Sasol: Working closely with suppliers to improve purchasing efficiency and liquidity
Explore Sasol’s journey with SAP
With a mission to innovate for a better world, Sasol harnesses technology to help it run efficient and socially responsible operations. To build strong and mutually beneficial partnerships with its suppliers, the energy and chemicals manufacturer implemented SAP Business Network for Procurement, SAP Ariba solutions, and SAP Taulia solutions.
| Industries | Region | Company Size | Partner |
| Chemicals and energy | Johannesburg, South Africa | ~28,000 employees | Intellection |
cost reduction on accounts payable in the southern Africa region using SAP Ariba solutions.
return on investment for the early-payment program using SAP Taulia solutions.
of 65,000 invoices processed automatically each month using SAP Business Network for Procurement.
Vice President, Supply Chain Services and Leverage Sourcing, Sasol Ltd.
Managing a fast-growing, global supplier base
With operations spanning 27 countries, Sasol Ltd. is committed to safely and sustainably sourcing, manufacturing, and marketing its chemical and energy products. Crucial to its efforts is the procurement function, which manages around US$7 billion in annual spend and a 5,500-strong supplier base.
Sasol needed visibility over each aspect of its supply chain to help ensure accurate and informed decision-making. However, a lack of integration across systems supporting 15 different business units at the onset made it difficult to get visibility into spend and sourcing. This led to procurement inefficiencies and weakened the company’s position in negotiating contracts. In addition, manual processes in areas such as handling early payments meant that procurement teams spent a considerable amount of time and effort dealing with requests while keeping suppliers waiting for a response.
To address this, Sasol sought a company-wide solution that could help it improve global procurement transparency and looked for technology that would help it automate purchasing, enhance supplier collaboration, and enable early-payment processes.
Vice President, Supply Chain Services and Leverage Sourcing, Sasol Ltd.
Standardizing procure-to-pay processes with integrated, cloud-based solutions
A long-term SAP customer, Sasol felt that SAP Ariba solutions would be a good fit, as they offered straightforward integration with the company’s existing SAP software landscape. To provide comprehensive functionality across the procurement cycle, the manufacturer adopted SAP Ariba Strategic Sourcing Suite.
It also implemented SAP Business Network for Procurement to automate the procurement process, providing transparency and increased efficiency with the added benefit of smooth supplier onboarding, management, and engagement together with real-time information sharing. The company used the cloud integration gateway capability to enable smooth integration between SAP Ariba Strategic Sourcing Suite and SAP Business Network for Procurement. It also integrated these solutions with the SAP ERP application to help ensure transparency across its business processes.
In addition, Sasol deployed SAP Taulia solutions to enable suppliers to submit early-payment requests digitally in exchange for a discount. Now, instead of making requests by e-mail or by calling the procurement team, suppliers can use intuitive, self-service functionality to make requests, detailing the specific invoice involved and the desired payment terms. SAP Taulia solutions directly impact the accounts receivable balance of Sasol’s suppliers and improve their days sales outstanding and working capital.
Crucial to the successful implementation of the SAP solutions was the guidance and support provided by SAP Services and Support. SAP experts helped in planning a supplier onboarding strategy for SAP Business Network for Procurement as well as taking part in change management and training programs. Meanwhile, SAP partner Intellection helped Sasol with its implementation of SAP Taulia solutions, helping the manufacturer achieve a smooth transition to digitalized early-payment processes in just two months.
Manager, Bank and Cash and Internal Control, Sasol Ltd.
Resetting procurement as a value creator
SAP solutions have enabled Sasol to significantly increase the efficiency of its procurement operations. By implementing SAP Ariba Strategic Sourcing Suite, the company has centralized and standardized procurement across its southern Africa sites, optimizing spend management through a single integrated solution. It’s also reduced the time taken to process and action purchase requisitions and purchase orders, enabling the organization to reduce procure-to-pay costs significantly.
Meanwhile, SAP Business Network for Procurement has provided significant opportunities for automation and optimization. Now, 80% of all South Africa–based invoices automatically created thanks to the integration with SAP ERP are submitted through the network. Previously, daily payment runs weren’t possible, and a monthly reconciliation needed to be carried out manually for strategic suppliers. However, with SAP Business Network for Procurement in place, that’s now changed. What’s more, automated invoice creation directly from POs has reduced invoicing errors by 85%.
Supplier experiences have also improved, with automated invoice processing through SAP Business Network for Procurement resulting in on-time payments increasing from approximately 45% to 99%. In addition, the network has improved visibility and traceability of documents such as POs, goods receipts, service entries, and invoices. Both Sasol employees and suppliers can now view all documents in one place—and get status updates 24x7.
The network is also crucial in enabling the rapid invoice processing that allows Sasol to offer suppliers early payments while maximizing savings from early-payment discounts. So far, 40% of suppliers are enrolled in the early-payment program based on SAP Taulia solutions. This gives suppliers more control and flexibility over when payments are made, enabling them to adapt payment terms through dynamic discounting to meet changing liquidity conditions and business circumstances. What’s more, the program helps Sasol meet its corporate social responsibility goals by offering preferential procurement initiatives to companies owned by disadvantaged groups or small enterprises that might be impacted by cash-flow challenges.
Vice President, Supply Chain Services and Leverage Sourcing, Sasol Ltd.
Featured partner
Intellection is a procure-to-pay specialist with a multidisciplinary team of experts in finance, supply chain, and information technology. The SAP partner guided Sasol through the deployment of SAP Taulia solutions, taking a leading role in the implementation of the software and training and onboarding of suppliers.