IVC Group breaks into new markets with help from SAP and IBM

Headquartered in Avelgem, Belgium, luxury vinyl flooring company IVC Group is expanding across Europe and into Russia – with increasing sales success in the US, too. Supporting continuous year-on-year sales growth and expansion into new markets was stretching existing business systems and infrastructure to the absolute limit.

Ignace Opsommer, ICT Manager, comments, “The technical infrastructure was limiting the growth of the company, which has been continuous since the start of the company in 1997. We were at the outer limits of our service level agreements in terms of response times, information delivery and service availability. We wanted to put in place a strategic solution that would enable IVC Group to meet its corporate ambitions, and yet continue to drive costs out of the business.”

“The systems overhaul allows IVC Group to take advantage of new business opportunities in a way that was not possible before, by acting as an integrated enterprise in multiple markets,” says Ignace Opsommer.

“With the new IBM infrastructure IVC Group easily outperforms its Service Level Agreements, with average dialog response times down from 1 sec to less than 0.5 sec at lower costs per transaction than the previous solution. The IBM server and storage landscape provides scalability, availability and redundancy at application, database and storage layers, essential for what is now a global, 24-by-7 enterprise.”

Becoming a global enterprise
IVC Group is rapidly transforming itself into a global enterprise. US production is based in Dalton, GA, with its distribution center in Rancho, CA, while the main European production sites are Avelgem (Belgian headquarters) and Wiltz (Luxembourg). Russian operations are based near St Petersburg.

The company is growing fast. In five years, turnover has increased by 50 percent, and now the 500 employees generate annual sales of approximately €200 million. Total flooring production capacity has reached 60 million sqm (646 million sq ft). IVC Group handles the complete sales, logistics, inventory, manufacturing and supplier chain within its SAP applications, originally hosted on HP servers.

This also includes inter-company sales as stock is transferred between the manufacturing sites and the different distribution centers.

One of the main components of IVC Group’s ICT applications strategy is to run the last stable release of the main business and other applications. Business can benefit from the newest functionality and technology, there is no risk of end-of-support issues, in general IVC Group wants an up-to-date application portfolio.

A new element was the growth of sales in Russia, the team had also been aware that providing Cyrillic script support would require the implementation of the Unicode standard. Both considerations would place additional processing workload on existing HP servers and storage, and information delivery would fall below the Service Level Agreements.

“As an international business, high availability and continuous operations became increasingly important, too,” says Ignace Opsommer. “We therefore looked for a system design that would embed high availability, resilience and disaster recovery, and incorporate scalability to allow us to increase our workload without service interruption. Any loss of the business-critical SAP applications has a direct impact on the whole business, from production through to finance, and we looked for a complete, strategic solution.”

IVC Group adopted a five-point plan to resolve these pressing issues. The key steps were to migrate to the latest version of SAP ERP, convert to the Unicode standard to provide support for Cyrillic and other non-Roman scripts, upgrade the operating systems, renew the database solutions, and deploy a systems infrastructure capable of scaling up over the next few years.

Selecting SAP applications
IVC Group chose to move from SAP R/3 Enterprise (also known as SAP version 4.7) to SAP ERP with Enterprise Core Components, with full Unicode support (also known as SAP version ECC 6.0). In the process, the IVC Group team chose to upgrade its Microsoft Windows operating systems and SQL server to the current editions.

“Our SAP ERP solution includes all standard applications, such as financials, controlling, sales and distribution, materials management, production planning, warehouse management and more,” says Ignace Opsommer. “It includes all major logistic business processes, such as customer sales for both rolls and cutting business, sales between the different IVC Group companies, sales from production facilities to end-customers, and tracking of third-party business for the local cuts business.”

In five years, IVC has increased from 135 to 200 SAP users, with a production database that has grown from 150GB to 700GB. From 500,000 user dialog steps each week in 2005, the system now experiences 750,000 each week, a 50 percent increase.

“SAP ERP has truly provided an end-to-end solution for our business, from purchasing raw and technical materials, final vinyl products, production and planning, our highly automated warehouse processes with radio-frequency identification of stock for putaway, picking and loading. SAP applications offer enormous flexibility within each functional area to deal with our complex business requirements within the group, allowing us to embed best practices and standards without losing sight of our unique needs.”

Choosing IBM infrastructure
As a corporate policy, IVC Group deals only with main system vendors, and invited HP and IBM to propose a full infrastructure landscape capable of meeting its business objectives and Service Level Agreements. The full request for proposal was to provide complete design, implementation and services.

The IVC Group technical team was aware that the introduction of the Unicode-enabled SAP applications would increase processor and storage workloads each by around 30 percent. It was essential to ensure that proper allowance for the change was included in the system planning.

“IBM presented a better response all-round,” comments Ignace Opsommer. “For implementation, support and maintenance, IBM offered a significantly more cost-effective and comprehensive package, and helped us out with the calculations at all levels, particularly for the critical SAPS capacity needed for the application and database layers, and the I/O required for storage layer. The technical estimates were more detailed, with good predictions of scalability, and the storage proposals were more convincing.”

IVC Group implemented its SAP applications on IBM BladeCenter HS21 blade servers, using VMware ESXi technology to group multiple blades for central management, running Microsoft Windows Server 2003 Enterprise Edition and Microsoft SQL Server 2005.

This arrangement allows IVC Group to add further blade servers, expanding the total capacity of the virtual machines in a non-disruptive and incremental manner as IVC Group grows. All 200 users access one or more VMware-enabled systems, including SAP Customer Relationship Management, Microsoft applications (such as MS Exchange, MS BizTalk and MS SharePoint), file and print serving, JIRA service desk, Bartender labeling and many more.

An IBM System Storage DS4700 Express model stores data for the SAP applications (Microsoft SQL Server database) and other file server data. The DS4700 Express offers up to 112TB of physical SATA storage capacity, powerful system management, data management, and data protection features. The DS4700 Express is designed to expand from workgroup to enterprise-wide capability, with up to six Fibre Channel expansion units, easily meeting IVC Group’s future growth plans.

IBM MetroMirror technology continuously mirrors data between the DS4700 Express storage system at the production data center and a similar DS4700 Express system at a second data center. SAP applications run load-balanced in both data centers simultaneously on HS21 blades, each having two processors and 16GB memory. IVC Group uses the clustering services of Microsoft Windows Server Enterprise Edition to provide highly available SAP database instances at each of the two sites. Development and test environments run purely in the primary data center.

“The IBM landscape delivers a solution which offers never-fail operations and complete disaster recovery at lower operational costs than before,” says Ignace Opsommer.

The additional performance & scalability of Intel Xeon processors gives businesses the capacity to deliver even greater responsiveness from SAP applications and reach out to more users.

“With our SAP applications on multi-core Intel processor-based servers, we can reduce space and power requirements and on-going system costs by as much as 80 percent,” says Ignace Opsommer. “Additionally, with Intel Intelligent Power Technology, we can make performance available for critical workloads while conserving power when there is less demand.”

Gaining support from IBM
As part of continuing service and support, IVC Group works with IBM Global Technology Services on three-monthly reviews of service levels, response times, performance and technical maintenance. This comprehensive service includes firmware revisions to servers and storage devices, right through to strategic planning to ensure that the solution continues to match the company’s business strategy.

“IBM Global Technology Services handled everything from system design and implementation through to handover support and training. Any issues that arose were immediately solved, and the solution is true to our objectives of being able to scale to sustain the future growth of the company for the next years,” says Ignace Opsommer.

Growing the business with SAP and IBM
The revised end-to-end SAP applications allow IVC Group to operate as an integrated enterprise across all its business units, regardless of country or language. Sales data is consolidated on one SAP ERP instance from each office, from St Petersburg to Rancho California, and provides accurate production planning information for the manufacturing plants. With production volumes more closely aligned to actual sales, IVC Group is able to cut inventory levels without risking stock-out situations, which in turn reduces the cash tied up in stock at warehouses. Physical floor space requirements are reduced, with fewer road trips moving stock between locations to meet demand.

The SAP warehouse management implementation in the IVC Group’s RF-enabled automated warehouses allows the company to track precise stock levels product-by-product at every location. Combined with production planning data, IVC Group is able to give its raw materials suppliers weekly updates on predicted requirements, and match purchasing quantities to manufacturing needs, cutting wastage and over-procurement.

Ignace Opsommer comments, “The efficiencies enabled by SAP applications on the IBM infrastructure are particularly important considerations for a rapidly growing company, where cash can be best utilized for opening up new markets and developing new products, rather than staying locked in unsold inventory or in unused materials.

“The combined SAP and IBM solution gives IVC Group the capability to develop its strategic business, scalably and reliably, and the support from IBM Global Technology Services has been the critical enabling factor.”