ICI will write off a total of £23m as a result of a failed
SAP supply chain software implementation last year in its Quest
flavours and fragrances division.
Following its full year results, issued this week, an ICI spokesman
said the company wrote off £18m last year as a result of the
problem, and £5m is to be written off in the coming financial
year.
The problems involved a project known as Q-Star - a SAP-based plan
to optimise the supply chain. ICI had hoped that Q-Star would save
Quest £20m a year by 2004. The company this week admitted it would
not gain this saving.
At the end of May 2002, when the system went live across four
locations in Holland, problems locating raw materials were
encountered and a huge backlog in orders to be processed
resulted.
Quarterly earnings at the Quest flavour and fragrance division fell
for the three quarters following the installation.
SAP's share price dipped by 3.6% following the release of ICI's
results.