Microsoft SQL ServerCustomer Solution Case Study

Manufacturer Speeds Processes for Boosting Trade and Revenue, Cuts Costs by 90 Percent

OverviewCountry or Region: South KoreaIndustry: Manufacturing—Communications equipment manufacturing

Customer ProfileHeadquartered in Anyang, Korea, LS Cable & System is the world’s third-largest cable company. In 2010, it employed 1,850 people and sold KRW 3.2 trillion (U.S.$2.8 billion) in products and services.

Business SituationTo take advantage of increasing global demand for products, the company needed to expedite the processes for securing free-trade agreements with countries such as the United States.

SolutionLS Cable & System engaged Samil PricewaterhouseCoopers to implement a business intelligence solution based on the Microsoft platform.

Benefits Increases revenue and cuts costs Speeds insight and efficiency Facilitates rapid growth Improves competitive advantage

“By deploying a BI solution on the SQL Server Fast Track Data Warehouse, we have gained the ability to expand our free-trade agreements, significantly reduce product tariffs, and increase future revenue.”

Taehak Kim, Assistant Manager, Purchase Planning Team, LS Cable & System

Global manufacturer LS Cable & System wanted to increase the volume of products that it sold to customers—especially in countries with free-trade agreements such as the United States. However, the internal processes for completing trade agreement forms such as the Certificate of Origin were cumbersome and slow, which restricted the number of products that LS Cable & System could sell abroad. To overcome this challenge, the company engaged Samil PricewaterhouseCoopers to deploy a business intelligence solution based on the Microsoft platform. The solution consolidates 6 terabytes of disparate data about more than 100,000 products and automates processes. By implementing its mission-critical solution, LS Cable & System increases revenue, cuts costs by 90 percent, speeds processes and data insight, supports rapid growth in global markets, and improves the company’s competitive advantage.

SituationLS Cable & System is the most profitable cable manufacturer in Korea and the third-largest cable manufacturer in the world. An agile industry leader, the company sells cables and electrical equipment to businesses around the world. In addition to its operations in 12 countries, LS Cable & System operates 11 global subsidiaries including LS Mtron, JS Cable, and DAESUNG Electric.

To take advantage of increasing international demand for its products, LS Cable & Systems needed to simplify internal processes for managing product pricing, tariffs, and trade agreements. For each of the company’s 100,000 products, employees in numerous departments had to manually share product data from disparate systems and then collaborate to determine the price of each product in every country in which it is sold. These discussions include considerations about the tariffs that each government imposes on imported goods. Higher tariffs elevate product costs for consumers and hinder sales.

In recent years, LS Cable & System has increased the number of products it exports to the United States. Not only is demand up, but also the North American Free Trade Agreement (NAFTA) eliminates tariffs on qualifying goods. To enjoy duty-free sales through NAFTA, however, exporters must complete a Certificate of Origin for each type of product sold.

As LS Cable & System increased the number of products it exported to the United States, the productivity of employees decreased. This is because it

took staff several days to complete a single Certificate of Origin form for each unique product exported to any country. “When sales personnel submitted a request to management to complete a Certificate of Origin for a product, there was always a lot of discussion about which division would manage the paperwork,” explains Taehak Kim, Assistant Manager of the Purchase Planning Team at LS Cable & System. “The process was very time-consuming because of ongoing debates about the internal roles and responsibilities of departments.”

To complete a certificate, an employee had to manually extract product information from multiple enterprise resource planning (ERP) systems that ran on technologies from vendors including SAP. In addition, the employee had to review government documents and consult with personnel in Purchasing to determine the product’s Harmonized System (HS) code—a process that typically took 30 minutes or more. Because the Certificate of Origin form is a legal document, an employee also had to submit the completed certificate to the National Tax Service in Korea for approval before submitting it to the NAFTA agency.

LS Cable & System wanted to expand the types of products it sold to the United States and other countries. However, manually completing a unique Certificate of Origin form for every one of its 100,000 products—and for every country that the product would be exported to—was not feasible.

To overcome this challenge, LS Cable & System needed to expedite the processes for establishing free-trade agreements. In March 2011, the company decided to

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implement a mission-critical, business intelligence (BI) solution that could provide a central source of product information and accelerate the processes for securing free-trade agreements, including determining HS codes. The solution needed to be flexible, scalable, and affordable because LS Cable & System wanted to extend it to support three of its subsidiaries: LS Mtron, JS Cable, and DAESUNG Electric.

SolutionIn March 2011, executives from numerous departments, including Architecture, Accounting, Purchasing, and Sales, met to establish the required functionality of the new solution. The team then researched available solutions based on technologies including Oracle and Microsoft SQL Server 2008 Enterprise data management software. LS Cable & System had to carefully screen third-party providers to ensure that consultants had in-depth expertise in multiple segments including accounting and customs.

After narrowing its choices to offerings from Samil PricewaterhouseCoopers (PWC) and Cheong Sol Customs & Trade Co., Ltd., LS Cable & System decided to engage Samil PWC to implement a BI solution based on the Microsoft SQL Server Fast Track Data Warehouse. Unlike the other solution options, the SQL Server Fast Track Data Warehouse includes reference architectures engineered by Microsoft that speed implementation, achieve fast performance, and minimize costs. “We chose the Microsoft SQL Server Fast Track Data Warehouse instead of Oracle because the Microsoft solution can easily contain the large volume of data that we have today and scale to accommodate the

significant data growth that we expect to see over the next three years,” says Jinseop Moon, Manager of the Information Strategy Team at LS Cable & System.

Samil PWC worked with LS Cable & System to select a mission-critical reference architecture that meets today’s requirements but can also scale to support long-term growth and increasing performance demands. Based on its research, Samil PWC deployed a SQL Server Fast Track Data Warehouse that runs on SQL Server 2008 Enterprise, the Windows Server 2008 Enterprise operating system, and one HP ProLiant DL380 G7 server computer. The server features four AMD Opteron processors and 17 terabytes of storage.

IT personnel from Samil PWC also used Java technologies to develop an Origin Compliance system running on Windows Server 2008 Enterprise that manages communication between the data warehouse and numerous ERP systems including databases at the three subsidiaries, LS Mtron, JS Cable, and DAESUNG Electric. For example, the Origin Compliance System extracts product information from the ERP systems and then transforms and loads the data into the SQL Server Fast Track Data Warehouse. Because data access and reporting speeds are directly related to the solution’s ability to quickly extract and transform data from disparate systems, IT consultants from PWC worked with Microsoft Services to tune these processes for optimum efficiency. The outcome included the implementation of a dedicated network to connect the data warehouse to the PWC and ERP systems to help maintain rapid data exchange rates

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“We chose the Microsoft SQL Server Fast Track Data Warehouse instead of Oracle because the Microsoft solution can easily contain the large volume of data that we have today and scale to accommodate the significant data growth that we expect to see.”

Jinseop Moon, Manager, Information Strategy Team, LS Cable & System

between systems. The engineers also used the Multipath I/O capability in Windows Server 2008 Enterprise to speed read and write procedures by supporting multiple paths for data.

Commenting on the role of Microsoft Services, Mr. Moon says, “It is not easy to predict how much data and how many reports our solution will process in the future. However, the tuning service Microsoft provided enabled us to take proactive steps to avoid any compromise in performance regardless of increases in demand.”

Consultants from PWC also added BI capabilities to the Origin Compliance System so that it automates the creation of approximately 30 documents such as Certificates of Origin. The animation sequence uses information in the data warehouse to determine a product’s HS code, populate form fields, and route the document to appropriate individuals for further information or approval. In addition, the solution generates alerts that notify employees when an action is required. Employees can also use the system to obtain best-practices information for pricing products for international markets.

The solution went into production in July 2011. At the time, the data warehouse included approximately 6 terabytes of information.

BenefitsBy implementing a BI solution based on the Microsoft SQL Server Fast Track Data Warehouse, LS Cable & System expands revenue, reduces expenses, accelerates

data insight, boosts productivity, facilitates growth, and improves competitiveness.

Increases Revenue and Cuts CostsWith its new solution, LS Cable & System and its subsidiaries can take full advantage of free-trade agreement policies such as NAFTA—and possible emerging free-trade agreement policies in countries such as Peru and China. Mr. Kim explains, “By deploying a BI solution on the SQL Server Fast Track Data Warehouse, we have gained the ability to expand our free-trade agreements, significantly reduce product tariffs, and increase future revenue. For example, we expect to reduce tariffs by up to KRW34 million (U.S.$30,000) during the first half of 2011. And, based on the volume of trade in 2010, we anticipate realizing KRW1.1 billion (U.S.$967,000) in profits in 2011 by taking advantage of NAFTA and consumer demand in the United States.”

LS Cable & System will also reduce internal expenses. “By implementing our solution on the SQL Server Fast Track Data Warehouse, we expect to reduce our operational costs by 90 percent,” says Mr. Moon.

Speeds Insight and EfficiencyToday, employees at LS Cable & System and its subsidiaries can access product information from disparate systems in real time. As a result, people from different departments can collaborate with less effort, which accelerates processes such as determining an item’s price. In addition, employees are more productive because they no longer spend days completing forms such as Certificates of Origin. Instead, the solution automatically populates the data needed in each of the form fields. Mr.

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“By implementing our solution on the SQL Server Fast Track Data Warehouse, we expect to reduce our operational costs by 90 percent.”

Jinseop Moon, Manager, Information Strategy Team, LS Cable & System

Kim says, “Since we have implemented our BI solution on the Microsoft platform, it takes seconds instead of days to issue a Certificate of Origin and submit it to the appropriate individuals for approval. We can also use the new solution to instantly send a certificate to the National Tax Service if required.”

The system also alerts the appropriate individuals if an item does not meet the requirements of the National Tax Service or other government agency. In addition, authorized personnel can easily update product information in the Fast Track Data Warehouse to enhance data accuracy.

Facilitates Rapid Growth LS Cable & System can now take advantage of export opportunities without worrying about whether employees can manage the required paperwork—or whether its system can scale to accommodate an increasing volume of transactions or data. “We use our SQL Server Fast Track Data Warehouse to manage more than 100,000 items from our company and our three subsidiaries,” says Mr. Moon. “With it, we can obtain information such as an HS code in seconds, with a click of a button, even when the system is processing a high volume of transactions.”

Elaborating on the solution’s fast performance, Mr. Moon says, “The architecture of the SQL Server Fast Track Data Warehouse is designed to use disks efficiently and achieve optimum load balancing.”

Improves Competitive AdvantageLS Cable & System is using its new solution to improve its brand value globally. For

example, because it has the infrastructure that it needs to manage a larger volume of exports, in 2011 the company became an Authorized Economic Operator (AEO). By doing so, it increases its contacts with other global companies, gains a framework for managing global trade agreements, and can streamline processes. Mr. Kim explains, “As a certified AEO, we can reduce customs procedures with other organization members and realize greater trade opportunities. And because we have automated our trade agreement processes with data stored on the highly scalable Microsoft platform, we can gain a competitive advantage in the global import and export markets.”

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“Since we have implemented our BI solution on the Microsoft platform, it takes seconds instead of days to issue a Certificate of Origin and submit it to the appropriate individuals for approval.”Taehak Kim, Assistant Manager, LS Cable

& System

Microsoft Server Product PortfolioFor more information about the Microsoft server product portfolio, go to:www.microsoft.com/servers

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about Samil PricewaterhouseCoopers products and services, call (82) (2) 709-0800 or visit the website at: www.pwc.com/kr/en/index.jhtml

For more information about LS Cable & Systems products and services, call (82) (2) 2189-9114 or visit the website at: www.lscns.co.kr

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published February 2012

Software and Services Microsoft Server Product Portfolio− Windows Server 2008 Enterprise− Microsoft SQL Server 2008 Enterprise

Solutions− Microsoft SQL Server Fast Track Data

Warehouse

Hardware AMD Opteron processors HP ProLiant DL380 G7 server computer

Partners Samil PricewaterhouseCoopers