Section 2.9. ESA in action: Nordzucker AG

2.9. ESA in action: Nordzucker AG

An excellent example of innovation using ESA is Nordzucker AG. Nordzucker is Europe's second largest producer and distributor of sugar, manufacturing more than 1.9 million tons each year. Headquartered in Germany, with 3,300 employees and revenue of 1.2 billion euros in the 2004/2005 fiscal year, Nordzucker's roots lie with the sugar beet farmers who form the base of its supply chain and who are typically shareholders in the company. With operations scattered across Poland, Hungary, Slovakia, and elsewhere in Eastern Europe, Nordzucker faced significant challenges in exchanging information with and delivering reports to the farmers within its network.

These challenges would be magnified in 2006 when the European Union would relax its rules on sugar importation, opening the market to nonEuropean producers and potentially triggering an across-the-board price drop. With these concerns in mind, Nordzucker set out to strategically overhaul its IT systems in an effort to streamline internal operations and extend as much information and functionality as possible to the farmers themselves. To that end, Nordzucker adopted SAP NetWeaver as its platform to integrate core applications using enterprise services as the blueprint, and to create the "Farmer's Portal" currently used by more than 2,000 of its producers in the fields.

Figure 2-12 shows the traditional IT landscape at Nordzucker in which farmers once waited for weekly status reports to arrive in the mail. Today, however, they log into a web portal containing real-time reports on the quantity and quality of their crop processed at Nordzucker plants that day, quotas for their next deliveries, Nordzucker's internal production forecasts and recommendations, and even their rights and shareholdings in the company. All of this information is available within the portal's interface and as a history of downloadable documents in spreadsheet form. Figure 2-13 shows Nordzucker's new system architecture.

Within 30 minutes of a crop's arrival at Nordzucker's production plants, fresh data begins appearing in the portal window, eliminating the need for the weekly reports that consumed three to four hours per day in paperwork handling by Nordzucker employees. The company has even managed to create a portal interface for PDAs that can collect information from Nordzucker's beet lifters and loaders, such as the quantity of beet lifted, position of lifters, and loading data.

The portal also contains functionality enabling farmers to order seeds, animal feed (i.e., beet pulp), and fertilizer (i.e., carbolic lime) through the same interface, with Nordzucker's systems automatically processing orders for its own productsthe animal feed and fertilizeror else passing seed orders directly to its suppliers. In this way, Nordzucker is able to present the best options to its entire network through a single interface, and then negotiate for discounts and deliveries with its now-consolidated list of suppliers.

Figure 2-12. Nordzucker's IT landscape: yesterday

Figure 2-13. Nordzucker's IT landscape: today

Underlying all of this is an IT environment built on a foundation of SAP products. Core functionality embodied in Nordzucker's custom-developed sugar beet management (SBM) system is based on SAP R/3, and is supplemented by implementations of mySAP Supplier Relationship Management (mySAP SRM) and mySAP Customer Relationship Management (mySAP CRM). The portal itself was created using the SAP NetWeaver Portal component, while SAP NetWeaver Business Intelligence (SAP NetWeaver BI) powers its reporting capabilities and interface elements created using the SAP NetWeaver Application Server (SAP NetWeaver AS) pass user input back to the appropriate applications. Meanwhile, SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) passes data to the portal from Nordzucker's shippers. Figure 2-14 illustrates the system integration effort at Nordzucker.

Figure 2-14. Levels of systems integration at Nordzucker

To provide the reporting capabilities for the Farmer's Portal, Nordzucker's IT team used SAP NetWeaver to make ABAP service calls to the SBM system. The process is nearly reversed when it comes to ordering seeds and other supplies; the farmers' orders are passed back to the SBM system, which automatically orders and pays for seeds and other supplies and then subtracts the cost from the farmers' accounts with Nordzucker. The orders are then automatically passed to the seed suppliers via XML messages received by the suppliers' own SAP R/3 and similar applications.

Shortly after completing the current version of the Farmer's Portal, Nordzucker reused its collection of enterprise services to create an internal counterpart for its own employees, the transaction and information portal, called TIP. More than 200 employees at the company's Brunswick, Germany, headquarters are now able to log in to a single-sign-on portal individualized for their own needs. Access to formerly disparate and now integrated sources of data has already reduced necessary employee training and improved productivity. And thanks to the flexible, easily recomposed nature of enterprise services, Nordzucker intends to add more features and functionality over time, just as it has to the Farmer's Portal.