Sorgal
SAP Helps Animal and Fish Feed
Producer Increase Visibility into
Inventory and Costs
Quick facts
“I can get better information with 20%
less effort, which leaves me more time
for value-added tasks.”
Pedro Machado, Systems Administrator
and Controller, Sorgal S.A.
Company
• Name: Sorgal S.A.
• Location: Ovar, Portugal
• Industry: Consumer products
• Products and services: Pet food and feed
for fish, livestock, and poultry
• Revenue: €2.18 million
• Employees: 194
• Web site: www.sorgal.pt
• Implementation partner: SAP® Consulting
organization
• Migrated from old to new catch weight
management architecture
• Connected directly with software developers
• Worked with key users in designing and
testing business scenarios
• Completed project on time, within budget
and scope, going live only 7 weeks after
software release
Why SAP
• Strong worldwide reputation
• Standardized, integrated platform
Challenges and Opportunities
for business processes
• Effectively manage catch weight processes • Successful previous implementations
for 2 additional companies
• Additional enhancements for “stock
• Enhance information available to business
on posting date” and other processes
managers
• Direct interaction with SAP consultants,
solution management, and developers
Objectives
• Standardize and automate processes
Benefits
for catch weight management
• Increased visibility into inventory
• Integrate catch weight and other business
and processing costs
processes supported by SAP for Consumer • Fully integrated catch weight management
Products solutions
with inventory management and accounting
• Improved timeliness and accuracy of stock
SAP Solutions and Services
information
• SAP enhancement packages for the SAP
• Enhanced responsiveness to pricing issues
ERP application, including catch weight
management functionality
Existing Environment
• SAP Ramp-Up program
SAP for Consumer Products solutions with
activated catch weight management
Implementation Highlights
• Installed latest enhancement package
Third-Party Integration
for SAP ERP application for first time
• Database: Microsoft SQL 2005
• Used SAP Ramp-Up and customer validation • Hardware: HP BladeSystem
program to minimize installation time, risk, • Operating system: Microsoft Windows 2003
and costs
SAP Customer Success Story
Consumer Products
Part of Group Soja de Portugal, Sorgal S.A. is one of the largest producers of pet food and feed for fish, livestock, and poultry in Portugal.
When new SAP® solution implementations required the introduction
of efficient processes for catch weight management, Sorgal installed
the latest enhancement package (enhancement package 5) for the
SAP ERP application. In addition to supporting the firm’s advanced
catch weight needs, the new software has improved other business
processes and increased visibility into inventory and costs.
Automating the Catch Management
Process
Catch weight processing, common in the
meat and dairy industry, is used where
there is variation in the weight of individual products. This variation can be the
result of biological differences in unit
content or a loss of weight during storage. Tracking inventory by weight in parallel with unit counts ensures greater
accuracy in pricing, invoicing, inventory
management, and many other business
processes. This is particularly important
in industries where thin profit margins
require cost planning and where firms
perform valuations based on the parallel
unit of measure.
The need for catch weight management
at Sorgal arose when the company
wanted to implement SAP solutions in
two firms involved in the slaughter and
distribution of poultry. To maximize efficiency, Sorgal sought to integrate the
new catch weight processing with other
business processes handled by SAP
for Consumer Products solutions, which
it implemented in 2008.
To meet this need, Sorgal decided
to install a new enhancement package
designed to help companies take advantage of ongoing innovations from SAP.
SAP enhancement packages make it
possible to activate specific features
and technical improvements that will add
business value to existing software without a major upgrade. In addition, the new
enhancement package offered a set
of tools to enable a straightforward stepby-step data migration from the old catch
weight management architecture to the
new and improved one.
independent units of measure (for example, pieces and kilograms) with a variable
conversion factor. The functionality is
fully integrated with inventory management and accounting. For each catch
weight material they use, customers can
choose valuations using either a base
unit of measure or a parallel unit of measure. For non–catch weight materials
the application’s behavior is consistent
regardless of whether catch weight management is activated or not. This means
that a single-instance strategy is enabled
for both material types.
Adding New Business Tools
Standard features in the enhancement
package include support for “stock on
posting date,” which is now enabled in
catch weight management.
“We are very pleased with our implementation of SAP for Consumer Products,
and we chose SAP because of its worldwide reputation in the food industry,” says
Sorgal CIO Stephen Hemsworth. “The
enhancement package offered the functionality we needed, along with support
for data migration.”
Catch weight management functionality
from SAP – its new architecture generally
available since May 2009 – supports two
“Auditors always want to see current
figures on the stock you have,” says
Pedro Machado, systems administrator
and controller at Sorgal. “Before the
implementation, we had to use several
workarounds to measure work in progress, and we depended on manual methods using Microsoft Excel spreadsheets.
This took us an extra day each month.
“In terms of business management,
we believe SAP products are the
best for us.”
Stephen Hemsworth, CIO, Sorgal S.A.
Now we can automatically see the stock
on the post date.” Other enhancements
in the package include localized features
for purchase account management and
standardized reporting functions.
Getting Personalized Help
“The SAP team provided all the contacts
we needed to ensure that the project proceeded as expected,” says Hemsworth.
“This included direct access to the software developers. We knew that whatever
we needed, they would attend to it
immediately.”
As the first customer to use the new
enhancement package, Sorgal worked
closely with SAP and the SAP Ramp-Up
organization, which helps customers
implement solutions that are tested and
validated, but not yet generally available.
The customers, in turn, have the chance
to communicate their real-world experiences directly to SAP product development experts.
SAP and Sorgal learned a lot from
each other, adds Hemsworth, who appreciated the personalized help his company
received. “Data migration is a risky
business,” he notes. “With SAP directly
involved, we felt more secure. And we
definitely saved time and money.”
“Our implementation began with the installation of a copy of our database at the
SAP headquarters in Walldorf, Germany,”
says Machado. “We then created and
tested different business scenarios
With the enhancement package in place,
Sorgal has the support it needs for accurate weight calculation. This should help
reduce freight costs and facilitate billing,
invoices, and payments based on actual
Increasing Visibility for
Better-Informed Decision Making
“The SAP team provided all the contacts we needed to ensure that the project
proceeded as expected. This included direct access to the software developers.
We knew that whatever we needed, they would attend to it immediately.”
Stephen Hemsworth, CIO, Sorgal S.A.
together with help from key business
users before finally going live.”
The installation of the latest enhancement
package included data migration from the
old catch weight management architecture
to the new one. The firm was able to go
live with the new business functions only
seven weeks after the new software
was released.
to the information they need for margin
control, improved many processes, and
helped Sorgal employees see how their
work links to that of other employees.
“From goods receipt through invoicing,
everyone sees their jobs as interrelated,”
Hemsworth says. “Inventory and sales
information is more visible, up-to-date,
and readily available to those who need
it. We can see the real costs of our products and, because we more quickly notice
problems – such as incorrect data input
– we can be more responsive.”
Sorgal has also found it much easier
to integrate data from multiple sources.
Standard SAP reports provide all the information its managers need.
“I can get better information with 20%
less effort, which leaves me more time
for value-added tasks,” Machado says.
“We expect to see additional benefits –
such as lower inventory and food processing cost and higher fulfillment rates
– when our poultry slaughter firms go live
with the new catch weight functionality.”
Looking Ahead
weight. It should also make production
planning more accurate, reduce overstocks, and improve inventory visibility.
In the meantime, Sorgal is researching
additional SAP solutions that can support
radio frequency identification in its warehouses as well as new human resources,
work flow, and mobility tools.
“We expect these capabilities to increase
efficiency and customer satisfaction,”
Hemsworth says.
“In terms of business management,”
Hemsworth says, “we believe SAP products are the best for us.”
Integration with other business tools
has given decision makers quick access
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