Lay Hong Berhad Supports grows with SAP

Feature Article | February 27, 2009 by Jeff Reich

The solution provides seamless financial and logistics functionality “from farm to fork” and helps the company keep up with expansions and improve real-time visibility to further competing successfully in the market place.

“With SAP and ISS Consulting, we have implemented ChemXPress to create a seamless, complex set of business processes and activities across our entire value chain,” says K.T. Ng, group finance director at LHB. “Over the course of our relationship, both companies have truly become trusted business partners. They have played a valuable role in helping us pursue continued, successful growth.”

Delivering industry-specific functionality

Jointly developed by SAP and SAP Partner ISS Consulting, ChemXPress is an SAP Business All-in-One solution designed for companies with as few as ten users that require a high degree of industry-specific functionality as well as cost-effective, quick-to-implement solutions. Implemented by ISS Consulting in four months, the solution was easily integrated into LHB’s existing hardware landscape, offering additional value and cost savings.

The ChemXPress application draws on a rich set of SAP Business All-in-One functionalities, including Financial Accounting, Controlling, Material Management, and Sales and Distribution. As a result, LHB is able to support the complete logistics planning cycle from sales order and production planning to delivery and billing. Because the solution comes preconfigured with best practices, there is no need to change or customize existing SAP code.

Tracking data from “farm to fork”

ChemXPress allows LHB to receive data from remote farmers with very limited IT know-how. Once in the system, ChemXPress transforms captured data into valuable reports available in SAP Business All-in-One for real-time business intelligence. Maintaining up-to-the-minute, precise data is critical to the company’s profitability, and the solution’s numerous data interfaces make accuracy and timeliness possible. Because many LHB farms are located in remote areas, remote connectivity is used to ensure fast and reliable data transmission.

Farms in the most remote areas are linked to a Network Operation Center (NOC) over the Internet via a satellite broadband connection. From the NOC, a leased line is deployed and connected directly to LHB headquarters. The data is then transferred into ChemXPress. Additional ChemXPress interfaces to Microsoft Office applications such as Excel further extend the solution’s functionality by making it possible to import daily farm update reports directly into the system.

A single version of the truth – in real-time

The ChemXPress solution has helped LHB achieve greater efficiency as well as integrate business activities and information. And because it is capable of coordinating scores of data in real time, it gives managers the ability to take a proactive position to anticipate trends.

A case in point is the poultry industry’s daunting challenge of maintaining up-to-date inventory values. Unlike some kinds of inventories, the market value of an individual chicken changes constantly over its lifetime – from the moment it is hatched until the moment it is processed, packed and shipped. As the fowl grows in age and size, its market value grows proportionally – a challenge for accurate inventory tracking.

ChemXPress functionality captures this data, generates meaningful business reports to reflect these constantly changing values in real time, and reevaluates livestock inventories to ensure the integrity of “real value” and “system value”.

Reaping the rewards of future growth

Since the implementation of ChemXPress, LHB has embarked on the most rapid period of growth in the company’s 40-year history, going from a turnover of RM$129 million and 761 employees to its current total workforce of over 1,000 and an annual turnover in excess of RM$300 million. Thus, the solution has easily adapted to a 250 percent growth in revenue without any additional software modifications or upgrades.

The service-oriented architecture (SOA) will enable LHB to extend its business process platform with additional services such as e-commerce, collaboration, and business intelligence for greater growth and competitive advantage. “Not only are we now armed with the right tools to achieve a competitive advantage, we have also successfully created the framework for sustained, long-term growth for the business,” concludes Ng.

The Lay Hong Berhad Group (LHB) is Malaysia’s leading producer of fresh farm eggs and chicken-related products under the Nutriplus brand. Its vast operations include three hatcheries, four breeder farms, one egg tray plant, one poultry processing plant, six layer farms, 13 broiler farms, two feed mills, one liquid egg processing plant, and three organic fertilizer processing plants.

Each year, LHB produces a staggering 440 million eggs, seven million broilers, 120,000 metric tons of poultry feed, 1,600 metric tons of liquid eggs and 12,000 metric tons of organic fertilizer.

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