SAP Business One: how New Products conducted a digital transformation of the business
In order to be one step ahead of competitors, one of the largest manufacturers of drinks and snacks in Ukraine implemented SAP Business One and placed it in the GigaCloud private cloud.
The New Products group of companies produces 220 types of drinks and snacks under 17 brands, and exports its products to 19 countries around the world. The company serves more than 25,000 customers and 106,000 active retail outlets around the world every day. The brands of the company are presented by the following: APPS, "Pryrodne Dzherelo", SHAKE, NON STOP, PIT BULL, KING'S BRIDGE, REVO, EatMe, GREEN ENERGY, FRIDAY, "Beertail", "Zhashkivskyi Kaban", "Zhashkivske", BIRZHA and others. New Products is included in the register of the largest taxpayers of Ukraine.
Plant of the New Products group of companies in Zhashkiv
The New Products group of companies produces drinks and snacks at the factory in Zhashkiv. Workshops are equipped with state-of-the-art machinery, and the production process meets the international standard Food Safety System Certification 22000. In addition, the company is conducting digital transformation and introducing new services. All this is not possible without fault-tolerant IT infrastructure. Since 2017, the company has transferred all its critically important programs and services to the GigaCloud cloud: accounting software, a document management system, databases, programs for working with counterparties, a system for automating the work of sales representatives and merchandisers, etc. 600 company employees work with these services and programs today.
The problem of fragmentation of the IT landscape and the lack of a production management system became noticeable with the constant development of the enterprise. No less acute was the issue of insufficiently effective interaction between departments and the high dependence of the enterprise on the human factor.
The company decided to implement a unified production management system.
Brewery of the New Products group of companies in Zhashkiv
New Products chose the SAP Business One solution for implementation. All because of HANA, which is the most advanced database today, it combines the advantages of OLTP and OLAP databases.
The advantage of implementing SAP B1 is the ability to connect all the following processes in a single system: sales, logistics, production, procurement, finance, R&D, etc. It is also important to improve planning and eliminate unevenness in demand, supply and production, which causes either losses in sales or losses from the inability to sell already produced products.
New Products specialists turned to TG Consulting company for help in implementing the ERP system. It was decided to place the system in the GigaCloud private cloud for two reasons.
First, SAP should easily integrate with all the programs and services that the enterprise uses. Therefore, it is better that everything is in the same environment. Secondly, when SAP is placed in the cloud of a foreign operator, a high delay is possible when accessing the IT infrastructure, which is due to the territorial remoteness of the cloud site.
Specialists of the New Products company tested the Microsoft Azure cloud. The tests showed that when accessing the infrastructure in the Azure cloud the delay is between 37 and 60 milliseconds, which is a critical indicator for the SAP operation. The company's specialists wanted to avoid such delays and therefore chose the GigaCloud cloud, which has a delay of only one millisecond.
The fault tolerance of the IT infrastructure is also important for the operation of the company, it must be available 24/7, since the production and shipment of finished products takes place around the clock, and its delivery to network points is mainly at night and early in the morning. The entire performance of the company depends on the stable operation of all programs and services. The downtime of the IT infrastructure means a stoppage of the entire company. An hour of downtime of IT services is equivalent to the company's losses of more than UAH 1 million.
The New Products group of companies pays great attention to the effective implementation of modern ecological equipment
Specialists of the New Products group of companies together with specialists of TG Consulting began to implement SAP in 2020. This is a difficult and lengthy process, since first the important blocks are integrated, on which the operation of the supply chain (purchases, sales) depends, and then gradually – production, warehouses. During this time, the joint efforts of both companies managed to implement the following:
- They created a new list of SKUs (product item identifier) that has a uniform format and meets the needs of all departments. Sales were converted to new SKU format.
- Data on sales and balances of distributors are received on daily basis.
- Sales forecasts are used to calculate the required balance in distributors' warehouses.
- The negative balance in distributors' warehouses are tracked.
- The budgeting module is implemented in SAP B1.
- The MRP mechanism (planning the need for raw materials and components) is put into operation.
- The enterprise is prepared for the next stage of production automation based on the MRP II (production capacity planning) standard.
- The number of errors in the work of the enterprise caused by the human factor is significantly reduced.
"The implementation of the production module ensures compliance with food safety standards through batch accounting and appropriate traceability of products along the entire supply chain: from raw materials to the shelf in the store, provides an opportunity to calculate and estimate the cost price in advance, allows you to optimally load production capacities and minimize their readjustment, minimize accidental downtime of equipment by implementing a preventive maintenance plan”, says Andriy Belinsky, CIO of the "New Products" group of companies. “An employee would need a lot of time to complete such tasks, and the result could be inaccurate, since the human factor has not gone anywhere. SAP does this reliably and without errors.”
SAP has been successfully operating in the GigaCloud private cloud for two years. The cloud has provided the company with a number of following advantages:
- Renting the cloud infrastructure to host SAP saved the cost that would be spent on purchasing additional equipment.
- Cloud infrastructure is a ready-to-use service, there was no need to wait months for the equipment to be ordered and delivered.
- The flexibility of the cloud allows you to increase or decrease the number of resources as needed.
- Low latency when accessing IT infrastructure.
- Resilience and preservation of company databases.
- Resources in the cloud are used only by the "New Products" company, which guarantees high performance and security.
- The opportunity to receive timely round-the-clock technical support from GigaCloud specialists.
"The implementation of SAP Business One is the first, but essential step towards even more modern, productive, responsible and perspective cooperation with distributors and customers, and in the end, timely and complete satisfaction of the needs of the end user," summarizes Andriy Belinsky, CIO of the "New Products" group of companies. “Cloud infrastructure provided by GigaCloud allows us to develop and improve our business even faster and more securely.”