Ferrotec Manufacturing

Ferrotec Material Technologies Corporation is a global leader in advanced materials and precision components, supplying industries such as automotive, medical devices, and semiconductors. With a strong manufacturing presence across the United States, Germany, and Asia, Ferrotec recently expanded its operations by establishing a new manufacturing site in Kulim, Malaysia, to meet the growing demand for semiconductor materials.

This move was part of a broader strategy to enhance its production capabilities and establish a regional hub for innovation and growth. However, the expansion required a robust IT foundation to support its operations and prepare for future challenges.

Ferrotec faced several critical challenges as it began operations at its new Malaysian facility:

• Lack of a unified ERP system: Each of Ferrotec’s global locations used different ERP platforms tailored to regional needs, resulting in operational silos and inefficiencies.
• Time-consuming manual processes: Without an integrated system, employees relied heavily on manual data entry, which was prone to errors and time delays.
• Complex manufacturing requirements: Semiconductor production involves precise processes, specialized knowledge, and advanced technology, demanding robust IT support.
• Urgent timeline: Ferrotec needed to implement a comprehensive ERP system quickly to ensure the smooth operation of its new site while laying a foundation for scalability and growth.

These challenges highlighted the need for an ERP solution that could centralize operations, reduce manual work, and provide real-time insights to support decision-making.

Ferrotec selected SAP S/4HANA Cloud Public Edition as its ERP solution, leveraging the GROW with SAP initiative for rapid cloud ERP adoption. This solution was chosen for its ability to streamline processes, integrate operations, and provide a scalable, future-proof platform.

The implementation was divided into two phases to align with the company’s priorities:

1. Phase 1: Focused on financial accounting, controlling, and supply chain management.
2. Phase 2: Targeted manufacturing processes, ensuring seamless support for production.

Ferrotec partnered with Axxis Consulting, an experienced SAP implementation partner, to accelerate the deployment process. Axxis provided tailored solutions, expert training, and on-the-ground support to ensure a smooth transition and minimal disruption to operations.

The adoption of SAP S/4HANA Cloud Public Edition brought significant improvements across Ferrotec’s operations:

• Finance Efficiency: A 40% increase in productivity within the finance team, allowing faster and more accurate reporting.
• Procurement Effectiveness: Procurement efficiency improved by 90%, streamlining supplier management and reducing lead times.
• Cost Reduction: Supply chain costs were cut by 50%, driven by enhanced process automation and better resource allocation.
• Data Accuracy: Issues with data accuracy dropped by 80%, enabling more reliable and informed decision-making.

Additionally, SAP’s integrated platform streamlined inventory management, logistics, and warehouse operations, positioning the company to optimize costs and improve delivery timelines.

Before implementing SAP S/4HANA, Ferrotec’s manual processes required significant time and effort. The new system eliminated redundancies, reduced errors, and enhanced traceability, enabling the company to operate more efficiently and sustainably.