Fonterra’s SAP HANA Solution Empowers Future Business

Background

Fonterra Co-operative Group Limited (“Fonterra” for short), based in Auckland, New Zealand, was established in October 2001, with the combined merger of the country’s two largest dairy co-operatives. Fonterra now has more than 22,000 employees and is New Zealand’s largest local company. The company exports dairy products, accounting for approximately 30 percent of the world’s dairy markets. With sales revenue exceeding USD $15.6 billion, Fonterra is the world’s largest dairy exporter.

Challenges

Surpassing Fonterra’s Long-Term Business Requirements

As a world-leading dairy company, one of Fonterra’s core advantages is a comprehensive, fully integrated supply chain. In New Zealand, Fonterra owns over 10,000 suppliers, and a transport fleet consisting of over 400 milk tankers. Around the world, Fonterra has over 80 dairy factories, producing dairy products sold to more than 100 countries. To support such a large number of suppliers and customers, Fonterra has been dependent on its enterprise IT system.

Currently, Fonterra’s entire live network services are hosted in the data center owned by Datacom, the largest local ISP. The two companies work closely together. Fonterra’s core production applications are deployed on SAP R3 products and a database, such as the Supply Chain Management (SCM) system, financial system, customer and order management systems. However, this IT architecture is under tremendous pressure for optimizing performance. On one hand, the bottom layer of Fonterra’s live network is deployed on a traditional database, which has high Capital Expenditure (CAPEX). Moreover, the data processing performance of traditional databases is highly dependent on external centralized storage, which limits real-time processing capabilities, and is highly susceptible to performance bottlenecks. These hindering factors make it increasingly difficult to expand Fonterra’s business development requirements. Fortunately, in 2015, SAP released its next-generation enterprise business suite SAP S/4 HANA based upon the HANA platform. As a result, when upgrading SAP-based enterprise applications and purchasing new IT hardware platforms, Fonterra needs to consider long-term service development and SAP product requirements — to ensure that the new enterprise IT system achieves the optimal balance between performance, reliability, CAPEX, and easy Operations and Maintenance (O&M).

SAP HANA is a high-performance real-time data computing platform launched by SAP based on in-memory computing technologies. However, with traditional transactional database architecture, programs do not support real-time business applications for large quantities of data processing. SAP HANA puts the data to be processed into memory and unleashes the enormous power of real-time service applications. Huawei has worked closely with SAP to not only present the SAP HANA appliance, but also to develop a diverse selection of industry solutions and best practices based on SAP HANA. For enterprises, the SAP HANA appliance simplifies implementations and plays an indispensable role to assure service development.

Solution

Huawei SAP HANA Appliance Solution after fully evaluating Fonterra’s existing IT system and future demands, delivers a complete solution that is powered on Huawei’s 5885H V3 4-socket rack server. This innovative solution offers the following advantages:

Shatters performance bottlenecks: SAP S/4HANA is an industry-leading in-memory database platform, which requires a high performance hardware platform. The 5885H V3 appliance solution is unique in that it uses Huawei’s ES3000 PCIe SSD card for SAP HANA database acceleration. The ES3000 increases the SAP HANA I/O performance by 3 times, allowing the SAP HANA to effortlessly address high-performance requirements.

Anticipates future needs: Huawei SAP HANA appliance solution offers high availability and flexible scalability, to easily handle any workload, rapidly respond to changing service environments, and implement agile production for customers — all help to tremendously improve production efficiency.

Secures services and data: The highly reliable hardware platform and solution-level reliability design of the Huawei SAP HANA appliance solution ensure the security of system data and services, minimize downtime caused by platform faults, and optimize overall system performance.

Drives down CAPEX: Huawei 5885H V3 server is designed and manufactured with industry standard server components, lowering both purchase and maintenance costs that would be higher with enclosed-architecture UNIX servers.

In addition, Huawei has extensive experience with SAP HANA system deployment and maintenance. Teaming up with SAP and Datacom New Zealand, Huawei helps Fonterra build a best-in-class computing platform empowered by an optimal service platform and service ecosystem.

The superb performance of SAP HANA appliance, as well as the synergy of the partners, proves the Huawei SAP HANA appliance the best choice as a comprehensive solution for Fonterra.

Benefits

Huawei and SAP have teamed up with Datacom New Zealand to help Fonterra implement a simple-to-use, highly scalable, and efficient financial and supply chain management system based on SAP HANA. The solution delivers easy and rapid real-time payment analysis, efficient account checking, and insightful decision-making, taking Fonterra to a new level of business agility and productivity.

The three companies work together, for example, to complete Proof of Concept (PoC) tests to help Fonterra establish a set of enterprise application benchmarks. They also make full use of the performance and reliability advantages of Huawei products, to construct an optimal solution that meets Fonterra’s current service requirements. Furthermore, the solution supports Fonterra’s business optimization for the future, matching its long-term business requirements. After the live network is migrated to the SAP HANA appliance, Fonterra will save an estimated USD $1 million in costs each month.

After three months of stringent PoC tests, the system officially went live in Q4 2016. All indicators have perfectly met the customer’s requirements. Therefore, Fonterra has decided to continue the collaboration with Huawei and its partners to carry out the Phase-2 system upgrade and reconstruction. “Looking forward, Fonterra is planning to implement another joint solution from Huawei and Datacom that runs on SAP HANA. The new solution will support critical decision-making through agile analytics for aggregating dynamic business data from multiple clouds and non-traditional sources,” explained Andrew Faid, Technical Lead of SAP Projects, Global Information and Solutions Group, Fonterra.

This project has helped Huawei receive an Honorable Mention in the Special Award category of the SAP HANA® Innovation Awards 2017 at SAPPHIRE NOW®, the world’s premier business technology event and largest SAP customer-run conference, held in Orlando, Florida, USA, in May 2017. Huawei was honored with the prestigious award in recognition of its leadership and contributions towards the SAP HANA platform and technology solutions. Looking ahead, Huawei plans to continue investing in innovations for SAP HANA industry-specific solutions, as well as collaborating with partners, to create more high-performance solutions for customers.

Winning SAP HANA^® Innovation Awards 2017 at SAPPHIRE NOW. Left to Right: Alan Nehemia, Huawei Enterprise Channel Director (NZRO); James Wang, Huawei US R&D Principal Architect; John Kirkman, Datacom Senior Architect.