This white paper is an IBM case study. IBM Global Business Services helped Synthite perform a fit-gap analysis to see where existing processes could be enhanced by replacing legacy systems with SAP ERP. IBM then helped to implement a suite of SAP applications and introduce new capabilities such as active ingredient-based costing and departmental key performance indicators. The result is a fully integrated sales order, manufacturing, quality control and product delivery solution with business analytics capabilities, based on SAP NetWeaver Business Warehouse. Visit http://bit.ly/KWh5Dx to 'Follow' the official Twitter handle of IBM India Smarter Computing.

1. we know
they know
Synthite tastes success with SAP and IBM
Overview
 The Challenge ingredient-based costing and business unit, and take corrective
Flavorings and spices company departmental key performance actions on pricing, manufacturing,
Synthite set ambitious sales growth indicators (KPIs). The result is marketing and management.
targets that existing back-office a fully integrated sales order,
procedures and systems struggled manufacturing, quality control  Key Solution Components
to support. Separate purchasing, and product delivery solution with Industry: Foods
manufacturing and documentation business analytics capabilities, Applications: SAP® ERP
processes could not be integrated, based on SAP NetWeaver Business applications including financials,
which prevented management from Warehouse. controlling, materials management,
gaining a whole-company view of sales & distribution, production
order status and manufacturing  The Benefits planning and quality management,
efficiency. Delays in collecting and Synthite uses integrated sales order SAP NetWeaver® Business
analyzing information led to missed and manufacturing data to match Warehouse, SAP Solution Manager
opportunities for consolidating procurement quantities precisely to Hardware: IBM System x®series
procurement and production. Lack production, which helps to control servers, IBM System Storage®
of detailed raw materials data and inventory levels, reduce waste DS4700, IBM System Storage
product costing prevented accurate and cut costs. Integrated materials TS3200 Tape Library Express
estimates of final prices, particularly and quality management help Software: Windows SQL Server
for new products, which had an Synthite to comply with stringent and Oracle database
impact on profitability. international food standards, Services: IBM ® Global Business
making it possible to expand into Services, IBM Global Technology
 The Solution new markets and geographies. Services
IBM Global Business Services Executives scrutinize enhanced
helped Synthite perform a fit-gap operational data to discover true
analysis to see where existing raw materials and production
processes could be enhanced costs, and ensure that sales prices
by replacing legacy systems achieve business profitability
with SAP ERP. IBM then helped objectives. Synthite uses SAP
to implement a suite of SAP NetWeaver Business Warehouse
applications and introduce tools to analyze profitability by
new capabilities such as active customer, product, region and

2. “IBM helped us with an Synthite Industries specializes in fresh For example, raw materials
and dried spices and their extracted procurement orders and the size of
executive dashboard
essences – known as oleoresins – for each order were based on typical
that gives me end-to- the foods, flavorings and fragrances historic usage rather than an accurate
end visibility of all key markets. For example, almost every sales pipeline figure. Similarly, where
metrics on a single screen. ketchup, seasoning and sauce uses a several orders from different
This exception reporting mix of oleoresins to add color, flavor customers arrived for the same
and spice. product, there was no way to share the
tool helps me and the
information between systems, which
department heads As the world leader in the field of meant that Synthite lost the opportunity
manage performance oleoresin extracts, Synthite has a to consolidate the order to a more cost-
much more efficiently. portfolio spanning more than 500 effective single production run.
All in all, this new, stable products – from fresh and dried spices
to oleoresins, floral extracts, value At a larger scale, international markets
and scalable IT solution
added products and application for foodstuffs and fragrances require
provides us the perfect oriented solutions. It has a turnover of detailed product traceability, quality
platform to deal with $90 million and is targeting $500 and safety standards. Separate
future growth, giving us million by 2020. Synthite is spread over business systems at each location
that critical edge in an five locations and has an annual made it difficult and costly for Synthite
production capacity of over 60,000 to provide evidence of compliance
increasingly competitive
tonnes. with regulatory standards. To make
international market.” growth into new markets possible and
The company’s executives understood cost-effective, Synthite wished to
Aju Jacob, Director at Synthite Industries
that existing processes, which were embed automated product traceability
managed by separate legacy systems and quality control into its business
at each location with no processes.
interconnection, would not be able to
scale up to meet the challenges Aju Jacob, Director at Synthite
created by growth. Industries, says, “A few years back, we
decided to accelerate our growth rate.
We were looking at new markets,
capturing more market share and we
wanted better control over pricing and
inventory. We wanted to be able to
forecast demand. But, we realized that
we couldn’t do any of this because our
legacy set-up was not integrated and
had too many incompatible systems.
So we wanted a unified and integrated
IT solution to align and optimize our
business processes to our strategic
goals.”
Minu Thomas, Head of Planning and
Information Systems, Synthite
Industries adds, “Some of the
challenges we faced due to our legacy

3. systems were lack of standardization, planning process. Hence, ability to “The IBM approach to
and wastage due to sub-optimal respond to customer enquiries with
this SAP
tracking in the areas of material likely delivery dates was also
planning, manufacturing, quality equally challenging.
implementation effort
control and finance. Since we didn’t was extremely
have a formal planning department, The lack of detailed information on methodical, structured
traceability of orders was a problem. production costs also made setting and disciplined, which
Synchronization between sales, product prices a real challenge,
was key to delivering
production and purchase was a which had an impact on the
challenge. We also wanted better company’s ability to respond
the project on schedule
control over product costing.” quickly to new customer enquiries and ensuring the
for different blends of spices / spice intended benefits.”
Looking for the right ingredients ingredients in order to win new
Synthite turned to IBM Global business and ensure its profitability Minu Thomas, Head of Planning and
Business Services to help evaluate objectives. Information Systems at Synthite Industries
possible solutions, and later, as a full
implementation partner. Sabu Gopinath, IBM Global
Business Services’ project lead,
“We chose IBM because of their deep comments: “Synthite’s management
industry knowledge and their proven had a vision and we understood that
expertise as a SAP consulting and vision perfectly. Smaller customers
implementation partner,” says Aju like Synthite need proven integrated
Jacob. “What impressed me was the solutions that provide rapid ROI. At
fact that they didn’t just talk about IBM Global Business Services, we
implementing SAP; they talked about have years of experience delivering
transforming our business using SAP. such solutions across industries, so
IBM demonstrated a clear we were able to tailor the perfect
understanding of our strategic intent solution for Synthite very quickly.”
and our business goals.”
A recipe for success
The principal objectives were to IBM Global Business Services
integrate the different legacy systems, recommended replacing legacy
moving all the production sites onto a systems and with a centralized ERP
shared business systems environment solution from SAP. Working closely
and to replace manual processes with with the Synthite team, IBM
automated solutions. performed a fit-gap analysis,
comparing the existing business
For example, due to separate “islands” processes with the capabilities TECHNICAL LANDSCAPE
of legacy systems across Synthite offered by SAP applications. As a Servers: IBM System x series servers,
locations, compiling the overall result, Synthite decided to IBM System Storage DS4700, IBM
production planning demand and re-engineer some of its processes System Storage TS3200 Tape Library
arriving at an overall material to align with SAP best practices, Express
requirements plan was a serious while also choosing to develop Software: SAP ERP, SAP NetWeaver
business challenge. There was no additional functionalities in the new Business Warehouse, SAP Solution
easy way to link sales forecasts, SAP environment to meet the unique Manager, Windows SQL Server and
production, procurement or inter-plant needs of certain business units. Oracle database
material movements as part of their

4. “I was very impressed Following the Ascendant methodology solution can track raw materials,
– an end-to-end framework warehousing, production and
with the IBM team
specifically designed for SAP delivery costs, generating a
through the entire implementations – IBM Global complete picture of product costs.
implementation Business Services helped Synthite Synthite uses this new understanding
process. Our senior deploy a core set of SAP ERP of input costs to ensure that pricing
management team applications to manage group-wide meets product profitability and
financials, controlling, materials margin objectives as part of the
came to regard them
management, sales & distribution, larger enterprise commitment to
as so much more than production planning and quality sales and business growth. The
just SAP technology management processes. SAP company also uses the same data to
consultants, but as NetWeaver Business Warehouse (BW) help understand how to improve
business consultants. was also deployed to provide detailed manufacturing performance and
analysis capabilities based on drive costs out of the business.
They remain a true
standardized, accurate data.
business partner and Serving up SAP to the business
trusted advisor. What “The SAP solution IBM set up for us With the planning and development
we achieved through provided tighter integration between stages complete, IBM Global
IBM was business operations, sales, logistics and Business Services managed the SAP
financials, and gave us visibility across implementation using a phased
transformation.”
the business,” says Minu Thomas. go-live model. In the first phase, the
Aju Jacob, Director at Synthite Industries “The larger solution included IBM core SAP ERP functionalities were
System x servers, infrastructure and introduced at the company’s main
technology services and software.” spices and oleoresin manufacturing
plants in Kerala and Karnataka. Next,
Developing unique flavors the solution was extended to three
IBM also helped implement new manufacturing locations across the
functionalities in the SAP environment country – a spice ingredients division
– for example, active ingredient in Kerala, a floral extracts plant in
management at a material-batch level, Tamil Nadu, and a spice pre-
which calculates costs based on the processing plant in Andhra Pradesh.
specific characteristics of the The third phase was the introduction
materials used in each product. The of SAP to the manufacturing facility at
IBM Global Business Services team Calicut subsequent to its merger with
was able to leverage experience from Synthite.
previous implementations in similar
industries to deliver this functional “IBM standardized the business
requirement effectively. processes across our various
divisions and locations, and aligned
The advantages that these new its business goals with organizational
functionalities give to the business are Key Performance Indicators (KPIs),”
considerable. For example, the active comments Pramod J Simon, Head of
ingredient management functionality Production at Synthite Industries.
helps to track and monitor costs at “Consequently, Synthite is now
each batch level, based on the active confident and geared up to handle
ingredients content (e.g. capsaicin any amount of future growth and
content for chilli). Now, the SAP innovation.”

5. Adding spice to the mix Learning with the master chef “Companies in India...
Synthite executives wanted to increase Implementing SAP applications with have access to
control of the business by examining the associated configuration, worldwide markets,
operational and product data and customization and training effort would
and they have the best
understand the impacts of financial, have placed a comparatively high
product and business decisions. For workload on the Synthite IT team. Much
of technology at their
example, this included establishing of the work required specialist doorstep. IBM and
end-to-end traceability at any level for knowledge only useful during the SAP is helping several
product batches, from raw materials to implementation process, and the peak such organizations
finished goods and scrutinizing slow- workload would have over-stretched an
achieve their business
moving goods against sales and internal IT team that was busy
inventory. supporting ongoing operations. In
aspirations, by taking
consequence, the skilled resources their journey with
The standardized SAP application provided by IBM Global Business them. We bring our
environment ensures that accurate Services were crucial to the success of global experience and
operational data is captured in a uniform the project.
knowledge and combine
manner for the Synthite group. Every
manufacturing site now accesses the “I was very impressed with the IBM
it with local insight and
centralized SAP system and every team through the entire implementation capability to help our
purchase, production information, process,” says Aju Jacob. Our senior clients innovate and
quality result, sales order and delivery management team came to regard succeed.”
instruction is captured. them as so much more than just SAP
technology consultants, but as Vanitha Narayanan, IBM Managing Partner -
IBM Global Business Services, IBM India
The captured data provides Synthite business consultants. They remain a
South Asia
with a valuable resource to examine true business partner and trusted
operations using SAP NetWeaver BW to advisor. What we achieved through
analyze operational performance by IBM was business transformation.”
customer history, current contract
status, or by volume, value and “The IBM approach to this SAP
profitability. These latter figures act as implementation effort was extremely
an essential check, allowing Synthite to methodical, structured and disciplined,
assess the accuracy of its production which was key to delivering the project
costing and sales revenues at the on schedule and ensuring the intended
customer level, by product, by product benefits. They first did a system
categories, regions, and other similar baseline assessment study to identify
dimensions. the gaps in our legacy systems and
also the benefits thereof in an SAP
Leveraging business intelligence system, before proceeding with the
IBM Global Business Services helped implementation. They did several
Synthite to define and implement a change management workshops to
range of departmental KPIs to help ensure our users are comfortable with
analyze this data and present it in an the new system so that the overall
easily understandable way. The business performance did not suffer.
NetWeaver BW solution was then used They also did a very good job of
to create customized dashboards as knowledge transfer to our employees
decision support tool for senior before they left,” remarks Minu Thomas.
management.

6. Tasting sweet success “Thanks to IBM and
With the SAP applications embedded
SAP, we are now fully
in the fabric of the company, Synthite
prepared to compete
is reaping the benefits of an integrated
information infrastructure. For in the global market. I
example, all sales are available as an think for any company
online report, by various dimensions looking at transforming
like customer, product, plant or sales
their business, IBM and IBM Deutschland GmbH
D-70548 Stuttgart
groups, etc. The enterprise-wide view
SAP should be in their ibm.com/solutions/sap
of sales orders allows planners to
predict manufacturing workload and shortlist.” IBM, the IBM logo, and ibm.com are trademarks
of International Business Machines Corporation,
registered in many jurisdictions worldwide. A
assess capacity on a plant-by-plant
Aju Jacob, Director at Synthite Industries current list of other IBM trademarks is available
basis, and shift production between on the Web at “Copyright and trademark
information” at http://www.ibm.com/legal/
plants if necessary in order to meet
copytrade.shtml
customer demand.
Intel, the Intel logo, Intel Xeon and the Intel Xeon
priced resources. They have access logo are trademarks or registered trademarks of
Intel Corporation or its subsidiaries in the United
Full batch traceability is maintained, to worldwide markets, and they have
States and other countries. UNIX is a registered
enabling Synthite to meet its regulatory the best of technology at their trademark of The Open Group in the United
States and other countries. Linux is a trademark
obligations and customer doorstep. IBM and SAP is helping
of Linus Torvalds in the United States, other
requirements, which removes barriers several such organizations achieve countries, or both. Microsoft, Windows, Windows
NT, and the Windows logo are trademarks of
to entering new markets. their business aspirations, by taking
Microsoft Corporation in the United States, other
their journey with them. We bring our countries, or both.
Aju Jacob comments, “It helps to have global experience and knowledge Other company, product or service names may
be trademarks, or service marks of others.
all the relevant information at my and combine it with local insight and
This case study illustrates how one IBM
fingertips in near real-time. IBM capability to help our clients innovate
customer uses IBM and/or IBM Business Partner
helped us with an executive and succeed.” technologies/services. Many factors have
contributed to the results and benefits
dashboard that gives me end-to-end
described. IBM does not guarantee comparable
visibility of all key metrics on a single Aju Jacob concludes, “Thanks to IBM results. All information contained herein was
provided by the featured customer and/or IBM
screen. This exceptional reporting tool and SAP, we are now fully prepared to
Business Partner. IBM does not attest to its
helps me and the department heads compete in the global market. I think accuracy. All customer examples cited represent
how some customers have used IBM products
manage performance much more for any company looking at
and the results they may have achieved. Actual
efficiently. All in all, this new, stable transforming their business, IBM and environmental costs and performance
characteristics will vary depending on individual
and scalable IT solution provides us SAP should be in their shortlist.”
customer configurations and conditions.
with the perfect platform to deal with
This publication is for general guidance only.
future growth, giving us that critical Photographs may show design models.
edge in an increasingly competitive © Copyright IBM Corp. 2010. All rights reserved.
international market.”
Conclusion
Vanitha Narayanan, IBM Managing
Partner - IBM Global Business
Services, IBM India South Asia, © Copyright 2010 SAP AG
SAP AG
comments: “Companies in India have Dietmar-Hopp-Allee 16
several advantages today: they are in D-69190 Walldorf
one of the fastest growing economies SAP, the SAP logo, SAP and all other SAP
products and services mentioned herein are
in the world and have access to trademarks or registered trademarks of SAP AG in
incredibly talented yet competitively Germany and several other countries.
SPC03287-INEN-00 (November 2010)