Harman electronics is looking to SAP’s Enterprise Information Management (EIM) software to help solve a problem...
of threes, according to Arun Kumar, the company’s director of enterprise architecture and compliance.
Based in Stamford, Conn., Harman makes a wide range of consumer and professional-grade electronics. The company’s infotainment line includes car audio and navigation systems, while the company’s professional division manufactures high-end audio and video equipment for broadcast companies, including clients like NBC. Lastly, the company also makes consumer electronics ranging from headphones and home entertainment systems, which includes the company’s well-known JBL subsidiary.
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The challenge with all that, Kumar said, is that the company uses three separate SAP ERP instances to run those three divisions. That’s three instances of ECC, and the applications behind it, which range from SAP Financials to SAP Supply Chain Management (SCM) and SAP Supplier Relationship Management (SRM). Harman also uses BusinessObjects for reporting, and SAP BusinessObjects Planning and Consolidation.
“We have three sets of everything,” Kumar said.
SAP EIM for supplier data
Harman’s decision to implement SAP EIM for master data management was the result of two strategic initiatives, Kumar said. One was the effort to standardize the company’s SRM global purchasing operations at the corporate level.
“We didn’t have a single source of truth when it came to suppliers,” Kumar said. There was no control over who could add suppliers into the system, which lead to widespread duplication of records across the systems. That made it nearly impossible to track the total amount the company was spending with suppliers like AT&T, which it uses for a range of telecommunications services.
“The spend was everywhere,” Kumar said. “Although you may be purchasing millions in services from AT&T, you really cannot get the negotiating power, and that affects the financials.”
Data inconsistencies also have a drag on invoicing, he said.
“When it comes to invoicing and managing the ship-to addresses, and the bill-to addresses, there will always be delays because you never really know the address,” Kumar said.
The other problem is that having data in disparate systems made it impossible to truly evaluate the performance of the supplier with scorecards and the use of various KPIs.
Materials management with SAP EIM
An even bigger challenge, Kumar said, is getting its materials data in sync.
Engineering is a core part of Harman’s operations, as it is with any manufacturer, Kumar said. The three product lines not only have separate ERP systems, but three distinct engineering operations.
“They operate in silos,” he said. “When it comes to material standardization, we have the exact same challenge as with our suppliers.”
To address those silos the company had to start “even farther out” with a standardized materials library from which engineers in all three divisions draw from, rather than each using their own, Harman said.
SAP EIM creates a centralized point for supplier information is entered, but materials management works differently, he said.
With material management, it’s not centralization, but consolidation, according to Kumar. The materials are not mastered in MDM itself, it gets created in the engineering system within different libraries.
“As those engineers create those materials [lists], they get immediately synced out to the EIM materials master solution,” he said. “It consolidates different sources, meaning which library it’s pulled from, and then you have a consolidated version of the materials [list], and that gets thrown down into the ECC system.”
Master data management before SAP EIM
Just how well these implementations will work – and the benefits they will bring – isn’t totally clear yet, Kumar said. EIM for supplier management won’t go live until August, and materials management won’t go live until sometime at the end of the year.
Before choosing SAP, Harman had no comprehensive solution for master data management software, let alone one that was being used for all three divisions, Kumar said.
“Before, MDM was a real project,” Kumar said, “there were [only] specific projects.” IT had to manually cleanse the data, and then load it back into whatever reporting application was used.
“It was a non-coordinated effort,” he said, “every project entailed doing the doing the same thing [as before], over and over and over.”
Kumar said the company considered the Oracle master data management suite as well as IBM Infosphere, but eventually chose SAP because it was an SAP shop to begin with, and was able to negotiate a better price overall.