To achieve its goal of doubling revenues, this manufacturer looked to increase its sales efficiency and capacity: a move that would help it reach new markets and expand existing business.
The company worked with IBM Services to move to integrated workflows powered by SAP Supply Chain Management with SAP HANA, on IBM Power Systems servers and storage in an IBM managed data center.
Streamlinedsupply chain with organization-wide sales and operation planning
Enhancedcustomer service with confirmed sales order delivery schedules
95%faster report generation puts KPIs at managers fingertips
Business challenge story
Striving for supply chain excellence
A leading industrial manufacturer with an annual production capacity of two million tons of steel and iron products looked to double revenues within just five years. To meet this ambitious plan, executives looked for efficiencies that would help the company to increase capacity and productivity.
Existing production planning and supply chain management processes could not easily scale up as the company grew. For instance, different teams used different spreadsheets for supporting raw materials and inventory planning, for rough-cut capacity planning, and for demand forecasts. This siloed approach to production planning made it very difficult for the company to optimize its supply chain management and to maximize manufacturing capacity utilization.
Determined to take an integrated, intelligent approach to production planning, the manufacturer decided to move its existing SAP ERP applications to a new, state-of-the-art SAP suite for supply chain management, powered by the SAP HANA in-memory data platform. The supply chain management process flow was streamlined and integrated with sales and operations planning, order promising, sales order approval and post order production planning process as the key project objectives.
A spokesperson comments, “We had a very clear vision of what we wanted to achieve: supply chain excellence. To realize that goal, we knew that it would be vital to infuse our processes with timely, accurate data.”
Engaging an expert partner
The manufacturer called on IBM Services (Global Business Services®) to move its SAP® ERP solutions to the SAP HANA in-memory data platform, and to deploy a suite of advanced, highly capable SAP Supply Chain Management applications. Having worked with IBM for many years, the company considers IBM to be a trusted partner, and recognizes IBM’s established position as a leader in SAP deployment services.
The company, SAP and IBM launched a detailed discovery and planning phase. Following this, the IBM Services team visited production plants to gain first-hand experience of the unique challenges involved in the company’s manufacturing operations.
SAP and IBM Services teams worked closely with the company’s in-house business support and IT teams, as well as key C-level stakeholders, to map out business processes in the new solution and to standardize data such as materials codes—helping to drive innovation.
Next, the manufacturer was faced with a choice: continue running its SAP landscape in-house or outsource the hosting to a third-party provider. To reduce costs and optimize resource utilization, the company decided to transfer the management of its SAP landscape over to IBM.
IBM Services moved the existing suite of integrated SAP ERP applications to the SAP HANA database before deploying SAP Integrated Business Planning and SAP Advanced Planning and Optimization to underpin production planning.
The IBM team moved the complete SAP environment from the company’s on-premises systems to run on IBM Power Systems servers and IBM storage systems hosted at professionally managed IBM data centers—launching the company’s journey into the cloud. These systems deliver security protocols and state-of-the-art power backup, ensuring round-the-clock availability of critical systems.
Through IBM Services for Managed SAP Applications, IBM guarantees 99.9 percent uptime and takes care of all the daily management and maintenance of its SAP landscape, so the manufacturer can have peace of mind that its mission-critical SAP applications will always run smoothly.
A spokesperson comments, “IBM have a proven track record and we know that we can rely on them to keep on top of everything. Thanks to this partnership, our IT team can turn their attention to strategic initiatives.”
Today, the manufacturer’s SAP landscape is hosted on four IBM Power E950 servers, virtualized using IBM PowerVM® technology. The production cluster runs in an IBM data center in one location, while an additional IBM Power E950 server is hosted in a second location and serves as a disaster recovery appliance, ensuring seamless failover in the event of an unplanned outage at one site.
The SAP applications run on the SUSE Linux Enterprise Server for SAP Applications operating system. Data is stored on IBM FlashSystem® 7200H devices, delivering cost-efficient information management combined with high performance, scalability and security.
Having identified and resolved potential technical challenges early in the deployment process, IBM Services was able to complete the move in just one day. IBM Services helped the company deploy SAP HANA in just four months, serving all business units in the manufacturer’s enterprise.
To minimize disruption during the migration, the company set a strict 24-hour downtime window, and the joint project teams worked day and night to complete the migration on schedule. The project was aptly named ‘passionate’, as the passion of all the stakeholders was palpable. The company’s ambitious migration timeline required unconventional drive to realize its vision, and the IBM Services team worked tirelessly to keep the project on track.
What’s more, IBM Services put together a structured training program to ease the transition from manual processes to standardized, automated workflows. This helped the company to drive adoption and ensure that employees could make the most of the new solutions.
Improving profit margins
By streamlining, digitizing and automating production planning and supply chain management with SAP business applications, the company has seen productivity soar at its South Asian manufacturing facilities. The principal solutions are SAP Integrated Business Planning and SAP Advanced Planning and Optimization (including SAP Production Planning and Detailed Scheduling and SAP Global Availability to Promise) running on the SAP HANA platform.
Moving its SAP landscape to IBM Power Systems servers enabled the company to consolidate its physical IT footprint, significantly reducing energy and cooling costs. In fact, the company calculated that it would need twice as many x86 servers to support its workload. As a result, IBM Power Systems delivers a much lower total cost of ownership compared to equivalent x86 architecture.
The manufacturer’s new SAP solutions provide a complete, unified supply chain overview, from the inflow of raw materials to the outflow of finished products, and everything in between. Today, senior management and C-level executives have key performance indicators [KPIs] available at the click of a button. This insight supports intelligent production planning, enabling the company to make optimal use of resources and manufacturing capacity. The company can now operate much more productively, making manufacturing more cost-efficient and more profitable, contributing to top-line growth.
A spokesperson adds, “We have been very impressed with the performance, availability and reliability of the IBM infrastructure. SAP application performance has doubled since we moved to the IBM Power E950 servers. The combination of IBM Power Systems and SAP HANA is a real winner, and means that we can generate reports in just one minute compared to 20 minutes before, a 95 percent improvement.”
Full steam ahead
The new SAP Supply Chain Management and related solutions first became live in the company’s manufacturing facilities in South Asia. The company is working with IBM Services to roll out the solutions globally, starting with three production plants in South Asia and the Middle East.
With IBM supporting its mission-critical applications, the company expects to replicate the success it has achieved in its South Asian plants across its international operations. Although the company still has more work to do, it has already started to see the benefits of the SAP solutions. For instance, senior leaders at the company can make more-informed, data-driven decisions around resource and capacity planning, cutting waste and increasing efficiency. Productivity and profitability are also increasing, putting the manufacturer on track to achieve its business growth and revenue goals in the next five years.
A spokesperson comments, “The management had a clear vision and supported the process in its entirety. The team jelled well, became a cohesive unit, responded to the expectations and requirements, and stayed focused on delivery. It was an experiential journey, punctuated with various challenges including inertia, but the energy from the management ensured alignment within the teams and remained focused towards achieving the final goal. The team showed resilience and grit during periods of stress, and never gave up.”
Looking further ahead, the manufacturer is considering moving to SAP S/4HANA, the next-generation ERP solution designed specifically for in-memory computing. The company plans to manage all core business processes using SAP S/4HANA, from the supply chain to sales, from production planning to plant maintenance.
The spokesperson concludes, “Every step in our operational efficiency journey helps us with productivity, profitability, and environmental performance. SAP S/4HANA represents the next stage in our digital transformation journey and we’re excited to continue on that path with IBM.”
About Leading Industrial Manufacturer
This leading manufacturer produces steel and stainless steel pipes, tubes, fittings and accessories for use in multiple sectors, including oil and gas, energy, water, wastewater, and other industries. Headquartered in South Asia, the company operates production facilities in Asia and North America.
- IBM Global Business Services
- IBM Power Systems E950
- IBM Services for Managed SAP Applications
- SAP Advanced Planning and Optimization
- SAP ERP
- SAP HANA
- SAP Production Planning
- SAP Supply Chain Management (SAP SCM)
- SUSE Linux Enterprise Server for SAP Applications
- Software - PowerVM (not HPC, nor VA Linux)
- Storage: IBM FlashSystem 7200H
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 Services, please contact your IBM representative or IBM Business Partner, or visit: /services