Casa Oliveira toasts greater business insight with SAP and IBM Global Technology Services

Published on 08-Feb-2011

Validated on 05 Jun 2013

"We truly believe that deploying SAP ERP on IBM hosted infrastructure has optimized processes at Casa Oliveira, making us faster and more agile and efficient." - Moisés Paula De Sousa, Partner at Casa Oliveira

Customer:
Casa Oliveira

Industry:
Wholesale Distribution & Services

Deployment country:
Venezuela

Solution:
Business Integration, BA - Business Intelligence, Business Resiliency, Enterprise Resource Planning, High Availability , Information Integration, Small & Medium Business, Optimizing IT

IBM Business Partner:
SAP

Overview

Founded in Venezuela in 1962 by the Portuguese immigrant Américo Oliveira, Casa Oliveira began as a small company intended to bring the taste of Portuguese cuisine to the South American country. The company evolved to specialize in importing and distributing liquor, wine, champagne and other beverages. Headquartered in Boleita Norte, Caracas, Casa Oliveira employs 70 people full-time, and another 50 on a sub-contracted basis.

Business need:
Accelerated growth put pressure on existing sales, purchasing, financial and payroll systems at Venezuelan drinks importer Casa Oliveira. A lack of integration between these processes prevented the company from identifying and acting on opportunities for greater efficiency. Sales and marketing reports had to be generated manually – meaning they were time consuming and out-of-date upon completion. Casa Oliveira was unable to adjust stock levels to match demand, could not target sales promotions effectively, and found it difficult to reduce waste.

Solution:
Casa Oliveira engaged IBM Global Business Services and IBM Global Technology Services to design, implement and host an environment based on SAP ERP, including Financials (FI), Controlling (CO) Materials Management (MM), Inventory Management (IM) and Sales & Distribution (SD) modules. The SAP ERP solution runs on five IBM System x3650 servers, with IBM System Storage TS3100 Tape Library Express providing backup, managed by IBM Tivoli Storage Manager and IBM Tivoli Continuous Data Protection for Files.

Benefits:
Time spent managing orders and associated invoices has been reduced by 90 percent. Decreased the proportion of tasks done manually from approximately 70 percent to 10 percent. Tasks that could previously only be performed once every six months (for example running sales reports) can now be completed weekly, speeding the flow of management information. Real-time data allows Casa Oliveira to adjust stock levels to match customer demand without the expense of importing surplus goods or the danger of stock-outs.

Case Study

Founded in Venezuela in 1962 by the Portuguese immigrant Américo Oliveira, Casa Oliveira began as a small company intended to bring the taste of Portuguese cuisine to the South American country. The company evolved to specialize in importing and distributing liquor, wine, champagne and other beverages. Headquartered in Boleita Norte, Caracas, Casa Oliveira employs 70 people full-time, and another 50 on a sub-contracted basis.

Adopting an SAP ERP solution, hosted by IBM Global Technology Services, has enabled Casa Oliveira to increase automation across operations, boosting efficiency and accelerating processes in a highly competitive market. The company has gained real-time insight into sales data, enabling adjustment of supply levels to correspond with demand and making more effective marketing possible. With SAP ERP hosted by IBM, Casa Oliveira has increased agility and responsiveness, while replacing a number of manual tasks with more cost-efficient and reliable automated processes.

Moving towards automated processes

Many of the management information and financial reporting activities at Casa Oliveira were manual, such as validation of sales reports, individual product prices and purchase requests. Specifically, calculation of the tax due on imported goods was performed manually, which was slow and introduced the risk of errors and consequent penalties from the authorities.

Moisés Paula De Sousa, Partner at Casa Oliveira, explains, “Working in importation means we encounter many regulations. For example, when a shipment container lands in Venezuela, seven different payment tax templates are generated once the invoice is presented to customs. Before, we were dealing with these all manually, meaning it could take up to six hours to process a single container.

“Employees would generate each template, make a product-by-product check, verify current tax rates before calculating the amount due and then make a note of when it was due to be paid. This left us vulnerable to human error and the serious penalties we would incur as a result, as well as pushing our operational costs unacceptably high.”

Sales, purchases and financial processes were not integrated, making it difficult for Casa Oliveira to gain an end-to-end view of business performance. Managers wanted to be able to identify which products were most popular to maximize revenue, analyze seasonal variations to help meet customer demand, and highlight lucrative gaps in the market.

De Sousa says, “As a wholesale distributor, we need to be at the very forefront of market trends, predicting what the retailers need to have in stock before they know it themselves. However, our previous system was holding us back, as it was simply too time consuming and difficult to generate sales reports. Importation and transport costs are our biggest expenditures, so it is vital for us to estimate demand of a particular product as closely as possible, ensuring we import enough to meet orders while minimizing waste.”

Finding the right partner

Casa Oliveira began working with a local software company to develop a custom-built solution, but the end result did not meet expectations. Instead, Casa Oliveira began seeking a tried-and-tested commercially available enterprise resource planning (ERP) solution, confident that the relatively larger investment would yield bigger benefits. The company selected SAP ERP, including Financials, Controlling, Materials Management, Inventory Management and Sales & Distribution, running on infrastructure hosted by IBM.

“After looking at similar companies, we found SAP ERP had a very impressive track record of success, and the kind of functionality and integration we wanted,” says De Sousa. “Rapid implementation was a high priority to us, and IBM consultants were able to make strong guarantees based on long-held experience with similar projects.

“Outsourcing the infrastructure to IBM enables us to enjoy the benefits of the new solution without the cost of training staff,” continues De Souza. “We are free to focus solely on our primary business objectives, confident that our IT infrastructure is being maintained by experts in their field.”

Hosted at an IBM facility in Venezuela, the IBM solution includes five IBM System x3650 servers with Intel Xeon Processor 5400 Series processors, running the SAP applications in the Microsoft Windows Server environment, supported by an Oracle database. The Intel Xeon Processor 5400 series is a quad core CPU with leading performance and performance per watt advantages. By providing the performance headroom needed to confidently consolidate applications onto fewer systems, the Intel Xeon processors help optimize return on investment and increase Casa Oliveira’s efficiency and responsiveness.

The project was divided into three stages: firstly, a 16 week ‘transition phase’, during which IBM Global Business Services worked with Casa Oliveira to fully understand the company’s needs, helping to ensure a stable and scalable solution was put into place. Following this, all systems were put into production for the two week ‘joint verification phase’, enabling the IBM Global Technology Services team to calibrate systems to optimize performance. Finally, the project entered the ‘stable operation phase’, where IBM began to provide MidRange eXpress hosting for Casa Oliveira’s SAP environment, which includes a call center to efficiently resolve Level 1 equipment problems; technical hardware support for IT maintenance; and management of the Microsoft Windows 2008 operating system, five days a week, eight hours per day.

Capitalizing on the extensive expertise of the IBM consultants, Casa Oliveira is able to pursue opportunities more proactively, making it easier for the company to achieve corporate objectives and use resources ultra-efficiently.

Storage is provided by a single IBM System Storage TS3100 Tape Library Express. IBM Tivoli Storage Manager is used for backup and recovery. This enables Casa Oliveira to be confident the IBM teams responsible for hosting the company’s business critical applications are utilizing the sophisticated range of storage management capabilities available with IBM Tivoli solutions. IBM Tivoli Storage Manager helps to maximize business continuity by decreasing backup and recovery times and maximizing application availability with advanced data recovery management technologies. Administration workload is decreased with the automated data protection capabilities designed specifically for SAP environments.

Deploying IBM Tivoli Continuous Data Protection for Files enables real-time, continuous backup for crucial data, running transparently in the background with a light footprint. The seamlessly integrated IBM Tivoli solution further minimizes the backup and recovery window, ensuring Casa Oliveira can restore to point-in-time as required with data integrity guaranteed.

Accelerating business processes

Deploying SAP ERP has enabled Casa Oliveira to automate and standardize many everyday operations, resulting in better use of resources. By increasing the efficiency of its processes, Casa Oliveira is able to pass on savings to its customers.

“With SAP ERP, managing orders and the associated invoices could not be easier,” comments De Souza. “Now, all payable taxes on an order are pre-calculated, a single check is performed before invoices are passed automatically to the accounting department. The time taken for this process has been cut, in terms of man hours, by approximately 90 percent – a huge advantage for the company. Accuracy rates are much higher now too, allowing us to avoid the cost of paying penalties to the authorities.

“We estimate that SAP ERP has enabled us to cut the number of tasks performed manually from 70 percent to just 10 percent. Streamlining our processes has also allowed us to significantly decrease overall operation costs, which we can then pass onto our clients, keeping our products competitively priced.”

Gaining market insight

With integrated SAP ERP solutions, Casa Oliveira is able to quickly and easily gain a comprehensive view of business performance, with real-time sales order information helping managers to plan future imports and more closely match stock levels to demand.

“Our marketing department is now able to pull real-time information for individual products using the SAP solution - something that would never have been possible before,” says De Souza. “Instead of relying on sales reports compiled every six months that were out-of-date upon completion, managers now have access to weekly reports. These include data such as product demand by client and geographical area. They can also track seasonal demand and study competitors’ presence in the market sector. This has transformed the responsiveness of our company to market trends, ensuring we stay at the front line of a highly competitive marketplace.

“Promotions and price-setting are critical to our success, and the SAP ERP solution gives us the tools to wield this weapon as effectively as possible. We are also able to predict demand levels more accurately than ever before, enabling us to order just enough to minimize transportation costs, whilst avoiding disappointing customers.”

Opportunities for the future

Casa Oliveira is able to leverage its new deeper understanding of the marketplace to forge stronger relationships with clients. For example, it has been able to offer major clients the ability to connect directly to the SAP ERP solution to track orders, a significant value-add that could prove a key competitive edge for the future. The company is also currently considering implementation of SAP Customer Relationship Management (CRM), encouraged by the success of the SAP ERP implementation.

De Souza concludes, “We truly believe that deploying SAP ERP on IBM hosted infrastructure has optimized processes at Casa Oliveira, making us faster, more agile and efficient. The greater insight into the marketplace has provided benefits that can also be passed onto our clients, as we tell them which products are doing well in the market that they do not currently carry – a highly popular new capability. Ultimately, we feel that working with IBM and SAP we are well-equipped for further success and expansion.”

Products and services used

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

Hardware:
Storage: TS3100 Tape Library, System x, System x: System x running Windows, System x: System x3650 M3

Software:
Tivoli Continuous Data Protection for Files, Tivoli Storage Manager

Service:
GTS Strategic Outsourcing, IBM-SAP Alliance, IBM Global Business Services

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