WOLF Garten is the only complete supplier in the market for gardening products and services in Europe. The company is active internationally and currently operates nine distribution companies throughout Europe and the United States. Three locations in Germany handle cross-plant production with various levels of output. WOLF Garten produces and distributes a range of products that includes traditional gardening tools (lawn mowers, scarifiers, gardening shears, or rakes), seed, and special fertilizers. With its Eurogreen business unit, WOLF Garten offers lawn-care services. The new soccer stadium in Gelsenkirchen, Germany (Arena auf Schalke) is a prominent client: Eurogreen maintains its turf.
The end of isolated thinking
The old IT infrastructure proved inadequate to support the future growth of WOLF Garten. “We recognized that the existing software no longer met the speed and the demands of the market,” says Thomas Utsch, the commercial director who is also responsible for IT management, describing the situation at the end of the 1990s. The seven companies that existed then all worked on different IT platforms.
The insular solutions had to disappear. WOLF Garten decided to change to SAP R/3, a solution that enables central control of all locations. With the implementation of SAP R/3, WOLF Garten hopes to meet its complex logistical requirements. The new platform links the production locations with the distribution companies and guarantees product availability during the highly seasonal garden business, along with cost efficiency.
Once internal structural change was completed and a solution design created, Novasoft was called in as the consulting and implementation partner. WOLF Garten knew that a comprehensive process of change would have to occur. “We not only knew that SAP R/3 would have to be adjusted to WOLF, but also realized that it would be necessary to adjust WOLF to the SAP software,” says Utsch of the deliberations.
Controlling seasonal business centrally and creating transparency
The core of the implementation was to provide integrated control and planning of production and distribution across national and international locations. “For example, we had a situation in which the same product had different product numbers in various WOLF Garten companies,” says Utsch. “And we couldn’t analyze personnel data or customer information in real time or meaningfully.”
To solve this problem, a comprehensive management information system was to be created at the same time as the implementation. In addition, customers and vendors had to be linked by EDI – a feature that has become standard in the consumer goods industry. Andreas Mecheels, project director from Novasoft, identifies another challenge. “Along with the implementation, collaboration began with an external logistics service provider who is now responsible for storing and delivering the finished goods,” he says. “We had to link these business-critical processes solidly into the logistics chain.”
Casting requirements into thin processes
Despite the complex requirements, the Novasoft team consciously decided to use thin processes when implementing the SAP solution and avoided deviations from the standard. “For WOLF Garten, it meant a great deal that we approached the thin process in the company with sensitivity rather than simply taking a textbook approach and overlaying SAP processes onto the existing structure,” says Mecheels. For example, because of the seasonal business, the integrated planning process (from results planning to rolling production planning in the short and long term) was a focal point of the implementation. In production, the greatest possible amount of transparency with the least possible amount of posting effort was created by working with SAP’s production control procedures, batch production, and kanban. Material withdrawals are posted almost exclusively during confirmation of the quantities produced.
Novasoft also realized a thin solution in the logistics execution system. The focus here was on warehouse management, the delivery process, and the link to the external logistics service provider using an Intermediate Document (IDoc) interface. At first, developers thought they had to use SAP’s storage unit management system to map storage units to open spaces. However, Novasoft found an easier way by dynamically assigning storage bins during putaway. The consultants solved a second complex issue by using a special field at the storage unit level for batch information in the steel band warehouse instead of implementing self-evident batch management.
Complex processing customer orders
The materials management component of SAP R/3 uses extensive forms of procurement and contracts. WOLF Garten uses almost the entire breath of SAP R/3 functionality, such as vendor evaluation, budget checks, and release procedures for purchase requisitions. And it maps stock transfer processes between production plants to keep stocks as low as possible. Here too, the kanban approach proved itself: the receiving plant requests prefabricated material at the production plant with the aid of defined container circulation, according to need.
Optimization of customer order processing developed into the most involved subproject. Pronounced customer hierarchies, such as third-party order processing or make-to-order processing and comprehensive complaint and guarantee processing, could be mapped as multifaceted processes with standard SAP functions. Flexible options for customizing and enhancements helped realize complex pricing for each distribution company. To master the high number of customer orders typical of the consumer goods industry, Novasoft developed special functions. These functions included distribution-independent creation of deliveries and automatic finishing of undelivered order items with the assistance of user-exit technology. Less effort was required to capture data because customers were linked via EDI. After only seven months, the consultants were able to meet the schedule and initiate production on September 3, 2003.
More management quality and saved costs
For Thomas Utsch, the success of the project is obvious. “We finally have transparency in our company,” he says. “We have the data and information that we need as the basis for planning. We can serve our customers better and recognize where we can take advantage of additional potential.” Centralization of logistics processes clearly lowers warehouse stock when the company is preparing for a season, which cuts costs. Utsch is confident. “After a start-up period, we expect to reduce our floating capital by about one third,” he says. The companies are closing down their end-product warehouses and joining in central logistics management.
WOLF Garten can now plan for the long term in controlling personnel. “When all international companies have been integrated at the end of 2004, we can quickly see where there is over- or undercapacity.” Utsch expects an additional increase in ROI when electronic linkage of customers has expanded internationally and when control of the sales force and internal services has been optimized.
“The implementation of SAP R/3 was a success for us – a success we could measure in euros,” says Utsch. Some 40% of incoming orders are already being processed electronically. That frees up capacity in internal services, capacity that we can use elsewhere to increase profits.” And the manager is confident of quickly reaching the goal of processing 50% of all orders electronically using EDI. When the rollout to all international companies is completed at the end of 2004, WOLF Garten will not have any more insular solutions.