Pirelli: Winning the Race for Service Excellence with SAP HANA and SAP ActiveEmbedded

Company Pirelli & C. S.p.A. Need for speed Headquarters Milan, Italy Industry, products, and services Automotive tire manufacturing Revenue 6.01 billion Web site www.pirelli.com On a hot, noisy racetrack, Formula 1 race cars roar through tight curves at blistering speeds. Aerodynamic design and powerful engines make the cars go faster. But Pirelli tires the only point of contact between the car and the road help the vehicles run safely. Pirelli designs and manufactures the premium tires for cars, trucks, and motorcycles that boost driver performance and comfort, regardless of road surface or weather conditions. SAP solutions and services SAP HANA platform; SAP business application accelerator software; SAP ActiveEmbedded services, including the SAP Rapid Prototyping service; and the SAP ERP application As one of the world s leading manufacturers of high-end and performance tires, Pirelli & C. S.p.A. has lapped the competition. The company includes 22 tire manufacturing facilities on 5 continents, and it employs more than 37,000 people. Founded in 1872, Pirelli is the only manufacturer of tires for both Formula 1 racing and the Superbike World Championship. With a long a history of technical innovation, the company is intensely focused on continually improving product quality and environmental sustainability. To help win the race for service excellence, Pirelli leveraged SAP ActiveEmbedded services for supporting and maintaining its SAP HANA database. Using the in-memory technology within the SAP HANA platform along with tools and services from the SAP Active Global Support (SAP AGS) organization, the firm now relies on nearreal-time data to help ensure that products are delivered to distributors at precisely the right time. The SAP offerings help consumers drive safely until the checkered flag. Read more 2 / 6 2013 SAP AG or an SAP affiliate company. All rights reserved.

Maintaining tire pressure Pirelli s customers are auto dealers and tire retailers that sell the company s products to consumers. Dealers often wait to replenish their stocks until the end of the month, so they can maximize volume dis counts. As a result, a significant amount of our sales occur during the last two or three days of each month, explains Daniele Benedetti, head of application architectural integration and innovation for Pirelli. Pirelli races to fulfill the orders before the end of each month. To enable accurate order processing and on-time product deliveries, the company collects huge amounts of demand data as well as information on inventory availability and location. Reports and dashboards help us check our sales data, review order shipments, and understand profitability, he adds. We use those factors to determine our product pricing and calculate discounts. Pirelli had developed several custom applications that collect and process sales data from its SAP ERP application. However, the calculations were too slow to support quick order management de cisions. Number-crunching against this Big Data also consumed too much server capacity. Often, a new hourly batch job began before the previous one finished, preventing a refresh of report data. Pirelli needed an advanced-technology solution that could accelerate data collection, processing, and distribution and make decision-support data available to the business in near-real time. At the end of the month, our business must have continuously refreshed demand data to support decision making. Daniele Benedetti, Head of Application Architectural Integration and Innovation, Pirelli & C. S.p.A. 3 / 6 2013 SAP AG or an SAP affiliate company. All rights reserved.

Fuel for change As a long-time user of SAP ERP, Pirelli is very familiar with SAP technology innovations. Still, the company considered solutions from other vendors, including some offered by its legacy database provider. After a careful review, we chose the SAP HANA platform and the SAP business application accelerator, explains Benedetti. The company s highly customized, batch-processing environment offered a unique opportunity to test the processing speed of SAP HANA on nonstandard applications. This seemed like an excellent use case for SAP HANA, he explains. We considered it a proof of concept that could help us evaluate the performance of in-memory computing with our customdeveloped applications. Freeing up server capacity was also important. Instead of simple queries, calculations, and aggregations, each report requires multiple iterations against huge volumes of data. SAP HANA seemed like our best choice for moving the calculation processing off the SAP ERP server, Benedetti adds. Pirelli also hoped to increase the speed of report processing. Our goal was to have the reports run 5 to 10 times faster, he explains. The accelerator offered an effective tool for increasing calculation speed and boosting the frequency of report generation. This proof of concept helped us evaluate the in-memory technology of SAP HANA, not only for this business case but also, in perspective, as a replacement for our legacy database. Daniele Benedetti, Head of Application Architectural Integration and Innovation, Pirelli & C. S.p.A. 4 / 6 2013 SAP AG or an SAP affiliate company. All rights reserved.

Shifting into higher gear During the five-week process, a team from Pirelli s IT department worked with experts from SAP to rapidly prototype the solutions and execute the proof of concept. To help ensure its SAP HANA database is sup - ported and maintained properly, Pirelli engaged SAP ActiveEmbedded services. SAP ActiveEmbedded delivers a unique combination of on-site services, provided by an embedded support team, and offsite engineering services, which are performed by experts with unparalleled expertise and located throughout the world. The SAP experts created a new, better-performing version of the custom code that would run on the old architecture. Then they modified the software to run more effectively on SAP HANA. When the project was complete, the SAP experts documented their best practices for code development and conducted knowledge transfer workshops to enable the Pirelli team to replicate the process. The SAP AGS experts taught our programmers how to improve the code so it runs better, says Benedetti. They also learned how to write code to get maximum benefit from SAP HANA. As part of the on-site SAP ActiveEmbedded services, SAP support experts offered to work on-site with Pirelli s programmers to review, rewrite, and optimize some of the company s custom applications developed in the ABAP programming language, such as the applications used to generate reports. The proof of concept, code optimization, and knowledge transfer were completed on time and within budget, thanks to the dedication of our SAP AGS team. Daniele Benedetti, Head of Application Architectural Integration and Innovation, Pirelli & C. S.p.A. 5 / 6 2013 SAP AG or an SAP affiliate company. All rights reserved.

Championship value The SAP solutions delivered several valuable benefits to Pirelli that help the company work more efficiently and enhance customer service. With the optimized custom code, the accelerator, and the in-memory processing of SAP HANA, the sales and distribution report runs 8.4 times faster than it did on the legacy database. This result met Pirelli s goal of a 5 times to 10 times performance boost. The database runtime also improved by 68%. The data compression offered by SAP HANA helped Pirelli reduce the amount of required server storage. On the legacy database, the report required 97 GB of storage. Using SAP HANA reduced the space needed to 50 GB, a gain of 48%. The in-memory technology also helped Pirelli reduce the runtime and space consumption for data backups, shrink disk consumption for the database, and slow database growth. With faster, more efficient code and the power of inmemory processing, Pirelli s proof of concept clearly delivered real value for the business. Not only did we learn how to optimize our custom code, but now we can use the powerful technology of SAP HANA to speed up table replication and report generation, says Benedetti. Reports can now be refreshed every 10 minutes, delivering updated information to users 6 times faster than before. Faster access to current product information helps Pirelli make better decisions and reduce the number of back orders. Best of all, our analysts can use the insight to ensure that our tires are available to consumers exactly when and where they need them, he says. Providing top service is the best way for us to win the race for customer satisfaction. CMP24321 (13/07) 2013 SAP AG or an SAP affiliate company. All rights reserved. 6 / 6

2013 SAP AG or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG and its affiliated companies ( SAP Group ) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices.