Customer Solution Case Study
/ / Mainframe-to-Windows Move for Mannington Mills Supports Rapid Growth, Saves $500,000
Overview
Country or Region: United States
Industry: Manufacturing
Customer Profile
Mannington Mills is based in Salem, New Jersey, and with 1,900 employees, is a leading maker of innovative, high-quality residential and commercial flooring products throughout the United States.
Business Situation
Mannington’s mainframe environment lacked the cost-effective scalability to support rapid business growth.
Solution
The company migrated to SAP R/3 enterprise resource planning software running on Microsoft® Windows Server System™ integrated server software.
Benefits
n High system reliability ensured.
n Cost-effective scalability supports business growth.
n Time to add new products to system cut from months to weeks.
n Lower costs save more than U.S.$500,000. / “The SAP-on-Windows Server System solution will make it faster and easier for our customers to do business with us. IT will do more than support business growth—we’ll contribute to that growth, too.”
Jim Sloane, Vice President of IT, Mannington Mills
When leading flooring-products maker Mannington Mills launched a five-year plan to double its revenues, the company's IT infrastructure threatened to doom the effort. Its many business applications ran on a pair of IBM AS/400 mainframe computers that were difficult to maintain and modify, and that lacked the cost effectiveness to support the company’s growth. So, Mannington migrated to SAP R/3 running on Microsoft® Windows Server System™. The result is a solution that fully supports—and contributes to—Mannington’s growth. For example, the time to add product lines to relevant systems has been cut from months to a couple of weeks; and programmers who used to manage legacy interfaces will add real business value by fine-tuning the solution to meet business needs. The solution does all this while lowering total cost of ownership by more than U.S.$500,000 per year.
Situation
Business had been good for privately owned Mannington Mills, the 90-year-old maker of innovative, high-quality residential and commercial flooring products. The company wanted to keep it that way.
Over the years, Mannington had expanded to manufacturing locations in Salem, New Jersey; Calhoun, Georgia; Epes, Alabama; and High Point, North Carolina. The company’s products included vinyl, carpeting, laminate, porcelain, and wood flooring.
Business had been so good, in fact, that in 2002 the company launched an initiative to double its revenues over five years. Each department was asked how it could contribute to the overall business goal—and what challenges it saw to success. That’s when Jim Sloane, Corporate Vice President of IT, Mannington Mills, spoke up.
“I was concerned that our IT infrastructure could be the hold-up to that growth,” says Sloane. “It wasn’t just a question of scalability. It was also a question of responding quickly enough to the needs of the business.”
The company’s IT infrastructure consisted of a dozen packaged applications running on a pair of IBM AS/400 mid-range systems with 2350 commercial processing workloads (CPWs) for batch processing and 560 CPWs for interactive processing.
This system ran Mannington’s entire business, including finance, inventory, order entry, and payroll. But because the applications weren’t integrated, it was difficult for them to work together. Conflicting data from different systems had to be reconciled manually. The isolated systems also encouraged different ways of managing the same processes in different parts of the company—another drag on productivity and growth.
Further, the applications had been heavily customized over the years to accommodate Mannington processes. But those same customizations made it extremely difficult both to accept commercial updates to the software and to quickly meet new business needs.
“It took a lot of application programming work to dig into our legacy system and make changes, such as adding product lines,” observes John Leonowich, Director of Technology Services, Mannington Mills. “It could take months to add a new product line to all the systems that had to know about it. It wasn’t acceptable from a business standpoint. It wouldn’t support the growth that management had in mind.”
“With the infrastructure we had, we were going to have to expand headcount in a near linear fashion to support growth,” says Sloane. “A 100 percent growth over five years was going to require a nearly 100 percent increase in headcount for IT and some other functional areas. That wasn’t supportable. We needed a better solution.”
Solution
Mannington decided to replace its variety of commercial applications with a single enterprise resource planning (ERP) solution. It considered offerings from J.D. Edwards, Oracle, and others before deciding on the SAP R/3 ERP suite.
“We chose SAP for several reasons,” explains Leonowich. “We felt that SAP was the most experienced and that more companies were using it. It had the best match of systems to the solutions we needed. The companies that we spoke with were very comfortable with their choice. We liked that.”
After choosing an enterprise-wide solution, Mannington next had to choose a platform on which to run it. The company considered and rejected several options—the IBM AS/400, a UNIX-based Sun and Oracle solution, and Linux—before choosing Microsoft® Windows Server System™ integrated server software. Ultimately, their choice included the Microsoft Windows Server™ 2003 Enterprise Edition operating system and Microsoft SQL Server™ 2000 database software.
Although Mannington had in-house expertise on the AS/400, it decided against moving to SAP on the IBM platform because of the high total cost of ownership (TCO). It eliminated the Sun and Oracle platform on the basis of TCO, as well.
Mannington also considered a Linux option from Dell Computer, but decided against it because of the uncertainty surrounding that operating system, according to Leonowich. “Linux didn’t have the support resources, the clear future product direction, or the vendor backing that we needed, given the importance of SAP to our operations,” says Leonowich. “The Windows Server 2003 operating system did.”
“We already had the skills in-house to manage Windows® and we thought it would offer lower TCO,” says Leonowich. “Microsoft had made a great leap forward with scalability and reliability in Windows 2000 Server and we anticipated further improvements in Windows Server 2003. And we liked the customer references for SAP on Windows Server 2003. The companies that were adopting SAP on Windows Server System were companies like us—companies that were experiencing and planning for significant growth.”
Mannington made its decision to deploy SAP on the Windows Server 2003 platform in December 2003 and began the deployment in early 2004. Mannington opted for a phased approach rather than a “big bang,” or all-at-once, switchover. “We put a premium on implementing the deployment without inconveniencing our users,” explains Leonowich. “We wanted time to iron out any ‘bugs’ that arose during the deployment, to deal with any unknowns. We weren’t under any time pressure—for example, we weren’t responding to a corporate merger—so there was no need to take the excessive risks that we felt came with a big-bang deployment.”
Phase one of the project implemented SAP R/3 modules for order management, warehouse management, and inventory management systems at the High Point operation, plus a partial deployment of accounts receivable. This phase was completed in August 2004.
Phase two expanded the High Point modules to cover the entire company and also included the enterprisewide deployment of human resources, payroll, and financial systems. This phase was implemented between October 2004 and August 2005. In 2006, Mannington intends to deploy SAP modules for production planning, plant maintenance, purchasing, and accounts payable company-wide. Mannington also plans to deploy an SAP self-service portal to provide employee access to medical and dental benefits information. It plans to complete this third phase, and finish its SAP deployment, in 2007.
The SAP and Windows Server System solution includes development, quality assurance, and production environments, as well as specialized SAP solutions such as the SAP Internet Transaction Server, which operates between Mannington’s business-to-consumer Web portal and the ERP backend. The solution also includes file-and-print servers, a Telnet server for wireless connectivity to Mannington’s warehouse, and third-party applications that Mannington uses in conjunction with SAP, such as a payroll-tax solution.
In all, this extended SAP environment runs on approximately 25 Dell PowerEdge 6650 and PowerEdge 2650 computer servers. Upon full deployment, the solution will be accessible by approximately 1,000 Mannington employees. The company anticipates several hundred concurrent users.
Benefits
By moving to SAP R/3 on Windows Server System, Mannington gains the reliability, scalability, and flexibility it wanted to support the company's business growth—while reducing costs.
High Reliability and Scalability Support Growth
Gaining the reliability and scalability to support the company’s proposed doubling of revenues over five years were crucial requirements of the SAP-on-Windows Server System solution. Mannington expects to achieve those goals now, according to Sloane.
The SQL Server database supporting SAP holds 100 gigabytes of data and can be scaled easily with additional computer servers to support rapid growth. Windows Clustering Service and SQL Server Clustering enable the SQL Server computers to be arranged in an active/passive cluster that promotes high reliability. The company experiences no unscheduled system outages with the solution.
“Windows Server 2003 Enterprise Edition is a hardened, reliable operating system,” says Leonowich. “And SQL Server delivers the performance that we need for SAP. This is exactly what we need to run our business today—and to grow with us in the future.”
Integration Enables Business Agility
Mannington also needed its ERP solution to support greater business agility. Mannington now expects to achieve this goal with SAP running on Windows Server System software.
In contrast to the months it used to take to add a product line to all relevant systems, the single, integrated solution reduces that time to two weeks, according to Leonowich. With shorter time-to-market, Mannington can move more aggressively to introduce innovative products to market and to gain dealer and customer attention—and market share—before its rivals.
“With SAP and Windows Server System, our technology is no longer an obstacle to our growth,” says Sloane.
In addition, the new solution enables Mannington to replace its disparate customer order placement systems with a single, companywide order placement solution. This solution will make it faster and easier for Mannington sales personnel to service the company’s customers. Further, the use of the SAP Internet Transaction Server will enable Mannington to roll out this single ordering system directly to its customers through the Internet. The result will be a consistent face to Mannington’s customers—which will become increasingly important as Mannington expands the number and type of flooring products it offers.
“The SAP-on-Windows solution will make it faster and easier for our customers to do business with us,” says Sloane. “IT will do more than support business growth—we’ll contribute to that growth, too.”
Sloane expects IT's contributions to the business to increase over time. The programmers who supported the legacy solution spent their time maintaining interfaces among applications—a necessary function, but not one that added business value. In contrast, with the SAP-on-Windows Server System solution, those programmers will be able to function as business analysts who work with line managers to determine ways to fine-tune SAP to support the business even more effectively.
Lower TCO Saves U.S.$500,000 Annually
The primary goal of Mannington’s migration to SAP on Windows Server System was to support business growth that wasn’t cost-effective on the mainframe. In addition, the move is also delivering a bonus—a $500,000-a-year bonus. That’s how much Mannington expects to save in reduced hardware and software maintenance costs on its new platform—a significant savings compared to operating the various legacy applications on the pair of AS/400 machines. Both the legacy and Windows Server System solutions are run on hardware acquired on three-year leases.
“On the application side, we replace the dozen maintenance agreements we formerly needed with a single maintenance contract,” points out Sloane. “On the hardware side, even though we have more computers, Windows hardware is so cost effective that we’re still saving significantly.”
Mannington saves in other ways as well. SQL Server 2003 is so “friendly, easy to use, and intuitive,” according to Leonowich, that the company doesn’t need a dedicated database administrator, as it would have had it chosen an Oracle database to support SAP. Instead, the “basis team” that maintains the R/3 applications can manage the database as well.
Microsoft Windows Server System
Microsoft Windows Server System is a line of integrated and manageable server software designed to reduce the complexity and cost of IT. Windows Server System enables you to spend less time and budget on managing your systems so that you can focus your resources on other priorities for you and your business.
For more information about Windows Server System, go to:
www.microsoft.com/windowsserversystem