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Case Study

 

Natura Seeks Sustainable Sales Order Tracking

Brazilian Cosmetics Manufacturer Improves End-to-End Order Visibility with SAP Cloud Platform

by Lauren Bonneau, Senior Editor, SAPinsider

April 9, 2018

Natura cosmetics

Natura, a leading manufacturer of cosmetics, hygiene, and beauty products in Brazil, is passionate about sustainability. With ingredients that are 83% renewable in recyclable packaging, the company stays true to its roots and puts an emphasis on positively affecting the environment. But as the company continued to grow and sales orders came in at an overwhelming rate of 300 requests per minute, it became clear that sales ordering processes would need improvement to be sustainable for future business. Hear how Natura leveraged SAP Cloud Platform to build SAP Fiori apps not only that improved sales order tracking to achieve greater insights, but also served as a launching point for future app development — with 70% quicker development cycles and 40% reduced costs.

Sustainability has become such a popular buzz word in today’s global economy that one could argue every company needs to develop more sustainable practices to maintain success and satisfy the world’s increasing number of environmentally conscious consumers. Brazilian manufacturing company Natura, which develops and markets cosmetics, hygiene, and beauty products to more than 1.7 million global customers (in direct sales) and more than 40 million final customers (online and retail), does more than just manufacture sustainable goods — it develops products made from simple and evolving plant-based formulas intended to improve people’s lives and positively affect the environment.

Natura doesn’t just say it is sustainable, but actually applies it every day as a very important component of the company’s strategy,” says Hamilton Bokaleff, Technology Manager of the SAP Enterprise Architecture at Natura. “With each one of its formulas, the company seeks to be closer to the wisdom of the people who already know how to use these natural ingredients.

Hamilton Bokaleff

Hamilton Bokaleff,

Technology Manager, SAP Enterprise Architecture,

Natura

Since we have a long-standing commitment to SAP software and we know that all the moves we make to SAP S/4HANA will be made within SAP Cloud Platform, it was a perfect choice given the simplicity of the platform and how it handles system and business process integration.

— Hamilton Bokaleff, Technology Manager, SAP Enterprise Architecture, Natura

From its beginnings in 1969 as a small cosmetics factory in São Paulo, Brazil, Natura has grown to 6,400 employees, with an additional 1.7 million consultants who are focused on direct selling and with operations in the US, France, Chile, Mexico, Peru, Colombia, and Argentina. With its headquarters based in São Paulo, Natura works directly with more than 30 local communities in the Amazon region — including nearly 4,300 families living in the forests and in the countryside — to assist in developing sustainable business models that benefit the rainforest and help them maintain their way of life.

Sourcing the biodiversity ingredients for formulas that are 81% renewable (vegetable-based) and manufacturing refillable products that have recyclable or reusable packaging — all while helping to conserve 257,000 hectares of Amazon forest — requires a very complex and adaptable business environment. Since 1999, Natura has relied on a large portfolio of on-premise SAP solutions to run its core systems — such as financials, human resources, customer relationship management, and data governance — in addition to a mix of homegrown applications. Over the years, as the data volume grew and the system landscape became more intricate, the business strategy modified to move in the direction of mobile and cloud solutions.

Moving to the Cloud

Natura currently operates a hybrid on-premise and cloud environment; however, a defined strategy is in place to migrate all system data to the cloud by 2022 in a move to SAP S/4HANA. For the past five years, the SAP system data has been hosted remotely in a data center in São Paulo to lower operating costs and ensure 24/7 availability of data. The business has also been experiencing great success running cloud and mobile applications — for example, the sales team has been using digital custom applications that integrate with SAP solutions, and IT is currently moving a series of SAP solutions for governance, risk, and compliance from on premise to the cloud.

Natura has adopted a mobile-first strategy and is committed to creating any new app development in the cloud only. When looking for a secure and managed cloud computing environment for creating or extending existing applications, Natura selected SAP Cloud Platform as its platform-as-a-service provider. “We wanted a simple and cohesive platform that provided the services we need to achieve our interconnected strategic objectives — one that handles all the integration so we don’t have to worry about it,” says Bokaleff. “Since we have a long-standing commitment to SAP software and we know that all the moves we make to SAP S/4HANA will be made within SAP Cloud Platform, it was a perfect choice given the simplicity of the platform and how it handles system and business process integration.”

Natura started using the platform in March 2017 to perform some proof-of-concept tests to evaluate the environment, understand how the services behaved, and create a guideline for governance. In June 2017, the business started to prepare the first projects. 

Pilot Project with SAP Cloud Platform

As a pilot for developing SAP Fiori applications with SAP Cloud Platform, Natura chose to improve its sales order tracking process first. In addition to sales orders from online traffic, orders come in each day from the 1.7 million people who make up the company’s sales force. On average, Natura receives 200 sales requests per minute, and distribution centers are separating 90,000 orders per day and loading products in boxes on trucks to be delivered to customers’ homes in 5,000 cities throughout Brazil. With this large volume of sales order transactions per day, manual processes simply cannot keep pace, especially considering the number of physical packages that transportation officers are tasked with tracking.

“The tracking of orders is a very critical activity for the company to identify any problems in the last mile of product delivery — such as loss of cargo or accidents with delivery trucks,” says Bokaleff. “Gathering and processing this data also helps us to follow up with other information that can improve future routes and deliveries.”

The company developed SAP Fiori apps on SAP Cloud Platform to control the entire process once an order is received — from when the carrier picks up the product from the distribution center, delivers the product to the customer’s location, and collects the signature of the person who received the goods. “The mobile application helps to keep Natura informed of what is happening with its deliveries, and it also serves as a compliance process to verify if people have received, signed, or delivered products,” says Bokaleff.

The pilot project, which leveraged the SAP Cloud Platform Integration service and SAP HANA smart data integration to connect SAP HANA, SAP ERP, SAP Fiori, and Amazon Simple Storage Service — started with just one carrier as a test case. The mobile application was up and running within three months, just in time for an October 1st rollout. By the end of October, all 10 carriers — a total of 150 users from the carriers’ staffs — as well as Natura’s transportation officers were using apps successfully in production.

To complete the application development, the team consisted of a project manager, two internal Basis administrators, and four additional resources from a third-party consultancy. SAP also provided some development assistance. The team was successful in the methodology it selected, which involved a lot of preplanning and testing throughout the project cycle. “It is better to err before rather than during the project, so we tested the environment before the design phase and performed user testing as things were getting ready,” says Bokaleff. “Preparation is crucial, especially when dealing with on-premise or mixed environments; my advice would be to spend the time upfront getting the environment well connected and working well with no problems or intermittency.” 

Improved Time to Delivery and Other Gains

After just a month in production, Natura already had plentiful benefits, according to Bokaleff. “With SAP Cloud Platform, our time to delivery was 70% faster and projects are 40% cheaper when compared with on-premise ones,” he says. “The platform is a great place to innovate, brainstorm, mock-up, test, and deliver — again and again.

As early as the evaluation and development phase, Natura saw environmental gains due to platform simplification. “The process of developing an application and putting it into production using SAP Cloud Platform was an easy one, without bureaucracy, and the integration was also very simple,” Bokaleff says. “We could safely interact with the different environments, making several changes to the application and testing those changes in just a few minutes.”

Within the first month after rollout, users were quite satisfied with the SAP Fiori app, according to Bokaleff, because they gained access to reports they did not have before as well as simpler, more visual panels. “Today, when we do trainings with users, they actually applaud, which is something we have never seen before when delivering a new system,” he says. “Most importantly, users see things happening faster, have more access to data, and have real-time training of the flexibility now offered.”

Additional Projects Delivered

To date, Natura has developed a total of eight additional projects with SAP Cloud Platform. One project, which also went into production in October 2017, was an extended application for employees to create performance goals. This project leveraged SAP Cloud Platform Integration, SAP ERP Human Capital Management, and SAP SuccessFactors solutions. The application was rolled out to approximately 6,400 Natura Cosmetics employees (in Brazil, Argentina, Chile, Peru, Colombia, and Mexico), and by the end of December, these users were successfully using the application to enter their performance indicators, provide feedback, and view their paystubs.

“This example showed the simplicity of SAP Cloud Platform’s one-touch development and how a person who did not know the environment was able to create an application in just two weeks,” says Bokaleff. “The platform brings us a completely different world with shorter delivery times, and users really enjoyed this experience of how the platform does everything automatically.” 

Additional projects that are currently completed or ongoing (to go live in 2018) include an online banking app to handle 30,000 accounts receivable registrations a day; an app to provide omnichannel sales experience rolled out to 6,000 employees; an extension app to provide end-to-end integration with SAP Ariba to handle 12,000 purchase orders a year; and an extension app to provide end-to-end integration with SAP Supply Network Collaboration to 128 suppliers using electronic data interchange and vendor-managed inventory systems. This list is just a sampling of the projects to come.

“As we continue to grow in 2018, we must expand the use of our existing portal, analytics, and mobile applications, as well as go into new areas,” says Bokaleff. “Natura will always be mobile first, so any new app development — evolving in the same cadence as the company’s cloud strategy — is going to be born in the cloud.” 

Natura

Headquarters: São Paulo, Brazil 

Industry: Cosmetics, hygiene, and beauty products manufacturing 

Employees: 6,400 

Revenue: $2.3 billion (R$7.7 billion) (2017)

Company details:

  • A leader in direct sales in Brazil with 1.7 million consultants taking Natura products and values to consumers
  • The global group Natura & Co includes Natura, Aesop, and The Body Shop
  • Natura product lines include Natura Cosmetics, Ekos, Sou, and Faces 
  • Operations in the US, France, Chile, Mexico, Peru, Colombia, and Argentina
  • 14 distribution centers, approximately 26 stores located in five countries, and products sold in 3,150+ drugstores

SAP solutions: SAP Cloud Platform, SAP Cloud Platform Integration, SAP ERP, SAP SuccessFactors solutions, SAP Ariba, and SAP Fiori



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