Dive Brief:
- Nestlé has completed the first phase of a cloud-based SAP S/4HANA deployment, rolling out the enterprise resource planning software upgrade across 112 countries and 50,000 employees, according to an Oct. 23 press release.
- The installation, which will take two more years to complete, will embed SAP's AI-powered assistant into Nestlé's core business systems, per the release. The company expects the added intelligence to improve procurement, supply chain management and order fulfillment efficiency.
- "With the upgrade, we gain more flexibility, capabilities and insights that will help us roll out new products globally faster to meet the needs of our customers and consumers," Chris Wright, CIO and head of Nestlé IT, said in the release.
Dive Insight:
With the deployment of a more AI-focused ERP system, Nestlé expects more advanced order fulfillment that matches supply and demand in real time for in-store and online retailers. Other upgrade advantages include consistency across reporting and planning processes, along with automated and standardized procurement procedures, according to the release.
“Nestlé has not been the most efficient company in the past," CEO Philipp Navratil told investors last month, adding that the organization wants to speed decision-making through more digitization and automation.
Nestlé’s upgrade comes as the company aims to reduce costs by cutting 16,000 jobs, or 6% of the global workforce, over the next two years. Three-quarters of the cuts will include corporate workers, with the remainder coming from manufacturing and supply chain staffing reductions.
The food and beverage maker is currently upgrading from SAP S/4HANA Finance, the legacy Enterprise Central Component ERP system on SAP HANA, an SAP spokesperson said in an email. SAP introduced ECC in 2004 and the finance component on the in-memory database management system in 2014. SAP plans to end mainstream support for ECC in 2027.
Nestlé migrated its entire SAP ERP from its data centers to the SAP Private Cloud in 2022, the spokesperson said.
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