Csiper logic sets new course for
Anglovaal Industries' vector logistics
- November 20, 2002
The Contract
Leading management consultancy Csiper Consulting, a subsidiary of arivia.kom,
has successfully completed a contract worth an estimated R7.5m to implement
the Sales and Distribution, Warehousing and Purchasing modules of SAP
R/3 for Vector Logistics.
The logistics business focuses solely on third party logistic services
(3PLS) for the food and related industries within Southern Africa across
the retail, wholesale and food service sectors. Vector Logistics, previously
known as the Customer Division within I&J, was entirely re-launched
as a separate company within the Anglovaal Industries stable as of 1
July 2002.
The Client
Vector Logistics, whose strategic intent is to be the preferred provider
of value- added third party logistics services to the South African
food industry, found that an opportunity existed to implement multi-temperature
contract distribution (MTCD) for the food service trade. This involves
management of the total supply chain for the distribution and packaging
across the three temperature zones of frozen, chilled and ambient products.
In simple terms, MTCD is a total logistics service
to selected large franchise groups who wish to have central control
and discipline with consistency throughout their branded outlets nationwide.
Through MTCD, Vector provides customers with central distribution centres
whereby they pull all their stock requirements within their food processing
disciplines and distribute from strategic hubs to their client’s
branches and units across the country. The service provides a one-stop,
third party logistics service through strategic partnerships.
The “Genesis” project was awarded to Csiper
Consulting in February 2001 and was implemented over a period of 20
months to October 2002. Colin Jackson, Csiper Consulting programme manager,
managed the entire project from its initiation, soon after which a selection
process was begun to appoint software consultants. Csiper Consulting
competed against SAP Africa, amongst others, and was eventually appointed
to provide project management and co-ordination, SAP consulting, as
well as implementation expertise.
Hans Visser, Managing Director of Csiper Consulting, comments: “We
are very proud to be associated with the brand names of Vector Logistics
and Anglovaal Industries, so much more because we are effectively state-owned
and we have made it our mission to challenge the clichés around
state-owned enterprises. We have been operating successfully and we
continue to win work in the private sector against the competitors both
in South Africa and offshore. We do not mind our competitors seeing
us as old-style “civil servants”, it keeps them complacent
and gives us the edge. It is however important that our clients see
the proof that we are a serious contender for leading-edge IT and management
consulting work.”
The Challenge
Vector Logistics found that its legacy systems were inadequate to cope
with the extensive flexibility demanded by the new business in warehousing
and distribution across three temperature zones as well as demands from
principals to fast track changes to the existing business methods according
to international trends.
“The inability of the legacy systems to cope with the demands
of setting up a division was a compelling reason to move to a different
enterprise management system (EMS). Also, SAP demonstrated the capacity
and flexibility required by the business,” explains Jackson. “As
SAP financial modules had already been deployed by the organisation,
Vector Logistics once again chose SAP in EMS to provide a wall-to-wall
solution for its new, as well as its traditional business.“
There were two significant challenges in this project, namely to build
functionality onto SAP to allow for random weight products and the peculiarities
of handling consignment stock for principals.
The Solution
The project was divided into three phases:
- The introduction of an entirely new business model
in contract distribution as a wall-to-wall multi-temperature foods
distribution hub is an entirely uncharted concept for South Africa.
The contract distribution model was introduced at Clayville (Johannesburg),
Pietermaritzburg and Diep River (Cape Town) within eight months and
included warehouse management and a call centre.
- The decoupling and ring-fencing of Vector Logistics
as a separately incorporated logistics company, within the SAP system,
with a separate financial system including assets, debtors, and reporting.
In this phase of the project a major practical challenge was the moving
of the approximately 15,000 debtors from I&J to Vector Logistics.
- The fast-tracked roll-out of SAP at the traditional
business sites, with full warehouse management, RF (radio-frequency)
wireless terminals and call centres.
Broad project elements within the implementation
of the traditional project included:
- The deployment of eight decentralised CRM call
centres, throughout South Africa and in Windhoek, Namibia.
- The introduction of SAP Archiving in parallel with
the main project
- Integration with Roadshow Software, which uses
satellite tracking for optimisation of scheduling and routing of transport
- The writing of bolt-on, post-trip reconciliation
system (functionality that does not exist in SAP) to take care of
the administration of cash receipts and handling of stock returns.
The traditional implementation project was dealt with
in stages, since Vector has one of the most extensive and sophisticated
national frozen and chilled distribution networks in the country, consisting
of 16 depots operating across the spectrum of stock holding principles.
The roll out started with four sites in the Western Cape (three in Cape
Town and one in George), before moving to Bloemfontein, Kimberley, Klerksdorp
and Welkom in the second phase. The third phase included Durban, Newcastle
and Empangeni and the fourth covered Port Elizabeth, East London and
Windhoek. The final roll out included Gauteng (Roodepoort), Polokwane
and Nelspruit. The entire traditional implementation and roll out took
under twelve months.
The Approach
Vector Logistics provided business input in the form
of the commitment of its most senior resources as steering committee
members and team leaders. Avision, which is also part of Anglovaal Industries,
provided technical expertise and some SAP skills as well as the entire
IT infrastructure according to requirements set out by Csiper Consulting
and the steering committee.
Concludes Jackson: “We completed a very large
project and roll out in unusual circumstances, since we had a very small
core team of Csiper consultants, and the considerable expertise of Avision
and its management. The success of the project can be attributed to
the high calibre of staff and resources seconded to the project by the
client, as well as the participation and commitment of the senior management
team. Decisions were always made timeously, and we were able to re-engineer
the system where appropriate, to world-class and cutting-edge standards.”
Benefits to the clients
David Hood, managing director of Vector Logistics says:
“In the long term we believe that the new SAP modules will help
us to exploit new business opportunities previously unavailable due
to the constraints of our legacy systems. I believe the biggest benefits
to come out of the project are the standardisation of our business systems,
the implementation of best business practices, the improvement of information
systems, as well as the flexibility to adapt readily to changing business
needs. A major operational benefit is our improved ability to control
stock rotation. This ultimately means the supply chain is streamlined
and the cost saving and management benefits for our clients are significant.”
Jackson estimates that the new model will have significant
tangible benefits for Vector Logistics in stock control, reduced losses
and improved information.
Contact: Csiper Consulting
Hans Visser, Managing Director
Telephone: (012) 341 3222
e-mail: hans.visser@csiper.com
www.csiper.co.za
David Hood, Managing Director
Vector Logistics
Telephone: (031) 313 8400
e-mail: daveh@vectorlog.com
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