From Aachen to the Amazon


Since January 2015, two sales companies and a production site in Ecuador and Peru have been using the system. All are supported by the SAP Center of Competence (CoC) in Aachen.
The rollout project required, above all, the company's know-how in global rollouts, its comprehensive expertise in regional requirements in Latin America and, in particular, the Brazilian-specific features in connection with the SAP Nota Fiscal Eletrônica (SAP NFE) solution.
Global approach with regional requirements
The Grünenthal Group is represented in a total of 32 countries with companies in Europe, Australia, Latin America and the United States.
The pharmaceutical company has set itself the goal of using a central SAP ERP system for all sales and production sites - including those in South and Central America.
With the help of a group-wide SAP system, Grünenthal intends to increase productivity, reduce process costs and introduce uniform reporting, thus also making all country organizations comparable worldwide.
At the same time, however, local requirements are to be supported by the central SAP ERP system. The organizational goal is to further expand the SAP Center of Competence (CoC) into a global service provider within the Group.
All countries in South and Central America are to work in a centrally hosted SAP system managed by the SAP CoC, as the European units have done in the past. The aim is to involve the regional IT department in South America in application management.
The challenge was therefore to reconcile a global SAP template with local requirements during the South American rollout. For Grünenthal, this was the first time that countries in a different time zone with sometimes complex legal and tax requirements that were still unknown to Grünenthal had to be integrated into the SAP ERP system that had previously only been used in Europe.
Before the rollout in Latin America began, Grünenthal had already successfully implemented SAP in Europe with one and the same team.
The company had not followed a pure template approach, but had previously defined its own SAP standards and implemented them individually.
The initial situation in South and Central American country organizations was very different: The subsidiaries have been using a customized ERP system and a regional system for business intelligence for many years.
In addition, the ERP system was not introduced in a uniform manner. And the situation in Brazil is also special: Since the Brazilian sales company did not have any operational business at all at the time of the SAP implementation, there were uncertainties with regard to the requirements for the new system, which only emerge in the day-to-day operations.
Complex tax system
Another key issue in the project is the high legal requirements for companies in Brazil, namely in tax procedures, material valuation and legal reporting.
While companies in Germany need an average of 220 hours a year to determine, report and pay taxes, it takes twelve times longer in Brazil, with 2,600 hours: each company must electronically transmit a so-called Nota Fiscal to the authorities for each individual transaction.
The rollout in Central and South America is a strategically important and large project for the phama company. The quantity structure includes the implementation of the global SAP ERP system in eight countries in Central and South America - with eight sales organizations and two production sites.
In addition, six logistics service providers and two weighing systems as well as two automated warehouses have to be integrated. The list of requirements also includes more than ten bank interfaces, local interfaces to payroll systems, interfaces to three different external order management systems, different variants of electronic invoices, and the new system for Nota Fiscal in Brazil.
Last but not least, around 650 new users will have to be trained and supported in the various time zones. The rollout in South America started at the beginning of 2013 and the pharmaceutical company has planned a total of four years for the rollout.
The project goal is to be achieved through a tailored SAP template. This includes a global template with SAP standards for processes, master data and reporting, but also global Grünenthal definitions for processes, master data and reporting as well as processes successfully implemented in Europe for different business models with different outsourcing concepts for logistics services.
A global interface concept for logistics service providers, payroll systems, travel expenses, BI systems and others will also be adopted in the new countries in Central and South America.
Furthermore, Grünenthal has a toolbox of tested and proven migration tools as well as a set of reports for daily business.
Global construction kit M-cbs
The M-cbs method developed by cbs Corporate Business Solutions enables a global rollout project to be controlled, accelerated and designed in a cost-efficient manner.
The template works like a modular system that contains a defined set of global business processes, process variants, and encapsulated processes from best practices.
The special Brazilian requirements such as Nota Fiscal, tax calculation or CFOP determination, i.e. the classification of the individual processes into codes specified by the authorities, can also be mapped.
Since Grünenthal had not yet been operational in Brazil, it was not yet familiar with the local requirements. However, the pharmaceutical company was aware that an integrated solution for the electronic transmission of Nota Fiscal data to the SEFAZ tax authority was mandatory for doing business in Brazil.
The SAP solution SAP Nota Fiscal Eletrônica (SAP NFE) offers real-time data transmission for this purpose. For this purpose, Nota Fiscals can be created directly from SAP NFE and sent to the authorities.
The country-specific SAP solution includes a set of processes or process variants as well as best practices for the Brazilian tax process.
A project over four years
The rollout to Brazil started with a workshop on July 1, 2013. The cbs consultants familiarized Grünenthal's central IT, the CoC in Aachen, with their knowledge and experience of the high and complex requirements in Brazil.
The consultants also addressed the cultural and language barriers. In the workshop, cbs showed what specific requirements exist in Brazil and how processes can be standardized in this environment.
The legal and tax requirements were presented and applied to Grünenthal's situation.
With this preparation, Grünenthal's central SAP CoC was able to adapt the ERP system to the new situation. Since Grünenthal was confronted with including a different time zone for the first time in its corporate history, the central IT in Aachen also completely revised its support concept with the assistance of cbs.
This created the conditions for successfully providing centralized maintenance and hosting for the SAP system in the South American countries.
In the run-up to the project, the Grünenthal ERP system was brought up to date with regard to service packages and enhancement packages in order to be able to use as many current SAP solutions as possible for legal requirements in South and Central America.
The setup of the system took place between May and June 2013 and was completed after tests in September 2013. Subsequently, the new users in Brazil and Venezuela were trained and further tests were carried out.
Overall, all standard SAP functions were introduced - from sales and distribution, controlling, finance, manufacturing & packaging, and quality management to warehouse management, procurement, inventory management, and demand planning. Special attention was paid to the specific requirements of the pharmaceutical industry in Brazil.
The SAP ERP system went live at the new Brazilian sales company on November 1, 2013, Venezuela followed two months later on January 1, 2014, and Peru with a sales company and Ecuador with a sales company and a production site on January 1, 2015.
The business runs
Now all European and the first five Latin American company codes at Grünenthal are mapped in SAP. The global SAP ERP system is hosted in Grünenthal's central IT in Aachen and maintained by the SAP Competence Center.
The new support concept is also being used in the four South American countries. Here's how it looks: First-level support is provided in the region by local IT experts and process experts from the business units.
Problems that cannot be solved on site are forwarded to second-level support in Aachen and solved there, if necessary with external support from cbs.
The entire rollout project of the Grünenthal SAP ERP system to the countries in Central and South America will run until 2016. A total of ten company codes are planned in eight countries.
In a rollout of this kind, it must be clear before the solution goes live, especially in Brazil, who will monitor and evaluate the quite frequent changes in the Brazilian tax system in the future. Only then is smooth operation possible in the long term.
It also makes sense to involve auditors at an early stage who can confirm that the requirements have been implemented in compliance with the law, so that adjustments can be made very quickly if necessary.
Grünenthal can now handle the growing business in the four South American countries more effectively thanks to proven processes. The uniform SAP solution makes it possible to compare the national companies transparently according to defined key figures.
Grünenthal has thus made good progress in its strategy of working with just one SAP ERP system worldwide and finding harmonized master data and standardized processes here.