MAQUET consolidates IT landscape with SAP ERP

MAQUET, founded 1838 and headquartered in Rastatt, Germany, is a leading supplier of medical technology for operating theatres, intensive care units, and cardiovascular surgery. The company, a subsidiary of the Swedish GETINGE AB group, employs 5,000 people and generates annual revenues of about €1,080 million.

MAQUET includes 36 sales companies, operates twelve production units in six countries, and runs its own worldwide service organization. The IT service provider for MAQUET businesses is headquartered in San José, California.

In 2008 MAQUET acquired two US businesses, and the Transition of Services Agreements (TSA) required the integration of business operations within 24 months, after which the former owners would no longer provide the necessary services. Both new acquisitions were using heavily customized SAP applications supporting their complex business processes. Comparing the two application landscapes, the MAQUET team concluded that at most there was only about 60 per cent similarity between the systems. The acquired businesses were divisions of larger companies, and the supporting data centers, applications and IT infrastructure was not included in the sale.

The reorganization required by the US acquisitions offered the opportunity to implement a consistent compliance environment. Cardiovascular medical devices often need to last a lifetime, which means dedication to quality, knowing which batch was delivered where and when, the individual production steps, the pre-fabrication processes right down to single synthetic threads used to stitch components together.

For MAQUET, the situation presented an opportunity to rethink and optimize its organizational structure and IT infrastructure, and prepare the enlarged company for future growth.

Analyzing the landscape
MAQUET engaged with IBM Global Business Services to analyze the existing application landscape and to create an integrated transformation program. IBM was chosen as partner for this program based on its excellent experience gained when working with IBM Germany on a previous project, integrating new business areas into the MAQUET group. IBM Germany demonstrated specific knowledge about the strategic concept of integrating new legal entities into an existing group, using special strategies, concepts and technologies.

First, IBM Global Business Services performed an as-is analysis of the IT environments of the different businesses. The previous IT landscape comprised 45 different applications, including SAP and more than 150 data sources. IBM Global Business Services aimed to create a right-size IT solution that would cut operating and maintenance costs, reduce complexity, and improve interoperability throughout the MAQUET group.

The TSA created a hard-stop deadline, and IBM Global Business Services and MAQUET set up teams in Germany and the US to deliver the project.

Then, in designing the new IT landscape, IBM Global Business Services identified SAP applications as strategic platforms that were central to MAQUET. The objective was to exploit a limited number of solutions as effectively as possible, an approach that would help to keep the system design simple and low cost.
The IBM Global Business Services team reviewed the 45 existing applications, to show where the required functionality could be provided by SAP applications. This approach allowed IBM Global Business Services to recommend eliminating many of the former applications without sacrificing functionality. In addition, IBM Global Business Services discovered that in some cases an application upgrade would include functionality currently supplied elsewhere, and little by little the existing landscape was reduced from 45 to 13 applications. The final set of applications included Windchill, Plateau, CATSWeb and KRONOS.

The MAQUET office in Rastatt was chosen to provide the SAP template, as their operations covered most of the business processes used throughout the group. A fit-gap analysis based on this solution was performed to identify the work required to complete the implementation at each MAQUET operation.

The individual implementations were conducted according to the ASCENDANT™ SAP Global Template Implementation Method. This unique methodology developed by IBM includes Preparation, Focus, Business Blueprint, Realization, Final Preparation, and Go Live phases. This approach ensures a structured and successful project delivery for complex enterprise software implementation projects.

Rolling out the new SAP solutions
The three new SAP solutions were rolled out in two stages. In the first phase, SAP components for sales and distribution were implemented at the office in San José, California, with physical distribution occurring from a third-party logistics service provider in Aurora, Illinois. The second stage was the start-up of all manufacturing operations based on SAP for the Vascular Surgery and Cardiac Surgery divisions in Wayne, New Jersey.

Working with the local MAQUET teams, IBM Global Business Services was responsible for planning and executing the different rollouts at the different locations and divisions. The rollout templates for the new SAP systems were designed and implemented with flexibility in mind, to support MAQUET’s growth strategy by enabling easy integration of future acquisitions into the harmonized SAP landscape. This was an important aspect for MAQUET in its effort to align its IT systems and operations to its corporate business development strategy.
As part of the overall change project, the Cardiac Surgery manufacturing operations were moved from Dorado, Puerto Rico, to the award-winning manufacturing facility in Wayne; then all manufacturing operations in Wayne went live at the same date.

For the SAP applications supporting the manufacturing plants’ interdependencies to time and attendance applications on the external HR system needed to be taken into account, to ensure a smooth transition to the new SAP platform.

Different project teams were established specializing in the various SAP components, including SAP Financial Accounting (FI), SAP Controlling (CO), SAP Materials Management (MM), SAP Sales and Distribution (SD), SAP Production Planning (PP), SAP Quality Management (QM) and SAP NetWeaver Process Integration (PI).

The mixed teams consisted of members from MAQUET Germany, key users from the combined MAQUET Cardiovascular business unit, and consultants from IBM Germany and IBM US. A further team took care of validation aspects across all the SAP components.

All teams were governed by a Project Management Office, overseeing all different SAP implementation projects.

This project structure was key to delivering a successful solution of this size in a dynamic environment such as the MAQUET group.

Johannes Förderreuther, Associate Partner at IBM Global Business Services, says, “Choosing a partner able to deliver IT transition projects in a global scale is an advantage for customers like MAQUET. Our team and our matured methods and tools, especially the Application Portfolio Management, convinced MAQUET to work with IBM Global Business Services. The result shows that this was a good decision for MAQUET.”

The principal steps were the analysis of the existing application landscapes for the two businesses, the planning and design of the new landscape, and the practical how-to steps required to complete the transition from the actual to the future state. The project included three SAP application rollouts over a period of 17 months, covering sales and distribution for the San José location, and manufacturing applications for the Vascular Surgery and Cardiac Surgery Divisions in Wayne.

Meeting tough governance challenges
The SAP template included common processes, data standards, custom development work as well as support documentation and training materials. Customizations to the template were needed for US legal requirements and for business reasons, such as local processes and local developments.

The former owner of the two acquired businesses agreed to run special data extraction software developed by IBM Global Business Services on the two independent SAP source landscapes to slice out all the data needed for MAQUET to become independent and to fulfill the data retention requirements of the FDA.

The data extraction approach followed a custom-made “driving table” strategy, which started with the agreed core master data, such as products, customers and suppliers, that determined the associated master data. All master data together determined the transactional and the historical data that needed to be extracted and migrated to complete the separation.

MAQUET’s payroll services were outsourced to Automatic Data Processing, Inc., in 2008, which feeds time and attendance data back to the SAP solutions at the manufacturing sites for use in planning capacity.

Managing change successfully
MAQUET asked IBM Global Business Services to support the change management process connected with the implementation of new IT systems and internal restructuring projects, and plan and sequence the IT projects to minimize disruption of MAQUET’s business.

IBM Global Business Services involved all the MAQUET stakeholders, from customers to staff to suppliers, all of whom contributed to the project.

For effective project management and progress monitoring during the whole transformation program, IBM Global Business Services leveraged IBM Rational Portfolio Manager to plan, keep track of and document all different projects and stages.

This professional and properly structured approach allowed MAQUET to manage this huge change management project effectively, including transformation and standardization of its core enterprise resource planning and reporting systems across various locations in Europe and the US, on schedule without any critical issues during the final go-live weekend.

Frank Kozar, Vice President Operations at MAQUET Cardiovascular, comments: “SAP is now in production on schedule. The SAP go-live weekend was the best I have experienced. The team was relaxed, joking and able to leave by mid-afternoon as no issues emerged. This success has been achieved through the great collaborative effort from IBM teams in Germany and the US, MAQUET Germany and MAQUET Cardiovascular. It was absolutely fantastic.”

Direct cost savings
The new IT solution based on SAP provides a cost-effective, consolidated and simplified landscape for MAQUET. The key was to reduce the number of applications and maximize the use of standard software functionality rather than rely on complex and costly customization. Additionally, by staying with SAP applications, MAQUET is able to capitalize on existing skill sets and avoids costly retraining.

MAQUET now has a consistent and flexible online sales reporting system accessible by authorized employees regardless of location, offering daily comparisons of planned and actual data. Sales commission calculations are fully automated based on the accurate sales reports, eliminating manual errors and speeding information delivery.