HP HELPS QUANTUM CREATE SUPPLY CHAIN SUCCESS

Storage Devices and Systems Supply Industry Challenges:

• Create a new business model to meet customers' changing needs
• Develop a shorter, more flexible and efficient supply chain
• Cost effectively implement new solution

Solutions:

• Consultants from HP and PricewaterhouseCoopers helped Quantum revise its business model using i2 software and HP hardware
• i2 Advanced Planning System (APS) was implemented for supply chain management
• APS integrates with Quantum's ERP solution

Results:

• APS implementation successful
• Cut company planning cycle from six weeks to one week
• Quantum able to realize significant return on investment

"Our alliance with HP for platform technology, as well as for consulting and mission-critical support services, has helped Quantum lay a strong systems foundation upon which we can incorporate new applications to help keep our market leadership." -- Tama Olver, Chief Information Officer and vice president of Worldwide Information Services Quantum Corporation

Storage Devices and Systems Supply Industry

Businesses today move with lightning speed, and nowhere is this more apparent than in the high-tech arena. Constantly changing technologies drive the industry, which means just-in-time (JIT) manufacturing and build-to-order processes are now mandatory for business survival.

Quantum Corporation, a leader in high-technology storage devices and systems, undertook an analysis of its operations to find ways to produce products at equal quality and lower prices for its OEM customers. Those customers, including companies such as Hewlett-Packard Company and Dell, were changing their own business models - moving toward JIT and pull-based systems. Quantum realized it could speed up its delivery of goods to its customers' factories and save money for both itself and customers by re-engineering the planning of its supply chain.

In the past, HP worked with Quantum to create a Virtual Data Warehouse (VDW) for business operations reporting. It runs on an HP 9000 Enterprise Server and replicates the company's Enterprise Resource Planning (ERP) data in near real-time for ad hoc and business intelligence reporting. After successfully tying its order management and financials across nine global business units into a single enterprise operation, Quantum realized a greater ability to analyze costs, vendor shipments and delivery information across worldwide sites. Since HP had helped create Quantum's Enterprise Resource Planning (ERP) system, the company asked HP to tackle its new enterprise information challenge with the VDW. So when Quantum needed to re-engineer its global supply chain, it naturally turned to HP to provide the answer.

Based in Milpitas, California, Quantum Corporation is a world leading storage supplier in five of the seven markets it serves: desktop hard disk drives; tape drives; network attached storage (NAS) appliances; solid state systems; and hard disk drives for the emerging personal video recorder (PVR) market. The company also is the second largest supplier of mid-range tape automation systems and high-end hard disk drives.

Quantum's customer base includes virtually all of the top personal computer manufacturers, including Apple, Compaq, Dell, Data General, HP, IBM, Packard Bell and Sun Microsystems. Other key domestic and international OEM customers are Acer, Apricot, Fujitsu, NEC, Samsung, Siemens and Unisys.

"We had to be able to respond quickly to market changes and customer preferences," explained Kevin Conway, Quantum's Manager of Information Systems. "Late in 1997, we established internal business process reengineering teams to study and improve our current company planning cycle. Generally, this planning cycle begins with the worldwide gathering of customer forecasts and concludes with the generation of a factory shipment plan that can be committed back to our customers. Our planning was taking six weeks. To maintain our competitive edge, we determined that we would cut that time down to one week."

Working with HP, as well as systems integration consultants from PricewaterhouseCoopers, Quantum created a supply chain planning solution utilizing the RHYTHM Advanced Planning System (APS) products from i2 Technologies, Inc. Quantum's i2 APS installation is the first among independent storage companies to provide worldwide snapshots of current and projected customer orders, materials and supply requirements, production schedules and supply chain or production constraints that could impact productivity. This is particularly valuable since Quantum plans to implement its APS project enterprise-wide.

On the hardware side, Quantum's decade-long partnership with HP made HP the clear vendor choice. Additionally, HP's contribution to the project included technical and operational assessments, educational services, architectural design and systems integration from HP Consulting, as well as business recovery services and HP Critical Systems Support services.

"HP's excellent hardware, support and services have led to a lasting vendor partnership," said Conway. "Over time, Quantum has standardized on HP in order to leverage it across the company's locations. Today, we have around 60 HP servers meeting Quantum's diverse and growing business needs. This set the foundation for our decision to continue with HP 9000 Enterprise Servers. Our solid experience with Enterprise Servers led us to utilize Microsoft Windows® NT - HP NetServers for the i2 Demand Planner module."

Quantum has 32 locations worldwide and over 6,000 employees, all accessing computer systems on the company's wide area network (WAN). On any given day, the company runs 24x7, with as many as 800 to 1,500 users concurrently accessing its transactions systems.

"We wanted to be able to promise product at any point, to any customer, at any time," noted Conway. "The i2 implementation of Demand Planner, Supply Chain Planner and Factory Planner provides Quantum with a greater ability to analyze customer demand and optimize factory schedules. The worldwide operations information for the APS implementation is derived from our single instance - Oracle/ERP Application - transaction backbone, insuring global consistency and coordination."

"Our Quantum Information Warehouse (QIW) is where we store summary and executive decision support information for all of the divisions," explained Conway. "We needed a data warehouse to effectively summarize thousands of ERP transactions. Our new planning system with the i2 RHYTHM software solution uses i2's Active Data Warehouse (ADW) to further summarize and extract QIW information for the planning system. We can use historical data, point-of-sale trends, customer input and statistical modeling to create faster, more accurate forecasts of demand - replacing the older, more manual system that relied on spreadsheets and templates."

In any mission-critical environment, including Quantum's, interoperability is key. "HP's UNIX servers are the backbone of all that we do on mission-critical systems," said Conway. "The HP 9000's high reliability, as well as the diagnostic and system management software, alerts us if any failures do occur. With our APS Demand Planner module, this will be the first time that we've put HP NetServers into a mission-critical applications role."

To execute and protect its high-availability capabilities, Quantum has hardware in place for system failovers including use of HP MirrorDisk/9000, plus additional coverage with HP's Critical Systems Support services. "We have had a mission-critical level of support from HP since our implementation of the Oracle/ERP application suite and have found that it has been invaluable to us maintaining our service level expectations for our end-users," explained Conway.

With its new APS solution, Quantum not only met its one-week planning cycle objective, but realized an important return on investment. Now, the company can more finely anticipate and forecast its needs, as well as better manage its supply chain. Moreover, Quantum expects to double the amount of shipments going direct from factory to customers from 20 percent to more than 40 percent.

David Spade, the PricewaterhouseCoopers partner who leads the consulting firm's integration effort, noted that Quantum has done more than simply add on new software to its existing supply chain management system. "They've integrated the new APS deeply into their business processes, systems and organization to a degree not done by many companies," he said. "These changes constitute a complete transformation of their fulfillment model."

Throughout its 10-year alliance with Quantum, HP has proven over and over to be a valuable partner. "HP has been with us at every step to ensure the company's successful systems implementation," said Tama Olver, Quantum's Chief Information Officer and Vice President of Worldwide Information Services. "There was a very strong commitment by HP's consultants and account team to make this implementation successful. More recently, HP and i2 have formally joined forces. Our decision to put i2 on HP was re-affirmed by this partnership announcement. There is now a broadening of capabilities coming from both HP and i2 - which is a real benefit to us."

Olver concluded, "Quantum's management team likes the reliability and performance characteristics of HP9000 Enterprise Servers. Our alliance with HP for platform technology, as well as for consulting and mission-critical support services, has helped Quantum lay a strong systems foundation upon which we can incorporate new applications to help keep our market leadership."