Rotkäppchen gets the best from SAP ERP

To read a German version of this case study, click here.

Rotkäppchen-Mumm Sektkellereien is a market leader in Germany, owning, producing and marketing a number of best-selling sparkling and still wines, spirits and other beverages and brands such as Geldermann, Rotkäppchen, Mumm, Jules Mumm, MM Extra, Chantré, Echter Nordhäuser, Mariacron, Eckes Edelkirsch and, since 2009, Blanchet. The name “Rotkäppchen” derives from the little red cap on the main sparkling wine brand. The company employs 528 people, and generated record revenues of €778 million in 2009, up from €740 million in 2008.

In December 2006, the company acquired Eckes Spirituosen & Wein. Initially, the two operations ran side by side, but the ultimate plan was to fully integrate the systems and processes of Eckes into the Rotkäppchen infrastructure, reducing operational costs and increasing standardization and efficiency across the whole business.

The process of integration began in May 2007, and took seven months. Business data from Eckes was migrated into Rotkäppchen’s SAP ERP landscape, and its unique business processes were either re-engineered to match the Rotkäppchen way of working, or integrated into the SAP application environment through customizing new SAP processes or through custom development. The entire business processes were taken over on 1 January 2008, in a “Big Bang” approach.

“We have been able to retire all of the Eckes servers and systems by integrating their processes into our SAP environment,” says André Birrenbach, Chief Information Officer at Rotkäppchen. “We followed a set of best practices for business integration that we had developed during previous mergers, which made it a very efficient process. It is difficult to quantify the benefits of the project, but of course the fact that everything runs in a single SAP environment has significantly improved business efficiency, as well as reducing our IT costs.”

A consequence of this integration was that there would be much more data in the SAP environment, and that it would need to support around 250 named users. To maintain performance, Rotkäppchen decided to refresh its hardware infrastructure.

Building on IBM i
“We have been using servers from the IBM i family for many years, and were keen to stay on the same platform,” explains Birrenbach. “The IBM POWER processors deliver excellent performance, and the IBM i operating system is extremely stable. This makes it a good platform for applications like SAP ERP, which are resource intensive, and which need to be online at all times.”

IBM i also includes the IBM DB2 database platform as standard, fully integrated into the operating system. This has enabled Rotkäppchen to avoid the cost of additional database licenses, and has also simplified IT management.

“Having IBM DB2 built in to the operating system is a key advantage in terms of keeping the infrastructure simple to manage,” says Birrenbach. “We don’t even need to employ a specialist database administrator because the whole database environment can be managed as part of the IBM i environment.”

As a result, the company decided to stay on the IBM i platform, and worked with IBM Global Technology Services to upgrade one new server. The production instances of SAP ERP (for financial accounting, controlling, sales and distribution, materials management and production planning processes) and SAP NetWeaver Business Warehouse run on an IBM Power Systems i550 with four IBM POWER6 processors.

For its SAP test, development and quality assurance instances, and to run SAP Solution Manager, the company uses an IBM Power 520 Express with two IBM POWER6 processors. The same machine also runs a number of legacy applications, such as a JDEdwards solution for tax inspection, in a separate logical partition (LPAR).

In fact, the i550 server had been selected to support production before the acquisition of Eckes, and confirmed as a good choice to reflect the combined companies’ growth strategies. “Even though the SAP landscape has grown considerably, the IBM Power servers have allowed us to maintain a high level of performance,” says Birrenbach. “The average response time for the SAP applications is around 500ms, which is very satisfactory.”

Energy efficiency
“With the IBM Power architecture, we only need two physical servers to run the entire environment,” adds Birrenbach. This makes the solution highly energy-efficient, compared to a distributed x86-based architecture – which is not only an advantage in terms of operational costs, but also helps to reduce the carbon footprint.

The introduction of the POWER6 processor-based Power 520 Express server, which delivers approximately twice the performance of the previous generation of hardware with virtually no increase in energy consumption, enables the company to run its SAP non-production and JDEdwards environments on just two processors – leading to a significant reduction in electricity and cooling requirements.

Reliable and resilient
Data is replicated between the two machines by Quick-EDD/HA software, which dynamically monitors both systems and can transfer applications and users from one machine to the other in case of failure. The software also includes a synchronization tool which can automatically rebuild a failed machine in the background, without any disruption to users.

“The IBM i servers are extremely reliable, and the Quick-EDD software adds an extra layer of resilience,” explains Birrenbach. “With excellent support from IBM Global Technology Services, who provide maintenance and technical support, we are confident that our infrastructure can provide the high availability we need to support the business-critical SAP application environment.”

Better business intelligence
Rotkäppchen is subject to the whims of fluctuating consumer demand, the worst of which can lead to out-of-stock positions, and possible lost sales. Executives were aware that much of the data within the SAP applications could be used to provide enhanced business intelligence, particularly in the areas of forecasting and production planning, provided the information could be successfully extracted, analyzed and interpreted.

The company selected IBM Cognos software, accessed via desktop client applications running on Microsoft Windows, to provide a range of sales volume planning, rolling three-month volume forecasting, annual customer profitability planning.

For example, based on available planning and actual data from SAP NetWeaver Business Warehouse Rotkäppchen key account managers enter their sales estimates into the Cognos tools, making adjustments on a month-by-month basis. This rolling forecast feeds in to the production planning solutions, which allows Rotkäppchen to balance its stock positions, actual and predicted sales and marketing promotions to optimize business efficiency. Business results are continuously fed back into the sales forecasting tool for the next monthly rolling forecast.

Future business
In the future, point of sale data from retailers such as Metro will be incorporated into the solution. Data will be captured directly from barcode scanning and returned to Rotkäppchen, offering insight into sales. Similarly, market research data from A C Nielsen is used to keep management abreast of current trends and habits, helping Rotkäppchen shape its product ranges.

“These advanced tools allow us to improve our processes and provide faster, and more accurate, business data for production and business purposes. We use the SAP NetWeaver Business Warehouse component to manage historical data and the SAP ERP controlling functionality for our current budgets,” explains Birrenbach.

“We export data cubes from SAP NetWeaver Business Warehouse into Cognos Planning and Cognos PowerPlay, which help us analyze the current situation, compare it to historical trends, and make predictions that help us with future budgets and planning.”

He adds: “The big advantage of IBM Cognos is its maturity and ease of use. Most business intelligence tools are complex: when you want to create a new report, you need to get the IT department to code it for you. By contrast, Cognos is so simple that business users can create new reports themselves, without any help from technical experts.”

Moving onto the Web
The company has recently completed an implementation of Cognos 8 Planning, and will soon replace Cognos PowerPlay with Cognos 8 Business Intelligence.

“Cognos 8 Business Intelligence will give us a Web-based interface, allowing users to generate a wide range of reports in real-time, even if they’re not in the office,” comments Birrenbach. “It will also be able to consolidate data from Cognos Planning and PowerPlay into a single report, which will save a lot of time. Finally, the Cognos 8 engine offers much better performance than the previous version, so we expect much faster response times.”

The Web interface will make life easier for most users, since they will not need to install any client software. At the same time, power users will still be able to use the client application to create new customized reports. The Cognos environment currently runs on a Microsoft Windows server, The company is planning to use iSCSI technology to enable this server to leverage shared storage within the Power servers. This can help to improve performance and reduce storage costs, as critical data can be moved onto the System i disk, and this data can then be incorporated into the regular server backup processes and included in the high availability solution. All the data on the System i disk, regardless of source, is copied onto the company’s IBM System Storage TS3200 Tape Library, using a single IBM i backup process.

Birrenbach concludes: “The breadth of IBM’s offering – including server and storage hardware, business intelligence software and technical services – helps Rotkäppchen get the most out of its SAP ERP environment and support the growth of its business. As we move forward with our next major project – an upgrade to SAP ERP 6.0 – our partnership with IBM Global Technology Services will continue to deliver value.”