In its research of emerging procurement automation technologies, the Aberdeen group identified enterprises that have been the most successful in deploying e-procurement to control costs, streamline processes and enhance responsiveness across the supply chain.
According to the report, Sasol was profiled for the innovative way that it is using e-procurement technology – working with its peers to improve classification standards and for its involvement in the development of e-tendering services that allow small, medium and micro-enterprises and black economic empowerment enterprises to benefit from e-procurement technology.
Sasol embarked on its e-business initiatives in 1999, being the first in its industry to embrace business-to-business e-commerce in South Africa.
When e-marketplace company Commerce One South Africa Distributor Operations launched the regional online marketplace MarketSite Africa, in February last year, Sasol took an equity stake in the venture. Sasol also licensed Commerce One's procurement solution to ready itself for e-commerce and integrate a complex legacy environment.
The open architecture of the company's solutions makes it possible for enterprises to communicate and collaborate with each other, no matter what systems they use, what language they speak, or what currency they trade in. Sasol faced several challenges in its move to embrace e-commerce.
Most of the company's 4 000 requisitioners conducted transactions manually, many of its smaller suppliers used phones and faxes, and not catalogues, to process transactions and, finally, Sasol worked with 22 different enterprise resource planning systems across its global business.
"Commerce One helped Sasol overcome these challenges by introducing the technology incrementally to a handful of selected business units," says Distribution Operations account manager Bruce Rowe.
Sasol has realised significant process efficiencies and improved manpower utilisation.
"Our ability to leverage technology across all aspects of our operations is vital to meeting our customer needs and our long-term profitability goals," says Sasol e-procurement manager Johan du Preez.
More than 2 000 users across six business units make use of Sasol's system.
The company has about 60 suppliers currently using the system, and processes over 5 000 line items a week, amounting to about 15% of all purchase orders processed.
Sasol has achieved substantial cost and time savings, such as reducing its requisition to delivery from 29 days to 8 days – an improvement of 72%. E-procurement, which uses pre-agreed catalogues (descriptions and prices), eliminates several reconciliation steps and reduces the number of month-end discrepencies once all business units work from the same catalogue. The company is now looking at a further roll-out to its remaining local business units as well as international subsidiaries in Germany, Italy, and North America. "Sasol has successfully taken steps towards realising the opportunities of e-commerce," says Commerce One South Africa—Distributor Operations new business development director Tim Frost.