Strong inventory management capability, multicurrency handling, forecasting and budgeting as well as system stability were the key system requirements when AEL Mining Services began evaluating enterprise resource planning (ERP) solutions for a roll-out across the organisation’s 15 subsidiaries outside of South Africa.
“We wanted a system that would enable consistency and standardisation in terms of processes and reporting, and provide better management controls across the business. We also wanted to improve access to, and quality of, information; increase the accuracy of sales forecasting; firm up stock management and reduce inventory holding. Multiple currency capability was another important prerequisite of the system. Our subsidiaries report to head office in their functional currency, usually USD, while in-country reporting is in local currency. Very few solutions are able to handle dual currency reporting well. Although many vendors advertise that they can,” says Rafael Fernandes, Group Financial Director at AEL.
The company looked at a number of solutions and the one that could best provide the necessary inventory management functionality, budgeting and forecasting, platform stability and true dual currency handling was SAP Business One, the ERP solution for small and medium sized enterprises. An added advantage of the solution is that SAP Business One is also easily integrated with SAP Business Suite/R3, which is used by AEL Mining Services’ South African operation.
The forecasting ability now allows them to forecast quantities by products, customers and regions, all from within SAP Business One. This data then updates GL Budgets and indicates raw material requirements at AEL South Africa (Head Office). The integration between SAP Business One and SAP Business Suite/R3 will allows branches to consolidate and process data in the same format and functionality as their larger counterpart running SAP R3, designed for larger enterprises. Reporting is currently done directly to the SAP BPC system by extracting data and adding it to the R3 reporting tool, which enhances integration and saves many man hours by no longer manually drafting reporting.
In an staggered approach, the solution has been rolled out to ten of AEL Mining Services’ subsidiaries including Tanzania, Mali, Ghana, Zambia, Zimbabwe, Botswana, DRC, Burkina Faso and Guinea, as well as Indonesia. This process has taken less than ten months. The next step is to implement the solution at the company’s subsidiaries in Mauritius and Chile early next year. SAP Business One’s architecture supports centralisation; and because of the SAP licensing structure, AEL only pays per user. The centralising of AEL’s server has also assisted in minimising hardware and software requirements.
According to Fernandes, the company is already reaping the rewards of using the system. Among the main benefits are improved inventory costing and management, increased control over user actions; better discipline in processing, improved access to information, faster and more accurate input of data, and multi-currency reporting.
Fernandes says, “SAP Business One has allowed AEL Mining Services to implement a standard operating blueprint across all companies, thereby bringing uniformity across the organisation. The system, although delivering on out requirement for standardisation, is highly customisable, allowing it to be easily-aligned to the specific tax requirements of each country we operate in.”
“It is also user-friendly. We have more people than ever before accessing the information they need to do their jobs optimally and efficiently. There is so much we want to do and we believe it will be possible with this solution. For now, our objective is to get everyone on the same platform and the system bedded down. Then we can really start exploiting the vast functionality that SAP Business One has to offer,” he says. Bluekey’s Managing Director, Paul Marketos says it has been a challenging but rewarding project.
“We are proud of the role we have played in what has been an extremely success roll-out. All members of the AEL Mining Services team have worked with us in the spirit of partnership and teamwork that is so critical to the success of a large project like this. We look forward to assisting them with the roll-out of the remaining subsidiaries,” Marketos says.
“SAP Business One has allowed AEL Mining Services to implement a standard operating blueprint across all companies, thereby bringing uniformity across the organisation.” Rafael Fernandes, Group Financial Director at AEL.