cannot tell a customer to come and collect beer at the factory without being sure it is available,” Mr Caldwell said.

That means that it will be possible to tell exactly how much stock is available or when a certain amount will actually be available.
The company’s move to have its shared services centre based at Kenya Re Towers instead of at the Ruaraka head office is intended to avoid duplications across the group and better integrate its services.

SAP, the new enterprise resource programme, has worked in other Diageo subsidiaries around the world. Diageo Kenya holds 42.82 per cent and is therefore the single largest stakeholder at EABL as at the end of June this year.

Mr Caldwell was appointed group commercial director in October 2005 having just completed a three-year assignment in South Africa where he led the formation of a joint venture between Diageo, Heineken & Namibian Breweries, and then served as finance and strategy director. Prior to this he worked in the Middle East with Diageo as finance and strategy director of the Dubai hub and also general manager in North Africa.

The SAP project has had a team of 50 people working as consultants.

The first phase involved analysing the group and its process. The second phase was about design or architecture of the system. The third was building the system involving physical documentation of processes. Currently the company is testing the SAP system using live data, says Mr Caldwell.
It will then move to the acceptance phase which is road testing the system, including training of its staff on it to ensure a smooth transition.

The system is expected to reduce the queuing time by lorries waiting for supplies at the Ruaraka brewery and reduce turnaround time thereby increasing efficiency.

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