According to Supply Chain Dive, Nestlé is upgrading from SAP’s legacy ECC system to a more AI-focused ERP platform to enable faster global product launches and real-time supply chain decisions. The food and beverage giant plans to cut 16,000 jobs over the next two years, representing 6% of its global workforce, with three-quarters coming from corporate roles. CIO Chris Wright said the upgrade will provide “more flexibility, capabilities and insights” while CEO Philipp Navratil admitted Nestlé “has not been the most efficient company in the past.” The company is moving from SAP S/4HANA Finance, which SAP introduced in 2014, with mainstream support ending in 2027. Nestlé already migrated its entire SAP ERP to the SAP Private Cloud in 2022.
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The timing is everything
Here’s the thing about massive ERP upgrades – they’re never just about technology. Nestlé is doing this while cutting 16,000 jobs, and that’s not a coincidence. When a company admits it hasn’t been efficient while simultaneously announcing both a tech overhaul and massive workforce reduction, you’re looking at a complete operational transformation. The fact that three-quarters of those cuts are coming from corporate roles tells you where they think the inefficiency lies. Basically, they’re betting that automation and AI can replace a lot of those middle-management and planning roles.
The SAP migration reality
Moving from ECC to S/4HANA isn’t just an upgrade – it’s a complete reimplementation. And Nestlé already did the hard part by moving everything to SAP Private Cloud in 2022. That cloud migration was probably the painful part, but it sets them up perfectly for this next phase. The 2027 deadline for ECC support ending is looming for everyone still on the legacy system, so Nestlé is actually ahead of the curve here. But let’s be real – these migrations are brutal. They take years, cost millions, and often reveal how messy a company’s processes really are.
Where the AI and automation actually help
Nestlé specifically called out “advanced order fulfillment that matches supply and demand in real time” as a key benefit. That’s not just corporate buzzword bingo – that’s actually where AI can make a difference. Think about it: a company that sells everything from coffee to frozen pizza needs to predict demand across thousands of products in hundreds of markets. Traditional ERP systems can’t do that in real time. But with AI-powered forecasting and automated procurement? Suddenly you’re not just reacting to demand – you’re anticipating it. The challenge is whether the reality will match the promise. These systems are only as good as the data you feed them, and Nestlé’s global scale means they’ve got decades of legacy data to clean up.
What this means for workers
When a company talks about “automated and standardized procurement procedures” while cutting 16,000 jobs, you don’t need to read between the lines too hard. The writing is on the wall. Corporate jobs in planning, procurement, and even some supply chain roles are clearly in the crosshairs. The question is whether this will actually make Nestlé more agile or just create a leaner, more fragile organization. There’s a real risk here – cut too deep and you lose the institutional knowledge that keeps giant companies running. But Navratil seems willing to take that risk in pursuit of efficiency. It’s a bold move, but will it pay off? We’ll find out over the next two years.
