Colgate- Palmolive : The business value of ERP Colgate-Palmoliveis a global consumer products company that implemented SAP R/3enterprise resource planning system. Colgate embarked on animplementation of SAP R/3 to allow the company to access moretimely and accurate data, get the most out of working capital, andreduced manufacturing costs. An important factor for Colgate waswhether it could use the software across the entire spectrum of thebusiness. Colgate needed the ability to coordinate globally and actlocally. The implementation of SAP across the Colgate supply chaincontributed to increased profitability. Now installed in operationsthat produce most of Colgate’s worldwide sales, SAP was expanded toall Colgate divisions worldwide. Global efficiencies in purchasingcombined with products and packing standardization – also producedlarge savings. •Before ERP, it took Colgate U.S. anywhere from oneto five days to acquire and order, and another one to two days toprocess the order. Now, order acquisition and processing combinedtake four hours, not up to seven days. •Distribution planning andpicking use to take up to four days; today, they take fourteenhours. In total the order to delivery time has been cut in half.•Before ERP, on- time deliveries use to occur only 91.5 percent ofthe time, and cases ordered were delivered correctly 97.5 percentof the time. After R/3, the figures are 97.5 percent and 99.0percent respectively. •After ERP, domestic inventories have droppedone third, and receivables outstanding have dropped to 22.4 daysfrom 31.4. Working capital as a percentage of sales has plummetedto 6.3 percent from 11.3 percent. Total delivered cost per case hasbeen reduced by nearly 10 percent. 1. Referring to the above caseexplain briefly that in which business processes ERP was integratedin Colgate Palmolive to gain the remarkable results? 2. What arethe important points that need to be considered for the timelySupply Chain. Explain briefly?
