To become a more competitive world-class mainstream energy company and respond to the rapidly changing needs of technology, markets and users, Canadian Solar decided to build a global operations management platform that would be resilient and adaptable to the ever-changing energy environment.
IBM Services partnered with Canadian Solar to build and deploy an integrated IT platform with SAP S/4HANA at its core using the IBM Ascend methodology powered by SAP Activate, which formalizes the agile process.
50%Reduction in inventory error rate
5%Increase in turnover rate
10,300Delivery orders implemented in just 4 months after the launch
Business challenge story
Responding to rapidly changing needs of technology, user and markets
The current economic environment faced by solar companies is equivalent to walking on thin ice. Technology advancement and changing regulations haven’t allowed companies to have a sustained competitiveness in this industry. As a result, they need to be agile and nimble-footed.
Canadian Solar is one of the world’s largest solar photovoltaic products manufacturer and energy solutions providers, as well as one of the largest solar power plant developers globally. It’s involved in the research and development, production and sales of silicon ingots and wafers, solar powered cells, modules, and solar power plants and other application products. Established in 2001, its production bases are established in many regions and countries such as China, Southeast Asia and Brazil. Branches have been established in more than 20 countries and are spread across 6 continents. Currently, it has more than 15 GW of solar projects in pipeline worldwide and is uniquely positioned to provide project development and complete turnkey solar solutions. By bundling services for the entire project life cycle—feasibility study, permitting, developing, engineering, procurement, construction, and maintenance.
The variable production environments, large scale of operations and varied regional needs add complex challenges to Canadian Solar’s global integration. "From a technology point of view, the technology iteration in the photovoltaic industry is very fast. From the coexistence of mono-crystalline, polycrystalline and thin films to the decline of thin films, the rapid growth of mono-crystalline and the speed of iteration is beyond imagination. Rapid iteration also means rapid elimination. Also, accumulation quickly becomes useless." - Qu Feng, Vice President and CIO, Canadian Solar.
He further adds, "From a market perspective, we are witnessing a trend of evolution from large ground-based power stations to miniaturization and decentralization. From a regional perspective, each region is different. Developed regions, such as Europe, United States and Japan have strong environmental awareness and require high-quality power. The subsidy regulations of governments around the world are constantly changing. Now photovoltaic companies not only need to consider power generation but also need to consider electricity usage and energy storage."
To become a more competitive world-class mainstream energy company and respond to the rapidly changing needs of technology, markets and users, Canadian Solar decided to build an IT platform for integrating and managing its global operations. The new platform would be resilient, highly productive and could be regularly refined. This transformation would lay the cornerstone for Canadian Solar’s vision of practicing Smart Manufacturing.
Building an integrated global operations management platform
After a thorough review of multiple vendors, Canadian Solar selected IBM Services as a partner for developing the IT platform for its global operations with SAP S/4HANA ERP at the core. IBM Services team worked with the client to deliver the project in three phases.
During the first phase i.e. Design, the IBM team conducted a Design Thinking workshop in Mar 2018, to closely understand the client’s business, its pain points and build a roadmap for the future state.
IBM team was able to identify 3 key issues that the client was facing:
- Lack of a standardized material coding management system
- Lack of an end to end integrated sales tracking and supply chain management system
- Lack of a global financial management system
"It's really not easy to come up with a solution when you have thousands of point of view. Fortunately, IBM has a lot of experience and best practices from global enterprises and effective methodologies. We didn't need to start research and development from the scratch. What we needed to do was to find a suitable example from the solar industry that was also suitable for Canadian Solar's needs" Qu Feng recalls.
Based on the knowledge of the current client environment and pain points, the IBM Services team designed a template for the to-be environment and processes. This global ERP template was refined to include local market intricacies.
As a part of the second phase i.e. Migration, the existing system was configured to make it suitable for the global ERP design, followed by platform development. This configuration was followed by three sprints of testing using the ‘IBM Ascend’ methodology powered by SAP Activate, which formalizes the agile process. The results of each sprint were shared with key client stakeholders for feedback to ensure that the project met expectations, delivered on functionality and achieved timelines.
As a part of the third phase i.e. going live, Canadian Solar launched the global operations management platform with SAP S/4HANA at its core. It successfully incorporated the global sales plan, production plan, production supply, procurement and supply system management of 6 continents, 12 sales companies and 7 production bases. The new IT platform has now integrated:
- CRM systems
- SRM systems
- Hyperion systems
- MES systems deployed in multiple locations at home and abroad
- Global third-party warehousing and logistics systems distributed in Europe, the United States, Asia, Africa and Australia
- Tax systems in Europe, Brazil and the United States
Expert partner, best-in-class platform
After 4 months of launch, 4,000 sales orders, 7,600 production orders, 4,400 delivery instructions and 10,300 delivery orders were implemented in accordance with the supply chain process specifications, reducing internal invalid communication and greatly improving inventory accuracy and work efficiency. Today, the inventory error rate has been reduced by 50% and the turnover rate has been increased by 5%.
The new ERP system also places the client on a journey for Smart manufacturing in different facets of its operations. For instance, in the packaging system - previously all packaging units were containers which was a concern as it didn’t allow deeper visibility and easy distribution into smaller units. The containers could only be split into multiple virtual containers in the original system and then later had to be traced back and merged when making statements. This was time-consuming, laborious, and the error rate was also high.
Now, in the process of implementing the project, the team changed the smallest unit of packaging to pieces. After such a unit change, all the work does not need to be split or merged as in the past. It’s delivered directly by pieces, pallets or containers. The change of the packaging unit has greatly improved logistics, sales, delivery and confirmation, financial statements, efficiency and accuracy.
Another scenario is the financial accounting system – IBM helped Canadian Solar build a globally unified and standardized financial accounting system, realizing multi-accounting standards, multi-currency and multi-language systems and the company's internal multi-dimensional refined cost accounting and profit analysis model. Now, it can meet the highly customized and localized financial requirements of different countries and regions and issue management reports according to different formats to deal with different tax needs on a global scale.
The testament to this project’s success lies in the recently announced, 2019 IDC China Digital Transformation Excellence Awards where IDC awarded the ‘Information and Data Transformation Leader Excellence Award’ and the ‘Manufacturing Industry Technology Application Scenario Innovation Award’ to Canadian Solar's global supply chain management integration platform project.
“It’s a journey from digitization and visualization to smart manufacturing. Today, Canadian Solar has completed digitization and visualization by building a globalized and efficient operations management platform. To further leverage the real value of data, we will advance to smart manufacturing and provide customers with higher quality, lower cost and faster delivery. Canadian Solar has embarked on this journey." Qu Feng concludes.
Dr. Shawn Qu, Chairman, President and Chief Executive Officer, founded Canadian Solar in 2001 in Canada with a bold mission: to foster sustainable development and create a better and cleaner earth for future generations by bringing electricity powered by the sun to millions of people worldwide. It was established in China in 2006.
Under Dr. Qu’s leadership, Canadian Solar has grown into one of the world’s largest solar photovoltaic product and energy solution providers as well as one of the largest solar power plant developers globally. It has cumulatively delivered over 46 GW of solar modules to thousands of customers in more than 160 countries, enough to meet the clean, green energy needs of approximately 10 million households.
Production bases have been established in many regions and countries along with China, such as Southeast Asia and Brazil. Branches have been established in more than 20 countries spread across 6 continents.
- IGF: IT Financing - IBM Hardware
- SAP ERP
- SAP HANA
- SAP S/4 HANA
- GBS - CAI: EA - Enterprise Transformation with SAP S/4HANA (Non Cloud)
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