Phillips Carbon Black drives lean, cost-efficient growth

Part of RP-Sanjiv Goenka Group and headquartered in Kolkata, India, Phillips Carbon Black Limited is the largest carbon black producer and exporter in India. With annual revenues equivalent to USD359.4 million, Phillips Carbon Black operates four strategically located, state of the art manufacturing plants in India, and operates in more than 30 countries worldwide.

Business Challenge
As it prepared for rapid global expansion, Phillips Carbon Black Limited recognized that tight, central control of scalable processes would be vital to maintain operational cost-efficiency as the company grew.

Transformation
Working with IBM Services, Phillips Carbon Black Limited moved from SAP ERP on-premises to SAP S/4HANA hosted on AWS, and simultaneously expanded its SAP landscape to cover all business areas.

Business benefits:

• 100% capital cost avoidance on new on-prem infrastructure by moving to cloud

• 85% of data conversion process automated during the SAP solution upgrade

• 30% faster application response times for business users

“By partnering with IBM, AWS and SAP, Phillips Carbon Black Limited is in a strong position to stay lean and agile as we rapidly grow our operations around the world,” said Dipan Sengupta, IT Head, Phillips Carbon Black Limited.

“One of the keys to the success of this project was the best practices and accelerators that IBM brought to the table. For example, using the SAP HANA Migration Console developed by IBM, we were able to automate 85 percent of the ABAP to HANA object conversion,” said Deepak Kalia, Associate Director, IBM Services.

“We have already recommended IBM to many organizations who are considering migrating to SAP S/4HANA as part of their digital transformation initiatives,” said Sabyasachi Bhattacharya, Chief of IT and HR, Phillips Carbon Black Limited.

“Without a doubt, the strong collaboration between AWS and IBM played a key role in delivering a highly effective solution within an aggressive timeframe. Throughout the engagement, experts from IBM and AWS were in constant contact, and that effective collaboration helped us overcome some tough technical challenges along the way,” said Bas Kamphuis, General Manager, ISVs, Amazon Web Services

Global aspirations
From tires to toner inks, and for thousands of manufacturing processes, carbon black is an essential ingredient. One of the world’s largest producers, Phillips Carbon Black Limited (PCBL) has set its sights on global industry leadership. In recent years, the company has expanded significantly, reaching out to more than 30 countries and identifying great opportunities to grow revenues and market share.

However, manufacturing carbon black is complex and resource-intensive, and margins are tight. To achieve its ambitions, the PCBL team knew that scaling operations cost-effectively while retaining excellent business controls would be critical to success.

Sabyasachi Bhattacharya, Chief of HR & IT, commented, “PCBL’s Digital Roadmap is to embrace the industry 4.0 concept within the next three years. Our journey to smart manufacturing will involve a strong, strategic focus on the customer experience, which will help us to differentiate our offering from competitors. The end destination is full integration with our customers’ supply chains, enabling true co-creation. We are already the largest carbon black manufacturer in our space in India, and our aspiration is to become one of the world’s preferred suppliers. Our back-office workflows, including sales, dispatch and finance, were already digitized with SAP ERP solutions, but the factory floor was still mostly controlled with manual, paper- and spreadsheet-based processes and decision-making. As we grew in production volume, numbers of clients and geographical reach, we knew it would be vital to ensure operational cost-efficiency at scale.”

Building processes that scale
To solve the challenge, the company decided to digitize its manufacturing operations, wherever possible. By replacing manual processes with automation and digital integration, PCBL could capture and analyze data that would help it fine-tune its manufacturing operations, reduce waste and synchronize production, sales and distribution. Collectively, the aim was to cut costs, improve efficiency and reduce the environmental impact of a very resource-intensive industrial process.

Dipan Sengupta, Head – IT at Phillips Carbon Black Limited, recalled, “We targeted a far-reaching digital transformation. The aim was to shape best-practice business processes and control them from end-to-end in a single, integrated platform. This new way of working unites everyone in the business: from manufacturing teams in our factories to marketing and human resources employees in our offices.”

Enhancing a best-of-breed platform
PCBL saw an opportunity to maximize the value of its investment in SAP solutions by moving from SAP ERP with Oracle databases to the future-facing SAP S/4HANA platform.

“In the IT department, our primary objective is delivering value to the business, and we were confident that SAP S/4HANA would empower us to spend less time deploying and maintaining the new SAP applications, and more time on development,” explained the PCBL IT team-members, adding, “With our on-premises infrastructure approaching end-of-life, we looked for a high-performance platform for the target SAP S/4HANA environment.”

Journey to cloud
After evaluating a shortlist of on-premises and cloud-based platforms, PCBL decided to deploy SAP S/4HANA on the Amazon Web Services (AWS) cloud—one of the first implementations of its kind in India.

“The economies of scale, flexibility and speed of deployment of the AWS cloud solution turned out to be a perfect fit for Phillips Carbon Black. As well as eliminating the need for significant up-front capital investments in compute, storage and networking hardware, the cloud model provides us with truly elastic scalability—meaning we only pay for the resources we use. In fact, we estimate that choosing AWS helped us to achieve a significant overall cost-saving compared to building our own scalable, highly available, ISO-27001-compliant platform on-premises,” said Dipan Sengupta.

Expert partner
To accelerate and reduce the business risk of its move to SAP S/4HANA in the cloud, PCBL engaged IBM Services to support its digital transformation journey.

Dipan Sengupta commented, “IBM has a truly global presence, and we had positive experiences working with IBM on critical and complex SAP migration projects in the past, which we saw as a key enabler of our long-term growth strategy. Crucially, IBM and SAP are strategic partners, and the close collaboration between the two companies assured us that they could solve any challenges we faced on our path to the cloud.”

During the journey, as a first step, IBM Services completed a SAP HANA Impact Assessment. This in-depth engagement helped PCBL to identify which of its processes would change after the transition to SAP S/4HANA, what employee training would be required, and which methodology would deliver the shortest time to value.

“Every SAP deployment is different, and the level of customization and patching can have a big impact on the approach,” added the PCBL IT team-members. The SAP HANA Impact Assessment from IBM helped us confirm that we could achieve our goals within the timeline we had set, and suggest the optimal strategy,” he added.

Seamless upgrade
Working together with IBM and AWS, PCBL extensively tested the target SAP S/4HANA environment by deploying a temporary on-premises replica of its production environment. After refining the critical process steps, IBM Services ran a single-step migration from HP-UX to SUSE Linux Enterprise Server for SAP Applications on AWS, simultaneously upgrading from SAP ERP to SAP S/4HANA.

The new AWS platform is based on Amazon Simple Storage Service (Amazon S3) and Amazon Elastic Compute Cloud (Amazon EC2) servers with Elastic Load Balancing—ensuring that incoming application traffic is automatically balanced across multiple Amazon EC2 instances. Protected with an additional layer of firewall, IPS & Antivirus security, the AWS cloud DC is accessed by PCBL over Amazon Direct Connect to its wide-area network. Amazon CloudWatch and other tools are used to monitor the applications and cloud infrastructure.

“Even though our move to SAP S/4HANA on AWS was a first for IBM at the time, the team was always confident that they could complete the process without any impact on our business users—and that’s exactly what they delivered. The support we received from IBM is world-class. There were plenty of early mornings and late nights in the lead-up to our go-live, but whether it was 2 p.m. or 2 a.m., IBM Services was always ready to help,” explained Dipan Sengupta.

By leveraging the IBM Ascend methodology for SAP S/4HANA, which includes the proven workflows SAP S/4HANA Conversion Best Practice, S/4HANA Conversion Process Flow and SAP S/4HANA Conversion Lessons Learned—IBM Services was able to deliver a smooth journey to cloud for PCBL.

Today, IBM continues to provide level-three support to PCBL for need-based critical issues with SAP S/4HANA applications.

Deepak Kalia, Associate Director, IBM Services, commented, “One of the keys to the success of this project was the best practices and accelerators that IBM brought to the table. For example, using the SAP HANA Migration Console developed by IBM, we were able to automate 85 percent of the ABAP to HANA object conversion. By cutting out manual, repetitive work, we were able to focus on more complex, technical aspects of the SAP ERP upgrade and move to AWS.”

Bas Kamphuis, General Manager, ISVs at Amazon Web Services, added, “Without a doubt, the strong collaboration between AWS and IBM played a key role in delivering a highly effective solution within an aggressive timeframe. Throughout the engagement, experts from IBM and AWS were in constant contact, and that effective collaboration helped us overcome some tough technical challenges along the way.”

Creating headroom for growth
By moving to a future-ready foundation for its SAP business systems, PCBL is ready to integrate its operations from end-to-end. The company has already rolled out SAP S/4HANA applications to support its manufacturing, human resources and marketing personnel, and plans to continue to roll out digital processes across its growing business.

“One core activity we knew would not scale in line with our growth objectives was the customer quotation process. In the past, our sales team needed to submit all the discounts they had agreed with customers to their managers for approval before production could begin. Typically, employees would share this information in spreadsheets sent via email, and receive authorization on the same channel. As well as adding significant amounts of time and manual work to the process, this approach made it very difficult to maintain a clear audit trail—increasing the risk of pricing errors slipping through. With SAP S/4HANA and SAP Fiori mobile apps, Phillips Carbon Black Limited has transformed its customer quotation process. Today, our sales team submits discounts for management approval via a transparent, digital workflow, all from their mobile devices. By boosting the efficiency of the approval process, we now have the headroom to support a large increase in order volumes without the risk of delays. The business is delighted with the new way of working. Our Chief of Procurement, who regularly travels around the world, told us that he no longer needs to take his laptop with him: he can approve everything via a secure, lightweight SAP Fiori app on his smartphone or tablet,” continued Dipan Sengupta.

Boosting efficiency
On this digital core of SAP S/4HANA, PCBL has now embraced SAP SuccessFactors, a cloud-based human resource management system with an integrated face-recognition attendance system, to accelerate repetitive workflows such as employee absence requests and travel reimbursement.

“Before we moved to SAP S/4HANA, our human resources team reviewed mountains of paper documents, ranging from fuel receipts to employee timesheets. All that painstaking work is now a thing of the past. Employees can request time off, reimbursement or even hotel rooms via the SAP SuccessFactors portal or mobile app, which is tightly connected to our SAP S/4HANA solution in the cloud. Better still, we’ve practically eliminated the need for paper. Employees simply take a picture of receipts with their phone, and we retain a digital copy in case we need it for future reference,” explained Dipan Sengupta.

Sabyasachi Bhattacharya added, “We saw SAP S/4HANA as the ideal backbone to enable our way-forward integrated business planning (IBP), as it is capable of integrating with a wide range of other enabling digital platforms. In line with our vision statement of ‘an exciting workplace to our people’, we have taken a giant leap on HR transformation by connecting SAP S/4HANA with SAP SuccessFactors. IBP will be an important milestone for us in coming years.”

Driving up productivity
Since transitioning to the latest SAP S/4HANA solutions, powered by the SAP HANA data platform, PCBL is measuring significant improvements in technical performance. The company has compressed its SAP application databases from 500 GB to 170 GB, and now offers 30 percent faster end-user application response times—empowering employees to work more productively.

In the past, PCBL relied on tape backups to protect its on-premises SAP application data. It took days to complete a backup, and would have required at least two days of manual work to restore the data in the event of a recovery scenario.

Today, in addition to local automated backups in AWS S3 Storage, the SAP environment in AWS Mumbai is replicated every 60 seconds to a disaster recovery instance based in AWS Singapore. With the low-latency, high-bandwidth connection between the two AWS regions delivering 98 percent faster replication, the company has cut its recovery point objective and reduced the risk of data loss in a recovery scenario. Crucially, the company can now spin up its recovery site in as little as two hours: 95 percent faster than previously possible.

“Phillips Carbon Black Limited sees IBM and SAP as strategic partners, and we are continuing to work closely with both companies to develop more efficient ways of working,” said Dipan Sengupta.

Sabyasachi Bhattacharya continued, “Our collaboration with IBM is symbiotic, and both our businesses have gained great value from this engagement. In supporting our move to SAP S/4HANA in the cloud, IBM has gained valuable practical expertise that will help streamline future engagements. We have already recommended IBM to many organizations who are considering migrating to SAP S/4HANA as part of their digital transformation initiatives.”

Dipan Sengupta concluded, “Our journey with SAP S/4HANA is just beginning, and we’ve only scratched the surface of what the platform can do for our business. By partnering with IBM, AWS and SAP, Phillips Carbon Black Limited is in a strong position to stay lean and agile as we rapidly grow our operations around the world.”

Benefits in detail

• By avoiding the need to invest in on-premises compute, storage and networking infrastructure for SAP S/4HANA, Phillips Carbon Black Limited has achieved 100 percent capital cost-avoidance.

• High-bandwidth, low-latency connection between the primary data center and secondary disaster recovery SAP S/4HANA instances and automated, tool-based backups cut the time to complete online replication and backup by 98 percent, reducing the company’s recovery point objective and shrinking the risk of data loss in a recovery scenario.

• Using the SAP HANA Migration Console, IBM Services automated 85 percent of the data conversion process during the SAP ERP to SAP S/4HANA upgrade—accelerating the process.

• By moving to SAP S/4HANA, Phillips Carbon Black Limited has reduced its database size from 500 GB to 170 GB—minimizing storage requirements and backup windows.

• Phillips Carbon Black Limited has cut end-user application response times by 30 percent, enabling greater employee productivity.

• By enbling the SAP Fiori User Experience for SAP S/4HANA, the organization has reaped the benefits of mobile, device-agnostic and secure access to SAP applications, contributing to faster decision-making based on near-real-time data.