Information technology is so essential to SerCom Solutions that the head of IT sits on the board of directors and the systems running the company are openly revealed on the corporate website.
Few businesses tend to declare what IT systems they use in full public view on their company website, but SerCom Solutions has done just that. In the competitive supply chain and logistics sector – not to mention in a tougher economic climate – technology is key to giving providers a strategic advantage and differentiating themselves from rivals. Declaring your IT affiliation is a badge of honour, a statement of intent.
From his vantage point as director of IT, Padraig Henry has seen a lot of technology-driven change among SerCom’s clients and its rivals. “We’re seeing a consolidation among our customer base and competitors towards a small number of ERP [enterprise resource planning] platforms. Companies have begun to eliminate the plethora of IT applications they were running internally and move to ERP, and I think the pace of that change has quickened,” Henry remarks. Organisations that are looking to outsource their supply chains to companies like SerCom now expect those providers to offer consolidated ERP applications.
Henry feels this trend validates SerCom’s decision almost a decade ago to run its business on SAP. “The entire IT strategy invested in by the organisation is around the principles of ERP, real-time visibility,” he explains. “We’ve been running SAP since the year 2000. We implemented SAP 4.6c at that time and just last year we upgraded to MySAP ERP, which futureproofs us for the next number of years.” To all intents and purposes, MySAP ERP is SerCom Solutions – the software covers all functions across the company’s financials, materials, sales order processing, inventory control, supply chain automation and systems integration between companies, as well as warehouse management, including radio frequency scanning technology and shop-floor control systems.
SerCom Solutions, part of the DCC group, provides a range of services from procurement and planning to quality inspection and control, receiving and warehousing, inventory management, distribution and fulfilment. The company began in the print and packaging sector in the late Seventies and has since diversified across a range of commodities and services. It manages everything from technology components, marketing communications materials, electronic components and finished goods to furniture, building materials and even clothing.
Not surprisingly, the company has a global footprint, with a sourcing and quality engineering office in Shenzen, China, a hub facility in Neuss, Germany and two locations in Poland at Lodz and Mzcnzonow. The firm’s network also extends to the US with facilities in Winston-Salem, North Carolina; Austin, Texas; Nashville, Tennessee; Bowlingbrook, Illinois; and Reno, Nevada. The company headquarters remain in Dublin, with an operational hub in Limerick. All of its IT – and there’s plenty of that – is managed centrally from the Dublin office.
Henry points to the board’s “tremendous enlightenment” in making such a significant statement with its IT, when SerCom’s parent company decided back in 1999 to invest in the world’s No 1 ERP system. “That was a significant step forward for a supply chain company in our sector at that time. We still remain, absolutely and categorically, the best-equipped supply chain organisation in our sector,” Henry declares. “IT is a competitive enabler for this company. We are a sourcing and procurement business that prides itself in its ability to take on world-class, blue-chip businesses and implement their processes in a flexible way, and to do this quickly in a robust and reliable way anywhere in the world. SerCom’s IT team here is that competitive enabler, so it’s hugely strategic for this company.”
SerCom’s own business model may be a testament to the concept of outsourcing, but application development on the MySAP platform is so strategic to the business that it’s deliberately kept in-house, Henry says. “We support the business using our internal resources only. It’s important to us that we’ve built up tremendous knowledge in our IT team, and not just of our own SAP system but of our customers’ businesses and processes. It’s hugely important to be able to get the best out of our systems.”
Henry leads a nine-strong IT team in a range of disciplines, from infrastructure and systems management to applications and systems development. A good portion of the development team’s role is taken up with testing new capabilities within MySAP. “We spend a lot of time looking at special processes that we are not currently using, reviewing the documentation, looking at the release notes and keeping ourselves up to speed on that type of thing. It’s one of our day-to-day activities to watch that stuff and there is a process in place to manage that.”
According to Henry, SerCom develops and enhances MySAP ERP on an ongoing basis and he frequently refers to its flexibility as a key attribute. His team looks at new processes on a monthly basis and must integrate them within SAP very soon after, in some cases, this is stipulated in service-level agreements with customers. He recalls one client in the consumer electronics sector recently asking SerCom to provide distribution services covering the Americas from a base in Chicago. “Part of that commitment was, can we be live in eight weeks? Without our internal team and without SAP, the answers to these questions become no, and we’re in the business of saying yes,” Henry states. Other sites have gone live in similarly speedy timescales – a location in Poland took four weeks to go live and another in China was online in a fortnight.
SerCom naturally has a close relationship with SAP on the ground in Ireland and its efforts in bringing flexibility into the supply chain have been endorsed by the software giant. “We find it to be a very supportive organisation. I think it likes some of the things we’ve been able to do,” Henry remarks.
SerCom also makes use of radio frequency (RF) technology in its warehouses and Henry points out the “amazing” processes driving quality assurance through RF scanning. “Every box coming into these buildings is scanned at the unique carton level. There’s also matching off of scanning part numbers, serial numbers and all of that stuff using RF,” he says. He is full of praise for Irish supplier Heavey RF, which installed and maintains the Techlogix RF system. The internal IT team at SerCom developed a compatible RF application within SAP Console so that it integrates seamlessly.
As with any modern IT chief, Henry is always looking at ways to remove cost from doing business and, to that end, he has been an enthusiastic adopter of open source and Unix variants where appropriate. For example, SerCom uses the open source software Nagios.org as its monitoring tool. A useful feature, Henry says, is the facility for sending text message alerts to the team in the event of an outage or about an issue that needs to be addressed. “Around the periphery, such as network monitoring tools, helpdesk applications or document management systems, we’re using a number of open source tools and we’re delighted with how well they’re working for us. At the coalface of delivering the business day-to-day needs we have exclusively commercial products, such as SAP, and I don’t envisage that changing, but open source has been good to us and we tinker around the edges,” says Henry.
“We run all of our enterprise systems on Unix and I think things like Red Hat have been enormous enablers for organisations to take cost out of their IT infrastructure,” he adds. “I think the maturity of the low-cost hardware and the maturity of the lower-cost Unix operating systems has allowed me, this time, to migrate away from the higher-cost platforms to something that is better for us. At one point we were running big, large blue-chip servers. For enormous sums of money you get one or two boxes, whereas during our recent hardware upgrade – for a reasonably substantial investment – I’m getting huge main servers, separation of database and application servers and messaging servers, and then a full set of resilient servers to move into our offsite DR location, so I’ve got failover. And all within a far lower cost than I was playing with until that upgrade.”
For all the talk of cost, Henry says the annual IT budget – “north of a million euro” – is sufficient. “For an organisation of this size I don’t think we spend overly but we do maintain a good internal team, a lot of sites and hubs and we would have a lot of infrastructure to support that,” he says. “It is more than enough to keep us innovating and I don’t think it’s excessive in any way.”
There’s plenty of debate about the role of IT in business and whether it can really contribute to an organisation’s strategic goals. Henry is in no doubt that it can and believes his own place on the company’s board of directors signals just how important technology is to SerCom. “I think there can be no greater statement of intent than that, in terms of the strategic nature of IT within the company. We see it here as an obvious senior management role,” he says.
For the past three years SerCom has been using the lean model of continuous improvement to drive efficiencies and reduce cost. Technology is seen not as an impediment but as an enabler. “We see our role as ensuring that everyone is aware of the enormous capabilities of what we have in place to deliver what they want, and to sit with the guys and work out what the best operational processes or supply chain processes might be. Then it’s our role to go and realise those things and make them happen, but we are there from the beginning, taking the lead from the business or giving the lead to the business where appropriate. And I think it is true to say most of the folks on our IT team at this stage are as much business-oriented as IT-oriented,” says Henry.
“In the global economy today, customers are looking for shorter supply chains, greater visibility of inventory at the supplier and sub-tier supplier level. They’re looking for people who have the systems that can absorb that kind of information and present it in a meaningful way. They’re looking for people who can automate supply chains and integrate easily between organisations for the sharing of information and transactional information as well. They’re looking for all of that, and in today’s world, they’re looking to do it in a lean way. They want to do it in the most automated way. We’re able to say ‘Yes, we can do these things’. We’re in a good place from a systems perspective. We’re lucky to have the technology and the team that allow us to say yes.”
By Gordon Smith