SAP Rollout in China

KUKA robots are used in a wide range of industry applications, such as for welding processes in the automotive sector. Foto: KUKA
KUKA robots are used in a wide range of industry applications, such as for welding processes in the automotive sector. Foto: KUKA

Modern PC-controlled robots, like those made by KUKA Roboter GmbH in Augsburg, Germany, are used extensively in the automotive industry and for a wide range of applications in the plastics and metalworking industries. Among other things, they help automate production processes and logistics chains. And they’re here to stay.

The KUKA Robot Group, with 25 subsidiaries in key European, American, and Asian markets, is a global player that sells its products worldwide. Its production facility in Shanghai, China, for example, currently employs 130 people.

Chinese market shows exponential growth

The Chinese robotics market has been growing at double-digit rates annually and has evolved into a real growth driver for KUKA. It is currently building a new, 215,000 square foot plant at its site in Shanghai, where it expects to start producing the KR QUANTEC robot series and the KR C4 universal controllers at the end of 2013. The market for industrial robots, however, is fiercely competitive.

Next page: SAP ERP – centralized client in Augsburg

For KUKA, standardized, end-to-end business processes and a smooth exchange of information and data between its subsidiaries are strategic factors for long-term success. That is why it has merged locations and business processes into one centralized client in the SAP ERP system in Augsburg. Using an SAP ERP template, KUKA has gradually been rolling out the IT processes defined there to all of its production plants worldwide.

Golden Tax software: vital for business opportunities in China

ORBIS Consulting Shanghai, a Chinese IT service provider, assisted KUKA with its SAP rollout in China, where KUKA needed to observe a number of country-specific regulations and standards, especially for financial accounting and reporting. Similarly, companies doing business in China have to use the “Golden Tax” system, a special tax software that is issued and controlled by the Chinese government, to exchange data with Chinese tax authorities. If they don’t, they are not permitted to sell goods to Chinese business partners and are not eligible for tax refunds. As such, companies need a central system landscape, and all outgoing invoices have to be recorded either manually or on a dedicated Golden Tax PC using special software.

But a direct data transfer between the SAP system and the tax software is difficult at best. That is why KUKA in Shanghai uses the ORBIS Golden Tax Interface (GTI), a bidirectional interface that simplifies the creation of Golden Tax-compliant invoices in the tax solution. GTI converts data from the SAP system into a text or Excel format that is readable by the Golden Tax system, and then transfers that data to the tax software. Conversely, GTI can convert Golden Tax data into SAP-compatible text or Excel format and import it into the SAP ERP solution.

Next page: Meeting Golden Tax regulations

KUKA also needs to provide Chinese tax authorities with specific reports when preparing its financial statements, otherwise the ledgers will not be accepted. The balance sheet, profit and loss statement, and the cash flow report are just some of the required documentation. To draw up these reports, KUKA’s subsidiary in China uses the SAP-based ORBIS FI-Reporting Package, which contains preconfigured reports. Since the SAP rollout in Shanghai, KUKA’s subsidiary now manages its financial data exclusively in the SAP ERP solution. As a result, local managers can see all key figures at a glance and steer the business in a more targeted way. Central controlling in Augsburg likewise has access to this financial data, and can thus consolidate and prepare financial statements more easily and more quickly. This in turn benefits management at head office, because it gains timely insight into the Chinese subsidiary’s performance.

The SAP rollout in China has also optimized KUKA’s logistics processes there. Requirements planning, procurement at suppliers, and delivery to end customers can be controlled more precisely, which means the KUKA subsidiary can now purchase materials and stage them for production on a truly demand-oriented basis.

SAP rollout: improved information exchange

In addition, information about orders, purchase orders, and materials are exchanged between head office in Germany and the Chinese subsidiary via the SAP ERP system. This cuts process costs along the value chain, because it speeds up and simplifies data collection and eliminates duplicate entry: In the past, data was exchanged via fax or e-mail and all orders had to be entered in the system twice (first in China, and then at the headquarters).