Rhodia, a producer and supplier of specialized chemicals, is currently going through a major corporate restructuring. In a strategy to lower costs, the global group, which consists of 20 companies, is in the process of reducing the number of subsidiaries and locations. As part of this strategy, Rhodia also plans to revamp its IT operations. Over the next several years, the chemical firm wants to create a uniform, common IT infrastructure – called Rhodia Core System (RCS) – that will also allows access to shared IT services. And although insular solutions might have the advantage of being optimally tailored to the needs of each location, they also require laborious implementation and customization – and non-integrated systems hinder decision-making companywide.
Doubled Revenues with SAP
The Rhodia Food subsidiary, a consumer specialty company and one of the strongest revenue producers within the Rhodia group, has completed a first step toward creating homogenous IT systems throughout the enterprise. With the support of a Swiss firm, SLI Consulting, 7 of the company’s 24 locations were connected to a common SAP system. As early as September 2000, Rhodia Food began to link its subsidiaries, including Meyhall Switzerland, Meypro Holland, Indal Portugal, and four Texel locations in France. Most of these firms already used an older release of SAP R/3 (3.1I), which first needed to be upgraded to the most recent release (4.6C). The implementation in Portugal included a completely new SAP system, with SAP solutions for financials, controlling, sales and distribution, and materials management. In the meantime, the French locations were completely integrated into the Rhodia Food system. The central computer, which is accessed by about 200 users in 4 countries, is located in France.
“Our goal is to double our revenue within the next five years,” says Jean-Marie Tomatis, director of information services at Rhodia Food. “Rhodia Food is also changing from being purely a manufacturer of ingredients to being a solution provider. To support this change, we need a uniform IT system. The SAP system will help us simplify and integrate business processes.”
United and Yet Separate
The migration of all master data, including customer and sales information, for all seven companies was completed within one year. As a result, the SAP system at Rhodia Food treats each company, Indal, Meyhall, Meypro, and Rhodia Food as an independent entity. “Even though this approach required more effort to install the system and to transfer data, it enabled a clear division of the individual firms for sound controlling,” says Vincenzo Lo Frano, project manager at SLI.
In November 2001, the group’s management also decided to outsource accounts receivable and accounts payable processes for all Rhodia’s production and sales units to an external financial services provider, Accenture. For example, Rhodia Food’s incoming vendor invoices are processed by Accenture in Prague, and are then transferred to the SAP system for additional posting and controlling. Since the beginning of 2002, the central SAP system has also handled accounting procedures.
The technical aspects and documentation of the initial SAP implementation served as a prototype for subsequent projects. “With the integration of the first seven companies, we wanted to create a comprehensive design for additional SAP implementations at Rhodia Food,” says Vincenzo Lo Frano. The company next made plans to link Biolacta to the SAP system. Poland-based Biolacta produces and sells bacterial cultures for Rhodia Food.
Optimal Use of the SAP Standard
Although Rhodia Food had been satisfied with the “old” releases of SAP R/3, individual customization at each location made it challenging to perform a common update of all systems. “At Rhodia, we now want to stick with the SAP standard; standard realization of the system already offers more than what we previously used,” says SLI consultant Vincenzo Lo Frano. The central system at Rhodia Food represents an important step toward integrating the different business processes in various countries and locations. For example, support and screen templates are now maintained for everyone in English. “For us, merging IT to a central standard means the first step toward a global SAP system for Rhodia Food,” says Tomatis, who is also satisfied with the current status.
But the work has by no means been completed: Rhodia Food has set further goals for 2003. First, the company wants to create a global catalog for Rhodia Food and optimize the supply chain using SAP Advanced Planner & Optimizer (SAP APO). In addition, it wants to enhance controlling for upper management on a global basis. And finally, the company wants to integrate additional locations into the Rhodia Food system, for example, companies in the phosphate area.
Groupwide Rollout Still Ahead
Because Rhodia Food’s products are seasonal (with foodstuffs such as ice cream), the company had to finish the project by spring 2002 – which meant it could not complete a total reorganization of all business processes. Only the next step, the groupwide realization of RCS, will enable complete restructuring.
In the restructuring, all 211 locations of the Rhodia group will be re-networked. And even though all locations are connected via an Ethernet network or through dedicated or dial-up lines, most companies still use their own solutions for production, warehousing, human resources, and accounting. In the end, RCS will provide a uniform system throughout the group, preferably with the SAP standard, and with a common ordering system.