Food and beverage giant Nestlé has taken a major step in its digital transformation journey with its first upgrade to SAP S/4HANA Cloud Private Edition.
The first of three upgrades, this involved more than 50,000 employees and was completed in under 20 hours. Supported by a standardized technology landscape that enabled minimal downtime, the smooth transition to SAP S/4HANA Cloud Private Edition sets a new benchmark for digital transformation in the fast-moving consumer goods (FMCG) industry, according to a press release.
This wave covers 112 countries, with more countries in Europe and the Americas to follow soon.
The announcement comes just a few days after Nestlé revealed plans to eliminate 16,000 roles in the next two years as it targets huge cost savings supported by business transformation and process automation.
Nestlé’s strategic digital transformation leap
The upgrade to SAP S/4HANA Cloud Private Edition marks a strategic leap in Nestlé’s transformation journey to future-proof the company as consumer expectations evolve and new technologies reshape the marketplace.
It also supports the company in making data-driven insights and improving processes to drive efficiency and effectiveness across business operations to better serve consumers worldwide who rely on its products every day. Furthermore, the upgrade provides a robust digital core ready for artificial intelligence (AI) and automation at scale across the company’s value chain.
“We are building a future-ready enterprise – one that works smarter and faster,” said Chris Wright, Nestlé’s head of IT and CIO. “Having a common ERP system as our backbone is already a tremendous advantage for Nestlé. It provides a unified platform and data foundation that allows us to execute end to end across the value chain and have visibility across the entire company and beyond.”
With the upgrade, the firm gains new capabilities and insights that will help scale new products faster globally to meet the needs of customers and consumers, he added. “With AI and automation at scale, we’ll drive efficiency and effectiveness across our value chain.”
Nestlé prioritizes business transformation and process automation
Nestlé is increasing its focus on operational efficiency, including leveraging shared services and automating processes, to drive positive business transformation. The firm is aiming to save 3 billion Swiss francs (US$3.3 billion) by the end of 2027, according to new CEO Philipp Navratil. Navratil said 12,000 office jobs will be impacted alongside 4,000 roles in manufacturing and supply chain.
“We are transforming how we work,” Navratil wrote on LinkedIn. “We are evolving and will simplify our organization and automate our processes.”
As Nestlé moves forward, it will be rigorous in its approach to resource allocation, prioritizing the opportunities and businesses with the highest potential returns, Navratil said in a statement.
“We will be bolder in investing at scale and driving innovation to deliver accelerated growth and value creation. We are fostering a culture that embraces a performance mindset, that does not accept losing market share, and where winning is rewarded.”
The world is changing, and Nestlé needs to change faster, Navratil added. “This will include making hard but necessary decisions to reduce headcount over the next two years. We will do this with respect and transparency. Along with other measures, we are working to substantially reduce our costs.”
The actions Nestlé is taking will secure its future as an industry leader and, collectively, they will enable it to improve overall performance and deliver shareholder value, according to Navratil.
Nestlé recently reported better-than-expected sales growth of 4.3 percent for the third quarter, with the firm prioritizing new growth opportunities and increased cost savings.
Image credit: Nestlé