Savola Foods Arabia Gains Enterprisewide, Real-Time Visibility, Improves Inventory Tracking with Enterprise Resource Planning Solution
 
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Savola Foods Arabia Gains Enterprisewide, Real-Time Visibility, Improves Inventory Tracking with Enterprise Resource Planning Solution

Savola Foods Arabia belongs to the Savola Group, one of the most successful and fastest growing multinational food companies in the Middle East. Founded in 1979, the Savola Group was ranked 12th in terms of revenue among the top 100 Saudi companies in a 2009 report published by Saudi Arabia’s leading daily newspaper, Al Eqtisadiah.

In light of Savola Foods Arabia’s goal of being the most efficient food product manufacturer in Arabia and Levant, the company needed to automate its manual supply chain by implementing an integrated information system. The company wanted to track each manufacturing-related activity—from forecasting to delivering finished goods—in a single, integrated enterprise resource planning (ERP) system.

To meet its goals, Savola Foods Arabia deployed Oracle Process Manufacturing and Oracle Advanced Supply Chain Planning—key Oracle E-Business Suite Release 12 applications—to automate important manufacturing functions—such as material requirements planning, production reporting, item-cost calculation, production scheduling, formula generation, and quality assurance—across the entire supply chain. It also established granular control over inventoried materials and facilitated analyzing the cost of goods sold. Using the Oracle applications, Savola Foods Arabia achieved 99.9% accuracy for monthly inventory tracking by continuously monitoring materials status, product shelf-life dates, and lot-expiration dates.

 
 

 
 

Challenges

A word from Savola Foods Arabia

  • “With a goal of becoming the most efficient food product manufacturer in Arabia and Levant, we needed to streamline our IT infrastructure for more efficient delivery of high-quality products. Oracle E-Business Suite Release 12 provides an end-to-end view of our entire business to drive necessary performance gains for continued growth.” – Fawaz Kilfaden, Regional IT Executive Director, Savola Foods Arabia

  • Record and track each manufacturing-related activity—from forecasting demand to delivering finished goods to the customers—using a single integrated enterprise resource planning (ERP) system
  • Reduce error-prone manual processes related to collecting and processing data from two manufacturing sites—including setups for 35 and 50 daily production batches, and 500 and 800 work-in-progress transactions, respectively—that produce edible oils and sugar
  • Automate a fully-manual materials-requirements planning process that resulted in many purchase requisition iterations and corrections and often compromised materials availability and suppliers’ ability to comply, due to duplicative and inaccurate information
  • Ensure edible oils and sugar batch releases and changes—due to sales and other unplanned demands and breakdowns—are immediately visible to shop-floors in the company’s two manufacturing plants
  • Enhance month-end closing activity efficiency by avoiding manual calculations for the cost of sold goods
  • Avoid unjustified stock adjustments when reconciling inventory balances for edible oils, sugar, raw materials, and packaging materials
  • Maintain a single repository of manufacturing master data for planning, quality management, and financial use
  • Provide a solid business intelligence platform to enable decision-makers to respond faster than ever to frequent market, capacity, and material fluctuations, resulting from the commodity market prices, availability of specific types of edible oil and sugar, as well as reactions of the company’s competitors

Solutions

  • Worked with Oracle Partner Mahindra Satyam to deploy Oracle E-Business Suite Release 12 to streamline business processes across the company and enable it to present business information in real time, enhancing productivity and operational efficiency
  • Used Oracle Process Manufacturing to automate important manufacturing functions across the entire supply chain—from planning, to product development; inventory, manufacturing, and quality management, to costing—to enhance visibility and lower costs, ultimately providing managers with enhanced decision-support capabilities on product costing; profitability analysis; daily, month-to-date, and year-to-date production figures; inventory levels; and material turnover cycles
  • Leveraged Oracle Process Manufacturing and Oracle Advanced Supply Chain Planning to integrate planning and production functions, reducing manual efforts and minimizing errors while establishing production and refinery plans, projected receipts, actual on-hand stock and shipments, and weekly production forecasts
  • Made batch releases and changes immediately visible at the shop-floor level, thus shortening manufacturing times and substantially enhancing plant efficiency
  • Strengthened the company’s transactional data security by introducing a single source of bills of materials and formulas with restrictive versioning control for manufacturing edible oils and sugar
  • Achieved 99.9% accuracy in monthly inventory tracking by providing daily updates of raw material consumption in production batches, as well as continuous monitoring of materials status, product shelf life dates, and lot expiry dates
  • Automated materials sourcing using Oracle Advanced Supply Chain Planning, which routinely calculates the most accurate materials demand while also considering all demands and supplies due, ultimately enabling the company to avoid errors resulting from a previously manual process
  • Facilitated a “cost of goods sold” analysis using powerful drill-down capabilities, providing detailed resource and overhead cost allocations on raw, refined, and packaged goods—an essential component in optimizing manufacturing costs
  • Introduced raw-material lot controls for edible oils, sugar, and packaging materials to enable full raw-material and traded-good traceability, including the ability to accurately and efficiently trace back from the finished goods to all the raw materials that were used to produce them

Why Oracle

“We had previously streamlined a number of key business processes with Oracle E-Business Suite and are very satisfied with the solution overall, said Fawaz Kilfaden, regional IT executive director, Savola Foods Arabia. “To include our manufacturing processes in the integrated application suite and manage our full business cycle with Oracle E-Business Suite, we added Oracle Process Manufacturing. We believe that Oracle E-Business Suite Release 12 is the best ERP solution in the market to meet our business needs.”

Implementation Process

The commitment of both Savola Foods Arabia and Mahindra Satyam’s project teams, as well as the harmony between these teams, were key factors in achieving a successful implementation. Savola Foods Arabia’s department heads and a steering committee facilitated the change management process. Further, Savola Foods Arabia went live during a seven-day factory shutdown, which enabled it to reduce the back-log for users in the initial Oracle Process Manufacturing introduction.

Partner

Savola Foods Arabia executed the Oracle implementation in close collaboration with Oracle partner Mahindra Satyam, a leading global IT services and consulting provider. Savola Foods Arabia’s implementation is part of a nine-phased project aimed at deploying key Oracle E-Business Suite Release 12 applications to cover financials, distribution, human resources, and manufacturing, and serve as a standard ERP system for Savola Group in Saudi Arabia and Egypt.