Kinh Do Corporation implemented SAP ERP solutions including financials, controlling, materials management, sales and distribution, production planning with SAP ERP Human Capital Management, SAP NetWeaver Business Warehouse and SAP BusinessObjects. Centralized to IBM Power servers, initially Power 550 and later a planned transition to Power 750 with POWER7 processors.The implemantation ntroduced fast, accurate month-end reporting, reduced stock-out incidence and improved manufacturing efficiency.For more information on Storage System, visit http://ibm.co/LIg7gk. Visit http://bit.ly/KWh5Dx to 'Follow' the official Twitter handle of IBM India Smarter Computing.

1. we know
they know
Kinh Do Corporation maximizes
efficiency with better business reporting
from SAP and IBM
Overview
 The Challenge  The Solution  Key Solution Components
To support its existing Solomon Implemented SAP ERP solutions Industry: Foods
business management and including financials, controlling, Applications: SAP® ERP 6.0
accounting software, Kinh Do materials management, sales and components including financials,
Corporation relied on spreadsheet- distribution, production planning controlling, materials management,
based reporting, which lacked with SAP ERP Human Capital sales and distribution, production
process control and was prone to Management, SAP NetWeaver planning with SAP ERP Human
error. In some cases, reports could Business Warehouse and SAP Capital Management, SAP
not be generated at all as data BusinessObjects. Centralized NetWeaver® Business Warehouse,
was locked in separate systems. to IBM Power servers, initially SAP Advance Planning and
Inventory reports, for example, were Power 550 and later a planned Optimization, SAP Budget
slow to produce, risking production transition to Power 750 with Control System, SAP Treasury
halts if materials were not available, POWER7 processors. and Risk Management, SAP
and consolidated month-end BusinessObjects™ business
financial reports took many days to  The Benefits intelligence solutions, and SAP
generate and required significant Introduced fast, accurate BusinessObjects Business
manual effort. Executives lacked month-end reporting, reduced Planning and Consolidation
enterprise-wide information on stock-out incidence and improved Hardware: IBM ® Power® 550, IBM
sales trends to support decisions, manufacturing efficiency. Enterprise Power 750, IBM System Storage®
as information was only available at reporting allows executives to drill DS4800
company level with no product-level down to examine what is profitable Software: IBM AIX®, Oracle
detail. from company level right down database
to individual SKU, helping to Services: IBM Global Technology
understand market opportunities Services
and drive profitability.

2. “Kinh Do selected IBM Kinh Do Corporation, of Ho Chi “Executives were constantly
Power Systems servers Minh City in Vietnam, is well on the requesting reports from us, which
way to becoming Vietnam’s largest required manual effort to produce.
because we wanted
food conglomerate, with associated Often the reports, delivered
a reliable and stable businesses in retail, property and as spreadsheets, contained
environment for these investment. Founded in 1993, sales inaccuracies and were late in delivery.
mission-critical SAP are growing by around 30-40 percent In some cases we could not create the
applications. We chose annually, and in 2010, Kinh Do reports at all because the data was
Corporation employs 8,000 people, simply not available or was locked up
IBM because we know
with VND 3.5 trillion legal capital and in separate systems. The result was
that IBM develops and revenues of VND 3.5 trillion ($170 that executives did not have the kind
remains committed to its million). of cross-enterprise information they
technology strategies for wanted to support their decisions.
the POWER platform, Starting as a small factory with 70
staff and workers and VND 1.4 billion “The classic example is the end-
whereas many other
investment, the Kinh Do group has of-month profit and loss, a simple
vendors seem to change grown to include more than ten task for one company to produce on
their processor or separate companies. one master spreadsheet. However,
development direction.” a manual, spreadsheet-based
Nguyen Xuan Luan, Corporate VP and approach does not work for multiple
Nguyen Xuan Luan, Corporate VP and Chief Chief Information Officer, comments, operational units with multiple
Information Officer, Kinh Do Corporation
“When we were a young and small inventory positions.
business, everything could be
controlled easily. There were relatively “On the operational side, poor
few transactions and we could simply inventory management of ingredients
remember all the key data. Now, ten as well as poor planning tools could
companies with different activities lead to halts in production – even
present a more difficult challenge. through something simple such
The food division alone is too big to as forgetting to order the supplies.
control without a strategic approach to Spreadsheets contain no process
information management. control, with no way to catch mistakes
and no mechanism or process
for informing management of the
business situation.”
Selecting SAP applications
The Kinh Do team was clear that an
integrated business management
solution was the right path, and
narrowed down the potential
suppliers to two, one of which was
SAP.
“For each ERP vendor, we analyzed
the cost of acquisition, the cost of
implementation, the cost of operation
and, most importantly, the integration
of the modules and the ability to
expand the solution to new business
divisions in future. We decided to
switch to SAP ERP,” says Nguyen
Xuan Luan.

3. “We felt that SAP ERP software offered is good, and IBM has a strong “The IBM Power servers
the best fit for Kinh Do, with examples Vietnamese support organization. play a critical role
of similar businesses in the region
in ensuring that the
achieving success based on SAP Further, the IBM Global Technology
solutions. We also knew that SAP Services team provided excellent
SAP applications are
has a good implementation record implementation services, and was always available. The
in Vietnam, and has a reputation for willing to give advice on sizing to IBM virtualization
investing in training its partners to ensure that we did not over-buy technologies enable
deliver excellent service. capacity. IBM Global Technology
Kinh Do to optimize the
Services provided expertise and
“While the vendors’ solutions were technical skills for the period we
technical performance
functionally equivalent in many ways, needed, and executed the project for each business area,
SAP offered better integration across efficiently and effectively.” ensuring that reports
all its components. We understood are generated rapidly
that SAP has developed its own Kinh Do runs its SAP applications
and reliably without
solutions in house and generally not in virtual servers on the Power 550
acquired third-party solutions, and the using logical partitions (LPARs).
impacting general
result is an ERP solution that functions Each LPAR is sized to provide production response.”
as an integrated whole, a very optimal processor and memory
Nguyen Xuan Luan, Corporate VP and Chief
important factor for Kinh Do.” for each application, with dynamic
Information Officer, Kinh Do Corporation
allocation of resources to ensure that
Smooth implementation service delivery is maintained during
Kinh Do implemented a complete times of high workload. For example,
package of SAP ERP software, the SAP applications share a total of
including financials, controlling, 64 GB of main memory, a larger or
materials management, sales and smaller proportion of which is made
distribution, production planning available to the production LPAR
with SAP ERP Human Capital during the working day.
Management, SAP NetWeaver
Business Warehouse and SAP “Virtualization on POWER is very
BusinessObjects for business impressive, enabling Kinh Do to
analysis. maximize performance without the
need to over-buy capacity,” explains
The SAP software replaced a number Nguyen Xuan Luan. “The business
of independent solutions, and the Kinh requires 24-hour operations, and we
Do team chose to create an all-new keep our systems running by using TECHNICAL LANDSCAPE
environment on centralized systems, LPARs, too. For example, normally Servers: IBM Power 550 servers with
selecting IBM Power 550 servers. we would need two or three days’ POWER6 processors, IBM Power 750
downtime for an upgrade or update servers with POWER7 processors,
“Kinh Do selected IBM Power Systems to a working application. With LPARs, IBM System Storage DS4800
servers because we wanted a reliable we create the upgraded or updated Software: IBM AIX, SAP ERP 6.0, SAP
and stable environment for these instance in a new LPAR and redirect NetWeaver Business Warehouse, SAP
mission-critical SAP applications,” users, and experience no downtime Advance Planning and Optimization,
says Nguyen Xuan Luan. “We chose at all.” SAP Budget Control System, SAP
IBM because we know that IBM Treasury and Risk Management, SAP
develops and remains committed Enjoying the business benefits BusinessObjects™ business
to its technology strategies for the Operational transactions for all intelligence solutions, and SAP
POWER platform, whereas many Kinh Do business units are now BusinessObjects Business Planning
other vendors seem to change their processed through SAP software, and Consolidation, Oracle database
processor or development direction. stored in SAP NetWeaver Business Users: 400 total users of SAP
Feedback from other businesses in Warehouse, and analyzed with SAP applications
Vietnam using the IBM Power platform BusinessObjects.

4. “With SAP ERP software, Kinh Do “SAP applications Nguyen Xuan Luan concludes, “SAP
has a single operational platform have transformed the applications have transformed the
across the business, which captures scalability of the Kinh Do Corporation,
scalability of the Kinh
and generates accurate data for and the IBM Power platform is the right
reporting and planning purposes.
Do Corporation, and strategic platform to help us meet our
Most importantly, the integrated the IBM Power platform business objectives.”
nature of SAP software means that it is the right strategic
also contains the essential workflow platform to help us
processes and automation, helping us
meet our business
avoid errors such as lack of ingredients.
Where an order is placed that would
objectives.”
require more inventory than we have
Nguyen Xuan Luan, Corporate VP and Chief IBM Deutschland GmbH
on site, the solution automatically Information Officer, Kinh Do Corporation D-70548 Stuttgart
highlights the issue and creates a ibm.com/solutions/sap
supplier order ready for authorization. IBM, the IBM logo, and ibm.com are trademarks
of International Business Machines Corporation,
registered in many jurisdictions worldwide. A
“The business result is that with SAP current list of other IBM trademarks is available
on the Web at “Copyright and trademark
solutions Kinh Do is able to do more only. Now, we can analyze which
information” at http://www.ibm.com/legal/
business with the same number of SKU makes money, with respect to copytrade.shtml
people; the IT department has not had whatever measure we choose, from Intel, the Intel logo, Intel Xeon and the Intel Xeon
logo are trademarks or registered trademarks of
to grow, even though the company division right down to the product level.
Intel Corporation or its subsidiaries in the United
continues to expand rapidly.” SAP allows us to define cost centers, States and other countries. UNIX is a registered
trademark of The Open Group in the United
assign raw materials, production
States and other countries. Linux is a trademark
Kinh Do manages its business key costs, and even the worker hours of Linus Torvalds in the United States, other
countries, or both. Microsoft, Windows, Windows
performance indicators with SAP for each SKU so cost of each SKU is
NT, and the Windows logo are trademarks of
BusinessObjects. Data in the SAP calculated much more accurately. Microsoft Corporation in the United States, other
countries, or both.
NetWeaver Business Warehouse Data like this shows us what we need
Other company, product or service names may
is examined for trends, errors and to do to improve.
be trademarks, or service marks of others.
exceptions, both as standard reports
This case study illustrates how one IBM
and ad-hoc queries requested by “The IBM Power servers play a customer uses IBM and/or IBM Business Partner
technologies/services. Many factors have
executives. critical role in ensuring that the SAP
contributed to the results and benefits
applications are always available. The described. IBM does not guarantee comparable
results. All information contained herein was
“With the spreadsheet-based system, IBM virtualization technologies enable
provided by the featured customer and/or IBM
we looked at sales volumes by month, Kinh Do to optimize the technical Business Partner. IBM does not attest to its
accuracy. All customer examples cited represent
and that was the best we could do,” performance for each business area,
how some customers have used IBM products
explains Nguyen Xuan Luan. “With SAP ensuring that reports are generated and the results they may have achieved. Actual
environmental costs and performance
BusinessObjects running on the IBM rapidly and reliably without impacting
characteristics will vary depending on individual
POWER platform, we can look at trends general production response.” customer configurations and conditions.
every day, and ask ourselves, ‘does This publication is for general guidance only.
Photographs may show design models.
this fit with the forecasts, does it fit with Looking to the future
© Copyright IBM Corp. 2011. All rights reserved.
our production capacity?’ We examine Kinh Do is in the process of
trends by SKU, sales area, product implementing SAP Advance Planning
category and more, and discover and Optimization, and at the group
trends, errors and outliers, and start level is deploying SAP Budget
to understand exactly what is actually Control System, SAP Business
happening. For example, does an Planning and Consolidation, and
abnormal sales report highlight a data Treasury Management. The extended © Copyright 2011 SAP AG
SAP AG
error or does it show us a new market applications will be deployed on an Dietmar-Hopp-Allee 16
development that we could exploit? IBM Power 750, featuring the IBM D-69190 Walldorf
POWER7 processors, and existing SAP, the SAP logo, SAP and all other SAP
products and services mentioned herein are
“Previously, we could look at historic SAP solutions will be migrated to the trademarks or registered trademarks of SAP AG in
profit at the operational unit level new server. Germany and several other countries.
SPC03324-VNEN-00 (May 2011)