Overview
A leading palm oil refinery based in Freetown, Sierra Leone operates a 300 MT per day physical refinery and dry fractionation plant. The company processes Crude Palm Oil (CPO) into RBD Palm Olein (vegetable cooking oil) and distributes its flagship brand widely across Sierra Leone and neighboring ECOWAS countries.
Background
As a continuous process manufacturing enterprise, the company operates with a complex Bill of Materials (BOM) and relies heavily on imported raw materials with long lead times. These dynamics posed significant challenges in production planning, inventory management, and financial oversight, ultimately affecting operational efficiency and decision-making.
Challenges
Order Processing from Inter-Companies
Orders were being received through various communication channels such as WhatsApp, phone calls, and emails. This led to frequent delays and order discrepancies.
Intercompany Financial Transactions
The finance team lacked real-time visibility on payments scheduled or made by related group companies, resulting in delays and reconciliation issues.
Planning & Production Forecasting
The company was dependent on Excel spreadsheets to manage complex production planning. Inaccuracies arose due to the intricate BOM structures and long procurement cycles for imported materials.
Oil Balancing and Stock Maintenance
Manual tracking of inventory across 24 storage tanks holding 7 different oil types caused inconsistencies in stock records, negatively impacting production planning.
Discrepancies in Oil Shipment and Billing
Disparities between received quantities and invoiced amounts often led to overpayments to suppliers, as shipment data wasn’t accurately verified or reconciled.
Profitability Analysis
Understanding profit margins across different business lines was time-consuming and lacked accuracy, impeding timely strategic decisions.
Solution Implemented and Benefits
Forecasting & Material Planning
Defined BOMs for both semi-finished and finished goods, along with clear routing processes, enabled automated planning and reduced dependency on manual spreadsheets. This significantly enhanced manufacturing efficiency.
Oil Balancing Module
Implemented dip stick methods to accurately calculate closing balances for each oil tank. Real-time monitoring of oil stock movements enabled consistent and reliable inventory management.
Discrepancy Management in Oil Shipments and Billing
Automated discrepancy tracking using defined tolerance levels resulted in accurate billing and prevented overpayments. This brought substantial cost savings and improved vendor reconciliation.
Order Exchange Functionality
Sales order creation was automated in response to intercompany purchase orders. Notifications were sent to relevant stakeholders, improving transparency and reducing processing delays.
Intercompany Financial Transactions
Financial workflows were streamlined, ensuring accurate supplier invoicing and timely payments across group companies. Enhanced visibility improved control over financial operations.
Profitability Analysis
Introduced department-wise accounting with the ability to run Profit & Loss reports for each unit. This empowered leadership to make quicker, data-driven decisions with a clearer understanding of departmental performance.
Results
Efficiency
Significant reductions in manpower requirements and manual errors across planning and production processes.
Accuracy
Improved tracking of oil stock levels and clearer visibility into financial transactions ensured smoother operations.
Cost Savings
Minimized overpayments and optimized material usage contributed to better cost control.
Visibility
End-to-end visibility in order processing, inventory, and financial transactions strengthened operational governance.
Decision-Making
Faster and more accurate profitability reports enabled better strategic and operational decisions.
Conclusion
The ERP implementation addressed critical pain points in inventory, finance, planning, and order processing. The company realized substantial gains in efficiency, transparency, and profitability. This case study illustrates how a tailored ERP solution can digitally transform and streamline operations for a large-scale palm oil manufacturing enterprise.