Lenovo build new VMI and CFE system on SAP HANA XS for x86 Business Line

Lenovo (HKSE: 992) (ADR: LNVGY) is a $ 46 billion US dollars of the “Fortune” Global 500 company, is a global leader in consumer, commercial and enterprise innovation and technology, In Jan 2014, Lenovo agreed to acquire the mobile phone handset maker Motorola Mobility from Google, and July 2014, acquire whole X86 server business from IBM.

Why Lenovo need this project?

Then, CIFUIS approved Lenovo’s X86 acquisition proposal from IBM on the condition that all the X86 servers sold in U.S have to be exclusively built in Lenovo owned plants located in Mexico and U.S. this strict regulation requirement brought about the Bohemia Project (core parts are new APO、new VMI and new CFE system), which is the key point on maintaining and expanding Lenovo business in North America.
Bohemia Project is designed to enable X86 manufacturing capability and build E2E supply chain IT platform in USFC and Monterrey plants (existing PC plants in North Carolina, US and Monterrey, Mexico, Shenzhen). Hence to realize 2 main goals which are: meeting CFIUS’s strict regulation and decreasing the cost per piece.

Additionally, the comprehensive E2E IT platform will lay essential foundation on the transfer from IBM system to Lenovo strategic platform, all these must be done before Aug. 2015.

Business solution we build for Lenovo

In Sep 2014, Lenovo and SAP signed the CDP contract, SAP would help Lenovo to delivery new APO, new VMI (Vendor Management Inventory) and CFE (Cost Forecast Engine) solution for the x86 acquisition, support Lenovo to finish this acquisition via replace legacy IBM supply chain network at IT system perspective.

VMI (Vendor Management Inventory) is a highly automated execution system as an indispensable part of Lenovo supply chain network. This VMI is similar to SAP SCM SNC module, but with many Lenovo’s special business features like zero inventory and integration with 3rd logistics system.

CFE (Cost Forecast Engine) is a cost calculation system, it was designed to process cost simulation、real calculation、analysis & finance control, and correct purchase pricing of ECC material master data.

SAP Labs China CD team is fully responsible for new VMI and CFE system, and that is a total E2E solution which was built from zero based on SAP HANA platform, covered requirements, redesign, development and final deployment, handover to Lenovo IT, also support its go-live and help them to build their own HANA maintain team.

Comments: Legacy VMI & CFE based on Oracle, Web logic and JDA i2, it will continued to works for Lenovo's PC business line, but new VMI and CFE will works for new x86 server enterprise business group, and its system architecture also different totally.

Challenges

We all knew that SAP HANA can be a high performance database of SAP ERP/APO/BW these classical application system, but…

• Could we build an independent system on SAP HANA without support of netweaver, only using SAP HANA XS as only Web Application server to support whole business process?
• Could we redesign and rebuild a VMI and CFE system on SAP HANA, and they can match all requirements of Lenovo and must do better than legacy oracle platform?
• Do we have any similar reference case about to build a customized non-sap system on top of SAP HANA XS? No one can tell you what is the result if you rebuild an oracle based system on top of SAP HANA, it is not a BI or EDW、or analysis oriented system.
• Only thing we knew is that SAP HANA has a lightweight XS web application server, maybe we could build everything on it, but it was just released to market without many reference cases and strong capabilities.

Human impact of SAP HANA

Global Planning and Purchase Department

They would use more than 1~2 weeks to finish an executable plan of cost forecast and guide price of each material before, as cost calculation could cost 11 hours at least, it’s a mandatory daily work in old business mode.

But now, they can finish it in 6~8 minutes, and the global team can re-calculate it at any time. Even if in global planning meeting of supply chain department, everyone can see its final result once a cost adder or expense factor changed immediately, this new CFE system fundamentally changed their work mode via leverage powerful computing capability of SAP HANA, also improved their planning efficiency of supply chain network.

Business user can complete a number of different simulated cost forecast plan as an alternative, rather than spend a week's time to complete the work, and each meeting must wait until the next day to see the new cost plan. Now, they can finish all calculations in morning, and finish it in global review meeting afternoon, it help them saved 4 days.

Global Supply Chain and Planning Department

Around 50 % IT support tickets comes from business end user related to VMI process, like process executed slowly and delayed, data missing between ECC/3PL and VMI, as Lenovo used many intermediate way like Oracle DB/FTP server/Java Program to handle data communication. Now, we mainly use Data Service and OData service to handle all data communication between ECC/APO/3PL and VMI system, eliminate unnecessary integration, and makes process simpler and smarter.

Business and Social Values

Business Values for Lenovo

1. New CFE system enable business user of planning and purchase department can finish all their work in one day, not one week or more. Increasing speed of decision making and ensuring them focusing more on valuable works.
2. New VMI system makes all processes faster and smarter with high automation,
3. And all the technical information are user-friendly for business users. With the well-designed process and UI, the business users can detect the issue at any point themselves and inform the IT support team to fix the problem in time.

Social Values and Impacts

1. After this project go live, it has been listed into customer successful story of SAP Labs China on SAP HANA innovation topic.

2. SAP HANA and XS were proved that it can be a robust platform for innovated application in customer's landscape.

3. By referencing Lenovo's architecture, SINOPEC plans to migrate partial business process of BW into SAP HANA, even they already migrated to BW on HANA. 

>> Customer invite us to present Lenovo’s solution and its usage in SAP HANA, their new business requirement and data redundancy makes BW on HANA more and more heavier.

4. HUAWEI also referenced these experiences, using DU/CR/TR to manage their development packages in current SAP HANA system, also adopting OData Service as an option in its whole enterprise web service architecture.

>> Huawei implements SAP HANA earlier than Lenovo, but most use cases are related to accelerating the oracle Exadata, support eFinance and MES BI, they did not deployed very critical business on top of SAP HANA XS.

Technical Impacts

Landscape Optimization

1. Non-sap system based on Oracle DB/Web Logic/JDA-i2, used many FTP/Java/Oracle DB as intermediate of data communication, it makes process very difficult to maintain and identify problems.
2. Eliminated all file exchange using Data Service and OData Web Service, and also moved whole oracle PCDW(Planning Consolidation Data Warehouse) into SAP HANA, it was used to store all PO and Master Data, BOM information centrally, as VMI and CFE has many data exchange with it.
3. The whole architecture of New VMI and VMI are simpler and clearly, easier to maintain in future. 

Performance Optimization

1. The core calculation and forecast process of new CFE system was accelerated from days into 6~8 minutes, this improvement totally changed current business operation mode, and all analytical reports are in 2~3 seconds.
2. New VMI system can hold 3 times supplier collaboration process of supply chain network than before.
3. More than 2000 business user in phase 1(Mexico Plant and Shenzhen Plant)

Solution Size

1. First custom development non-sap system on SAP HANA XS
2. Biggest pure Native XS application CDP project.
3. 7 times data compression and 2TB Lenovo (IBM x86) HANA server
4. 100 UI5 Screens
5. 330 Customized tables
6. 490 Store Procedures
7. 500 Roles (Real DB Roles   Virtual Role), 95% are virtual
8. 2000 Business end users
9. 250000 lines SQL Code (Old process and New Process)

Patent of BOM Explosion

How to handle massive BOM explosion? e.g. 100 thousands BOM, each BOM has 5 layers and dozens of components in each levels. 

Usually, we would use cursor to loop all BOM one by one in traditional way, but it does not work in SAP HANA very well.

So, we use the hierarchy and temp table to solve this most important performance part and submitted a patent application in SAP, it’s very valuable for projects which has similar requirements.

Source: scn.sap.com