Iskra Mehanizmi moves into automotive sector with SAP and IBM

Published on 04-Mar-2008

Validated on 01 Aug 2013

"The IBM hardware and software provides a highly reliable, high-performance platform for our SAP applications – significantly improving performance while reducing administrative workload. IBM virtualization technologies on the System p platform help us extract the best possible performance from our hardware investments, providing a highly scalable environment that keeps long-term IT costs low." - Zoran Šimnic, Chief Information Officer at Iskra Mehanizmi

Customer:
Iskra Mehanizmi

Industry:
Industrial Products

Deployment country:
Slovenia

Solution:
Enterprise Resource Planning, Infrastructure Simplification, Optimizing IT, Supply Chain Management, Transforming Business

Overview

Iskra Mehanizmi, which manufactures a wide range of electromechanical products, operates from two sites in Slovenia, and has recently opened a new plant in Bosnia-Herzegovina. The company employs around 500 people, and has been in business for over 50 years.

Business need:
To increase its resilience to changing market conditions, manufacturer Iskra Mehanizmi sought to diversify its product range by moving into the automotive sector. This created an increasingly complex supply chain, which the company’s legacy information systems were struggling to manage.

Solution:
Working with IBM, Iskra Mehanizmi implemented ERP software from SAP. As the environment grew, the company migrated to the IBM System p platform, using an IBM DB2 database and deploying a SAN using IBM System Storage DS4300 hardware and IBM Tivoli Storage Manager. The SAP applications are also integrated with the company’s IBM Lotus Domino document management system.

Benefits:
Single central SAP application environment can handle complex business processes for all Iskra Mehanizmi’s manufacturing divisions, minimizing administrative workload and improving financial management. Virtualized System p hardware provides excellent reliability and a 90 per cent reduction in SAP application response times. System p is easy to manage, cutting IT department workload by 20 per cent.

Case Study

Iskra Mehanizmi, which manufactures a wide range of electromechanical products, operates from two sites in Slovenia, and has recently opened a new plant in Bosnia-Herzegovina. The company employs around 500 people, and has been in business for over 50 years.

The company started as a manufacturer of electromechanical counters, which form an important part of its business even today. However, with changing market conditions, Iskra Mehanizmi made a strategic decision to diversify its product set, and began to produce household appliances under license for consumer electronics giant Phillips. The company also moved into the automotive sector, providing precision components for a number of major European manufacturers.

“In business terms, we have made a fairly rapid transition from specializing in one particular range of products to being involved in three quite different industry sectors,” explains Zoran Šimnic, Chief Information Officer at Iskra Mehanizmi. “As a result, our extended supply chain became considerably more complicated.

“To compete in these new markets, we needed an information system that would be able to support three different sets of very sophisticated production processes while maintaining tight centralized control of the company’s finances. Our existing IT environment was simply not up to the task.”

Iskra Mehanizmi had been using a system developed by its in-house IT specialists, running on an Oracle database platform and HP servers. Extending this solution to encompass the processes required by the company’s new business ventures would have meant considerable development work, so the IT department began to look for a new solution.

Finding a solution

Iskra Mehanizmi evaluated a number of different ERP vendors, and ultimately chose SAP.

“We quickly realized that a solution from SAP would provide the sophistication we needed in order to transform our business and enter new markets,” says Zoran Šimnic. “In addition, we knew that Phillips had implemented SAP ERP, so we thought it would be easier for us to interact with them if we used the same platform.”

The company initially implemented the SAP applications on a pair of Intel-based servers running Windows NT and a Microsoft SQL Server database.

“The Windows and Intel server platform was successful for several years,” explains Zoran Šimnic. “But as the volume of data grew, we realized that we would either need to move to a multi-server environment, or implement a 64-bit operating system that could address more than 4GB of memory. At the time, we were not confident that 64-bit Windows would be reliable enough, and we wanted to retain a single-server environment to minimize administration costs – so we decided to migrate to IBM System p.”

Simple server management with System p

The company’s current environment has the SAP applications – including financial accounting, controlling, production planning, materials management and quality management functionalities – running in three logical partitions (LPARs) on a single IBM System p 570 server, with three POWER5+ processors and 20GB of memory.

“The virtualization capabilities of the System p server give us a very efficient environment in which to run our SAP applications and databases,” says Zoran Šimnic. “The IBM AIX operating system makes the hardware very easy to manage, so we spend at least 20 per cent less time on IT administration than we did with our Windows environment.”

As Iskra Mehanizmi’s ERP environment expands, the company is evaluating the benefits of the new IBM POWER6 processor, which can offer significant improvements in performance and energy efficiency, as well as a host of new abilities such as Live Partition Migration.

“Ultimately, it all comes down to price-performance,” says Zoran Šimnic. “With rising electricity costs and software that is licensed on a per-processor basis, the ability to use fewer, more efficient processors is very attractive – so POWER6 looks like a good option for our business.”

DB2 cuts database administration

The IT department has also migrated the data in its ERP environment from Microsoft SQL Server to IBM DB2 – providing further improvements in performance and reducing database administration workload. After an in-depth planning period, the migration itself took just a single weekend, minimizing disruption to the business.

“Because of the close relationship between IBM and SAP, DB2 needs very little expert tuning for the SAP software environment,” says Zoran Šimnic. “Unlike SQL Server, it also has a DBA Cockpit that can be accessed within the SAP software interface, which makes it easy for database administators to learn how to use it, and contributes significantly to the 20 per cent overall reduction in administration workload. We have also found that DB2 caching is very efficient, which means less physical I/O traffic and better performance.”

The company plans to upgrade to DB2 9 in the near future, to take advantage of the new Deep Compression functionality. Deep Compression will help Iskra Mehanizmi minimize its storage needs as data volumes grow, while simultaneously boosting performance.

“With our previous environment, users had to wait for up to two minutes for their queries to be processed, whereas now it is a matter of seconds,” says Zoran Šimnic. “On average, the combination of DB2 and the System p server has cut SAP application response times by more than 90 per cent.”

New storage environment

Iskra Mehanizmi has implemented a storage area network (SAN) based on an IBM System Storage DS4300 disk system, which can offer up to four TB of physical storage, or 52TB when expansion units are attached. The system can hold a combination of high-volume SATA and high-speed Fiber Channel disks, offering both excellent performance and cost efficiency.

The company has also deployed IBM Tivoli Storage Manager for Enterprise Resource Planning (TSM for ERP), which is highly integrated with the SAP applications and enables simple management of the tiered storage environment. TSM for ERP also handles the company’s backup policies, moving vital business data from the disk system onto an IBM 3583 Tape Library to ensure business resilience.

The software backs up information incrementally – only copying data that has been added or edited since the previous backup – which reduces the required backup window and helps keep systems online for longer.

Integration with Lotus

The final aspect of Iskra Mehanizmi’s SAP software landscape is a specially developed connector that enables the SAP applications to access data held in the company’s IBM Lotus Domino document management system. Vital business documents generated by the SAP applications are automatically stored in the Lotus repository, and licensed SAP and Lotus Notes users can access them from within the SAP software interface, with no need to re-key data or duplicate files.

“The integration between the SAP applications and Lotus Domino makes it simple for licensed SAP and Lotus Notes users to collaborate and share information,” explains Zoran Šimnic. “With document management integrated into the SAP application environment, we ensure that all business data is stored safely and centrally – so it is easily accessible to all the licensed SAP and Lotus Notes users who need it.”

Reaping the benefits

Zoran Šimnic concludes: “By leveraging our SAP application landscape, we are able to manage three disparate sets of highly sophisticated business processes while managing the whole business as a coherent single financial entity – enabling us to diversify our product range and enter entirely new markets.

“The IBM hardware and software provides a highly reliable, high-performance platform for our SAP applications – significantly improving performance while reducing administrative workload. IBM virtualization technologies on the System p platform help us extract the best possible performance from our hardware investments, providing a highly scalable environment that keeps long-term IT costs low.”

Products and services used

IBM products and services that were used in this case study.

Hardware:
Storage: DS4300 Express, Storage: Tape & Optical Storage, System p: System p5 570

Software:
Lotus Notes, Lotus Domino, DB2 for AIX, Tivoli Storage Manager for Enterprise Resource Planning

Operating system:
AIX, AIX 5L

Service:
IBM-SAP Alliance

Legal Information

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