Premier Foods ‘improving processes’ with SAP ERP

Premier Foods is improving business processes and cutting costs, it said, using a new SAP enterprise resource planning system.

The company, which manufactures brands including Hovis bread, Mr Kipling apple pies and Bird’s custard powder, said the continued rollout of SAP was “beginning to enable more efficient and effective business processes”.

The rollout would also give the company “greater scope” to improve its agility and cut costs “over the next three years”, it said. The implementation began in 2006 and is largely complete.

From now until 2012 Premier Foods will concentrate on using the system to improve back office operations and slash costs. It is targeting a “lean, integrated back office”.

It brought SAP implementation back in-house from Atos Origin in 2009, saying that after acquiring the Campbell’s and RHM businesses in the prior two years it had the scale to carry out the work itself.

Describing its support functions, including the back office, as “already relatively low cost”, Premier Foods said it was removing any remaining duplication from processes.

In the Campbell’s and RHM businesses, technology and business processes have been “largely retained”, it said, except for integrating the two companies’ supply chains into Premier Foods’ own. It forecasted “substantial” benefits of a four percent cut in supply chain operational costs.

The company announced a return to annual profits, reporting a £47 million income before tax, compared to a £405 million loss the year before when heavy integration and restructuring costs took their toll on its balance sheet. Support function costs, including back office and IT, fell eight percent to £166 million.

Copyright © 2010 IDG Communications, Inc.

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