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Riding on SAP digitisation, Malaysian manufacturer kickstarts regional expansion, slashes costs

AvantiKumar | May 19, 2016
We chose SAP solutions to enhance our financial and operational systems to drive our expansion strategy, said ACM IT Head Erik Looi.

ACM staff in action 

Photo - ACM staff in action.

 

By using enterprise applications provider SAP's solutions, Malaysian manufacturer Alliance Contract Manufacturing (ACM) said it has already realised ROIs, which include procurement savings of 20 percent.

ACM's senior manager (head of IT) Erik Looi said the SAP HANA Database and SAP S/4HANA Finance, which were selected primarily to help regional expansion, were rolled out by local systems integrator Brightree Solutions to ACM's enhance financial and operational systems.

 Brightree Solutions managing partner Phuah Ewe Cheng said: "We are extremely pleased that ACM can now reimagine finance in today's era of the digital economy, through optimising processes, as well as run on-the-fly analysis, amongst many other innovative business benefits."

ACM's Looi said the systems will be integrated into ACM's existing organisational environment for visibility into operations, "allowing integration between business areas throughout the company's value chain and a flexible, scalable system to quickly accommodate change.

He said ACM, an SAP customer since 2002, was facing challenges in securing integrated and real-time information between different business areas and across business information challenges.

Looi said that to achieve their expansion plan and build a niche in the global outsourcing arena, ACM asked SAP to upgrade current capabilities and prepare the organisation for expansion.

"ACM chose SAP as they offered superior capabilities in end-to-end solution handling across the entire value chain, expertise in systems for real-time information for decision-making and offered globally proven solutions," he said.

ACM is a manufacturer of precision machined components, motors, electromechanical assemblies, sheet metals and welded frames, which provides turnkey manufacturing solutions for commercial and industrial equipment.

 World class ICT

"It is part of ACM's strategy to build our business on a world-class ICT solution, with built-in best practices, extensive and global support structure, highly scalable with continuous innovations," he added.  "We also felt that as an industry leader, SAP would fit the bill.

The SAP HANA database implementation was completed within three months, with SAP S/4HANA Finance taking an additional three months, said Looi. "The solutions implemented so far have positively impacted all business functions throughout the value chain for ACM."

Commenting on returns on investments (ROIs), Loo said: "Although we have only just completed this implementation, we are excited to expect a 20 percent  increase in procurement savings in the future, be provided with the ability to maintain a 30 percent reduced inventory levels and as a result, reduce uncollectable accounts receivable by up to 50 percent,"

"Facing a challenging business environment, these achievements are significant and enable us to compete much more effectively, across the board," he said.

SAP Malaysia's managing director Terrence Yong said that through SAP S/4HANA Finance, ACM was now positioned to drive process and technology simplification with a system that removed data replications, reconciliations, and redundancies.

"To partake of these business benefits, ACM have accelerated their financial transformation, so as to realise greater productivity and efficiencies to support ACM's planned expansion," said Yong.  "Enterprises can achieve significant business value with the innovative use in core areas - such as finance - to take full advantage of a simplified data architecture and a responsive user experience. We are helping our customers to evolve in the digital economy with a solution that provides the most value through digitising end-to-end operations."

Looking ahead, ACM's Looi said: "With the new solutions, ACM now has the flexibility to cater to various business scenarios and to fulfil their own customer requirements for faster delivery.  There is greater control through the new highly scalable system that can quickly integrate their subsidiaries and provide easy data access and visibility to the business. Such changes will allow for more frequent reporting, fewer latency periods and faster operations, leading to better informed decisions.

He said ACM now intended to implement SAP S/4HANA Enterprise Management at their overseas plants in the Netherlands and the Czech Republic.

 

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