Quick facts

	For a recent acquisition, we brought the company on board within two months. Without a single platform, that would have been impossible.”
Stefan Lanna Lepecki, CIO, Braskem S.A.

Braskem S.A. is the leading petrochemical company in Latin America with nearly US$13 billion in revenue. The company operates 19 plants with a total production capacity of 5 million tons per year of petrochemical and chemical products, including thermoplastic resins and solvents. Braskem redesigned its IT landscape in just 1 year by focusing on operations and supply chain management and has realized tremendous benefits in manufacturing, logistics, and inventory management.

• Industry: Chemicals – specialty chemicals
• Revenue: US$13 billion
• Employees: 5,500
• Headquarters: Camaçari and São Paulo, Brazil
• Web Site: www.braskem.com
• SAP® Solution and Services: SAP® Business Suite, SAP Transportation Management application, SAP NetWeaver® components, and SAP Solution Manager
• Implementation Partner: Accenture
• Key Challenges:
  Speed up business integration and synergies
  Standardize heterogeneous processes into a single corporate process with built-in best practices to facilitate growth, acquisitions, and internationalization
  Implement a common business platform within 1 year
  Ensure user proficiency of 4,000 office and production personnel
  Reduce IT complexity resulting from past mergers
• Implementation Best Practices:
  Evaluation by steering committee of every customization proposal based on business case
  Approach to implementation as a business transformation initiative, not just an IT project
  Gain support of entire enterprise from steering committee and executives to production employees
  Invest in training and change management to ensure successful user adoption
• Financial and Strategic Benefits
  More quickly assimilated companies acquired through mergers and acquisitions
  Reduced inventory through improved supply chain operations
  Increased plant capacity due to fewer setups
  Achieved better coordination between production and sales to optimize shipping and improve order fulfillment
  Reduced data complexity and achieved reporting and auditing compliance
  Improved employee productivity by automating processes
• Why SAP Was Selected?
  Ability to scale software to support business growth and global expansion
  SAP’s experience in the petrochemical industry
  Best-practice business processes that are supported by standard industry-specific software
  Ability to leverage the experiences of other SAP customers
• Low Total Cost of Ownership:
  Adopted scalable solution that can support growth without additional investment
  Reduced operating costs by eliminating legacy and redundant applications
  Implemented 97% of the standard solution to reduce IT and maintenance costs
  Reduced integration time and costs for acquired businesses
  Automated managerial report generation
• Operational Benefits
  Key Performance Indicator
  Integration of a newly acquired business: From “virtually impossible” to 2 months
  Financial closing time: Reduced
  Finished goods inventory: Reduced
  Maintenance material inventory: Reduced
  Maintenance, repair, and operations costs: Reduced
  Acquisition costs of indirect material and services: Reduced
  Freight costs: Reduced

Going for Top Ten Through Business Process Transformation

When raw materials in a petrochemical plant are brought together under the right conditions, a new and stronger product is made. Something similar happened when six Brazilian companies merged their petrochemical assets in 2002. A new and stronger company was formed – Braskem S.A.

Braskem wanted to leverage the advantages of its integrated production chain and grow its business to be one of the world’s top ten petrochemical companies. But the company’s existing technology landscape could not support this vision. “We needed an integrated, global management platform that would help us grow not only through strategic acquisitions but also through internationalization,” says Stefan Lanna Lepecki, Braskem CIO.

Finding Value in Experience

Braskem focused on the technology initiative as a business transformation, not as an IT project. It narrowed its choices down to two software companies, Oracle and SAP. After extensive testing, Braskem selected SAP® software. “Nine of the top ten petrochemical companies use SAP software. We wanted to leverage the best-practice experiences of other customers. With SAP, you have that around the world,” Lepecki explains.

Maintaining Focus and Momentum

To stick to its one-year implementation schedule, it was important that Braskem achieve enterprise-wide buy in from all levels of the organization, and it did. “Our steering committee, top executives, people in the plant – everyone understood the relevance of the project,” Lepecki comments.

Instituting a strict governance process, Braskem was able to minimize customizations to keep the project moving. “We decided to be very rigid in the customization approval process. For every request, the business leader had to present a business case and cost benefits and had to get approvals from the process manager and the steering committee. About 97% of what we implemented was standard SAP software,” Lepecki explains.

Adherence to the schedule was evident throughout the course of the implementation, which Braskem successfully completed within one year and without any operational or billing impact.

Ensuring User Adoption

Knowing that a fast implementation is meaningless if your people can’t use the software, Braskem instituted a rigorous training regimen totaling 63,930 hours of training for 4,000 employees throughout Brazil. “We created simulators and used software to develop documentation and training materials. Before a person could use the actual software, they had to master at least eight grade levels in the simulator,” Lepecki adds.

Streamlining Mergers and Acquisitions

Postimplementation, business processes throughout the enterprise have improved. “For mergers and acquisitions, we now have one managerial platform to implement. It’s a way to speed up the business integration and realize the benefits of the merger faster,” Lepecki explains. “For a recent acquisition, we brought the company on board within two months. Without a single platform, that would have been impossible,” Lepecki adds.

Realizing Operational Benefits

As far as quantifiable business benefits go, Braskem has reduced maintenance, repair, and operations costs. Supply chain improvements have enabled Braskem to reduce its finished goods inventory and its maintenance material inventory. In addition to gaining Sarbanes-Oxley compliance, Braskem can perform financial closings more quickly and with fewer people – reducing the time required from eight to five days.

Production has improved as well. “It’s important to include demand planning in your sales and operations procedures. We have the right production planning measures so we have a better balance of sales and production,” Lepecki adds.

With a strong technology platform, integrated business processes, and strategic vision and leadership, Braskem is ready to pursue further growth and emerge as one of the world’s largest petrochemicals players.