High-Volume Service Parts Management success with IBM and SAP

Published on 03-Jul-2008

Validated on 01 Aug 2013

Customer:
Automotive and Industrial Products Industry clients

Industry:
Automotive, Industrial Products

Deployment country:
Germany

Solution:
Business-to-Business, Customer Relationship Management, Enterprise Resource Planning, Optimizing IT, Supply Chain Management, Virtualization

IBM Business Partner:
SAP AG

Overview

Competitive pressures demand ever greater efficiencies from every part of the extended enterprise. For companies with complex Service Parts Management (SPM) requirements, the use of advanced SAP applications can offer significant cost savings and a high degree of integration with manufacturing, inventory and logistics systems.

Business need:
Implementing effective Service Parts Management processes can be a major challenge for enterprises, requiring large volumes of orders to be generated and processed very rapidly. Without a solution that is fully integrated with financial and logistics systems, the complexity of these processes can become too great for most companies to handle successfully.

Solution:
The SAP solution for Service Parts Management includes forecasting and inventory planning models that provide both improvements in service levels and reductions in inventory costs. It enables all aspects of planning, procurement, warehouse management, fulfillment, transportation, collaboration and analytics. IBM and SAP ran a proof of concept using IBM System p servers and IBM DB2 to demonstrate the power of this solution.

Benefits:
In the proof of concept, all targeted benchmark goals were met, and the performance results exceeded expectations. For example, the whole planning run - previously a 24-hour job - can now be processed in less than 6 hours. The performance and scalability test demonstrated the ability of the extended warehouse management system to handle the workload of one or more typical large-scale distribution centers with a single infrastructure footprint.

Case Study

High-Volume Service Parts Management success with IBM and SAP

Meeting the needs of Service Parts Management
Competitive pressures demand ever greater efficiencies from every part of the extended enterprise. For companies with complex Service Parts Management (SPM) requirements, the use of advanced SAP applications can offer significant cost savings and a high degree of integration with manufacturing, inventory and logistics systems.

The SAP solution for Service Parts Management includes the latest forecasting and inventory planning models, which provide dramatic improvements in service levels and reductions in inventory costs.

The solution is designed for the unique and demanding needs of service parts. It enables all aspects of planning, procurement, warehouse management, fulfillment, transportation, collaboration and analytics. It supports small to very large service parts operations, provides worldwide accessibility and visibility of information, and is able to adapt to a dynamic, constantly changing environment.

Concept and reality
IBM and SAP conducted a wide-ranging performance and scalability test, based around production data at existing automotive customers. The performance and scalability test showed that the high-volume SPM solution scales reliably to handle more than 10,000 order lines per hour, even in the most complex of scenarios.

Built on IBM DB2, IBM System p servers and IBM System Storage infrastructure, and using the SAP solution for Service Parts Management, the test environment proved its ability to manage high-volume service parts operations in complex, multi-tier networks.

IBM and SAP have created a solution easily capable of handling the service parts management requirements of the world’s largest automotive customers. Within the scope of this project, a special request from a major German automotive manufacturer with a critical load requirement for order fulfillment was also addressed. This additional high-volume test proved that the technical performance and scalability test was immediately applicable to real life, adding additional validity to the commercial value of the results.

Key solution components
The SAP solution for Service Parts Management consists of several SAP applications, principally:
SAP SCM – Service Parts Planning. This application manages all purchasing activities and increases collaboration with all the suppliers.

SAP CRM – Service Parts Fulfillment, which supports the ultimate goal of a parts organization to fill service parts orders for customers and dealers. It includes the complete order processing and order fulfillment functionally.

SAP SCM – Service Parts Warehousing with SAP Extended Warehouse Management improves parts workflow and processes in parts distribution centers. The capabilities support collaborative processes between multiple warehouses, suppliers, customers, logistics service providers and other business partners.

SAP ERP – Service Parts Management Execution and SAP SPT – Service Parts Transportation, which manages all inbound and outbound transportation shipments.

Building the solution
The high-volume service parts performance project was based on the SAP solution for Service Parts Management – edition 2005. It covered the simulated combined requirements of several large automotive manufacturers. The tests were completed as an enablement project, designed to ensure the quality, performance and stability of the solution under high load conditions, and demonstrate sufficient scalability for a high-volume business.

The IBM technology provided a responsive, flexible, and highly scalable infrastructure, taking advantage of the virtualization capabilities of the IBM System p and IBM System Storage servers and the data compression features of IBM DB2.

Successful conclusion of the enablement tests would assure the quality of the product and its integration with the supporting infrastructure. The tests themselves covered three separate scenarios, including Service Parts Planning, Service Parts Fulfillment, and Service Parts Warehousing.

Successful test completion
An original infrastructure, support functionality and low-end scalability test of the SPM solution was successfully completed in March 2007. High-end scalability tests were commissioned to ensure upward scalability and overall performance when running very high loads.

These tests also gave IBM an opportunity to demonstrate the strengths of its hardware infrastructure and the versatility of the IBM DB2 database to meet the requirements of the high-load scenario for SPM.

The database demands of SAP SPM are unique amongst supply chain scenarios, as functionality normally located in the liveCache is implemented using the database. The IBM DB2 9 database proved a match for this demanding load, and demonstrated its functional strengths through the use of data compression (DB2 Deep Compression) and multi-dimensional clustering (MDC).

Test scope and goals
The goals were to meet the high-load expectations for three differing scenarios. System behavior, under varying conditions, would be used to derive recommendations for implementation and tuning best practices.
The scope covered a number of extremely complex scenarios. These included Service Parts Planning in SAP SCM, the order management process of SAP SPF (which spans an integrated landscape of SAP SCM, SAP ERP, and SAP CRM), and the extended warehouse solution in SCM.

The tests for the service parts warehouse solution required the scripting load driver streams to simulate the high-load online user devices. The scenarios used in these tests were based on customer feedback and implemented to simulate a real customer situation, and the data volume used was derived from actual current customer requirements.

Objectives of the test
The objective of the performance and scalability test was to perform an integrated high-volume test for the SAP solution for Service Parts Management (edition 2005) to:

  • Obtain realistic, proven benchmarks for the performance-critical SPM processes
  • Verify sizing recommendations
  • Optimize application and hardware settings
  • Identify and resolve software and middleware bottlenecks
The scope was to perform high-volume tests for:
  • Service Parts Planning
  • Stocking/Destocking
  • Demand Forecasting
  • EOQ
  • DRP
  • Deployment
  • Service Parts Fulfillment – Order Management
  • Service Parts Warehousing
  • Complex Outbound Processing

Achieving the key performance indicators
The SAP solution for Service Parts Management implementation was based on the simulated combined requirements of several large automotive customers. This reality-based set of data provided the challenges for the proof of scalability and performance:
  • Service Parts Planning: Process weekly parts planning volume (2 million part locations) on Sundays – within 24 hours
  • Service Parts Fulfillment: Create150,000 sales order lines in an hour (5 order lines/order)
  • Service Parts Warehousing: Process 10,000 – 12,000 order lines per hour (2 to 3 times typical warehouse volumes for large distribution centers).

Supporting strategic business goals
In business terms, the test was designed to demonstrate support for the strategic goals of an automotive manufacturer, with the strategic objective “to be the best-in-class,” measured by:
  • Revenue growth through increased customer retention and brand loyalty
  • Competitive differentiation through greater organizational agility and adaptability
  • Superior visibility into parts operations across the entire service parts supply chain
  • Better collaboration with suppliers, partners, customers, and employees.
By satisfying the requirements of the test objectives, the solution proved that it can address the expectations of even the most demanding companies. This message is also emphasized by the integrated actual “Customer Test Case,” which was carried out in parallel during this enablement project.

IBM infrastructure
The performance and scalability test was developed on an IBM Power Systems infrastructure, housing SAP ERP 2005, SAP CRM 2005 and SAP SCM 2005 applications. These included SAP Advanced Planner and Optimizer, SAP Supply Network Collaboration and SAP Extended Warehouse Management, and SAP NetWeaver – with SAP NetWeaver Exchange Infrastructure and SAP NetWeaver Business Information Warehouse.

The SAP solution for Service Parts Management is highly integrated, and some of the business scenarios run across several components. For example, a sales order might call on functions such as order entry in SAP CRM, availability check in SAP SCM, and credit check in the SAP ERP application, followed by deliveries processing in SAP ERP and outbound processing in SAP SCM and SAP EWM.

The unique processor sharing abilities of IBM PowerVM virtualization technology effectively managed the requirements of the three system landscape and the load shift of the processing cycle across this landscape.

Real-world expert advice
The IBM team included the IBM SAP International Competence Center, the IBM SAP DB2 Center of Excellence and SAP DB2 Development/Porting Center (all in Germany), and the IBM SAP Solution Center in France.

SAP and IBM Germany provided the specific skills around applications, business processes and performance. The IBM manufacturing and benchmark center in Montpellier, which traditionally supports major customer stress tests and high-end benchmark requirements, and which is also the home of the SAP Customer Solutions Center, provided the high-end landscape and the infrastructure expertise.

The SAP solution for Service Parts Management is highly integrated, and some of the business scenarios run across several components. For example, a sales order might call on functions such as order entry in SAP CRM, availability check in SAP SCM, and credit check in the SAP ERP application, followed by deliveries processing in SAP ERP and outbound processing in SAP SCM and SAP EWM.

Delivering the results
All targeted benchmark goals were met, and the performance results exceeded expectations, especially for Service Parts Planning. For example, the former 24-hour whole planning run can now be processed in less than 6 hours.

The requirement was to create 150,000 order lines, or 30,000 orders with 5 line items, within an hour. The test delivered the result in less than half the time, at 28 minutes and 54 seconds, and is able to handle a total of 286,200 order lines, or 57,240 sales orders with 5 order lines, in an hour.

For Service Parts Warehousing, the systems processed almost three times a typical distribution center’s outbound volume, in terms of lines per hour, through the extended warehouse management module. By processing nearly 14,000 lines per hour at only 34,000 SAPs, the performance and scalability test demonstrated the ability of the extended warehouse management to handle one or more typical large-scale distribution centers from the single infrastructure footprint.


To learn more about the solutions from IBM and SAP, visit ibm-sap.com

For more information about SAP products and services, contact an SAP representative or visit sap.com

For more information about IBM products and services, contact an IBM representative or visit ibm.com

For more information on this specific solution, visit ibm.com/support/techdocs/atsmastr.nsf/WebIndex/PRS2833

Products and services used

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

Hardware:
Storage: DS4000, Storage: DS8000, System p

Software:
DB2 for AIX

Operating system:
AIX

Service:
IBM-SAP Alliance

Legal Information

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