Guangzhou Baihua integrates its IT environment with SAP Business All-in-One and IBM DB2

Published on 26-Feb-2009

Validated on 01 Aug 2013

"SAP Business All-in-One makes it much easier to do business and respond rapidly to the changing needs of our customers. IBM DB2 provides a resilient and powerful infrastructure to support the SAP applications, and the whole solution was implemented on budget within just six months. " - Lin Jinying, Internal Consultant, Guangzhou Baihua Flavors and Fragrances

Customer:
Guangzhou Baihua Flavors and Fragrances

Industry:
Chemicals & Petroleum

Deployment country:
China

IBM Business Partner:
SAP

Overview

Guangzhou Baihua Flavors and Fragrances is China’s largest manufacturer of essential oils, aromatic chemicals, flavorings and fragrances, which it creates for the food, chemicals, tobacco, pharmaceutical and animal feed industries. The company’s 557 employees operate a 54,100 sq. meter plant in Guangdong province, which produces 1,000 tons of aroma chemicals and 4,300 tons of flavors and fragrances every year. These products are sold throughout China and exported across the globe.

Business need:
Guangzhou Baihua relies on fast product innovation and development to drive growth. Obtaining rapid business data on current sales performance is essential to understanding the market. Separate systems for financial accounting, purchasing, sales and inventory management created data inconsistencies. The challenge was to eliminate a slow and labor-intensive data reconciliation process, and enable transparent reporting throughout the group.

Solution:
Guangzhou Baihua decided to replace its existing systems with an integrated ERP solution. Working with Netzoom and Horizontal Information, the company implemented an SAP Business All-in-One solution, utilizing IBM DB2 as the database platform and IBM Lotus Notes and Domino for integration with SAP applications.

Benefits:
The centralized ERP solution provides a ‘single source of truth’ for business data, eliminating the need for reconciliations. Integration with IBM Lotus software extends ERP access to all employees, even those who are not direct users of the SAP applications. IBM DB2 provides a highly reliable, high-performance, cost-effective database platform to support the SAP applications. The company expects to see a full return on investment within three to five years.

Case Study

Guangzhou Baihua Flavors and Fragrances is China’s largest manufacturer of essential oils, aromatic chemicals, flavorings and fragrances, which it creates for the food, chemicals, tobacco, pharmaceutical and animal feed industries. The company’s 557 employees operate a 54,100 sq. meter plant in Guangdong province, which produces 1,000 tons of aroma chemicals and 4,300 tons of flavors and fragrances every year. These products are sold throughout China and exported across the globe.

Like all modern manufacturing companies, Guangzhou Baihua uses IT systems to manage its supply chain and core business processes. However, until 2002, the company was relying on two separate systems: one for financial accounting, and the other for sales, purchasing and inventory management. With no integration between these two systems, the company often experienced problems with data quality.

“We often found inconsistencies in the data held by the two systems, and had to reconcile them manually, checking every item until we found a mistake. This was a very time-consuming and labor-intensive process for our accountants, and it caused delays in finishing the monthly and annual financial reports. As a result, it was difficult for our managers to make decisions quickly, because they needed to wait for accurate data to become available.”

Guangzhou Baihua has a strong focus on the development of innovative new products, and must react quickly to changing market trends in order to make the right choices for allocating research and development budgets. A transparent view of sales and financial data was vital, so the company decided to replace its existing systems with a single centralized ERP solution.

Working with Netzoom and Horizontal Information, the in-house IT team reviewed a number of different ERP solutions, and became convinced that SAP would be the right vendor. The company initially considered implementing SAP R/3®, but ultimately decided that a smaller SAP Business All-in-One implementation would suit its needs more effectively.

“For a company of our size, the SAP Business All-in-One solution is ideal,” says Lin Jinying, Internal Consultant at Guangzhou Baihua Flavors and Fragrances. “It is relatively quick and easy to deploy – unlike many ERP solutions – and includes many best-practice business processes out of the box, so little customization is needed. SAP has an excellent reputation in the ERP sector and a clear roadmap for its products, so we knew it would be a good choice for the long term.”

The new SAP application environment would also need a reliable, high-performance infrastructure to support it. Guangzhou Baihua considered an Oracle database platform, but ultimately chose IBM DB2.

“IBM and SAP are working closely together, and have aligned their strategy for SAP ERP and DB2 to optimize resilience and performance,” explains Lin Jinying. “Working with Horizontal Information and IBM on a proof of concept, we also saw how easy DB2 is to use with SAP, and we were impressed with the cost-effectiveness of DB2 compared to Oracle.”

With help from Netzoom, the SAP Value Added Reseller for the SAP Business All-in-One solution, and Horizontal Information, the company installed the SAP applications and IBM DB2 software in a Microsoft Windows environment, running on Dell servers. The SAP Business All-in-One solution now manages the company’s financial accounting, controlling, materials management, production planning, and sales and distribution processes.

The solution is also integrated with Guangzhou Baihua’s IBM Lotus Notes and Domino platform, which enables the SAP applications to interact with employees via the company’s email system. Data can be extracted from the ERP environment and delivered to users who do not have direct access to the SAP applications themselves. The Lotus environment also provides workflows to help ensure that data and documents are sent to the right people for approval, so multi-level approval processes can be managed much more easily than before.

“We only have 20 employees who use SAP Business All-in-One directly in their day-to-day work, but thanks to the Lotus Notes integration, many more of our employees benefit from the solution,” explains Lin Jinying. “The SAP applications can send reports, notifications and alerts to appropriate staff members by email, so the business can respond more quickly.”

With a single system governing finances, production and supply chain management processes, Guangzhou Baihua no longer needs to spend time reconciling inconsistencies: all data is held in a single DB2 repository, so there is a ‘single source of truth’. This not only saves time for accounting staff – it also means that financial and sales reports can be published more quickly, which helps managers to make timely decisions.

“SAP Business All-in-One makes it much easier to do business and respond rapidly to the changing needs of our customers,” concludes Lin Jinying. “IBM DB2 provides a resilient and powerful infrastructure to support the SAP applications, and the whole solution was implemented on budget within just six months. Due to the enhancements in business efficiency delivered by the solution, we are hoping to see a full return on investment within the next three to five years.”

Products and services used

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

Software:
DB2 9 for Linux, UNIX and Windows, Lotus Domino, Lotus Notes

Service:
IBM-SAP Alliance

Legal Information

IBM Deutschland GmbH D-70548 Stuttgart ibm.com/solutions/sap IBM, the IBM logo, ibm.com, DB2, Domino, Lotus and Notes are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at http://www.ibm.com/legal/copytrade.shtml Intel, the Intel logo, Intel Xeon and the Intel Xeon logo are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. UNIX is a registered trademark of The Open Group in the United States and other countries. Linux is a trademark of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. Other company, product or service names may be trademarks, or service marks of others. This case study illustrates how one IBM customer uses IBM and/or IBM Business Partner technologies/services. Many factors have contributed to the results and benefits described. IBM does not guarantee comparable results. All information contained herein was provided by the featured customer and/or IBM Business Partner. IBM does not attest to its accuracy. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. This publication is for general guidance only. Photographs may show design models. © Copyright IBM Corp. 2009. All rights reserved. © Copyright 2009 SAP AG SAP AG Dietmar-Hopp-Allee 16 D-69190 Walldorf SAP, the SAP logo, SAP and all other SAP products and services mentioned herein are trademarks or registered trademarks of SAP AG in Germany and several other countries.