Farmacéuticos Maypo gains real-time, accurate business information with SAP and IBM

Published on 08-Jul-2011

Validated on 01 Oct 2013

"We have never experienced a failure with IBM servers, making them the obvious choice on which to run our SAP applications. Since deploying SAP ERP on IBM hardware, we have seen an impressive reduction in ERP response times of 80 percent. " - Eric Barceló, Technology Director, Farmacéuticos Maypo

Customer:
Farmacéuticos Maypo S.A. de C.V.

Industry:
Life Sciences, Wholesale Distribution & Services

Deployment country:
Mexico

Solution:
IGF: IT Financing - IBM HW, IGF: IT Financing - IBM SW, Business Resiliency, Enterprise Resource Planning, High Availability , Information Governance, Information Integration, Small & Medium Business, Virtualization, Virtualization - Server

IBM Business Partner:
SAP

Overview

Farmacéuticos Maypo S.A. de C.V. is a wholesaler that sells and distributes highly specialized pharmaceuticals in the Mexican market, principally to public-sector clients. The company serves 80 affiliated laboratories and more than 200 health-related organizations, and is the second-largest distributor of medicines for government health institutions. Since few Mexican laboratories have the infrastructure to make sales directly to the government, Farmacéuticos Maypo helps these vendors penetrate the market. Employing 600 people, the company owns and operates two large warehouses.

Business need:
To run its operations, Mexican wholesaler Farmacéuticos Maypo relied on an enterprise resource planning solution, which over time had become highly customized. A complex web of component dependencies and connections caused upgrade attempts to fail, and the system was unable to provide an integrated overview of operations or useful business intelligence. For example, matching staff vacation rosters at each location and the centralized payroll data was performed manually, as there was no way to link local data to the financial systems.

Solution:
Farmacéuticos Maypo selected SAP ERP, SAP ERP Human Capital Management, SAP Supplier Relationship Management (SRM), SAP NetWeaver Master Data Management (MDM), SAP NetWeaver Business Process Management (BPM), SAP NetWeaver Process Integration (PI). The SAP applications run on leased IBM systems, including two IBM Power 570 servers and IBM BladeCenter JS43 Express, running IBM AIX and IBM DB2 database. The company also deployed IBM PowerHA, and a suite of Tivoli software.

Benefits:
Farmacéuticos Maypo has a simplified, standardized and integrated ERP solution. Response times have been cut by 80 percent and batch processing times cut from four hours to 15 minutes. SAP applications meet the company’s needs with minimal customization and offer real-time views of business processes. SAP Master Data Management allows the company to catalog 8,000 products, providing a single source of accurate information on essential data such as price, expiry and storage. IBM Power and BladeCenter technology has proved highly reliable.

Case Study

Farmacéuticos Maypo S.A. de C.V. is a wholesaler that sells and distributes highly specialized pharmaceuticals in the Mexican market, principally to public-sector clients. The company serves 80 affiliated laboratories and more than 200 health-related organizations, and is the second-largest distributor of medicines for government health institutions.

Since few Mexican laboratories have the infrastructure to make sales directly to the government, Farmacéuticos Maypo helps these vendors penetrate the market. Employing 600 people, the company owns and operates two large warehouses.

Users in different divisions had customized their enterprise software to fit their needs, which had resulted in a range of isolated applications. This situation introduced major challenges when it came to unifying information from each department, and without access to real-time, comprehensive data on each order, it was difficult to track processes and identify errors, leading to delays in replying to customer inquiries.

For example, it was important to match staff vacation rosters at each location with the centralized payroll data, to ensure people were correctly paid. With no way to link local personnel data to the financial systems, the matching process was performed manually, a slow and inefficient operation that was prone to error.

Similarly, fragmented databases and isolated systems prevented the development of an enterprise-wide product catalog, making it difficult to establish stock availability and delivery performance. Without centralized data, it was impossible to perform business analysis – such as cost control, margin, inventory turn and more – and learn how to improve.
Efforts to upgrade the software were hindered by the complex network of dependent applications. The cost and time required to simplify the application landscape was commercially unacceptable, if it was even possible.

“If our deliveries are delayed, this does not just have consequences for clients’ confidence in our ability to meet expectations – it can also result in fines, thereby costing us both in terms of client goodwill and financially,” explains Eric Barceló, Technology Director at
Farmacéuticos Maypo.

“Without a single, standardized ERP solution in place, it was difficult for departments to work together in a coordinated manner to ensure orders were fulfilled accurately and on time.”

He adds: “Excessive customization led to a ‘Frankenstein’ type of system, with sections changed to suit a particular group of users’ needs. This prevented efforts to migrate to a more advanced version, as we struggled to untangle the web of dependent applications.

"We decided to start afresh – selecting a solution that would require as little customization as possible, while supporting the varied needs of the company.”

Finding the cure
Farmacéuticos Maypo selected a comprehensive range of SAP applications, including SAP ERP, SAP ERP Human Capital Management, SAP Supplier Relationship Management (SRM), SAP NetWeaver Master Data Management (MDM), SAP NetWeaver Business Process Management (BPM) and SAP NetWeaver Process Integration (PI).

With a comparatively small staff supporting a large customer base, one of the most significant challenges in the company was managing vacations, pay and related personnel issues. The first phase of the project involved implementation of SAP ERP Human Resources, which included a portal for employees to manage and coordinate items such as vacation time and pay slip receipts.

“Selecting SAP as our standard applications across all divisions has made a huge difference to our company ­­— we now have significant, new functionality and more automated processes. For example, SAP ERP Human Capital Management enables us to automate human resources tasks that were using up employees’ valuable time,” says Eric Barceló.

The next step was to introduce a standard product catalog that would contain critical data on more than 8,000 products. In the pharmaceutical market, this means storing the standard SKU and related data, alongside price, expiry and storage instructions. Farmacéuticos Maypo implemented SAP NetWeaver Master Data Management (MDM), which replaces multiple and sometimes unreliable data feeds with a single source of consistent information.

“SAP NetWeaver Master Data Management has allowed us to create a catalogue for more than 8,000 products – approximately half of the 15-16,000 products we estimate are currently used in the pharmaceutical industry – storing details such as expiry dates and storage instructions. SAP MDM gives us the tools to keep track of stock quality efficiently and effectively, ensuring we can fulfill orders accurately.”

Boosting transparency
Next, Farmacéuticos Maypo deployed SAP NetWeaver Business Process Management (BPM), to help teams to model, execute and monitor business processes based on a common process model. As well as providing internal access to process management, Farmacéuticos Maypo has combined the BPM solution with SAP NetWeaver Portal technology, which enables clients to view status of their tenders, track sales orders and other details in real-time.

Eric Barceló comments: “Farmacéuticos Maypo markets products on behalf of smaller companies to the end-user public health organizations. By enabling browser-based access to data through SAP NetWeaver Portal, our customers can see exactly what we are doing on their behalf. This is an extremely attractive prospect for our clients, as they could probably not afford to track the activities in this manner, and yet with SAP NetWeaver Portal, Farmacéuticos Maypo makes this possible.”

Superb reliability from IBM hardware
Farmacéuticos Maypo has been using IBM servers since 2002 and has experienced the resiliency of IBM systems first-hand. The company selected two IBM Power 570 servers and one IBM BladeCenter JS43 Express server housed in an existing IBM BladeCenter S Chassis, all running IBM AIX and IBM DB2 for Linux, UNIX and Windows.

The IBM solution was chosen for its cost-effectiveness and high level of integration with SAP applications. To fund the acquisition, Farmacéuticos Maypo took advantage of a leasing contract with IBM Global Financing rather than outright purchase, which makes commercial sense for a fast-growth company.

“We have never experienced a failure with IBM servers, making them the obvious choice on which to run our SAP applications,” says Eric Barceló. “Leasing the equipment from IBM Global Financing gives Farmacéuticos Maypo the flexibility to seize new business opportunities whilst minimizing risk, a great advantage. The high degree of interoperability between IBM and SAP technology is a significant bonus, providing benefits in terms of performance and availability.”

Farmacéuticos Maypo was among the first IBM customers in Latin America to install Solid State Drives (SSDs) in its IBM Power 570 servers. In contrast to traditional hard disk drives, solid-state drive technology eliminates the rotational delay of a spinning platter and of waiting for an arm to move to the correct position, thereby accelerating access to data. SSD technology also offers benefits in terms of efficiency, providing better performance whilst also reducing energy consumption.

“We are very excited to adopt pioneering IBM solid-state drive technology,” says Eric Barceló. “The cost-performance ratio is pretty difficult to beat, and response times are drastically reduced.”

Maximizing availability
Using IBM PowerHA for AIX & Linux, Farmacéuticos Maypo was able to create a high availability cluster for SAP ERP. Combining this with Live Partition Mobility makes it even easier to maintain availability. This PowerVM feature enables the Farmacéuticos Maypo IT team to seamlessly move virtual server workloads from one blade to another for load-balancing purposes.

Farmacéuticos Maypo selected a comprehensive suite of Tivoli solutions to manage availability and performance of SAP and manage the storage environment. Tivoli Monitoring addresses almost every aspect of availability and performance management, from infrastructure monitoring and system health through to graphical views of SAP application performance. The Tivoli Monitoring solution standardizes management and control, helping to reduce infrastructure management costs.

The IBM Tivoli solution – including IBM Tivoli Composite Application Manager (ITCAM) for Applications – provides a single solution for monitoring, viewing, analyzing and managing integrated SAP applications across the enterprise – consolidating critical application data in one easy-to-use interface. Integrating smoothly with the SAP applications, Farmacéuticos Maypo has gained comprehensive visibility and control of its entire application environment.

“The IBM PowerHA and PowerVM technology makes us confident that we have optimized availability for our business critical SAP ERP systems,” comments Eric Barceló. “IBM Tivoli Monitoring ensures that we can catch issues before they have even occurred, enabling us to be highly responsive. In the unlikely event that we do experience a failure, having IBM Tivoli Storage Manager in place automating backups and restore gives us the peace of mind that we can be back online as soon as possible.”

Enjoying a dose of success
Farmacéuticos Maypo has gained an integrated, standardized ERP system that has minimized delays to processes and boosted efficiency.

“Since deploying SAP ERP on IBM hardware, we have seen an impressive reduction in ERP response times of 80 percent,” says Eric Barceló. “Moreover, we estimate that our batch processing times have been slashed from four hours to just 15 minutes, whilst quality of service is approximately four times better – a huge improvement.”

Different departments at Farmacéuticos Maypo can leverage the SAP applications to coordinate operations and maximize productivity. The inherent flexibility in the SAP and IBM solution has enabled the company to roll out the solution with minimal customization – a major goal for the implementation.

“The SAP and IBM solution has provided the flexibility and versatility we were looking for,” concludes Eric Barceló. “It meets the needs of our diverse workforce whilst adhering to our goal of minimal customization, making the implementation process as painless as possible and ensuring that future upgrades will be less effort!

“Our users are very satisfied with the new solution, working more independently and productively. We are able to offer clients greater transparency, and can be confident in data integrity. Farmacéuticos Maypo now has a platform that equips us to deal with continued growth, and we feel confident that IBM and SAP technology will be our strategic partner for further success for many years to come.”

Products and services used

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

Hardware:
BladeCenter, BladeCenter JS43 Express, BladeCenter running OS - AIX, BladeCenter S Chassis, Power 570, Power Systems, Storage, Storage: DS5100, System Networking: SAN24B-4, Storage: TS3200 Tape Library

Software:
AIX, PowerHA for AIX, PowerHA, DB2 for Linux, UNIX and Windows, PowerVM, Tivoli Storage Manager, Tivoli Monitoring

Operating system:
AIX

Service:
IBM-SAP Alliance

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