New England Biolabs, Inc. (NEB) prides itself on being built “by scientists, for scientists.” As one of the world’s leading providers of innovative products for molecular biology applications, specializing in recombinant and native enzymes for genomic research, the organization works hard to enable the advancement of scientific studies. Established in 1974, NEB has grown rapidly in recent years, expanding to a global business that includes seven subsidiaries around the globe in addition to its headquarters in Ipswich, Massachusetts. The company contributes to the advancement of science both by promoting internal research — scientists at NEB have authored or co-authored more than 1,000 publications (to date) — and by providing the highest quality products to external labs and other customers.

Having been founded by and for scientists, the organization’s inventory data was often managed in ways that scientists were accustomed to — in paper lab notebooks, in spreadsheets, or in home-grown applications. The information that was stored on the company’s systems existed on a data center located in the basement of a building that was over 100 years old. This IT environment was fine when NEB was a small company, but consistently strong company growth led to a host of challenges and scalability issues that needed to be solved. 

Unified inventory only existed at the level of finished products at NEB, without any tracking of sub-components or any bills of materials (BOMs) detailing the composition of the finished product. This lack of visibility led to inefficiencies when product managers attempted to determine if the exact materials needed for production were available or when procurement struggled to get a clear view of what to order to create the enzymes and other products NEB’s customers rely on.

It also hampered NEB’s ability to respond efficiently to bulk orders from its customers. Whenever a customer wanted to place a bulk order, the team in charge of fulfilling that order had to perform a triage to determine if NEB had the correct inventory in stock to actually produce the product. “This would involve contacting each respective product manager to ask if they had enough of X product so they could make Y product,” says Sharon Kaiser, CIO at NEB. “This was a time-consuming effort and was fraught with complications as things continued to change.”

Product costing was equally difficult without a centralized system. Employees at NEB had a general idea of what it would cost to make each product, but they had no way of judging the accuracy of their estimates because they lacked insight into the exact materials and quantities used, the equipment costs utilized, and the labor that was required to manufacture the products.

It quickly became apparent that NEB needed a stable, reliable, and scalable platform to support its production and inventory management efforts. Without such an upgrade, the company would struggle to keep up with the growing demands of its customers and maintain the high quality products those customers had grown to expect.

Designing the Shift

In mid-2014, NEB began the process of moving its legacy systems to SAP ERP 6.0. This initial phase of the implementation involved going live with the finance and sales and distribution functionality, to be followed by a second phase to add new functionality to support the production, quality, product costing, and procurement areas.

After the first phase of the implementation was deployed and stabilized, NEB started making final plans for the second phase of the project. Given the growing prominence of SAP S/4HANA and SAP’s stated product direction, it made sense for NEB to build a strategic roadmap that would move the company to SAP S/4HANA. Kaiser understood that implementing the supply chain functionality on SAP ERP before deploying SAP S/4HANA would involve a reimplementation in the near future, which would be resource-draining and costly. For that reason, NEB elected to begin its transition to SAP S/4HANA right away, and in conjunction, to migrate its production and procurement processes directly onto SAP S/4HANA, utilizing SAP Fiori 2.0 apps as much as possible to support end users in the process.

“I wanted to offer NEB the best of what SAP had to offer, and that meant implementing SAP S/4HANA,” says Kaiser. “For the actual implementation itself, there was no incremental cost to NEB to go with SAP S/4HANA versus staying with SAP ERP 6.0.”

Since SAP S/4HANA was fairly new in the logistics area, NEB decided to conduct a proof of concept effort to ensure all the company’s production processes could be supported. This project was completed in July 2016. Once that was achieved successfully, the team embarked on the next step of NEB’s SAP strategic roadmap and business transformation.

Moving to the Next Phase

First, NEB had to get the SAP ERP 6.0 environment to the latest enhancement package to ease the migration path. NEB hired an implementation partner, consolut, to lead the company on the SAP S/4HANA journey. Under consolut’s project management, NEB seamlessly upgraded to enhancement package 7 and, at the same time, built out a full test case library for phase one functionality.

After the upgrade, the next step was to ensure that NEB was on a reliable and scalable infrastructure. In late 2015, the business chose to have its SAP environment hosted by Symmetry to take advantage of the service provider’s Basis and security support, robust customer support model, and depth of SAP HANA expertise. “Symmetry’s full suite of services stood out above the rest,” Kaiser explains. “Symmetry’s deep expertise and proven experience with SAP HANA is enabling our IT strategy.” (For more information on the services Symmetry offers, see the sidebar at the end of the article.)

Working with consolut and Symmetry, NEB initially established a plan for phase two of the SAP implementation that would last 9-10 months and would conclude with a full SAP S/4HANA and SAP Fiori deployment. Phase two included support for production planning and execution, quality management, product costing, e-procurement, and fixed assets. Things don’t always go as planned, however, and NEB soon had to significantly change its strategy. Another initiative being carried out at NEB fell behind schedule and took up a large portion of the resources available in both NEB’s limited IT department and the business as a whole. As such, the SAP S/4HANA project was delayed. However, rather than postponing the whole project, NEB found a way to make progress despite its setbacks.

The project shifted to a technical upgrade that moved its current financial and sales and distribution data from SAP ERP to SAP Business Suite running on SAP HANA, thereby effectively realizing the power of SAP HANA before making the full transition to SAP S/4HANA. With the leadership from consolut and the technical expertise from  Symmetry, NEB completed an expedited migration to SAP Business Suite running on SAP HANA, which it hosted on Symmetry’s cloud platform. “The implementation went flawlessly and was a complete non-event,” says Kaiser. “By making this into a pure technical play, the project team did not need to take up a lot of time from the limited business resources. There was no change in business functionality and, therefore, required no retraining of business users. The project was simple to execute and was completed with no business disruption.”

In addition to migrating the SAP data that was previously on SAP ERP, the implementation of SAP Business Suite running on SAP HANA also involved the introduction of SAP HANA Live capabilities for improved data warehousing and reporting. With the technical upgrade out of the way, Kaiser and her team could spend more time in phase two focusing on the business functionality and processes that would be enabled by SAP S/4HANA.

Another project decision occurred early into the phase two timeline, which kicked off in August 2016. The proof of concept was conducted on SAP S/4HANA 1511. However, NEB knew that the 1610 release would soon be coming out, and it would make sense to upgrade the project environments and eventually go live on the newest release. For assistance in the upgrade plan, Answerthink, NEB’s SAP Channel Partner, nominated NEB to participate in the SAP S/4HANA customer care program. Kaiser realized that the program would be of great value to helping the team navigate the nuances and challenges of the new release. NEB would gain access to a management sponsor from the SAP development team, a project coach, and a named SAP S/4HANA development expert. “NEB was accepted into the program, and it has been hugely impactful to the success of the project,” she says. 

According to Kaiser, the biggest challenge was collecting and consolidating supply chain information for the data migration. There were previously no pre-defined processes for creating BOMs or routings, and there were no business applications for inputting such data. Instead, that data had to be pulled out of the lab notebooks or spreadsheet files kept by NEB’s scientists or product managers and entered into the SAP system. “This data collection has involved a massive company-wide effort and has resulted in over 30,000 line items,” she says, “but the end results of the effort will be well worth it.”

As of the end of the first quarter of 2017, NEB is in the user acceptance testing phase of its SAP S/4HANA and SAP Fiori deployment and is on track to go live by the end of May 2017. The final landscape will include the functionality from phase one of finance, controlling, and sales and distribution, as well as the production planning  and execution, material requirements planning, complete inventory management, quality management, e-procurement, product costing, and fixed assets functionality from phase two.

Analyzing the Results

With the robust, real-time capabilities of the SAP HANA and SAP S/4HANA applications that have already been deployed, NEB no longer has to worry about the accuracy of its inventory, the traceability of its products, or the accuracy of its product costs. NEB can maintain real-time inventory data not just for finished products, but for all sub-components as well. This real-time data means that there is never a question as to whether over-the-counter (OTC) or original equipment manufacturer (OEM) bulk orders can be filled, and NEB can respond quickly to its customers, providing those research institutions with high-quality products and excellent customer service, which helps to further their scientific advancements.

It also means that NEB now has complete traceability of all its products, from the finished product back through to the raw materials. This will bring noticeable improvements to the production planning process, allowing NEB to improve the efficiency of its production cycles and better track forecasted demand. Additionally, product costs are no longer shrouded in mystery. With the new data provided by the SAP S/4HANA system, NEB will have the information available to make better decisions around production planning, pricing, and marketing.

The ease of locating data in real time not only helps NEB stay on top of demand, but it also does the same for its customers. In 2014, NEB launched an Internet of Things initiative called the NEBnow Freezer Program. This program uses sensors inside the freezers in customers’ research labs to track inventory, monitor freezer temperature, and control the freezer door. Products removed from the freezer are scanned, and that data is sent back to NEB’s SAP systems. From there, the SAP consignment functionality takes care of automatically replenishing the freezer stock. This program ensures that customers never run out of the critical materials needed for their research.

Finally, procurement is now easier than ever. Orders for raw materials can be made through a simple, intuitive process, so scientists and product managers can devote all of their time to promoting scientific research, extending the work that NEB was built for. The benefits of the e-procurement process running on SAP S/4HANA, according to Kaiser, include quick and easy punch-out ordering by NEB scientists to 15 of the company’s top suppliers; quick approvals of the purchase requisitions due to the ease of the SAP Fiori multi-channel approval app; electronic purchase orders to the suppliers; notification of the order and expected delivery dates directly to the scientist; and electronic invoice receipt, matching, and payment. “The e-procurement functionality added to our SAP S/4HANA project has been a great addition to NEB’s system portfolio,” she says. “Our procurement manager is very happy to be able to reduce purchasing costs, have better visibility into NEB’s spend, and provide an easy option to our scientists.”

NEB is now looking toward the future and considering the next steps for its SAP environment. Possibilities include rolling out product lifecycle management or document management functionality for SAP S/4HANA, as well as extending the SAP landscape to NEB’s global subsidiaries. “I am excited to be on SAP’s flagship product, SAP S/4HANA, as this will bring to NEB countless opportunities to improve our processes, add new functionality, and support our growth — only limited by our imagination,” says Kaiser.