SOA the logical choice for logistics giant

SYDNEY- A AUS$1.5 billion (US$975.5 million) global logistics company is not what many consider agile, but Dematic has proven it is just that after the Asia Pacific arm replaced its core IT architecture in less than a month with a platform built on Service Orientated Architecture (SOA) and Information Technology Infrastructure Library (ITIL).

The United States-based company employs 500 staff in its Asia Pacific sites and is one of the largest suppliers of automated materials handling equipment. It deploys some of the most innovative technology in the industry — much of it developed in the company’s research and development centers including its 30 seat Sydney office — used in its client warehouses such as Woolworths, Myers and P&O Ports, and for its own operations.

Its services include logistics, mechatronics and IT such as Enterprise Resource Planning (ERP) connection, Radio Frequency Identification (RFID) and track and trace.

The company’s IT shop of 10 was handed a 90-day deadline to shaft all business process and technology infrastructure, including its core SAP system, after then-Dematic owner Siemens sold the company to Germany-based Triton in late 2006. Local CIO Allan Davies bucked the trend to deploy the SAP templates used by its European and U.S. offices to rebuild with solutions built on SOA.

“Our expense management system, hosted with Siemens, required four days a month of manual data entry into our enterprise management system,” Davies said, noting the restructure required extensive training and the deployment of a new private branch exchange and a wide area network.

“SOA lets us basically plug and play. I know how painful legacy systems are and this means we don’t need to mess around because we need to be very responsive. “We have a lot of feeds from our systems that have to be managed and we tended to write a lot of interfaces — we have eliminated the legacy systems .”

Davies said the company saved $500,000 a year in licensing costs by swapping SAP for an Infor ERP system as well as its asset management and financials. Still more was saved by the abolition of legacy systems which Davis said chewed up a considerable amount of cash.

The numerous interfaces from data collecting nodes, including maintenance and monitoring systems, have been simplified in line with Dematic’s swing to SOA.

The expense management system has been pulled back in-house where it will be connected to a new client assessment management and process management platform. Davies will focus on automating invoice, purchase order approval process and business intelligence, and squeezing more out of existing systems.

“In the lean times ahead we need to squeeze more out of what we have,” he said. Dematic’s processes have been refined over the last four years, including the introduction of ITIL’s change management in the service desk, which is about 60 percent complete.

Davies said IT shops should cherry pick the parts of ITIL which are suitable for the business, or risk “drowning for little benefit”.

Without the software like the enterprise asset management system, Woolworths would be without fruit and Myers stores would run out of perfume. It functions as the brain between a complex array of sensors and controllers that decide what technology, be it pick-to-light or RFID, will be used. He said RFID, while initially expensive, is an important link in the logistics chain because it makes companies like Dematic versatile enough to ship different products as markets change.

“You need to be adaptable to move different products and it is a matter of picking the right technology, Davies said.” Dematic deployed the Infor suite of enterprise software, including its ERP system, asset management and financials.

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