viastore speeds up the supply chain of Kaeser Compressors
SAP HANA with EWM
Kaeser Compressors is a leading compressor manufacturer and supplier of compressed air systems. The company required an efficient competitive sustainable supply chain, the core of which is its global distribution center in Coburg, Germany. By migrating to the modern SAP EWM and SAP HANA (High-performance Analytic Appliance), viastore SOFTWARE has been able to increase the efficiency of the distribution center many times – in every area. Kaeser and viastore SOFTWARE were pioneers here, undertaking one of the first SAP projects of this kind worldwide. Mentioning some benefits: Goods received are now processed up to 20 percent faster, Kaeser has recorded a 40 percent increase in picks, the packaging process has become 50 percent faster, and the warehouse activities as well as reporting are executed 20 times faster than in the past.
With branch offices and partner companies in more than 100 countries worldwide selling the compressed air systems produced by the Coburg family business, having a strong supply chain is vital. “This means that supply chain organization is the most important task of our IT,” says Falko Lameter, Chief Information Officer (CIO) of Kaeser Compressors Group. The focal point is the distribution center in Coburg: From here, the company supplies its products and spare parts not only to locations in Europe, but also to its U.S. distribution center. The Coburg logistics complex was completed in 2002, using SAP as the warehouse management system. “We implemented SAP in our company back in 1992, and were one of the first SAP R/3 customers,” says CIO Lameter. “With the SAP TRM (Task and Resource Management) introduced in 2002, we then had the opportunity to integrate the automated high-bay warehouse to SAP in conjunction with SAP LES (Logistics Execution System). Again, we were pioneers.” Beside deciding in favor of SAP in the warehouse, Kaeser also opted of engaging viastore. As an SAP integration company and international provider of turnkey intralogistics systems, viastore designed and built the distribution center with best of class warehouse automation and integrated the newly built distribution center with SAP. “viastore as an SAP Partner was not only focused on the warehouse automation concepts, but rather looked at the end-2-end processes required for a consistent process execution,” says Falko Lameter.
Demands on the supply chain have risen
The usage of the SAP system has grown fundamentaly over time. In addition, a high-bay warehouse, 19 carousel lifts, a mini-load system, automated guided vehicle system, conveyor system, 6 packing stations for small parts, 11 pallet packing stations, and a buffer warehouse section for faster loading of up to 100 trucks daily, are all integrated to SAP. Since then the demand on logistics and the entire supply chain have changed tremendously as well, as Falko Lameter explains: “Direct dispatch has become more and more common and important in our distribution during the past decade. This is also due to the greater variety of products as we’re no longer a classical mass producer with pre-manufactured products in stock. Rather, we assemble and dispatch a large number of our products in the configuration requested by the customer.” However, the situation is different when it comes to spare parts: “These are kept in stock, of course. But today we are planning the jobs in advance.” That means, the parts are delivered to the customer so that they arrive on site at the same time as the fitter.
In view of this massive demand increase on the supply chain, the connection of the numerous control systems caused problems, as Rainer Kemmelmeier, Applications Manager Logistics in Kaeser IT, explains: “Due to the huge volume of messages we’re exchanging here, we were increasingly having trouble processing them in the system appropriately. Therefore, we had to reduce the number of communication points on the tote conveyor system, for example.” But this was not the only reason that prompted Kaeser’s decision to upgrade to the latest SAP Extended Warehouse Management (EWM) software version in 2012. “The warehouse is significantly important for us, so it is only natural that we use the high performance warehouse management system,” Falko Lameter points out.
Smooth integration of warehouse technology
A major advantage of SAP EWM is that the control of underlying systems – automatic pallet and mini-load storages, carousel lifts, automated guided vehicle systems and conveyor system – can be directly connected to the warehouse management and material flow systems. “EWM is designed by the material flow system to seamlessly connect to this underlying systems,” says Kemmelmeier. Futhermore, the architecture of EWM provides far much faster communication than LES and TRM. With aide of the SAP PCo (Plant Connectivity) software, an integrated standard platform which connect the hardware controllers to the EWM system, the connection to the underlying system was achieved. “PCo replaced the previous gateways and enables the data transmission from an qRFC interface to a TCP/IP socket,” says Harouna Mohamadou, senior manager SAP Consulting at viastore SOFTWARE. His colleague, SAP consultant Martin Rommler, adds: “To control the logistics system before EWM, copious amounts of source code had to be developed in SAP LES and TRM. With SAP EWM, we were able to significantly reduce the number of custom programmed codes without jeopardizing with the further release and support of the system.” In the past, for example, carousel lifts were controlled by means of viastore SAP add-on; today this is completely integrated in SAP EWM.
However, some enhancements enabling accelerate the supply chain were indispensable. One of these relates to one of the major focus of viastore SOFTWARE to tailor ergonomical user interfaces, in other words, to develop efficient user dialogs for the stationary picking and packing stations. “The standard EWM solution offers extensive warehouse monitoring and control functions as well as many preconfigured features for radio frequency mobile transactions,” says Kemmelmeier. “In contrast, in our distribution center, we have many stationary workstations, for which the standard EWM doesn’t provide appropriate dialogs for our purpose. ”Process reliability was an essential criteria in this context, and operators should have only those input and communication options they really need. This significantly reduces the possibilities of making mistakes. “We have benefitted greatly from the knowledge of the viastore experts who had already implemented and integrated similar turnkey technologies in SAP EWM,” says Rainer Kemmelmeier, clearly pleased.
Next step: SAP HANA
In just few months, the distribution center had been successfully migrated to SAP EWM. But after golive there was no time for the Kaeser and viastore experts to sit back and rest. Kaeser decided to strategically migrate their entire corporate platform from Oracle to SAP HANA.
“Due to our high level of globalization, software is extremely important for us. It is very essential to be at the forefront in this field as well,” Falko Lameter emphasizes. “For us as SAP users, HANA is therefore a must. Particularly the capability of processing “Big Data” close to realtime by SAP HANA sounds very interesting to us.” Lameter compares the implementation of SAP HANA with the architectural revolution from mainframe to PC network systems. “Today, the internet has such a level of maturity that you can build a whole new architecture on it. For companies that is probably a more fundamental change than the migration to client/server solutions back in the days.” Lameter points to the fact that HANA is an entirely new software, which is based on a new type of database. “With HANA, you basically only have a table of documents – the original postings,” Kaeser’s CIO explains. “Reportings are made on-the-fly, they are calculated only upon request, and they are not stored anywhere. This architecture results in a considerably reduced database.”
As a result Kaeser began with the migration from Oracle to SAP HANA step by step – starting with SAP CRM, then SAP BI, followed by SAP APO (advanced planning and optimization) and concluded with SAP Extended Warehouse Management System. In order for the migration to be feasible, the entire solution portfolio on the platform needed to be updated to the latest release of SAP solutions. This impacted the upgrade of the freshly implemented SAP EWM from version 7.1 to 9.1. “Just shortly after haven successfully carried out an open heart surgery so to say, we had to launch the next project,” Lameter says with a smile. One of the most significant challenge of the EWM deployment was that all the activities had to be carried out during on-going operation. “During peak times, the system runs 19 hours straight, 6 days per week – this alone enormously reduced the times available for testing the software,” says Martin Rommler. “We only had a certain time slotson the weekends to connect the warehouse automated turnkey technologies to the test system, empty the storage types and check the functions.”
viastore’s core duty of the HANA migration included: upgrade of SAP EWM 7.1 to 9.1 and subsequent compatibility as well as plausibility checks of the system. “We had to ensure that the ABAP codings of especially the enhanced functionalities were all HANA compatible, so as to ensure a smooth end-2-end processes execution in the productive system,” says Mohamadou. At the same time new features were implemented as part of the process and operation optimizing post go live. However new dialogs and user interfaces weren’t implemented. So after successful migration from Oracle to HANA the warehouse operators didn’t notice any chance at first. “Only the controllers noticed a speedy execution of their reports,” Lameter recalls. Not only the controllers are pleased today with the performance but also the supply chain exection team as a whole: “Due to the connection of SAP EWM to the underlying PLCs of the automated warehouse technologies, the system needs to process many telegrams faster– this is just perfect for HANA,” emphasizes Lameter. As a result, the response times are now much shorter and the processes in the distribution center have become significantly faster compared to the old solution with SAP LES. Goods received are now processed 20 percent faster, the number of picks has risen by 40 percent, the packaging process is 50 percent faster, and warehouse activities and reportings are carried out 20 times faster than before. “With the SAP LES solution we would never have been able to cope with the daily volumes we ship today,” Rainer Kemmelmeier points out. “The output of our distribution center has increased significantly and we have become much faster – in every area.”