Outsourcing Meets Outsourcing

May 2, 2006 by admin

“Procure. Provide. Supply” is the motto of Berlin-based Betronik GmbH. The enterprise is a distributor of electronic components as well as a provider of logistics services, and generates sales of around 50 million euros with 80 employees in several German locations.

Logistic Center

Logistic Center

In its two fields of business, the enterprise faces very different challenges. For example, in the distribution sector Betronik works with relatively few but very large electronics suppliers, such as Vishay, AVX, Epcos, General Semiconductor, but in contrast has a very large number of customers, for example from the automotive supply industry or mechanical engineering, who all transmit their orders in customer-specific format. Another challenge facing the company is that it needs to supply the electronic components very quickly, using different logistics models. These include just-in-time delivery at exactly the required time, delivery direct to production (ship-to-line), and demand-driven replenishment (kanban) or forecast-based models.
The company has to meet very different requirements in its role as a provider of logistics services, which customers such as Siemens, SEW Eurodrive, or Sirona Dental use to outsource their supply chain processes. Here, the main task is to organize all purchasing activities or order processing.

All employees are SAP users

Without sophisticated business processes and highly efficient IT, all this would scarcely be possible, as Gordian Sehrig, Betronik’s head of IT, explains. “If we weren’t able to use our SAP R/3 applications for even just a short time, our whole business would be seriously under threat.” IT plays a key role in the company’s market performance and market position. All 80 employees are SAP users.
To be able to operate as a midsize company with an IT department of two people, Betronik must concentrate strictly on its core competences. Other functions and tasks are handed over to external partners. For the hosting of SAP system operation, including basic support, the company has been working with the Stuttgart-based IT service provider AC-Service AG for a number of years. “We are a logistics outsourcer ourselves, and in practice therefore extend our customer-side business model to the procurement side,” states the head of IT, Sehrig.
For its SAP R/3 systems, Betronik concentrates primarily on mapping a comprehensive process landscape of distribution and logistics center processes in an end-to-end enterprise solution. For the IT department, it is also important that the opportunities for business process optimization are exploited.
Betronik covers around 90 percent of all its operational processes with SAP. The remaining 10 percent are distributed among various non-SAP systems that are closely connected to SAP R/3. “We are quite proud of the fact that we have been able to map very complex processes in the standard SAP system,” says Sehrig. For example, the company has been able to implement multi-level article structures with various manufacturer approvals, as individual customers usually approve different manufacturers as suppliers for one and the same article. The combination of the SAP R/3 components Sales and Distribution (SD), Material Management (MM) and Project System (PS), enabling the prices to be represented on the basis of different sales orders in the procurement process, is also complex, as is the combination of PS and consignment processing.

Seamless cooperation

All the threads for IT operation a drawn together in AC-Service’s Outsourcing Service Center in Stuttgart. Betronik uses WAN (wide area network) connections to access a two-level SAP R/3 landscape with production and development system. For unbroken communication along the supply chains, the Outsourcing Center also runs EDI (electronic data interchange) servers and fax servers. In addition, Betronik uses the Easy-Archiv archiving solution from the ASP service center. Several of AC-Service’s customers share this service and therefore achieve a high degree of economic efficiency.
In the sphere of logistics services, the activities of Betronik and AC-Service are often tightly integrated and go far beyond classic SAP hosting, for example in a project at Siemens COM. Here, Betronik took over a complete business process of the Siemens telecommunications division in the procurement of C-parts. The SAP R/3 solutions of Betronik and Siemens were connected up to ensure seamless business process handling. AC-Service achieved the technical connections using application link enabling (ALE).
For other Betronik customers, such as automotive specialists SEW Eurodrive, for example, the Outsourcing Service Center manages demanding supply chain projects. AC-Service does not just ensure SAP operation and provide support for the basic software here, but also takes on, in Sehrig’s words “extensive responsibilities that are important for our customers, for example in the area of data security. We were one of the first electronics distributors to meet standard VDA 6.2, drawn up by the German Association of the Automotive Industry to ensure service quality, and were certified accordingly. IT operation in a comprehensively protected, external Outsourcing Service Center and the reference to certified partners has clearly simplified our own certification and has led to concrete cost benefits.”

Other projects in the pipeline

To secure further competitive advantages, the Berlin-based electronics and logistics experts continuously optimize the central “business backbone,” SAP R/3. The enterprise is currently assessing the implementation of SAP Business Information Warehouse (SAP BW). This solution would enable corporate controlling on the basis of sophisticated management reporting. For this project too, the company plans to work with its proven partner AC-Service.

Otto Hess

Otto Hess

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