DeLaval has over 125 years of experience and innovation in the dairy industry. With a market presence in over 115 countries, the company is represented in the most far-flung corners of the world - good reason for supporting globally standardized business processes using an appropriate IT strategy.
DeLaval is part of the Tetra Laval Group, which also includes Tetra Pak. With its extensive product range, DeLaval is represented in more than 115 countries and supplies half of the world’s milking equipment. Some branches are located in growth regions and consist of relatively small teams of employees focusing on sales and service.
To provide technical support for the internationally standardized business processes, DeLaval has opted for a two-tier ERP strategy, i.e. a combination of “the major” SAP ECC used in corporate headquarters and in larger branches, and SAP Business One for smaller sales companies to replace its own ERP systems which evolved historically.
“Our SAP Business One Project is far more than just an IT project. Our primary goal was to standardize our business model worldwide. Switching to SAP Business One provides technical support for the business processes and their associated roles in small sites and means we can close the gap with SAP ECC. So a key factor in the success of this project was the symbiosis between business and IT,” explains Konstantin Reidel, IT architect of DeLaval Services GmbH, the DeLaval Group’s global IT and logistics service provider.
Business Processes and Roles Reorganized with IT
The key starting point for the project was the business model that applies to the whole company with around 4,500 employees. In selecting the new ERP system for relatively small branches, the overriding issue therefore was which system could meet the requirements resulting from the business model. “The reason why we opted for SAP Business One was because it could meet virtually all of our requirements, and it fits almost seamlessly into the existing SAP Ecosystem in the Group. A few modifications and additions still had to be made, but we were able to implement them extremely well using the add-on solution coresuite country package by coresystems,” reports Reidel.
The ERP project kicked off at the start of 2011, with the Columbia branch used as the pilot project. Following its successful conclusion, Turkey, South Africa, Ukraine and India were also equipped with SAP Business One and the coresuite country package. Connection to SAP ECC is via the SAP B1i interface, with the SAP BW interface implemented via direct SQL access.
“Using SAP Business One is a transparent and intuitive process. In a complex SAP ECC environment we would have had to train our employees for several weeks – with Business One it only took a few days,” says Reidel.
SAP Business One now supports the branches in all their business processes, including finance, materials procurement, sales, and warehousing. As a result of its integration into the existing SAP landscape the branches can be better included into global process flows. The interface serves to send current financial and sales reports as well as the current product range with inventory levels directly from SAP Business One to the headquarters, which can then be retrieved in the central SAP Business Warehouse as and when required. The synchronization between SAP Business One and SAP ECC ensures in-house materials procurement, and product subscription allows for an up-to-date and harmonized product range.
Up-to-the-minute Product Information
To keep the key product data in the branches as streamlined and transparent as possible, DeLaval uses the eCatalog by coresystems. With this add-on, all products that are actually available and serviced in the respective subsidiaries can be subscribed from the main list of the SAP ECC . If a product is in the subscription status, the local system of the subsidiary automatically receives all pertinent information, prices, updates, and country-related product releases. The remaining product range stays in SAP ECC. Thus, the eCatalog, in combination with the IDOC interface, at all times ensures a streamlined and up-to-date data structure in SAP Business One.
ERP Template Ensures Fast Go-Live
The Coresystems consultants and DeLaval have jointly developed a Small Business ERP-template (international standard). When a branch receives a conversion or a new branch is formed based on SAP Business One, the new business model is introduced at the same time. The project duration from kick-off to go-live is around 10 weeks for system conversions, and around 6 weeks in the case of a new installation.
“We equipped our first five branches with SAP Business One within a year and a half and are very happy with the outcome. For 2013 there are plans to switch over additional sites, for example South Korea,” says Reidel, summing up the current project status.
Integrating the branches, and the harmonization that goes with that process, has rounded out the existing ERP landscape perfectly. This has enabled DeLaval to create a sustainable IT structure, as the integrated unity of business processes and technology allows for growth and rapid implementation of innovative improvements.
For example, in 2012 the company introduced electronic ordering, enabling the branches to trigger orders in the parent company directly via SAP Business One. This saves around 30 minutes per order – extrapolated to a week this adds up to a fair amount of man hours.
Technical standardization is also worthwhile when it comes to employee training. For example, DeLaval prepares training materials and videos that show employees around the world a standard way of dealing with various different business processes and how this can be done using SAP Business One. “The initial skepticism expressed by branch managers and employees quickly dissipated, and we are now very pleased about the positive feedback. The clear division of roles has proved its worth and is extremely helpful for employees in their day-to-day business. Integration also improves efficiency within the Group,” Reidel emphasizes.
Another result of the implemented process and role concept is the marked improvement in terms of compliance and associated audits. With the help of a specially prepared authorization report, roles and their authorizations can be compared across databases. That way, critical combinations can be quickly identified for "segregation of duties".
“Our standardized ERP environment gives us flexibility in every direction. Whether we open up new markets or further expand – our consistent SAP strategy allows us to perfectly support each and every development“, is Konstantin Reidel’s conclusion.