Confectionery and drinks giant Cadbury Schweppes says problems with its SAP implementation have hit revenues and profits in the UK to the tune of some £12 million.
In its latest trading update ahead of publishing interim results in August, Cadbury Schweppes CEO Todd Stitzer says: “Our EMEA region has had a challenging start to the year, particularly Cadbury Trebor Bassett [CTB] in the UK. Revenues and profits in CTB have been impacted by an estimated … £12 million due to … increased discounting to clear high levels of inventory built up during the implementation of a new IT system in the fourth quarter.”
Apparently, chocolate bar stocks were allowed to build too high towards the end of they year and that, combined with what Stitzer describes as a weak market early in 2006, meant that various popular brands had to be heavily discounted.
CTB’s SAP ERP-based Probe implementation, which went live in July last year, was built to integrate all of its manufacturing, supply chain, distribution, sales and marketing, with the usual expected efficiencies and profitability and business improvements.
Alastair Sorbie, CEO of SAP rival IFS, says: “It just goes to show that what some regard as a safe choice can cost you your share price, your results, and even your job. The days of the global wall-to-wall five-year rollout are over, and businesses can only benefit as a result.
“SAP needs to learn from its customers, enable them to become more agile, and integrate their business processes. In the current economic climate you need to be able to respond quickly to change, and not remain shackled by unresponsive systems that can’t react.”
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