OSI GROUP an International Food Processor Requires a World-Class ERP Solution – SAP® Business One 1

SAP Customer Success Story Consumer Products – Food

OSI GROUP An International Food Processor Requires a World-Class ERP Solution – SAP® Business One 1

Quick facts “SAP Business One is tailored to our food- Company Implementation Highlights • Name: OSI (China) Holding Co. Ltd. • Secured executive-level sponsorship and processing business and meets manage- • Location: Shanghai, China participation in the project ment needs. It has helped us streamline • Industry: Consumer products – food • Selected an experienced implementation • Products and services: Raw, partially partner with proven methodology the business process, improve operations cooked, and fully cooked chicken, beef, • Mapped business processes to enterprise and pork products; a variety of dough, requirements efficiency, and enhance data visibility . . . egg, and produce products while minimizing the cost and risk of • Employees: 3,500 Why SAP • Web site: www.osigroup.com.cn • SAP’s market leadership and reputation implementation.” • Implementation partner: Shanghai MTC • Scalability of the software and ability to Information Technology Co. Ltd. support best-practice business processes Steven Zhang, VP and CFO, OSI (China) Holding • The software’s power, affordability, and Co. Ltd., OSI Group, Asia-Pacific Region Challenges and Opportunities ease of use • Accommodate rapid sales growth and • Ability to meet enterprise demand for business expansion industry-specific functionality, data analy- • Comply with stringent food safety sis, and configurability requirements • Flexibility to support ongoing business • Manage increased complexity of business needs processes and variety of products Benefits Objectives • Standardized and optimized business pro- • Update, centralize, and standardize busi- cesses with enhanced operational control ness processes • Better tracking and monitoring of product • Strengthen management control of enter- quality, along with traceability in real time prise operations • Improved cash-flow efficiency and • Achieve real-time product tracking and increased visibility of the cost structure tracing • Greater support for enterprise decision • Support management decision making making with multiperspective reporting with real-time information access and data tools and key performance indicator analysis analysis

SAP® Solutions and Services SAP® Business One application OSI Group is an international food-processing company with over that SAP was the right choice for us,” Zhang explains. “The software 50 facilities in 17 countries around the world. It was established in supports best-practice business pro- 1909, and the headquarters is located near Chicago, Illinois. Today, cesses for many industries and is highly regarded worldwide.” Adopting OSI Group is a global leader in supplying value-added protein items SAP Business One provided the added and other food products to leading foodservice and retail brands. benefit of keeping operations on a common platform with OSI Group’s When the time came for OSI Group to update its business manage- other business units in the United ment software for its Asia-Pacific region, it turned to the SAP® States and Europe, where SAP software is used to support enterprise Business One application. operations.

Powerful, affordable, and intuitive to Striving for Operations Excellence communication and interaction with our use, SAP Business One offered OSI customers,” Zhang explains. “To keep China an accelerated implementation OSI Group opened its first plant in up with increasing volume, along with cycle so it could quickly address enter- China in 1991, in Beijing, and has pro- increasing requirements for our cus- prise demands for business manage- vided high-quality food products to tomers, we needed to invest in our ment support and industry-specific McDonald’s restaurants since then. technology infrastructure.” functionality. “The software addresses Under OSI (China) Holding Co. Ltd., a the entire spectrum of our business Shanghai-based regional headquarters, OSI China realized that its legacy infor- operations so we can make tangible the company today employs over 3,500 mation system was failing to address improvements in operational efficiency,” people across its meat and vegetable the company’s rapidly growing business Zhang explains. “It can also help us processing facilities in China. “Our goal needs. Data was not fully integrated, enhance internal controls and be more is to become the dominant supplier to transactions relied heavily on manual responsive to market demands while leading global foodservice companies processes, and financial reporting often supporting decisions to improve service and the branded food products industry came too late for management to use. quality and customer satisfaction.” within China through operations excel- “When it became apparent that the old lence,” says Steven Zhang, VP and system was an obstacle to our business During its software selection process, CFO of OSI (China) Holding Co., OSI growth, management urged that we find OSI China carefully evaluated imple- Group, Asia-Pacific Region. a more reliable and powerful solution,” mentation partners and selected Zhang says. Shanghai MTC Information Technology OSI China has been experiencing Co. Ltd. (MTC). “We believe MTC has rapid business growth in recent years, Selecting a New System strong technical capability, a profes- with increased need to adapt to ever- and Partner sional and stable consultant team, changing market environment and to good experience in providing ERP solu- be more responsive to its customers. After evaluating its business require- tions for the food industry, and a strong “A close customer-supplier relationship ments and researching available soft- track record for serving multinational is vital to our business success. ware solutions, OSI China selected clients,” Zhang says. We always strive to maintain sound SAP Business One. “We believe “Some customization is necessary to tailor to local business needs. . . . By adopting a 90% standardization–10% customization rule, we fully utilized the value of the system while minimizing our capital, implementation, and maintenance costs.”

Steven Zhang, VP and CFO, OSI (China) Holding Co. Ltd., OSI Group, Asia-Pacific Region 2

Reengineering the quality inspection stage, and we can erly authorized and carefully evaluated Business Process research other factors to meet product to avoid out-of-control deviation. By recall requirements,” Zhang explains. adopting a 90% standardization–10% Through active collaboration between “We also implemented a virtual ware- customization rule, we fully utilized the the project and business teams, as well house module to control the product value of the system while minimizing as good cooperation with MTC consul- quality. This has helped our shop-floor our capital, implementation, and main- tants, OSI China achieved a very suc- managers keep track of the quality sta- tenance costs.” cessful implementation of SAP Business tus of every product in real time, from One. The company reengineered busi- the first day material arrives to the last SAP Business One enabled streamlin- ness processes to take full advantage day on which finished goods ship.” ing business processes in almost all aspects of daily operations with adequate internal controls set in place. For “We’re able to deal with shelf life in a timely manner, which significantly example, the company integrated SAP reduces the risk of obsolete inventory as well as error and waste caused by Business One with an e-banking system, enabling the plant accountant to manual operations.” perform a “four-way match” of pur- Steven Zhang, VP and CFO, OSI (China) Holding Co. Ltd., OSI Group, Asia-Pacific Region chase order, receiving, quality status, and invoice through the SAP software. This information will be automatically of SAP standard functionality as well as Boosting Business Success posted to the e-bank payment center, customized development that was tai- with the 90%–10% Rule where the company treasurer will lored to the food industry. review and arrange for payment, thus OSI China has implemented SAP greatly improving cash-flow efficiency. “Seamless cooperation between the Business One successfully in all six project team and external consultants domestic business units. “Based on Data visibility has also been enhanced was critical for the success of the proj- SAP Business One, we have a compre- significantly with SAP Business One. ect. We required everyone from the hensive, integrated business platform A multilevel cost structure has been team, including our consultants, to for OSI China, laying a solid foundation established, and different cost centers understand our business in depth. for the long-term development of our have been accounted for, generating all Everyone worked diligently,” Zhang business.” Zhang says. related costs for different processing says. centers and final products. “Having the “The standard functionality of SAP information all in one place supports For example, to embed the company’s Business One met roughly 90% of our enterprise decision making by allowing stringent quality and food safety business requirements,” Zhang contin- for multiperspective report manage- requirements into the software, the ues. “We reinforced from the beginning ment and key performance indicator MTC implementation team customized that we must standardize most of the analysis,” Zhang adds. food-tracing functionality based on functionality so it could be easily repli- standard functions in SAP Business cated to other business units later on. The new visibility also enables the com- One. “We can now trace our products Some customization is necessary to pany to conduct real-time monitoring back to their source of origin in just a tailor to local business needs. How- of product-quality status, so operators minute, and all the way through the ever, such customization must be prop- can instantly see warranty periods, www.sap.com/contactsap

qualified products, defective product Building on the success of the SAP tracking and disposal, and product Business One implementation in China recall information, all within the soft- allows OSI Group to duplicate its software. Through the product-quality ware footprint into other Asia-Pacific tracking function, the software can countries. OSI India was first, taking remind operators to remove products only three months to go live success- from inventory that are approaching fully, and this gave the management their expiration dates. “We’re able to more confidence for rolling out imple- deal with shelf life in a timely manner, mentation in Australia, where OSI has which significantly reduces the risk of two sizable manufacturing facilities. obsolete inventory as well as error and That project has already been kicked waste caused by manual operations,” off. Zhang says. Meanwhile, OSI China is honing its Duplicating the Software Footprint software expertise with an eye on Across Operations expanding use of SAP Business One into new business divisions. “We are The majority of the standard functional- planning to expand the scope into our ity in SAP Business One has been agricultural and husbandry business, used. Where there is a need for cus- such as poultry vertical integration, Picture Credits 1: © OSI Group. Used with permission. tomization, adequate authorization has beef feedlot programs, and a lettuce- 2: © OSI Group. Used with permission. been enforced by OSI senior manage- growing farm,” Zhang says. “By taking ment to avoid overcustomization that these steps and making full use of SAP will lead to uncontrollable deviation. Business One, OSI China is poised to 50 111 123 (12/04) achieve its long-term sustainable ‘farm ©2012 SAP AG. All rights reserved. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, to table’ strategy.” SAP BusinessObjects Explorer, StreamWork, SAP HANA, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries.

Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trade marks of Business Objects Software Ltd. Business Objects is an SAP company.

Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL Anywhere, and other Sybase products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Sybase Inc. Sybase is an SAP company.

Crossgate, m@gic EDDY, B2B 360°, and B2B 360° Services are registered trademarks of Crossgate AG in Germany and other countries. Crossgate is an SAP company.

All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary.

These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.