According to Supply Chain Dive, Nestlé is upgrading from SAP S/4HANA Finance and the legacy Enterprise Central Component ERP system to a more AI-focused platform. The company plans to cut 16,000 jobs globally over the next two years, representing 6% of its workforce, with three-quarters coming from corporate roles. CEO Philipp Navratil admitted Nestlé “has not been the most efficient company in the past” and wants faster decision-making through digitization. CIO Chris Wright said the upgrade will provide more flexibility and insights to roll out products faster globally. Nestlé migrated its entire SAP ERP to the SAP Private Cloud in 2022, and SAP plans to end mainstream support for ECC in 2027.
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The Real Stakeholder Impact
Here’s the thing about these massive ERP upgrades – they’re never just about technology. For Nestlé’s 16,000 affected employees, this is life-changing news. But for the remaining workforce, it’s going to mean completely different ways of working. Automated procurement, standardized processes, AI-driven order fulfillment – that’s going to eliminate a ton of manual work.
And let’s talk about what “AI-focused ERP” actually means in practice. Basically, Nestlé wants systems that can match supply and demand in real time across both physical stores and online channels. That’s huge for a company that sells everything from coffee to chocolate to bottled water. Imagine being able to predict exactly how much Nescafé will sell in Brazil next month versus how much KitKat will move in Japan.
The Timing Tells a Story
Now, the timing here is pretty telling. Nestlé just finished moving everything to SAP’s private cloud in 2022, and they’re already pushing for this major upgrade. With SAP ending mainstream support for ECC in 2027, they’re getting ahead of the curve. But let’s be real – this isn’t just about avoiding technical debt.
The company is clearly using this transition period to completely rethink how they operate. When the CEO openly tells investors they haven’t been efficient, that’s a pretty clear signal that major changes are coming. And cutting 6% of your workforce while simultaneously investing in AI systems? That’s the classic digital transformation playbook.
What This Means for Everyone Else
So here’s the million-dollar question: is this the new normal for big consumer goods companies? Probably. If a giant like Nestlé feels the need to make these moves, you can bet other food and beverage makers are watching closely. We’re likely seeing the beginning of a major industry shift toward AI-driven supply chains.
The real test will be whether these systems actually deliver on the promise of faster product launches and better demand matching. Because let’s face it – ERP upgrades don’t always go smoothly. But if Nestlé can pull this off while managing the human cost of those job cuts, they could set a new standard for the entire industry.
