BAT strengthens its supply chain to stop illicit trade

British American Tobacco is the second largest quoted tobacco group by global market share, with products sold in more than 180 countries.With over 250 brands in its portfolio, its subsidiary companies produce some 724 billion cigarettes every year through 50 factories and across 41 countries. British American Tobacco employs more than 60,000 people worldwide.

In response to the developing draft of the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC) Protocol on Illicit Trade in Tobacco Products, one of British American Tobacco's priorities was to further secure its supply chain by building on existing capabilities for a global Track and Trace solution. Bluefin was chosen to design, build and test parts of the SAP solution components, in particular SAP - Process Integration (PI) and elements of SAP – Enterprise Resource Planning (ERP). This played a significant part in the success of this cross-functional initial implementation.

The business challenge

British American Tobacco needed a proven, automated capability for the tracking and tracing of cartons (normally containing 200 cigarettes), master cases (normally containing 10,000 cigarettes) and pallets (normally containing 500,000 cigarettes), from the point of manufacture, to the point of sale, to the first external customer. Each package had to be marked with a unique identifier (UID) so its movement could be tracked within the supply chain and traced backwards to the point of departure from the legitimate supply chain. This is essential in the event any customs or other authorities wish to check the origins of any seized product.

During the design and build stages of the solution development, it was important to account for the potential future need to globally implement the solution across all factories and Distribution Centres (DC). However initially, British American Tobacco wanted to test the end-to-end solution by installing it in one manufacturing site and an associated distribution chain. Its factory and the domestic market in Poland were chosen for this purpose, along with the UK as the export market.

The team were working towards an international legal requirement that, to this day, is under development. Therefore, the solution had to be flexible to adjust to changes as required by the final requirements of the international law and furthermore, have the ability to configure into new premises, processes and into new supply chains, with maximum ease.

Bluefin has an excellent understanding of SAP and people, and of how different individuals operate; they know how to adapt their style when approaching people on pressurised projects." David Atkins, Track and Trace IT Lead, British American Tobacco

The solution

A multi-disciplinary team was assembled to analyse and map the existing and future manufacturing and logistics processes, design labels containing unique product IDs, introduce new capabilities to scan the labels, and link all the data to a central Track and Trace database.

The Track and Trace database: To limit risk, British American Tobacco looked for a packaged application that could act as the central Track and Trace database, and would cope with the immense quantity of data resulting from scanning high volumes of product. SAP's Object Event Repository (OER) was chosen as it offered the required flexibility and scalability, as well as the best integration capability with British American Tobacco's other SAP platforms.

Scanning barcodes: The barcode scanners were integrated into the production lines so that tracking data could be sent to the Track and Trace database with minimal manual intervention. A similar degree of automation was deemed unrealistic for the logistics element of the process, so the focus turned to ensuring manual scanning activities were as efficient and accurate as possible.

Bluefin was asked to project manage the custom development of a new hand-held scanning solution that could be used in both internally managed and outsourced DCs. Deliveries would be scanned when they reached a DC and again, after the re-packing of products to customer orders was complete.

Despite extremely tight project timescales, the mobile scanning solution was ready in time for the first DC go-live.

Integration: With so many system components involved, the need for a sound integration strategy was a key challenge. A Bluefin system integration expert helped to tailor the industry standard for electronic product tracking (EPCIS) to British American Tobacco's requirements and to carry out the design and build of enterprise services on SAP PI. Linking up a range of hand-held scanners, the factory site in Poland, and British American Tobacco's European ERP system was challenging but a clear integration strategy was successfully implemented.

With Bluefin's support within the IT work-stream, extensive testing was planned and executed using SAP Solution Manager, which included the tracking of defects and change requestmanagement, thus ensuring the Track and Trace testing was fully consolidated and co-ordinated.

"Bluefin project members demonstrated a professional and assertive culture balanced with a gentle manner. I personally had a number of 'plates to keep spinning', so having people on the team who had the right level of knowledge and initiative, helped immensely." David Atkins, Track and Trace IT Lead, British American Tobacco

The business benefits

Project Track and Trace has been an outstanding success and is in operation with high levels of accuracy. British American Tobacco now has immediate access to detailed reports on the movement of products within its supply chain, which can be accessed via a single common entry point. This capability also extends to authorised regulators who upon request, via an e-mail automation system, have access to data on tracked and traced products, including details such as product description, manufacturing information and supply chain journey.

British American Tobacco strongly supports the WHO FCTC Protocol on Illicit Trade in Tobacco Products and having proven an automated Track and Trace solution, it is in an advanced position in preparation of the anticipated international regulation. With an ongoing commitment to fight illicit trade in tobacco products, British American Tobacco, and its Track and Trace implementation partners and solution providers alike are more than happy to share experiences and lessons learnt from implementing such a solution, with interested regulatory parties.

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