With subsidiaries in Europe, Asia, and the US, Dräger Safety was quickly outgrowing its order management system. To drive a single, enterprise-wide supply chain solution, the leader in hazard measurement and management turned to Oracle 9i Database and Application Server. Read: Why the company decided to maintain multiple ERP systems — linked by a common database and data model. How the company has automated and standardized intra-company processes. How the company delivers orders faster while slashing global inventory by 40 percent.

As Published In February 2004

Integrated Oracle system speeds global delivery and boosts net revenues for international safety-equipment company.

Every hour of every day, in countries all around the world, people work in hazardous environments. They dive deep below the surface of the ocean on salvage expeditions. They descend into mines, clean toxic waste, and fight fires—or try to prevent them. These people know their jobs are risky, and, to minimize those risks, many of them rely on Dräger Safety.

Dräger Safety develops and sells a wide range of safety products, including breathing equipment, protective suits, and gas-measurement systems. Based in Lübeck, Germany, Dräger Safety sells equipment around the globe through a network of more than 40 subsidiaries. It has grown from a two-person shop in 1889 to become one of the world's most respected and innovative safety-products companies.

But, in the last decade, as the number of Dräger Safety subsidiaries grew, the company began to face some serious risks of its own, including those of lost revenue and increasing costs. This situation arose, as it does in many companies, because of the inherent difficulty in taking and fulfilling orders between 40 companies spread across Europe, Asia, and North America.

"Because of the increasing speed of international business, customers began expecting Dräger Safety to fulfill orders much more quickly," explains Christian Zott, project leader and process owner. Unfortunately, the company's IT infrastructure kept it from doing so. Each company subsidiary maintained its own standalone technology, including order fulfillment, and database systems. Without the technology to link sales, production, storage, and shipping across the enterprise, every order had to be handled manually, which was extremely complicated for such a global enterprise.

For instance, it was not unusual for Dräger Safety to take an order in Canada, generate a purchase order in Germany, source the product in the United States, and ship it to Canada. With a completely manual system, this process was not only costly, it also often resulted in delayed shipments and poorly managed inventory. To solve the problem, the company needed to somehow bundle its subsidiaries together into an international supply chain. But how?

"We had two options," Zott says. "One, we could set up a common ERP [enterprise resource planning] system at every site. But because Dräger Safety has 33 different legal entities, it would have been time-consuming and expensive to standardize ERP systems at each location." The alternative—which Dräger Safety ultimately chose—was to maintain the company's heterogeneous set of ERP systems and link them together with a common database and data model.

Dräger Safety selected Oracle9i Database and Oracle9i Application Server (Oracle9iAS) Interconnect Adapter with standardized ERP interfaces as the first crucial step. "We chose Oracle because no point-to-point connection was required between systems, allowing the company to easily link subsidiaries on three continents," Zott says. "Thanks to the Interconnect Adapter, Dräger Safety could also connect a broad range of ERP systems to the same data platform, allowing the company to automate its intercompany processes."

Snapshot Dräger Safety www.draeger-safety.com Dräger Safety provides products and services that offer comprehensive hazard management and measurement, and protection from airborne contaminants. The company's core areas of specialization are personal protection, gas detection, and diving technology. The company is headquartered in Lübeck, Germany. Year founded: 1889 Annual revenue: n471 million (US$556.5 million), 2002 Number of employees: 3,300 Software: Oracle9i Database, Oracle9i Application Server, and PointOut, a product of Munich-based mSE Hardware: Differs by location—includes IBM, HP, and Intel machines Services: mSE, for technology implementation and process reengineering; Oracle Consulting, for assistance on return-on-investment calculations

To use the single database effectively, Dräger Safety had to standardize those processes, including planning, reporting, and product and inventory management. The company also had to create a standard data-numbering system for customer items, vendor items, production orders, and bills of materials. "We couldn't have done any of this without having a common worldwide data structure," Zott says.

But users also had to be able to access data in the same way. Through the use of a software program called PointOut, developed by mSE, a Munich-based software-consulting firm, the desktop data interface now looks and acts the same way at each company.

The benefits of automating the supply chain, linking disparate ERP systems through Oracle9iAS Interconnect Adapter, and operating on a single Oracle database have been phenomenal, according to Zott. To begin with, all processes are automated, which naturally speeds the sales cycle. In the old days, a salesperson would manually create a purchase order and mail it to a production hub, where the order would be input, assembled, stored, and shipped back to the original sales office, which would then ship it out to the customer.

Today, not only is the entire order process automated, but Dräger Safety can also track orders worldwide. This capability has allowed the company to centralize its inventory in each region, allowing for direct product shipments to customers.

"Before, it would take Dräger Safety weeks to fulfill orders because of all the cumbersome, manual steps required," Zott says. "Today, it takes just minutes, and the process is far more reliable."

How much more reliable? Now, 93 percent of all orders in the integrated companies are delivered to customers within 48 hours, versus 86 percent in 2000. The company has also been able to reduce the amount of global inventory by 40 percent, decrease inventory at sales locations by 95 percent, and slash process costs by 30 percent. These efficiencies, in turn, have boosted net revenue by 20 percent in just one year. Furthermore, the company now has greater control over its planning process and is spending far less on order fulfillment.

"Although the full implementation will not be complete until 2005, we've been able to meet—and exceed—project goals two years ahead of schedule," says Dräger Safety CFO Thomas Holzgreve.

In the future, Oracle's database and its interconnectivity program will make it possible for Dräger Safety to continue its worldwide expansion, because new partners and acquired companies will be able to be integrated into the network much more quickly.

For Dräger Safety, the risks of growth have been minimized, and the company—like its customers—can now perform at its best without worrying about what hazards may lurk around the corner.

Shari Caudron writes for Workforce Management magazine, Business Finance, IndustryWeek, and other management publications.