COMPRESS DIGITAL TECHNOLOGY LIMITED

amaranthgymnophoriaElectronics - Devices

Nov 15, 2013 (3 years and 8 months ago)

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SAP Customer Success Story
AT A GLANCE
Company name
Compress Digital Technology
Limited, Hong Kong
Industry
Electronics Industry
Employees
Over 100 employees in Hong
Kong and Shenzhen
Revenue
US$35 million in 2004
Key Challenges
Make critical information readily
accessible to improve the
accuracy in planning and
purchasing components, further
reducing costs
Implementation Partner
Compass Consulting Group
Solution and Services

mySAP™ ERP (Enterprise
Resources Planning)

Compass provides
implementation, consulting
and support services
Implementation Highlights

Critical information readily
accessible for management

Quick implementation - 4
months
Key Benefits

Improved planning and
operational efficiency

Provided an infrastructure that
can benefit the company to
expand its business efficiently
and effectively in the next 5
years.
Hardware
HP ProLiant Server,
128K leased line connecting the
Hong Kong office and the
Shenzhen R&D center
Operating System
Microsoft Windows Server 2003,
SQL Server 2000
“The adoption of SAP’s solution provides
us the infrastructure that will enable CDT
to grow and expand our business in the
next 5 years.”
Mr. Sham, Chairman, Compress Digital Technology Ltd.
COMPRESS DIGITAL
TECHNOLOGY LIMITED
mySAP™ ERP system provides critical
information for real-time business planning
that we simply couldn’t do in the past.
Compress Digital Technology limited ("CDT") is a Hong Kong-
based company with a strong design and development team in
China. With over 100 employees, CDT focuses in providing
high quality and cost effective ODM services to its customers.
As one of Philips Consumer Electronics’ ODM suppliers, CDT
provides R&D, quality assurance, materials planning and vendor
management in a range of Philips’ products, including CD, DVD
and MP3 players, and micro audio systems. CDT is
responsible for purchasing major electronics components from
raw materials vendors, and consigning and selling the materials
to its sub-contracted manufacturers for production.
CDT’s vision is to build the company into a leading global ODM
player in the next two to three years by focusing on providing
efficient and effective technologies and services to customers.
Founded in 2003, CDT almost tripled its annual revenue,
surging from US$9 million in 2003 to US$35 million in 2004.
INDUSTRY TREND AND CHALLENGE
In the 1960s, many large consumer electronics companies began
outsourcing their product manufacturing to Asian countries such as
China. In recent years, in order to further lower operating costs,
some companies have further outsourced their entire product lines
- from R&D to manufacturing - to other ODM companies which are
equipped with strong engineering resources. In addition, with the
rapidly growing market demands, ODM players such as CDT more
than ever need to carefully track components and materials as well
as accurately manage and monitor sub-contracted manufacturers.
As Philips Consumer Electronics’ ODM supplier, CDT is always
looking for different tools and means to improve its efficiency and
effectiveness to further expand its business opportunities and
marketshare. "We are not just an ODM company, we are a
company that provides a complete R&D solution to meet our ever-
growing customer requirements," said Alex Kwok, logistics manager
of Compress Digital Technology.
CDT aims at further strengthening and expanding its relationship
with Philips Consumer Electronics. To achieve this goal, both
"customer" and "supply" are two key factors that drive business
growth. "The key challenge for us is ‘timing’ and ‘cost’," Alex
added.
Currently, Philips has over 20 new products being launched into the
market every year. With the ever-growing consumers’ demands for
the latest electronic gadgets, the product development cycle has
been shortened from nine to six months. CDT believes that the
shortened development cycle will continue to be the market trend
for years to come. Therefore, prompt time-to-market has become a
key condition for business success, and it was essential for CDT to
find a management system that can help address this issue.
Another key challenge for CDT is component costs. On the one
hand the company needs to maintain the quality of its component
materials. On the other hand, CDT needs to have a clear picture
about where and how the materials are being used to keep its stock
at optimal levels. The company does not wish to have excess
inventory as upgraded components are replacing older generation
of components, however, CDT needs to have stock readily available
to complete manufacturing of current orders. "We needed a
strategic partner like SAP to implement a system that would ensure
optimum component inventory and help manage our production in
an efficient and timely manner, so we can keep our customers
happy and ultimately improve our profit margins," said Mr. Alex
Kwok, Logistics Manager, CDT.
“We needed a strategic partner like SAP to
implement a system that would ensure
optimum component inventory and help
manage our production in an efficient and
timely manner, so we can keep our customers
happy and ultimately improve our profit
margin.”
Mr. Alex Kwok
Manager, Logistic Department
Compress Digital Technology Ltd.
Benefits from SAP
The project started in July 2004 and was completed in October.
The company has noticed significant improvements in information
accessibility, facilitating more timely critical business decisions for
the management team.
Increased visibility and better control
CDT’s mySAP™ ERP system includes MM (Material Management),
SD (Sales and Distribution), FICO (Financial and Cost Controlling)
and PP (Production Planning) modules. This solution provides an
integrated technology platform to improve the visibility and accuracy
of data, leading to more consistent reporting.
The comprehensive BOM (Bill of Materials) and ECM (Engineering
Change Management) functions provided by SAP assists CDT to
record and manage their product specifications. After the system
goes live, the time for updating data reduced from one week to one
day. Product costing and BOM cost control functions in SAP are
also critical for CDT to closely monitor overall production costs.
“With the implementation of mySAP™ ERP system, we have
significantly improved our control over various data, have raised our
accuracy in planning, and have ultimately maximized our profits,”
said Eric Chan, director of finance and administration, CDT.
In addition, SAP’s MRP module helps CDT to plan and manage raw
materials provided to sub-contracted factories. This also benefits
the purchasing department who can easily issue and manage the
PO of raw materials. "The SAP solution helps to minimize CDT’s
business risk by closely monitoring the inventory level. In addition,
the integrated technology platform also improves the transparency
of materials purchased and helps re-allocate our resources and
materials easily," said Eric Chan. Errors incurred in shipping of
components and materials to sub-contracted manufacturers
improved significantly from 20% to 1%. Shortage in materials and
purchasing errors were reduced from15% to 2%.
Another key benefit brought by SAP is that the system is
"information ready". With the integrated ERP system, all financial
information is integrated into the mySAP™ FICO module which
provides better control and more accurate data integrity. It enables
the management team to access and analyse information like never
before, allowing them to make important business decisions much
more efficiently and in a timely manner.
Meet Customer Requirement
Philips, CDT’s sole customer, is also using SAP’s solution. The
deployment of the SAP solution has helped CDT to meet some
business requirements from Philips, and ultimately streamline its
reporting and operating procedures with its customer. "SAP has
the best solution used by most of the top players in various
industries. When we outlined the issues we needed to tackle,
SAP’s solution provided by Compass, is the only solution that can
address all of our concerns. Therefore, our chairman chose SAP
for our ERP solution." Alex added.
With the implementation of mySAP™ ERP
system, we have significantly improved our
control over various data, have raised our
accuracy in planning, and have ultimately
maximized our profits.”
Mr. Eric Chan
Director of Finance and Administration,
Compress Digital Technology Ltd.
CRITICAL SUCCESS FACTORS FOR SAP
IMPLEMENTATION
Management Support
In deploying such a large system, management support is essential.
When CDT considered installing an ERP system, the management
team wanted to deploy a system that can expand as the company
does. "CDT chose mySAP™ ERP solution because this is an
infrastructure that can easily expand and can help enable our
company’s dramatic growth plan over the next five years." said, Mr
Sham, Chairman of CDT.
Throughout the implementation, CDT believed one of the most
important components was the Business Blue Print, which decides
how the system will be run in the company. With the support of
SAP and Compass’ professionals, it was implemented successfully
within a short-time frame of four months.
SAP HONG KONG
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T 852.2539.1800 F. 852.2539.1818 www.sap.com/hk
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www.sap.com/hk
“This is not a one-off project, but rather a long-
term project that can grow with our company.
Today, SAP plays a key role in our business
planning process and provides the accurate
data and information necessary for our critical
business decisions,”
Mr. Sham, Chairman
Compress Digital Technology Ltd.
Customer Service Support
Without any dedicated IT technicians in the company, CDT works
closely with Compass which provides configuration support. "This
is not a one-off project, but rather a long-term project that can grow
with our company. Today, SAP plays a key role in our business
planning process and provides the accurate data and information
necessary for our critical business decisions." added Mr Sham.