Issue No. 9 - February/March 2003
Productivity Gains for Elders new Web-based Supply Chain Management System
In what seems to be a very smooth partnership between peers, Elders and IBM recently ran out new Web-based supply chain management system that has brought Australia’s rural giant some impressive productivity gains.
Elders has been dealing with IBM for several years for both hardware and software and the dialogue between senior management of both companies allows the solutions to be more than providing computer boxes.
“We are a large transaction business,” says Greg Hunt, State Manager for Elders in South Australia. “The volume is huge, and most of the systems were paper-based. As the work has grown we faced the decision whether to put more bums on seats or get our people to work longer and harder on work other than core business.”
During the past five years, Elders turnover in sales of merchandise has grown from $450 million per annum to $1000 million. Rural business has grown from $400 million to $1,300 million and livestock business has grown from $1,000 million to $2,000 million.
Nationwide, Elders operates from more than 400 locations, making 85,000 product offerings, dealing with 1,600 suppliers, 100,000 clients using a sales staff of 1,000. More than 1.2 million merchandise invoices going through the system in one year.
“You can imagine the pressures we are under to cope with this volume of business,” Greg says.
More than 80% of Elders business is done with 10-12 major corporate entities. The paper-based system involved processing some 500 faxes a day. Other potential benefits were obvious; adjusting product ranges on paper used to take days, but IBM’s Web-enabled solution provides for automatic updates.
Translating paper systems to electronic form, Elders needed a close partner in IBM to make sure 40 years’ experience of providing commercial infrastructure to Australian farmers was not lost. The IT had to support a highly-refined supply chain.
IBM State ...