Brazil's Termomecanica turns to SAP for multi-plant integration

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Thursday, July 21, 2016

For Brazilian copper and metal alloy product manufacturer Termomecanica, technology means more than industrial automation to streamline copper manufacturing. The firm ranks among the largest in the country in processing copper and its alloys, as well as semi-finished and finished products,

Termomecanica's digital platform, for example, is currently responsible for nearly a third of all the company's sales. Using this platform, customers benefit from price quotes in real time, with projections that can be rebuilt and transformed into applications in minutes, according to the company.

Recently, the group extended its partnership with SAP and announced the adoption of Business One, the cloud-based corporate management suite developed by the German software firm, for its plants in Santiago, Chile and Buenos Aires, Argentina.

The objective is to integrate operations in Chile and Argentina with those in São Bernardo do Campo, São Paulo state, where the company is based.

BNamericas: How was the process to select SAP? Was it via a Request for Proposal? And when was the contract actually signed?

Sanches: This process involved other providers and technologies as well. We evaluated the ERP [Enterprise Resource Planning] developed by QAD, which was in use in Argentina and Chile; SAP's ECC [Enterprise Central Component], which is Termomecanica's basic ERP for the units in Brazil; SAP All-in-1 and SAP Business One.

After a Request for Information, we wrote off both SAP ECC and SAP All-in-1. We then made a Request for Proposal for QAD and SAP Business One, because we understood these two would be more compliant options for our businesses Cembrass Argentina and Cembrass Chile, both in terms of features and processes, such as product price or deployment.

The choice was Business One, because in addition to the above [features, processes, price] we saw Business One would also facilitate the integration of systems and processes with our São Bernardo do Campo matrix.

BNamericas: What's the schedule for implementation at the plants mentioned?

Sanches: The project started on April 25. It's expected to be concluded by October 1 at Cembrass Chile and by November 1 at Cembrass Argentina.

BNamericas: From a technology point of view, what are the biggest requirements and obstacles for a company like Termomecanica today? Systems interoperability, for example?

Oliveira: The business of semi-finished copper products runs across a long supply chain and at the same time it's inserted in a highly disputed market, defined by international prices and international competitors.

To gain presence in this market, it's crucial to have real-time monitoring of our business availability and the flexibility of our services in order to better serve our customers and establish a competitive equivalence in all our units.

BNamericas: And what are the main challenges from the CIO's point of view?

Oliveira: In the short and midterm, expanding and enhancing services provided to our customers through the digital platform, which is already responsible for 28% of our sales.

Also, in the short term, increasing the efficiency of the company with full review and adjustments of all critical processes.

Then, in the medium and long term, the company's digitalization, starting with the most important processes from a customer's perspective: commercial, production and logistics.

Also in this time range, it's essential to improve decision-making, using the information already available to the management and that being mapped from different processes in predictive models. IoT is one of the components here.

And last but not least, information security.

BNamericas: How much of the revenue is invested in technology and/or R&D?

Oliveira: I can say we channel 0.8% of our gross revenues to both opex and capex.