UB Spirits cuts 111 servers and boosts capacity with IBM and SAP

The UB Group, based in Bangalore, India, is a diverse, high-growth conglomerate, with interests that range from media to fertiliser. UB Group Spirits division is an international success, and is ranked in the top ten globally as well as dominating the local spirits marketplace.

India’s 30 states operate independent tax and legislative regimes for the sale of alcohol. In some cases, only state-approved distributors may sell alcohol, and fresh licence auctions are held yearly, while in other states a free market operates.

T K Subramanian, Divisional Vice President of Information Systems at UB Spirits, comments, “Except for the common currency, dealing with the states is like selling to separate countries. Our operations in each state used their own IT systems and business processes, running on more than 100 servers that needed constant attention. Extracting consistent data for month-end reports was slow and costly, and if we were to grow the business we had to stop the rise in costs, reduce the administration workload, standardise our operations and provide accurate information to management more rapidly.”


Choosing the right ERP solution

UB Spirits selected SAP R/3 software, and implemented financials, controlling, materials management, production planning, and sales and distribution applications.

“SAP software provided the best fit with our complex business model and offered the ability to implement standard processes in a single location,” says Mr Subramanian.

“Before the SAP software implementation, there were multiple ways of working and fragmented information systems. With the SAP solutions, we have control at the centre, which reduces costs and enables much more rapid management reporting from a single data source.”


Choosing the best infrastructure for SAP

A key objective for UB Spirits was to reduce the IT maintenance and administration workload generated by the 111 Microsoft Windows-based servers in its 65 offices.

UB Spirits originally chose to implement its SAP software on an IBM eServer iSeries model 820 server, and rapidly upgraded to an i825 server with a second i825 server for disaster protection.

When UB Spirits acquired its largest competitor, workload increased by around 50 per cent almost overnight, and the company has now implemented two IBM System i5 550 servers, supporting around 400 users and handling 1.5TB of data stored in IBM DB2 Universal Database.

“We chose the System i5 platform because it is so simple to manage. The integrated DB2 database is a free-of-charge part of the i5/OS operating system, which offers us very low administration costs and provides a single source of consistent information for all company operations.

The two i550 servers also support a range of IBM Lotus Domino applications for messaging and collaboration, several Linux applications such as DNS, SAMBA and firewall, and Microsoft Windows applications through the use of IBM Integrated xSeries Server (IXS) and IBM Integrated xSeries Adapter (IXA) technologies.

Consolidating multiple workloads and operating systems to the two i550 servers offers considerable management and cost-saving opportunities to UB Spirits.

“The two i550 systems have replaced 111 other servers, reducing our maintenance and administration – we have been able to redeploy 20 IT engineers to more productive development tasks.”


Centralised operations for high margins

By providing core business administration services - sales, production, finance and more – from a central point of control, UB Spirits has changed the way it operates. Month-end closing is now fast and accurate, and all the regional offices use the same sales order and reporting processes.

“Production wastage has declined with the new SAP software in place,” says T K Subramanian. “Sales orders are transferred to suppliers more accurately and rapidly, which helps us match manufacturing to customers more closely.”


Cost-efficiency is king

Many of the prices for sales contracts are set by direct agreement at government and state level, and profits are therefore largely driven by improvements in process and production efficiencies at UB Spirits.

By implementing SAP software on the IBM System i5 servers, UB Spirits has successfully positioned itself to grow the business and continue with it cost-reduction programme.

T K Subramanian concludes, “SAP software on System i5 allows UB Spirits to focus on generating new efficiencies. Management is easier, costs are lower and our business processes are standardised throughout the enterprise. We are able to close our month-end more rapidly and provide accurate data to managers, helping us plan the next round of growth at UB Spirits.”