SAP Cloud Platform Product Overview – Drive Agility During Rapid Change
SPC03518WWEN.PDF
1. Case study
Founded in 1991 and headquartered
in Cairo, Egypt, Egyptian German
Industrial Corporate (EGIC)
manufactures and distributes water
supply and drainage products.
Employing more than 900 people,
the company operates 10 customer
services locations and three factories
across the country.
Capitalizing on busts of market
activity
Working in an industry with extreme
seasonal peaks in demand, EGIC’s
success depends on its ability to
maximize every sales opportunity.
To achieve this goal, EGIC faces the
challenge of predicting the likely sales
volume for each of its products, and
stocking the optimal quantities at its
stores in a timely manner.
Amr Abo Zied, IT Director at Egyptian
German Industrial Corporate, explains:
“Because we make the majority of our
sales within a relatively short period in
EGIC taps a wellspring of demand to
lift revenues with SAP and IBM
Overview
Challenge
EGIC wanted to maximize
revenue during its peak season
by optimizing stock levels at each
store – but inconsistent sales
forecasts delayed manufacturing,
leading to stock-outs and
missed sales.
Solution
Using integrated business
processes supported by SAP
software and IBM servers,
EGIC can improve forecasting
accuracy, create effective
manufacturing plans and deliver
optimal quantities of stock in a
timely manner.
Key benefits
Today, EGIC keeps its in-store
stock levels in line with predicted
market trends. A 25 percent
increase in operational efficiency
enables it to minimize the risk of
stock-outs, lift sales and boost
revenues.
the year, planning our manufacturing
and distribution processes carefully is
essential. If we manufacture too little of
a certain product, we risk discarding
valuable sales opportunities and
opening the door to competitors. If
we manufacture too much, we could
be left holding significant stock until
the next sales cycle – exposing us to
cash-flow risks.
“In the past, our stores used different
methods and systems to track sales
data, which created multiple versions
of the truth across the business. As a
result, we were forced to create sales
forecasts based on intuition rather than
insight, which limited our ability to plan
accurately and effectively.”
Designing integrated processes
To solve its challenge, EGIC performed
a thorough review of its business
processes, and targeted key areas
for improvement. “EGIC has grown
rapidly in a relatively short space of
2. 2
time, and what was once a small family
business is now a large enterprise,”
continues Amr Abo Zied. “We aimed
to replace the old ways of working with
fully integrated, standardized business
processes – offering trustworthy
data to build accurate forecasts, plan
manufacturing more effectively and
capture incremental sales.”
Selecting a proven solution
After designing the new end-to-end
business processes, EGIC looked for
a proven software platform to support
the new approach.
“In the past, our operations for planning,
manufacturing, logistics and finance
were all managed separately, and relied
heavily on paper-based processes,”
says Amr Abo Zied.
“We realized that managing our new
business processes in an electronic
system would enable us to obtain
greater operational efficiency. Of all
the potential solution vendors we
considered, SAP came out on top.
Some of our key stakeholders had
first-hand experience with SAP® ERP
applications during their time with
other large companies, and we knew
it could deliver the functionalities we
needed to complete the business
transformation successfully.”
Expert partner
To help accelerate its deployment of
the SAP solutions, EGIC engaged
expert consultants from IBM® Global
Business Services®.
“Because of the importance of the
SAP implementation project to the
business, we wanted an experienced
partner with the resources to ensure
that the process went smoothly,”
says Amr Abo Zied. “We selected the
IBM Global Business Services team
because they demonstrated a high level
of technical competence, and a strong
commitment to the success of our SAP
implementation project.”
Resilient infrastructure
EGIC, working together with the IBM
Business Challenge
EGIC wanted to increase its share of
seasonal bursts in market demand.
Achieving the goal meant ramping
up manufacturing and logistics
processes at the right time. However,
inconsistent reporting limited EGIC’s
ability to plan, manufacture and
distribute optimal quantities of stock,
leading to missed opportunities.
25 percent increase in
manufacturing process
efficiency
3. 3
team, began scoping the infrastructure
requirements for the new SAP solutions.
“To ensure that our SAP business
systems could drive our new business
process effectively, we looked for an
IT infrastructure that could deliver
high levels of availability, reliability and
performance,” recalls Amr Abo Zied.
“We decided to implement a new
infrastructure based on IBM solutions.
We knew that the IBM and SAP solution
development teams worked together
closely, and we were confident that
an IBM server platform would provide
a stable foundation for our SAP
business systems.”
For its SAP ERP application production
environment, the company selected
high-performance IBM Power® 720
servers virtualized with IBM PowerVM®
software and running the IBM AIX®
operating system. The platform is
connected to an IBM XIV® Storage
System, with automated backups via
IBM Tivoli® Storage Manager software
assuring the resilience of vital business
data. Amr Abo Zied comments: “IBM
XIV has practically eliminated the need
for manual storage management in
our IT department, which means we
can spend less time on repetitive tasks
and more time developing services for
the business.”
Maximizing valuable sales
opportunities
With help from IBM Global
Business Services, EGIC replaced
its decentralized, paper-based
approaches to business process
management with an integrated SAP
solution.
Today, EGIC uses SAP ERP with
applications for finance, controlling,
materials management, warehouse
management, sales and distribution
and production planning to manage
its operations from end to end. With a
single, centralized platform to manage
its business, EGIC can capture
valuable sales during the all-important
peak season.
Solution
EGIC implemented fully integrated
business processes, supported by
SAP ERP software on an IBM server
platform – enabling a single source
of the truth for highly accurate
reporting and forecasting. Today,
EGIC can identify market trends, and
create efficient manufacturing and
distribution plans to dispatch the
optimal levels of stock to each store
in a timely manner.
75 percent cost
reduction for invoicing
4. 4
“Thanks to our SAP solutions, we have
a single source of the truth across the
entire business – from the moment we
purchase raw materials to the moment
the finished product is sold,” says
Amr Abo Zied. “Using a trustworthy
source of historical sales data, we can
rapidly generate accurate forecasts.
Moreover, because our business areas
for planning and manufacturing are
connected, the forecasts automatically
take external factors such as inventory
levels and manufacturing schedules
into account.
“Based on our forecasts, we can
build efficient plans to ensure that we
manufacture the optimal quantities of
our products, and stock them at our
stores at the ideal time to maximize our
sales. In fact, since the SAP solutions
went live, we have driven up our sales
volumes, which has contributed to a
significant uptick in annual revenue.”
Unlocking operational savings
The SAP solutions also enable EGIC
to drive greater efficiencies within the
manufacturing process.
Amr Abo Zied adds: “Our
manufacturing processes were
previous based on paper-based
records, which made it difficult to
ensure that we were utilizing our
resources effectively. Now, we have
built a manufacturing process based
on best-practice approaches for our
industry. With SAP solutions managing
every step of the journey, we can track
every kilogram of raw materials we
use, and identify ways to improve the
efficiency of the process.
“We have already unlocked substantial
savings by using insights from our SAP
solutions to improve the efficiency
of our manufacturing process by 25
percent. And by having an accurate
picture of our total manufacturing
Key Solution Components
Industry
Industrial Products
Applications
SAP® ERP with applications for
finance, controlling, materials
management, warehouse
management, sales and distribution
and production planning
Hardware
IBM® Power® 720, IBM XIV®
Storage System
Software
IBM AIX®, IBM PowerVM®, IBM
Tivoli® Storage Manager; Oracle
Database
Services
IBM Global Business Services®
“The IBM Global
Business Services
team demonstrated a
high level of technical
competence, and a
strong commitment
to the success of our
SAP implementation
project.”
Amr Abo Zied
IT Director
Egyptian German Industrial
Corporate
5. 5
capacity, we can determine ways
to maximize our capacity utilization,
reduce waste and drive up our margin.”
Foundation for growth
EGIC uses its SAP solutions to ensure
timely payments from customers,
further improving its cash flow. “Prior
to implementing the SAP solutions,
invoicing a customer involved up to
12 types of sales orders, which led to
delays and increased the risk of unpaid
invoices going unnoticed,” says Amr
Abo Zied.
“Today, our accounts receivables
department use collective sales order
processing from SAP to automate the
invoicing process. We no longer need
to print out multiple paper invoices:
Business Benefits
• Facilitates a significant sales uplift
by capturing a larger market share
in the peak season.
• Boosts revenue and drives
business growth.
• 25 percent increase in
manufacturing process efficiency
unlocks substantial savings through
optimal use of raw materials and
manufacturing capacity.
• 75 percent cost reduction for
invoicing via an automated, paper-
free process.
• 50 percent improvement in order-
processing efficiency, saving two
hours of manual work for each
employee per day.
cutting the cost of the process by 75
percent, saving at least two hours per
day for each employee, and improving
order processing efficiency by 50
percent. In addition, it is possible to
see any overdue payments at a glance,
which helps us to ensure timely
payments and a healthy cash flow.”
He concludes: “Without a doubt, our
IBM and SAP solutions have been key
enablers of our transformation from a
family business to a large enterprise.
Looking to the future, we plan to grow
our business into new markets, and
we are confident that our IBM and SAP
solutions provide the solid foundation to
help drive our growth.”
50 percent improvement
in order processing
efficiency
