Qingdao Hodias Food Ingredients: Bringing Chinese flavors to a global audience with SAP S/4HANA Cloud
Explore Qingdao Hodias Food Ingredients’s journey with SAP
Qingdao Hodias Food Ingredients Co. Ltd. has led in the Chinese condiments market for 30 years. Faced with the opportunity to go global, the company realized its traditional management approach wasn’t fit for the future. It used SAP S/4HANA Cloud, public edition as a new digital foundation and established six major business control lines to standardize its management processes.
| Industry | Region | Company Size | Partner |
| Consumer products | Qingdao, China | >400 employees | Acloudear |
shorter sales planning cycle.
greater customer satisfaction.
General Manager, Qingdao Hodias Food Ingredients Co. Ltd
Updating legacy management processes holding back growth
Qingdao Hodias Food Ingredients (Hodias) has refined the food ingredient processing sector for nearly 30 years as a leading business in its sector in Qingdao, China. It embarked on its journey to industry leadership in 1994 as Baihua Fragrance and Spice Trading Company, dealing in essences and spices. Soon after, its visionary founder, Zhang Fucai, recognized the rapid evolution of Chinese cuisine. Yet, maintaining consistent flavors proved challenging, offering the business an opportunity in seasonings.
So, Hodias extended its presence along the industrial chain, increased investments, built factories, and transformed into a dedicated manufacturer of Chinese seasonings. Today, the company boasts an annual production value of nearly ¥400 million, operating manufacturing facilities in Qingdao and Jiangsu, China, with a burgeoning international sales network. An IPO is also set as a cornerstone of the company’s strategic development.
However, as the company began a journey of corporate expansion and faced an ever-growing global market, its traditional one-on-one management model proved insufficient. From a production standpoint, scheduling and customer gift inventory management were often rudimentary, and production plans frequently faced disruptions due to last-minute orders, resulting in the need for overall efficiency improvements.
On the management side, the lack of data led to dependence on employee experience in procurement and stocking, causing inventory backlogs and an inability to respond promptly to market changes. Moreover, with the impending IPO, Hodias would face more stringent compliance requirements and the need for proactive market foresight. These transformative shifts necessitated a comprehensive digital management framework.
Standardizing digital management to enable group expansion
Using the public edition of SAP S/4HANA Cloud as its digital foundation, Hodias established six major business control lines: research and development, marketing, production, procurement, logistics, and warehousing. This marked the company’s first achievement of standardized management throughout the production process. Notably, in ingredient ratios, the production module of SAP S/4HANA Cloud clearly defined varieties and quantities of ingredients, significantly reducing reliance on skilled labor. In newly launched factories, core personnel were sufficient to rapidly expand production lines.
To address challenges encountered during implementation, the cloud customer care team at SAP offered project guidance and answers to product-related questions. The SAP Globalization Services team and the Partner Success Services team served as the bridge between the customer and products, efficiently resolving project issues. They also provided empowering support, such as the application of demand-driven material requirements planning (DDMRP) within SAP S/4HANA Cloud, public edition, enabling Hodias to understand the applicability of DDMRP and implement it in daily operations. Continuous essential task support during month-end and upgrade periods after going live better ensured smooth business operations.
The implementation of SAP S/4HANA Cloud, public edition simultaneously marked the company’s journey toward enhanced management and granularity. For instance, addressing previous inventory management challenges, SAP platinum partner Acloudear optimized the implementation by adding “safety stock,” “order lead time,” and “material planning” management processes based on industry best practices. This helped Hodias establish a more scientific and modern inventory management system.
Using the robust integration of finance and business data enabled by SAP S/4HANA Cloud, along with localized Chinese financial solutions, Hodias can now rapidly produce financial reports and engage in full-process analysis. This includes insights into high-margin products, raw material trends, and the effectiveness of giveaways. In anticipation of the company’s future public listing requirements, Acloudear preemptively deployed personalized settings for tax compliance and other needs, helping ensure Hodias’s ongoing development.
Embracing the future of cloud-based business
Based on SAP S/4HANA Cloud, Hodias established an integrated business and financial data management system, achieving refined cost, production, and sales management. A modernized, scientific management approach allowed Hodias to leave behind its reliance on experiential cost allocation. The management team now has clear control over gross profit fluctuations, enabling timely decision-making in response to market changes. On the supply chain side, the expertise of seasoned professionals was transferred to digitalized standard processes in SAP S/4HANA Cloud, helping ensure food safety and the preservation of Chinese flavors. The accuracy and efficiency of the entire process, from orders to production scheduling to sales receipt, significantly improved. The company now uses various localized products, such as Chinese statutory financial statements, value-added tax solutions, and bank reconciliation. This change supported compliant operations and management and laid a solid digital foundation for the company as it ventured into the global market.
Today, whether navigating the live streaming e-commerce trend or tackling the challenges of financing and going public, Hodias possesses formidable digital capabilities. Assisted by SAP S/4HANA Cloud and the combined support of teams such as the cloud customer care team, SAP Globalization Services, and Partner Success Services, Hodias is efficiently expanding multiple innovative products as well as rapidly adapting to market trends and channel changes. With the Jiangsu factory in operation and the new Qingdao headquarters plant soon to be launched, the cloud-based process management core continues to support Hodias’s rapid expansion.
Featured partner
With profound insights into the food processing sector and manufacturing industry, Acloudear built a more streamlined and efficient framework for Hodias based on the public edition of SAP S/4HANA Cloud. The company also deployed financial and tax compliance modules to meet Hodias’s impending listing requirements.