MFI and BA hit supply chain problems

MFI and British Airways have been hit by supply chain problems over the summer, as they attempt to replace a range of legacy systems with new SAP applications.

The furniture retailer issued a statement last week warning shareholders of an unexpected shortfall in delivering orders as planned, which will contribute to a 'substantial' loss for the current financial year.

'The company has been working to move a range of legacy supply chain systems to one platform. In Easter, we installed the inventory component and have been experiencing teething problems around that,' said a spokeswoman for the firm.

MFI announced in May 2002 that it was starting the second phase of a five-year plan to replace its supply chain and enterprise resource planning systems with SAP software.

The company operates a more complex supply chain than many other retailers, as it builds, distributes and sells a wide range of household furniture across 192 UK stores, as well as operating a customer delivery operation.

The spokeswoman says the firm is still working to resolve the causes of the problems, as it gains closer understanding of the new system.

Problems around a new supply chain system has also affected BA, which launched phase one of its Engineering Wide System (EWS) in July (Computing, June 24, 2004).

EWS is an ambitious programme that replaces 150 ageing IT systems, but has resulted in problems for the airline in sourcing spare parts to service aircraft, causing disruption to some services.

'We initiated a series of actions to rectify the problems and once the teething problems are ironed out, EWS will deliver many benefits by improving airworthiness control through enhanced data quality and better integration,' said a spokesman for the airline.

SAP was not available for comment at the time of going to press.