Abstract
M.Comm.
In the Information age, advanced technology has dealt organisations such as Eskom, a
new deck of cards with which to leverage people's knowledge onto a much higher competitive plateau. Whether it be improving logistics competencies and processes,
facilitating more decentralised decision making, improving customer support, winning
important orders, or reducing mistakes and missed opportunities, the application of
Information Technology knowledge in logistics is playing an ever increasing role in
organisational success. Eskom, a para-statal utility, finds itself in the wake of major restructuring. In efforts to strengthen its competitive position in the future electricity supply market, a Finesse program was launched in the Generation Group, to replace current legacy Information Systems with a state of the art ERP system, SAP R/3. SAP R/3 provides a totally integrated business solution that spans across an entire organisation and reaches out to its customers and suppliers. One of Eskom's goals is to use SAP R/3 to integrate all of the logistics and commercial departments and processes in Eskom Generation, from purchasing, financials and logistics to materials management. The specific problem / opportunity addressed by this research is to provide a perspective
on an Integrated Logistics Management System in Eskom Generation. In particular, the
study focuses on the characteristics of the Logistics Management approach in Eskom
Generation and considers the effects of SAP R/3, an ERP Software Tool, with an emphasis on logistics. The findings of this study illustrate the practical benefits offered by SAP R/3 to Eskom logisticians and in contributing to the Eskom Vision of supplying the lowest cost electricity. This study is presented in the form of a Technical report regarding improvements and problems experienced (as identified through qualitative personal interviews and focus groups) around an Integrated Logistics Management System in Eskom Generation. The research is supplemented by a comprehensive and in-depth literature analysis on an ERP perspective of Integrated Logistics Management. From the analysis that was done, it is clear that SAP R/3 can realise efficiency and cost effectiveness benefits as a result of improved integration. Eskom Generation has to a
large extent achieved the integration benefits of SAP R/3, with emphasis on the logistics
disciplines of materials management, purchasing and accounts payable, although much
progress still need to be made. The study also indicated however, that Information
Technology on its own cannot improve business performance. It is logisticians that
create wealth through the appropriate utilisation of the ERP software tool, SAP R/3 and
additional "built-on" software technology.