The taste of success

Feature Article | July 12, 2006 by admin

Portrait

Portrait

For more than a hundred years, Torres has guaranteed wines of the highest quality. The family-run business exports its wines, such as Sangre de Toro or Vina Sol, and spirits, including various brandies such as the famous Jaime I and Torres 10 brands, to over 120 countries. The wines are produced for stock for the Spanish market, while they are generally made to order for export.

Mapping a large number of variants for export

As a result of its strong export business, Torres needs to manage and document a large number of variants of the same product. The different countries and languages lead to different requirements for the wines and spirits, depending on the year of manufacture, the size and shape of the bottles, the type of bottle seal, and the label. “To be able to map order, production, and delivery processes in full and without integration gaps, we therefore needed an integrated information management system based on standardized product master data and an integrated IT landscape,” explains Juan Luther, itelligence project manager at Torres.
Before the implementation of SAP, the IT infrastructure basically consisted of the ERP system MOVEX (Intentia). Torres used this solution to cover the areas of financials and controlling, materials management, and production. The wine producer used the COMERCIAL sales information system, a customer development, to manage export business and local sales. Grouped around these “main systems” were additional systems for field sales, warehouse management, or customs processing for export, for example.

SAP implementation at Miguel Torres

SAP implementation at Miguel Torres

Over the years, therefore, the IT landscape had become connected by means of numerous interfaces and was highly complex. Some of the individual departments worked with their own product master data based on Excel lists. In 2004, the Torres management decided to map the business processes in a transparent way, using a future-proof software that maintains consolidated data and information on a standardized platform. The company decided on SAP R/3 Enterprise at an early stage. Thanks to its industry expertise, experiences in comparable international projects, and excellent reputation, SERVICIOS INFORMATICOS ITELLIGENCE, S.A., the Spanish subsidiary of itelligence AG, was selected from the five competitors bidding to execute the SAP implementation. Quality assurance was conducted by SAP España.
The SAP project was launched in October 2004, and SAP R/3 Enterprise went into productive operation on January 9, 2006 in a “big bang” approach. With the ASAP implementation method, itelligence made use of best practices from global SAP implementations. “One reason for the project’s success was the structured implementation method, another the high level of motivation and the excellent cooperation among all those involved in the project,” says Juan Luther.

SAP at Torres – at a glance

SAP at Torres – at a glance

The new, integrated planning features range from sales forecasts through to budgeting, they meet the requirements of purchasing, and optimize the flow of goods and material requirements planning. Torres now has standardized data management and transparent sales processes. These extend from pricing through to the management of the marketing budget for the wine suppliers in the export trade. Important information, such as the production data for wines and spirits, shipping notes from suppliers, or transfer orders from customers, for example, is consolidated centrally at an early stage. “As a result, Torres can now also easily manage the large number of product variants it has for a red wine like Coronas, a white like San Valentín, or a dessert wine like Moscatel,” says Luther.
In addition, the wine producer has been able to simplify its handling of goods movements within the warehouse, for example stock putaways, removals, and transfers, as well as goods receipts and issues. A prerequisite for this was SAP Handling Unit Management (HUM) – which is integrated with several important customers by means of EDI. Torres uses an individual HU number containing all relevant identification data, to track each package of wines or spirits accurately. The wine producer now also manages the whole life cycle for extensive retail contracts, which are common in Spain, fully in SAP – with an add-on developed by itelligence.
The Torres management is also benefiting from the integrated SAP software. Previously, important information about logistics or finance first had to be obtained from the individual business divisions and consolidated, a time-consuming process. “SAP Business Information Warehouse (SAP BW) has brought major improvements to reporting at Torres and has considerably accelerated the processes – for example analyses and comparisons of sales statistics on the basis of planned, current, and historical sales figures,” states Luther. In addition, the Torres management can use profitability analyses to evaluate Sales and other business divisions and individual market segments – split up by products, customers, or orders – with regard to their contribution to earnings or contribution margin. SAP BW is also providing transparency in cost accounting, because the document flow can be tracked right down to the level of detailed information for the individual documents, for example.

Business divisions connected

However, Torres’ greatest benefit from the SAP implementation is the integration of the individual business division coupled with internal restructuring. As part of the SAP implementation, Torres set up a separate department for supply chain management, and the company hopes this will result above all in tighter logistics processes and thus cost savings in the future. Customers and merchants, on the other hand, benefit from a higher service level and better delivery reliability.
As a result of its positive experiences, Torres wants to standardize its IT landscape further, reduce the costs for maintenance, and lower the total cost of ownership over the long term. For example, the company is planning fully automatic warehouse management for more economically effective warehousing. SAP Mobile Sales will also further improve information management for Torres sales staff.

Dr. Andreas Schaffry

Dr. Andreas Schaffry

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