Ansell has announced plans to invest a minimum of $30 million in advancing its digitization strategy over the next three years, with a particular emphasis on expanding its use of cloud technology. The company disclosed this initiative in a trading update.
The goal of this accelerated digitization effort is to build upon the successes achieved through recent investments in modern cloud-based supply chain planning and manufacturing enterprise resource planning (ERP) systems. Ansell aims to extend the replacement of its ERP system to encompass its commercial units, ultimately working towards a consistent global ERP and decision support systems.
While the specific technology choice was not mentioned in the announcement, recent case studies suggest that Ansell may have selected Microsoft’s Dynamics 365. When contacted by iTnews, an Ansell media representative declined to provide specific details about the chosen platform.
Ansell’s managing director and CEO, Neil Salmon, addressed concerns raised by financial analysts regarding the company’s ability to undertake another major ERP project. Salmon reassured them by highlighting Ansell’s track record of successfully completing over 11 go-lives in the past 18 months to two years without significant disruptions. He emphasized that the company’s confidence in executing the project is based on its previous accomplishments.
ERP implementation work would be handled internally by Ansell’s team
Salmon clarified that while third-party consultants would be involved in certain aspects of the technical capabilities of the system, most of the ERP implementation work would be handled internally by Ansell’s team. He also mentioned that alongside the cloud-based ERP rollout, Ansell has recently overhauled its decision-support systems, resulting in improved demand, supply, and inventory planning as well as enhanced customer service levels.
As part of its digitization expansion, Ansell plans to temporarily slow down production of finished goods to normalize inventory holdings. The company also intends to reduce manufacturing employee numbers to partially offset the impact of reduced production, while simultaneously investing in more automated systems in the long run. The exact extent of the employee cuts has not yet been determined.
Ansell anticipates increasing its IT spending by $30-35 million over the next three years to support its digitization efforts. A portion of the additional investment will be allocated to FY24, with the majority earmarked for FY25 and FY26.
The company is confident that these investments, based on their past successful systems upgrades, will lead to increased productivity and improved customer service.
