Brownfield migration in two project phases

Cooling systems for submarine engine rooms that do not rely on outside air, cost-effective air conditioning for cruise ships, and electronic control systems for commercial vessels. In many cases, the technology required for these systems is supplied by Noske Kaeser in Hamburg!

The experts at Noske Kaeser have been setting new technical standards over and over again for 140 years. The Hamburg company is one of the world’s best-known leaders in the field of air-conditioning, ventilation and fire-fighting technology for the shipbuilding and offshore industries.

And new standards were also the focus of Noske Kaeser’s project to replace its current SAP ERP system and implement SAP S/4HANA. After all, a company like Noske Kaeser needs a powerful ERP system to reliably control and manage its business processes.

For the conversion project, the Hamburg-based company enlisted the help of consulting experts from GAMBIT Consulting.

Multiple extended output system

Noske Kaeser was using a system that was really starting to show its age. The company had implemented a comprehensively designed SAP R/3 4.6C system in 2002, which had been repeatedly adapted to new requirements over its long period of use, for example, by merging company codes. At the time of the changeover project, therefore, the system contained a lot of settings and data that were no longer necessary and needed to be cleaned up.

Besides the age of the system, the impending end of maintenance for SAP R/3 systems at the end of 2027 was another factor in the company’s decision to switch to SAP S/4HANA.

“We knew we had to act,” says Conrad Leilich of Noske Kaeser, “but also wanted to keep the transition lean in order to minimize costs and risks and avoid overburdening the organization.” The company therefore opted for a purely technical conversion, also known as a system conversion. In a system conversion, the existing system is transferred one-to-one to SAP S/4HANA – including processes, data, and custom developments.

Usage of the standard

The people responsible at Noske Kaeser expressed a wish to retain the functioning Customizing as well as standard processes that would not be affected by the changeover to SAP S/4HANA. However, given the high level of complexity of some of the company’s own business processes, they also wanted to use new SAP standard functionalities with SAP S/4HANA where possible.

Many required functions of the PP (production planning), MRP, LVS/WM (warehouse management system), MM-IM (inventory management and physical inventory), and material master data management modules, for example, were already mapped with standard functions in the legacy system.

“It was very important for us to find a new solution that we could work with quickly,” says Conrad Leilich of Noske Kaeser. “This is why we made a conscious decision to postpone the optimization of our processes and functions to a second phase after go-live. Keeping the project as short as possible was simply a higher priority for us.”

The changeover to SAP S/4HANA at Noske Kaeser started off in August 2021with a Unicode conversion in the SAP R/3 4.6C system.

Intermediate step to SAP ERP

Then, because a direct changeover to SAP S/4HANA was not possible, the original system had to be upgraded to the SAP ERP 6.0 version with EHP 5. The EHP 7 enhancement package for SAP ERP was also imported in this step.

“Changing over to SAP ERP with an intermediate step was already something special. However, it did not cause us any technical problems, so we were able to perform the readiness check directly afterwards and implement all further preliminary projects that were necessary,” says Dr. Thomas Fischer, project lead and partner at GAMBIT Consulting.

In the readiness check, the experts examined a number of factors, including the required size of the HANA database after the in-place upgrade, which Fiori apps could be used with SAP S/4HANA, and – by using the Simplification List for SAP S/4HANA – which changes and new features there would be with SAP S/4HANA compared to the legacy system.

Several preliminary projects that are mandatory before a system conversion were also implemented: the introduction of the new general ledger (New GL), a customer vendor integration to replace customer and vendor data with the new “Business Partner” master data object, and the introduction of new Asset Accounting.

Once these preliminary projects had been completed, the actual technical migration from SAP ERP 6.0 to SAP S/4HANA finally followed in August 2022. “Together, we managed to complete the project right on schedule and at an even lower cost than originally expected,” says Dr. Thomas Fischer.

Integration of previously isolated solutions

Now that the migration is complete, work is continuing as planned: For example, Noske Kaeser is expanding the new system to include particular workflows and is working on the integration of previously isolated solutions and tools. “In addition, we are implementing a new system for product lifecycle management, which will steadily and significantly improve the stability and transparency of our processes,” says Conrad Leilich of Noske Kaeser.

One of the company’s key objectives is to reduce the proportion of non-digital processes in the company, and, in doing so, further advance the digitalization strategy defined in 2020 with the help of SAP S/4HANA.

“We intend to reduce the number of activities that do not create value – like, for example, employees in the warehouse spending ages looking for a particular part because they don’t know the exact storage location. By digitalizing these processes, we can make the work easier and more attractive for our employees,” says Conrad Leilich of Noske Kaeser.

“It will also allow us to concentrate even more on our core business activities: developing and producing the right products and solutions for our customers so that we can continue to set standards in the industry in the future,” says Conrad Leilich.