Digital Transformation leads to ‘Sea Change’ for ASMAK
Mamoon Othman, Chief Executive Officer of IHC, spoke to CNME Editor Mark Forker, about why they selected SAP’s technology to drive their digital transformation goals, the challenges they needed to overcome to achieve greater operational efficiency, and the success of its partnership with experienced IT leader Seidor MENA.
In April 2019, ASMAK took the decision to embrace digital transformation and decided to invest in SAP’s digital expertise and knowledge as part of their effort to increase its operational efficiency. However, can you tell our readers why you have decided to do business transformation and digitise your entire business? And what where the key challenges that you were looking to overcome?
Alliance Food Company (ASMAK), a subsidiary of ADX-listed International Holding Company (IHC), is the leading provider of fresh and frozen seafood across the region.
The company’s AED200 million investment in one of the largest seafood factories in the Middle East enables us to process an initial 40,000 tons annually, with scope to increase capacity to 60,000 tons.
This is in line with our objective to expand our business model and evolve the value-added convenient products in the most efficient and cost-effective manner, complementing IHC’s aggressive expansion plan to grow the food business.
To achieve this, we could no longer operate on an old process with an outdated system, which would only slow us down. Undergoing a business transformation was inevitable and our investment in operations including adopting advanced technology capabilities, efficient operations, customer centric approach, data modeling, user experience, effective decision making and successful business processes, with the help of SAP, is what made this achievement possible.
The key challenges we were looking to overcome with SAP implementation included the lack of online processing of transactions leading to manual input and higher risk of human error, lack of online data for effective decision making, supply chain and production inefficiencies, high inventory level, inventory loss, customer dissatisfaction due to inconsistent quality and late deliveries, and non-traceability of products across the supply chain.
We know that many companies in the IT ecosystem have positioned themselves as agents of digital transformation, and there are many other technologies available outside of SAP, but can you outline to us why the management of ASMAK, selected SAP Technology and Seidor MENA as their partners for transformation?
Our first step was to change the processes related to our core business operations, hence it called for the implementation of an ERP system. We compared multiple ERP systems with different parameters.
After conducting a full fledge and thorough evaluation, SAP was identified to cater to our challenging needs especially in the operation of fresh foods and fish market operations.
We also considered our future scalability of the systems to other technologies like BI and IOT for which SAP is well suited.
Asmak evaluated a number of implementation partners for this change initiative. We found Seidor had the right experience and team for such digital transformations. They also committed to providing back up in the form of their team from their global competence centre in Spain.
We know the benefits of digitalisation in terms of its ability to lower costs, increase efficiency and provide visibility on your overall business performance. But was there resistance from some within the ASMAK organisation, because going digital, you are radically changing the culture of the business? Was this a challenge you had to overcome to ensure the project was a success?
We anticipated there would be challenges on such significant changes. Accordingly, we ensured all heads of departments and chiefs of respective areas were the key drivers for changes in their domains.
Messages for change were communicated from the bottom to the top. We even got the support of external business consultants in some areas, such as HR for implementing changes like grading structure.
Multiple training sessions were planned and conducted for all levels, especially to blue collar employees. As an outcome of the change, we needed to adjust a certain percentage of the employees.
At what stage in the project did ASMAK begin to see a ROI on its decision to go digital with SAP and Seidor MENA – and what where the clear and tangible business benefits to the company in addition to managed costs and increased efficiency following the implementation of SAP technology?
We did the estimation for both the quantitative and qualitative ROI before making the investment. We as a team felt the ROI is clear, KPIs for different processes were estimated and payback is achievable within 3 years.
Currently, we have just completed 1 year after going live. We have already started achieving a number of KPIs, such as a decrease in inventory loss, inventory reduction, man-power adjustment, traceability, rollout for poultry distributions, quality and on time delivery to customers and we plan to rollout to other divisions as well.
In your opinion, what where the key contributing factors that ensured this project was a resounding success for ASMAK? If you had to do this project again, what would you do different?
It is always the teamwork, which is one of the key factors for the success of such a project. Some of the other important factors, which contribute to the success include proper innovation for the critical process, right selection of the implementation partner and the team, and following the 10 quality principles from SAP, and most importantly continuous emphasis on change management and training.
There is no end to doing things differently, so I do not think I would do anything differently than what I have done. We are constantly improving our processes and systems whenever we think it is adding value to the business.
As aforementioned above the project between ASMAK, SAP and Seidor MENA was a phenomenal success, but what were some of the key lessons you learned throughout the process that you perhaps did not foresee at the outset?
We always learn from the past and that builds our experience. Probably some of the processes like parallel run with old systems could have been planned a bit better than anticipated. But ultimately, we delivered a successful project.