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Customer Snapshot

Empowering Track-and-Trace Tobacco Compliance

6th  largest

company listed on the London Stock Exchange

 

Up to 660 billion cigarettes consumed each year are either smuggled, counterfeited or tax evaded—causing governments to lose up to $40 billion in taxes annually. The threat of illicit tobacco trading is a growing concern, causing increased international legislation, and standards—which SAP helps British American Tobacco to meet.

 

The World Health Organization (WHO) leads a treaty, setting out standards that all governments must comply with. One of these is the introduction of a “track and trace” solution to assist in supply chain security. The scope of this will measure supply chain security, such as customer identification, as well as tracking and tracing, licensing and record keeping, security and preventative measures, and Internet sales. BAT looked to SAP to meet this legislation and were one of the first companies to implement SAP‘s track and trace solution.


Company

British American Tobacco (BAT)

Headquarters

London, England, UK

Customer Website

www.bat.com

Revenue

£15 million

Number of Employees

56,000

Implementation Partners

Movilitas Consulting AG

Line of Business

Manufacturing

Industry

Consumer Products, Wholesale Distribution

Featured Products

SAP BusinessObjects Business Intelligence Platform, SAP Object Event Repository (SAP OER)

History

More than a century of cigarettes

            

  • 1902A business was formed as a joint venture between the UK’s Imperial Tobacco Company and the American Tobacco Company founded by James ‘Buck’ Duke.
  • 1904The company expanded to India, Ceylon, Egypt, Holland, Belgium, Sweden, Norway, Finland, Indonesia, and East Africa.
  • 1910British American Tobacco sales reached more than 10 billion cigarettes.
  • 1911BAT was listed on the London stock exchange.
  • 1915The first world war, begun in 1914, created additional demand and BAT cigarette sales reached 25 billion cigarettes.
  • 1927Celebration of the company’s 25th anniversary. BAT was recognized as one of the UK's leading companies with 120 subsidiaries, more than 75k employees globally, and profits of £6 million.
  • 1942The second world war reduced profits to £3million, where they stayed until the war ended.
  • 1960Global cigarette sales exceeded 280 billion, and profits exceeded £58 million. The company diversified into paper, pulp, cosmetics, and food.
  • 1966Profits exceeded £100 million. A new chairman, Denzil Clarke, takes the helm.
  • 1998BTW became a separately quoted company on the London Stock exchange.
  • 1999BTW rose to be the second largest tobacco company in the world.
  • 2005Swedish-style snuff was test marketed in Sweden and South Africa, offering smokers the pleasure of a less harmful form of tobacco.
  • 2008BAT was awarded a Gold ranking in the 'Companies that Count 2008' list of the UK's 100 most responsible companies, published in the Sunday Times and based on the Business in the Community Corporate Responsibility Index.
  • 2010The company won best online Learning program in the corporate learning category of the 201 E-Learning Awards.
  • 2011BAT was ranked as the top company in the grocery sector by the UK Environment agency in their CRC Energy Efficiency Scheme Performance League table. It was one of only 22 companies out of 2,000 that scored 100%.

Business Model

Manufacturing a variety of cigarettes for
retail distribution

British American Tobacco Plc (BAT) is the second largest tobacco group in the world, and sells 250 brands in more than 180 countries. Their 50 cigarette factories are spread across 41 Countries and they use 40k ton of tobacco leaf every year. 80% of this comes from farmers in emerging markets. They work with an indirect model selling their various brands through retailers.

The Challenge

Two challenges seeking one solution

BAT wanted to both minimize the impact of illicit trade on their company brand as well as ensure they were set up to comply with impending international tobacco control laws. The challenge they faced was finding a solution that could manage the large volumes of data they manage daily to enable the tracking and tracing of their products as they left their manufacturing plants.

Enter SAP

Turning to a trusted partner

As an existing SAP customer, BAT relies on SAP to manage their large supply chain. SAP was already a trusted advisor.

The SAP Experience

SAP is already on board

British American Tobacco relied on SAP for their supply chain needs. When they needed a solution that could handle large volumes of data on a daily basis as well as meet the very specific industry regulations laid out by the world health organization, they looked to SAP.

 

The functionality of SAP’s OER solutions solved the challenge of having to build a track and trace hierarchy unique to their industry. When they implemented the solution as it stood, there was minimal customization to deploy a global track and trace solution.

Running Better

Bar codes match cartons to cases and pallets

The British American Tobacco Track and Trace solution works by unique computer-generated codes (bar codes) printed onto labels that are applied to cigarette cartons, which normally contain 200 cigarettes. These bar codes are scanned as the cartons are packed into master cases normally containing 10,000 cigarettes, which are also marked with unique codes and scanned – this then links the cartons inside to the master cases.

 

The process continues with master cases being rescanned as they are packed onto pallets. Final scanning of the pallet, also marked with a unique code, links the master cases to the pallet into which they are packed. As the supply chain journey of cartons, master cases, and pallets labeled with unique track and trace codes begins, scanning of these product containers at certain points within the supply chain allows for their movement to be uniquely identified and therefore tracked.


Today

Preparation is key…

The solution tracks 90 million records each month. BAT leaders believe they are well prepared for compliance with the laws, and for safeguarding their brand. The company will continue to anticipate and prepare to meet WHO legislation, and combat the illicit tobacco trade.

Journey Ahead

Proactive compliance-readiness

British American Tobacco will continue to work towards anticipating and preparing to meet World Health Organization legislations, and combating illicit tobacco trade.

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