Liqui Moly’s ship battered by software storm

Liqui Moly CEO Ernst Prost is infuriated by computer problems.

German oil company Liqui Moly is acknowledging it has faced considerable supply chain challenges since upgrading its enterprise software.

According to a company press release, “the system that was supposed to simplify processes and reduce costs for the oil and additive specialist, has had precisely the opposite effect.”

A tongue-in-cheek picture of Liqui Moly CEO Ernst Prost shows him suffering from software-induced rage.

“If we were listed on the stock exchange, I would have to issue a profit warning,” Prost admits.

Among other things, the new software is intended to manage corporate purchases, control production, organize product shipments, and issue invoices. It replaces a suite of software programs that had reached its limit after decades of use.

Instead of the anticipated minor teething issues, however, the new software caused major difficulties that are still ongoing. The company says supply chain numerous problems have arisen and additional costs are being incurred.

“In my entire professional career, I have not had to apologize so often to customers, as I have had to in the last six months,” Prost said. “The level of service that we are currently delivering really pains me.”

All of this has left significant tracks in the company’s figures. Compared to the first half of 2018, turnover has fallen slightly by 0.8 percent to € 259.6 million, and this is only because the high backlog of orders cannot be fully processed due to the computer problems. Earnings for the half-year fell by around 30 percent to € 11 million.

“I never would have thought that in 2019 a change of software could send a whole company skidding off the road,” Prost said.

He stressed, however, that Liqui Moly’s fundamental strengths remain in place, and the supply challenges have brought new strategies to light.

“The storm that we are currently going through is a lot stronger than predicted. Big waves are breaking over our ship, some of the crew are getting wet and some of the passengers are a bit nauseous. But our ship is seaworthy and not at risk. And the storm will soon be over,” he predicted. “I hope that, together with our software company, we will have resolved all the computer problems by the end of the year at the latest.”