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Kinh Do Corporation maximizes efficiency with better business reporting from SAP and IBM


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Kinh Do Corporation implemented SAP ERP solutions including financials, controlling, materials management, sales and distribution, production planning with SAP ERP Human Capital Management, SAP NetWeaver Business Warehouse and SAP BusinessObjects. Centralized to IBM Power servers, initially Power 550 and later a planned transition to Power 750 with POWER7 processors.The implemantation ntroduced fast, accurate month-end reporting, reduced stock-out incidence and improved manufacturing efficiency.For more information on Storage System, visit

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Kinh Do Corporation maximizes efficiency with better business reporting from SAP and IBM

  1. 1. we know they knowKinh Do Corporation maximizesefficiency with better business reportingfrom SAP and IBM Overview The Challenge  The Solution  Key Solution Components To support its existing Solomon Implemented SAP ERP solutions Industry: Foods business management and including financials, controlling, Applications: SAP® ERP 6.0 accounting software, Kinh Do materials management, sales and components including financials, Corporation relied on spreadsheet- distribution, production planning controlling, materials management, based reporting, which lacked with SAP ERP Human Capital sales and distribution, production process control and was prone to Management, SAP NetWeaver planning with SAP ERP Human error. In some cases, reports could Business Warehouse and SAP Capital Management, SAP not be generated at all as data BusinessObjects. Centralized NetWeaver® Business Warehouse, was locked in separate systems. to IBM Power servers, initially SAP Advance Planning and Inventory reports, for example, were Power 550 and later a planned Optimization, SAP Budget slow to produce, risking production transition to Power 750 with Control System, SAP Treasury halts if materials were not available, POWER7 processors. and Risk Management, SAP and consolidated month-end BusinessObjects™ business financial reports took many days to  The Benefits intelligence solutions, and SAP generate and required significant Introduced fast, accurate BusinessObjects Business manual effort. Executives lacked month-end reporting, reduced Planning and Consolidation enterprise-wide information on stock-out incidence and improved Hardware: IBM ® Power® 550, IBM sales trends to support decisions, manufacturing efficiency. Enterprise Power 750, IBM System Storage® as information was only available at reporting allows executives to drill DS4800 company level with no product-level down to examine what is profitable Software: IBM AIX®, Oracle detail. from company level right down database to individual SKU, helping to Services: IBM Global Technology understand market opportunities Services and drive profitability.
  2. 2. “Kinh Do selected IBM Kinh Do Corporation, of Ho Chi “Executives were constantly Power Systems servers Minh City in Vietnam, is well on the requesting reports from us, which way to becoming Vietnam’s largest required manual effort to produce. because we wanted food conglomerate, with associated Often the reports, delivered a reliable and stable businesses in retail, property and as spreadsheets, contained environment for these investment. Founded in 1993, sales inaccuracies and were late in delivery. mission-critical SAP are growing by around 30-40 percent In some cases we could not create the applications. We chose annually, and in 2010, Kinh Do reports at all because the data was Corporation employs 8,000 people, simply not available or was locked up IBM because we know with VND 3.5 trillion legal capital and in separate systems. The result was that IBM develops and revenues of VND 3.5 trillion ($170 that executives did not have the kind remains committed to its million). of cross-enterprise information they technology strategies for wanted to support their decisions. the POWER platform, Starting as a small factory with 70 staff and workers and VND 1.4 billion “The classic example is the end- whereas many other investment, the Kinh Do group has of-month profit and loss, a simple vendors seem to change grown to include more than ten task for one company to produce on their processor or separate companies. one master spreadsheet. However, development direction.” a manual, spreadsheet-based Nguyen Xuan Luan, Corporate VP and approach does not work for multiple Nguyen Xuan Luan, Corporate VP and Chief Chief Information Officer, comments, operational units with multiple Information Officer, Kinh Do Corporation “When we were a young and small inventory positions. business, everything could be controlled easily. There were relatively “On the operational side, poor few transactions and we could simply inventory management of ingredients remember all the key data. Now, ten as well as poor planning tools could companies with different activities lead to halts in production – even present a more difficult challenge. through something simple such The food division alone is too big to as forgetting to order the supplies. control without a strategic approach to Spreadsheets contain no process information management. control, with no way to catch mistakes and no mechanism or process for informing management of the business situation.” Selecting SAP applications The Kinh Do team was clear that an integrated business management solution was the right path, and narrowed down the potential suppliers to two, one of which was SAP. “For each ERP vendor, we analyzed the cost of acquisition, the cost of implementation, the cost of operation and, most importantly, the integration of the modules and the ability to expand the solution to new business divisions in future. We decided to switch to SAP ERP,” says Nguyen Xuan Luan.
  3. 3. “We felt that SAP ERP software offered is good, and IBM has a strong “The IBM Power serversthe best fit for Kinh Do, with examples Vietnamese support organization. play a critical roleof similar businesses in the region in ensuring that theachieving success based on SAP Further, the IBM Global Technologysolutions. We also knew that SAP Services team provided excellent SAP applications arehas a good implementation record implementation services, and was always available. Thein Vietnam, and has a reputation for willing to give advice on sizing to IBM virtualizationinvesting in training its partners to ensure that we did not over-buy technologies enabledeliver excellent service. capacity. IBM Global Technology Kinh Do to optimize the Services provided expertise and“While the vendors’ solutions were technical skills for the period we technical performancefunctionally equivalent in many ways, needed, and executed the project for each business area,SAP offered better integration across efficiently and effectively.” ensuring that reportsall its components. We understood are generated rapidlythat SAP has developed its own Kinh Do runs its SAP applications and reliably withoutsolutions in house and generally not in virtual servers on the Power 550acquired third-party solutions, and the using logical partitions (LPARs). impacting generalresult is an ERP solution that functions Each LPAR is sized to provide production response.” as an integrated whole, a very optimal processor and memory Nguyen Xuan Luan, Corporate VP and Chiefimportant factor for Kinh Do.” for each application, with dynamic Information Officer, Kinh Do Corporation allocation of resources to ensure thatSmooth implementation service delivery is maintained duringKinh Do implemented a complete times of high workload. For example,package of SAP ERP software, the SAP applications share a total ofincluding financials, controlling, 64 GB of main memory, a larger ormaterials management, sales and smaller proportion of which is madedistribution, production planning available to the production LPARwith SAP ERP Human Capital during the working day.Management, SAP NetWeaverBusiness Warehouse and SAP “Virtualization on POWER is veryBusinessObjects for business impressive, enabling Kinh Do toanalysis. maximize performance without the need to over-buy capacity,” explainsThe SAP software replaced a number Nguyen Xuan Luan. “The businessof independent solutions, and the Kinh requires 24-hour operations, and weDo team chose to create an all-new keep our systems running by using TECHNICAL LANDSCAPEenvironment on centralized systems, LPARs, too. For example, normally Servers: IBM Power 550 servers withselecting IBM Power 550 servers. we would need two or three days’ POWER6 processors, IBM Power 750 downtime for an upgrade or update servers with POWER7 processors,“Kinh Do selected IBM Power Systems to a working application. With LPARs, IBM System Storage DS4800servers because we wanted a reliable we create the upgraded or updated Software: IBM AIX, SAP ERP 6.0, SAPand stable environment for these instance in a new LPAR and redirect NetWeaver Business Warehouse, SAPmission-critical SAP applications,” users, and experience no downtime Advance Planning and Optimization,says Nguyen Xuan Luan. “We chose at all.” SAP Budget Control System, SAPIBM because we know that IBM Treasury and Risk Management, SAPdevelops and remains committed Enjoying the business benefits BusinessObjects™ businessto its technology strategies for the Operational transactions for all intelligence solutions, and SAPPOWER platform, whereas many Kinh Do business units are now BusinessObjects Business Planningother vendors seem to change their processed through SAP software, and Consolidation, Oracle databaseprocessor or development direction. stored in SAP NetWeaver Business Users: 400 total users of SAPFeedback from other businesses in Warehouse, and analyzed with SAP applicationsVietnam using the IBM Power platform BusinessObjects.
  4. 4. “With SAP ERP software, Kinh Do “SAP applications Nguyen Xuan Luan concludes, “SAPhas a single operational platform have transformed the applications have transformed theacross the business, which captures scalability of the Kinh Do Corporation, scalability of the Kinhand generates accurate data for and the IBM Power platform is the rightreporting and planning purposes. Do Corporation, and strategic platform to help us meet ourMost importantly, the integrated the IBM Power platform business objectives.”nature of SAP software means that it is the right strategicalso contains the essential workflow platform to help usprocesses and automation, helping us meet our businessavoid errors such as lack of ingredients.Where an order is placed that would objectives.” require more inventory than we have Nguyen Xuan Luan, Corporate VP and Chief IBM Deutschland GmbHon site, the solution automatically Information Officer, Kinh Do Corporation D-70548 Stuttgarthighlights the issue and creates a order ready for authorization. IBM, the IBM logo, and are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A“The business result is that with SAP current list of other IBM trademarks is available on the Web at “Copyright and trademarksolutions Kinh Do is able to do more only. Now, we can analyze which information” at with the same number of SKU makes money, with respect to copytrade.shtmlpeople; the IT department has not had whatever measure we choose, from Intel, the Intel logo, Intel Xeon and the Intel Xeon logo are trademarks or registered trademarks ofto grow, even though the company division right down to the product level. Intel Corporation or its subsidiaries in the Unitedcontinues to expand rapidly.” SAP allows us to define cost centers, States and other countries. UNIX is a registered trademark of The Open Group in the United assign raw materials, production States and other countries. Linux is a trademarkKinh Do manages its business key costs, and even the worker hours of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windowsperformance indicators with SAP for each SKU so cost of each SKU is NT, and the Windows logo are trademarks ofBusinessObjects. Data in the SAP calculated much more accurately. Microsoft Corporation in the United States, other countries, or both.NetWeaver Business Warehouse Data like this shows us what we need Other company, product or service names mayis examined for trends, errors and to do to improve. be trademarks, or service marks of others.exceptions, both as standard reports This case study illustrates how one IBMand ad-hoc queries requested by “The IBM Power servers play a customer uses IBM and/or IBM Business Partner technologies/services. Many factors haveexecutives. critical role in ensuring that the SAP contributed to the results and benefits applications are always available. The described. IBM does not guarantee comparable results. All information contained herein was“With the spreadsheet-based system, IBM virtualization technologies enable provided by the featured customer and/or IBMwe looked at sales volumes by month, Kinh Do to optimize the technical Business Partner. IBM does not attest to its accuracy. All customer examples cited representand that was the best we could do,” performance for each business area, how some customers have used IBM productsexplains Nguyen Xuan Luan. “With SAP ensuring that reports are generated and the results they may have achieved. Actual environmental costs and performanceBusinessObjects running on the IBM rapidly and reliably without impacting characteristics will vary depending on individualPOWER platform, we can look at trends general production response.” customer configurations and conditions.every day, and ask ourselves, ‘does This publication is for general guidance only. Photographs may show design models.this fit with the forecasts, does it fit with Looking to the future © Copyright IBM Corp. 2011. All rights reserved.our production capacity?’ We examine Kinh Do is in the process oftrends by SKU, sales area, product implementing SAP Advance Planningcategory and more, and discover and Optimization, and at the grouptrends, errors and outliers, and start level is deploying SAP Budgetto understand exactly what is actually Control System, SAP Businesshappening. For example, does an Planning and Consolidation, andabnormal sales report highlight a data Treasury Management. The extended © Copyright 2011 SAP AG SAP AGerror or does it show us a new market applications will be deployed on an Dietmar-Hopp-Allee 16development that we could exploit? IBM Power 750, featuring the IBM D-69190 Walldorf POWER7 processors, and existing SAP, the SAP logo, SAP and all other SAP products and services mentioned herein are“Previously, we could look at historic SAP solutions will be migrated to the trademarks or registered trademarks of SAP AG inprofit at the operational unit level new server. Germany and several other countries. SPC03324-VNEN-00 (May 2011)