29th April 2003

Bamburi reaps from software
By Bob Okello

THE information age has necessitated that corporates automate their information technology systems, not just to match the times, but also the improve the efficiency in production and service delivery.

At Bamburi, the largest producer of cement locally, just like any other big manufacturer, the quest for new business information systems for use at its locations in Kenya and Uganda, couldn’t have been more necessary.

“We looked around for a standard business application software system that would match out needs, and settled on SAP R/3 from Germany, that would fully integrate our various functionalities,” says Joash Kiombe, The Business Systems Coordinator.
Previously, Bamburi used an outmoded analog system that was not only inefficient, but also expensive to manage.

There is a wide variety of choice when firms select information systems to suit their needs. Enterprise Resource Planning Systems (ERPS) such as JD Edwards, Oracle Financials and SAP R/3 are available for choice. Such systems are only appropriate if they have local sites or agents with experience on the package to support their implementation.

Bamburi started using the system in 1998 by selecting five modules that were and still remain critical for the efficient running of the company’s operations – financials, Assets management, Controlling and Management Accounting, Sales and Distribution and Materials Management.

Although areas such as Human Resources, Plant Maintenance and Production Planning have not holistically embraced the system, Kiombe enthuses that cost management, reporting and integration of various functions between the head office and other branch locations has become more efficient. Says Kiombe: “Through the various modules, we have adopted a preventive and proactive approach to our operations as opposed to being reactive”. He explains, for instance that in the Controlling and Management Accounting module, any expenditure being incurred is pegged to a monthly performance indicator, attached to a cost centre. It therefore simplifies the budgetary control process. Generally, it is easy to maintain depreciation parameters in coded registers because the required information is always available in the system.

‘Previously, it would take three weeks for it to prepare financial reports ’

The costs for full implementation of the software was in the region of Sh78 million, coming barely five years after it had spent about Sh46.8 million to port rig its then custom made business application Software to a new hardware platform.
“The software has enabled us reduce our headcount, improve sales, purchase, inventory, cement transport and financial costs and also provide better business information. It has also enabled us re-engineer our business processes,” says Kiombe.

To optimize the use of the system, a lot of commitment is required from everyone in the company, the internal functional experts (SAP super-users), end-users and the management.

The implementation of the system has also improved the timeframe within which the firm executes its final reports. Previously, it would take three weeks for it to prepare financial reports. It only takes three days with the SAP technology.

Besides, the software provides the advantage of a single point of data entry and cross-functional integration, enhanced accuracy, control and understanding of business.

Bamburi, however use a different technology for maintenance in its plants-Maximo, which is the standard Plant maintenance system for Lafarge, the holding company. Maximo is a comprehensive computerized maintenance management system (CMMS) designed to tools needed to reduce downtime, increases equipment life, maximizes productivity, lower overall costs and simplify plant equipment maintenance process. An interface has been developed between SAP and Maximo to help exchange inventory and exchange data. For a manufacturing plant, the system is such that, the Maximo provides the job description as the SAP gives the costs of the process. This means that before a job is done, plant operators are able to know from the Maximo monitor, the spares required and their details, and the cost is monitored as production is in process.

“Our engineers and plant operators have been able to cut down on repair and maintenance costs significantly since only what is needed is used.”