Spar Group, an international wholesaler and distributor of commodities, is currently dealing with the consequences of a challenging SAP software implementation at its distribution hub in KwaZulu Natal (KZN), South Africa.
Last year, the company reported a $43 million loss resulting from its software problems.
Yesterday, the Johannesburg-Stock-Exchange-listed company gave shareholders a trading update for the 20 weeks to 16 February 2024, saying the disruption of the system and impact on profitability over the past 12 months has been extensive.
It said: “Fundamentally, while the system is functioning as designed, the business' ability to predict demand and manage availability is not yet optimal. The sub-optimal use of the system is impacting margin and exaggerating costs for this region.”
Further, the group said it has performed a “thorough reassessment of the SAP project over the past six months”. It added that this involved “stabilising the KZN implementation, reassessing the warehouse management system and whether it is fit for purpose and reviewing how the system can continue to be rolled out at a significantly reduced risk level. This will include separating the ERP from the warehouse system and implementing them independently.”
Spar is an international group of independently owned and operated retailers and wholesalers who work together in partnership under the Spar brand. The business comprises more than 13,600 stores in over 48 countries on four continents.
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