Skincare giant Ego Pharmaceuticals has chosen SAP to upgrade its systems in a $2 million overhaul to boost its production and supply capacity.
Implementation of the new suite is primarily aimed at improving demand forecasting abilities and supply chain and warehouse management and is projected to save the firm up to $100,000 per month.
Ego Pharmaceuticals managing director, Alan Oppenheim, said the upgrade would significantly reduce the incidence of stock-outs – customer orders outstripping production capacity – by helping manage cyclic export demands unique to the business.
“Stock-outs have been a significant issue for our business as most retail outlets, especially in our export markets, simply won’t accept backorders. For example, Saudi Arabia is a large export market for us. But the Saudis don’t allow us to ship our products in the height of their summer. The alcohol base in some of our sunscreen products makes them flammable and they can’t refrigerate flammable items on ships,” he said.
“That means that if we miss the shipping timeframe because we’re out of stock, we miss the summer sales of these items. This can have huge implications for our business.”
Oppenheim also said the new package would help them manage compliance with quarantine inventories imposed by the Therapeutic Goods Administration (TGA).
Clarity Solutions is in charge of rolling out the SAP All-in-One software, with migration scheduled to begin immediately.