To succeed in a highly competitive industry, how could General Milling Corporation improve production, distribution and financial efficiency in its complex manufacturing and logistics network?
By moving to integrated workflows driven by SAP S/4HANA and running on IBM Power H922 servers and IBM FlashSystem storage, GMC will gain timely insights into almost every area.
80%faster month-end closing by accelerating consolidation from over 30 days to just three
Enhancesinventory management, reducing waste and improving cost-efficiency
Laysthe foundation for big-data analytics initiatives, enabling future process improvements
Business challenge story
Quality baked in
For more than five decades, General Milling Corporation (GMC) has delivered tasty, high-quality food for consumers across the Philippines. Specializing in product lines such as bread and pasta, GMC manages some of the country’s best-known brands, including General, Commodore, Islands, Isla, Baker's Choice, Swans Down, and Magnifico Pasta. The company is also active in the animal feed market through its General Feeds, Megamix and Kargado brands, producing hog and poultry products and pre-mixed feeds.
Product quality is a constant focus for GMC. For almost 60 years, the company has made substantial investments in modernizing and expanding its production facilities. Today, GMC operates some of the region’s most high-tech processing facilities for milling, livestock and poultry rearing and food manufacturing.
Diversification and modernization proved to be the perfect recipe for GMC’s business growth. However, managing a complex network of distributed operations efficiently presented some tough challenges.
Tessie Ricafort, SAP Administration at General Milling Corporation, explains, “Although our manufacturing processes are highly automated, we were still reliant on manual workflows in other areas of the business. For example, our financial controlling teams needed to collate spreadsheet-based reports from each of our business units at the end of each month, which meant that we often couldn’t close our books until around 30 days later.”
She continues, “We also saw great potential to enhance the inventory management process at our food-processing facilities. In the past, we tended to overstock our inventory to ensure we’d always have enough to complete our weekly production plans. If we could optimize our inventory levels, we knew that we could reduce waste and shrink our costs. However, manual planning processes made it difficult for us to flex our supply chains quickly enough to achieve the goal.”
With its existing business systems and infrastructure platform approaching end-of-life, GMC decided to take a fresh approach. To complement its high-tech factories with ultra-efficient digital workflows, the company looked for a new solution.
Foundation for transformation
After considering a number of enterprise-class ERP platforms, GMC selected SAP S/4HANA as the foundation for its new digital business.
“We see that SAP is a clear global leader in the ERP space, and many of the world’s largest manufacturing organizations trust SAP S/4HANA with their most critical business operations,” continues Ricafort. “The fact that so many businesses in the Philippines and around the world were already using SAP S/4HANA gave us great confidence that the platform would meet our specific operational requirements.”
Working together with a local consulting company, GMC began evaluating its existing business processes and mapping out the new digital workflows for SAP S/4HANA. The company realized that it would need a high-performance infrastructure platform to maximize the value of its investment in the solution, and decided to build on the latest IBM POWER9™-processor-based systems.
“When we started searching for an infrastructure solution, IBM Power H922 servers were pending certification for SAP S/4HANA,” recalls Ricafort. “We knew that we wanted the performance, scalability and availability of IBM POWER9 systems, but we didn’t have time to wait until the certification process was completed before signing the deal.”
She continues, “IBM was extremely helpful and flexible in this respect. The team helped to structure a contract that guaranteed we’d receive an SAP-certified platform no matter what, either one based on IBM POWER9 servers if the process was finished in time, or an IBM POWER8 solution if certification took longer than expected.”
Shortly after GMC signed its contract with IBM, SAP fully certified the IBM Power H922 platform for SAP S/4HANA. Working together with IBM Platinum Business Partner Questronix (external link) and a team from IBM Systems Lab Services, GMC deployed the SAP solution on a brand-new IBM infrastructure, based on two IBM Power H922 servers connected to IBM FlashSystem storage.
Today, GMC runs SAP S/4HANA on the SUSE Linux Enterprise Server for SAP Applications (external link) operating system. To generate PDF reports for business users, the company also deployed a separate IBM PowerVM® logical partition running IBM AIX®, which hosts Adobe Document Services. To enable effective disaster recovery capabilities, the company uses IBM PowerVC with SUSE Linux Enterprise High Availability Extension (external link), allowing rapid failover to its secondary environment in the event of an unplanned outage.
“Working with IBM Systems Lab Services and Questronix on this project was a very positive experience,” says Ricafort. “The implementation went very smoothly, and we were extremely pleased with the effective collaboration between all the companies involved.”
Building a digital business
With SAP S/4HANA on IBM infrastructure at the heart of its new digital business, GMC has got its transformation journey off to a flying start. More than 100 employees, from the back office to the factory floor, are now using the SAP solution to help drive their day-to-day work.
“Although our journey with the SAP S/4HANA solution is just beginning, we can already see some very positive changes on the horizon,” explains Ricafort. “For example, we are currently configuring SAP S/4HANA to handle our month-end consolidation process. Once this work is complete, we will be able to replace manual, spreadsheet-based reconciliation with an automated workflow. The difference for our finance team will be like night and day, and we predict that we’ll slash our month-end closing process from around 30 days to as little as three—an improvement of at least 80 percent.”
Reducing waste, boosting efficiency
As well as providing accurate and timely financial data for GMC’s decision-makers, the company is confident that SAP S/4HANA will have a transformative impact on its manufacturing operations.
“Currently, we estimate our inventory requirements quite conservatively because of the risk of stock-outs and production delays, but in the future that will all change,” continues Ricafort. “Because SAP S/4HANA will manage our value chain from end-to-end, any changes we make to a forecast will automatically flow back into our production planning system. As a result, we will be able to rapidly identify our inventory requirements and keep the optimal level in stock at all times. The end result will be reduced waste, lower costs and even higher efficiency.”
Targeting a data-driven future
As it continues its rollout of SAP S/4HANA, GMC already has an eye on the future. With in-memory analytics running on high-performance IBM Power H922 servers and IBM FlashSystem storage, the company is keen to explore the possibility of augmenting its workflows with artificial intelligence and big-data analytics capabilities.
“We know that in the years to come, data is going to become even more important in enabling manufacturing organizations like GMC to drive high-quality production while keeping costs lean,” concludes Ricafort. “Thanks to our engagement with IBM Systems Lab Services and Questronix, we’re building a strong digital foundation for our long-term growth goals on IBM Power Systems servers and IBM FlashSystem storage.”
General Milling Corporation
Operating for more than five decades, General Milling Corporation (GMC) is one of the largest integrated food companies in the Philippines. With a passion for quality products, the company manages a large portfolio of brands, including General, Commodore, Islands, Isla, Baker’s Choice, Swans Down, Magnifico Pasta, Megamix and Kargado.
- AIX / IBM i
- IBM Power Systems H922
- IBM Systems Lab Services: Power (AIX)
- SAP S/4HANA
- SUSE Linux Enterprise High Availability Extension
- SUSE Linux Enterprise Server for SAP Applications
- Software - PowerVC (not HPC, nor VA Linux)
- Software - PowerVM (not HPC, nor VA Linux)
- Storage: IBM FlashSystem 5010
Take the next step
To learn more about the IBM SAP Alliance, please contact your IBM representative or IBM Business Partner, or visit: /sap
To learn more about IBM Power Systems solutions, please contact your IBM representative or IBM Business Partner, or visit: /it-infrastructure/power
To learn more about IBM FlashSystem solutions, please contact your IBM representative or IBM Business Partner, or visit: /storage
Headquartered in Makati in the Philippines, Questronix is an IBM Platinum Business Partner with more than 30 years of experience implementing enterprise-level SAP solutions. To learn more about products and services from Questronix, please visit: questronix.com.ph (external link)