“SAP ERP is more than a mere tool to aid and optimize work.
It is a business solution, a philosophy for the workplace,” says
Joaquim Paulo, CIO of Grupo São Martinho, one of the largest
worldwide producers of sugarcane and sugarcane derivatives,
including sugar and ethanol.
As a longtime user of SAP software, the Brazil-based Grupo
São Martinho decided to migrate to SAP ERP, convinced that the
solution could help the group seize new business opportunities –
by enabling greater visibility into its operations and by helping it
improve management of information groupwide.
Grupo São Martinho – comprising Usina São Martinho S.A.,
Monte Sereno Agrícola S.A., Companhia Industrial e Agrícola
Ometto, Boa Vista Agrícola e Pecuária Lda., and OMTEK –
employs 6,200 people. Currently managed by the Shared Services
Center located in Pradópolis, the group began operating in 1937.
On a yearly basis, it processes an average of 10 million tons of
sugarcane, which yields around 800,000 tons of sugar and 400,000
cubic meters of ethanol.
Beginning of a Long Relationship with SAP
In the mid-1990s, the group conducted a survey that clearly
showed it had to streamline its processes – if it wanted to cut costs.
“Costs were very high, which was a concern to the company,” says
Paulo. “So, in January 1996, we decided to carry out a survey of
our management, financial, and supply areas and outline new
SAP ERP is more than a mere tool to aid and
optimize work. It is a business solution, a philosophy
for the workplace.
|Joaquim Paulo, CIO
Grupo São Martinho.
“The survey covered approximately 2,500 items, involving the
positioning of the companies, as well as cost/benefit ratios and
other strategic and technological requirements,” explains Paulo.
After a detailed analysis of market offerings, the group opted for
SAP ERP software, “because of its huge potential to meet the
requirements of our new business model,” explains the CIO.
“The restructuring process involved a total investment of US$10
million, with the purchase of the SAP accounting software for
only 10% of this sum,” says Paulo. “The result was a savings of
US$18 million in the first year.”
The project represented a pioneering effort in the industry –
and gained much attention because of its impressive results.
Better than Expected Results
The implementation led to a reduction of the product purchasing
cycle from 22 days to 2 days. It also enabled the group to settle
accounts in 5 days rather than 20, and reduced the number of
suppliers from 1,500 to 900.
The implementation of the SAP software for material management,
financial accounting, and controlling began in July 1997.
The software went live in September 1998. “Upon completing
the project, we drew up a battle plan to deal with problems –
which as of today have not appeared,” jokes Paulo.
The same team that carried out the survey restructured the
maintenance, cultivation, harvesting, and industrial production
processes using SAP software for plant maintenance and production
Building on Success
It was in part because of its earlier success with SAP ERP that
Grupo São Martinho decided to migrate to a new version – and in
part because the company knew the solution would deliver
exactly what it needed.
The group also made plans to implement the analytics functionality
found in the SAP Strategic Enterprise Management (SAP
SEM®) application. SAP SEM, which is part of SAP ERP,
supports the entire performance management life cycle, and
includes capabilities for business planning and simulation,
business consolidation, strategy and performance management,
and stakeholder relationship management. It is especially
helpful to companies with distributed operations.