Endress+Hauser internationalizes its SAP ERP application and expands its sales and production processes to the Brazilian market.
The Swiss company Endress+Hauser, a global leader in measurement instrumentation and solutions and services for industrial process engineering, has gained a firmer foothold in the Brazilian market and now also produces in Brazil.
Since 2003, Endress+Hauser has had a sales subsidiary in Brazil. In 2012, a new facility opened in Itatiba, about 60 miles north of São Paulo, in which two manufacturing subsidiaries produce flowmeters, level indicators, and pressure gauges. Endress+Hauser makes more than 2,000 products, many of which can be ordered in millions of variants.
The Brazilian customers now benefit from the proximity to the manufacturer, shorter lead times, and manufacturing based on European standards. The company’s existing SAP ERP application has also been implemented in the Brazilian sales and manufacturing subsidiaries.
Replacing SAP Business One
The main project goal was to replace SAP Business One – the IT solution that the Brazilian sales subsidiary had been using – with standard, company-wide processes. For this to happen, the company’s existing SAP template had to be adapted to Brazilian requirements and rolled out to the two newly founded manufacturing subsidiaries, Endress+Hauser Maulburg and Flowtec AG in Itatiba.
Furthermore, it was necessary to implement the SAP Electronic Invoicing for Brazil (SAP Nota Fiscal Eletronica) application for electronic tax returns and to implement country-specific SAP reports (for example, SPED ICMS/IPI, SPED Contribuições, GIA). In addition to localization and to the safeguarding of cross-system process and data consistency – especially with regard to the master data that had to be migrated – integrated supply chain management (SCM) using an electronic order and invoice interface was essential.
Complex legal requirements in Brazil
Brazilian legal requirements are extensive, and they necessitate an adjustment of the global SAP template. Specific declarations to the authorities, such as the legally required nota fiscal, more than 60 different taxes and duties, which depend on the industry and the product, as well as tax-free zones mean that companies operating internationally face enormous challenges when making new investments or expanding existing locations in the country.
For the template rollout at the sales subsidiary, the group’s own IT service provider Endress+Hauser InfoServe, which was familiar with the details of the project, was able to rely on an established core team that worked closely with the IT team in the fit/gap analysis and during the test phase.
The nota fiscal is a legally obligatory document that international companies must forward to the Brazilian governmental authority SEFAZ. It accompanies all goods deliveries and serves both as a delivery note and invoice. To manage the many documents better and to automate and accelerate the transfer process, companies can send their notas fiscais electronically (Nota Fiscal Eletrônica, NFe).
Since 2008, electronic transfer has even been compulsory for certain branches of industry, such as the automotive sector and the oil and gas industry. Ongoing extensions to and alterations of the laws relating to the NFe pose an additional challenge for companies. With SAP Nota Fiscal Eletronica, the notas fiscais can be created and sent directly from the SAP system.
Hand-in-hand: corporate IT and specialist for Brazil
Endress+Hauser InfoServe plays a leading role in supporting the SAP internationalization process and accompanies implementation projects throughout the world. Consultants from the Heidelberg, Germany-based company cbs Corporate Business Solutions provided expert assistance in designing and implementing the Brazil-specific legal requirements: in tax determination for Brazil in the SAP modules SD, MM, and FI; in the configuration of SAP ERP for the nota fiscal and in the area of finance; for enhancements to SAP Nota Fiscal Eletronica 10.0 and the Brazilian DANFE form; and in data migration.
From the BRIC briefing to the go-live
When the project kicked off in February 2012, a BRIC briefing workshop was held to impart fundamental knowledge about template-based SAP rollouts to Brazil. Content included specific legal requirements and their impact on process design, system landscape and reporting, and the right strategy and methods for planning and implementing a template rollout in this country.
The rollout project started in April with a workshop at Endress+Hauser’s site in Weil am Rhein, Germany. The objective of the event was, first, to exchange expertise and, second, to create a customizing prototype in the SAP modules SD, MM, and FI – both with a focus on supply chain management. Two months later, a fit/gap analysis was performed on-site in Brazil. Based on this, the legacy system was replaced and all ERP processes were adapted and integrated into the SAP components materials management, sales and distribution, customer service, and financials and controlling. The production processes were not localized.
The go-live took place at three different sites. Two integration tests guaranteed that the solution was stable and of a high quality, enabling it to go live in Itatiba as early as November 2012.
After the successful go-live of the Endress+Hauser sales subsidiary in São Paulo and the Maulburg manufacturing subsidiary, the cbs consultants made the system settings for Endress+Hauser Flowtec AG remotely. In fall 2012, the second part of the project kicked off in Brazil: Two integration tests and one user acceptance test were performed in Reinach, Switzerland. The final go-live at the Endress+Hauser Flowtec AG location in Itatiba went ahead in mid-April 2013.
Globally transparent processes with SAP ERP
The Endress+Hauser Group now has a standardized SAP ERP template solution with integrated processes at its new manufacturing facilities in Itatiba and at the local sales subsidiary in São Paulo. As a result, Endress+Hauser meets all country-specific legal requirements for Brazil and has successfully integrated the new subsidiaries into its internal, standardized SAP process environment.
Endress+Hauser now enjoys the benefits of globally transparent production processes – and regional manufacturing is also consistent with the high standards of the European parent organization.