Founded in 1907, AGC is the world’s largest glass manufacturer. Besides its architectural and automotive glass offerings, the company manufactures and sells electrical components, fluorochemicals, and other chemical products in markets worldwide. AGC is also the core of the AGC Group, which has more than 50,000 employees around the world and recorded 1,282.6 billion yen in net sales in 2016.
In February 2016, the AGC Group established its "Vision 2025" plan and a long-term strategy for realizing goals described in the plan. The plan designates core businesses as stable, long-term sources of earnings and aims to achieve high growth in strategic businesses like mobility, electronics, and life sciences. Supported by these core and strategic businesses, AGC Group is in the process of becoming a comprehensive materials manufacturer. In line with this evolution, the company changed its name from Asahi Glass Company, Ltd. to AGC Inc. in July 2018.
As its business changed, AGC recognized the need for change in its approach to IT. More efficient and stable IT systems were required for the company’s established business domains, while the firm’s strategic businesses needed IT systems that could respond rapidly to changes in the market.
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Business-continuity planning (BCP) was another concern for AGC, which began work on BCP for large-scale disasters after the Great East Japan Earthquake of 2011.
As part of BCP for its IT systems, AGC considered establishing an additional data center. However, this would mean duplicating equipment and hardware, more than doubling current costs. Faced with that reality, the company considered a new option: the cloud. “We felt that using the cloud would bring disaster preparedness within reach,” says Koji Oki, electronics and infrastructure technology group manager, information systems department, AGC.
The company began exploring cloud solutions in 2013, and eventually chose Amazon Web Services (AWS). Compared to other cloud services, “AWS was almost the only choice in terms of stability and a proven record,” says Masami Mitsubori, digital innovation group professional, information systems department. Because AGC also wanted its systems to be located in Japan, the existence of the AWS Tokyo region sealed the deal. “We determined this would let us realize BCP at a low cost, optimize system lifecycles, and secure governance,” says Tsutomu Asanuma, digital innovation group manager, information systems department. Although cost reduction and disaster preparedness were the company’s primary goals, it also benefits from the speed and employee-production benefits of AWS.
In 2014, AGC decided to move its SAP ERP environment to the AWS Cloud. Some employees expressed concern over making such a critical system the target of the company’s first use of the AWS migration system. However, the company decided that if enterprise systems needing to be solid and stable could be moved to AWS, there would be significant benefits in terms of disaster preparedness and cost reduction. Success would also make it easier to expand the scope of migration to other systems.
Other doubts about the AWS migration revolved around governance and security. However, there were already examples of other companies in the category running SAP ERP on AWS, and AGC was reassured by migration stories it heard from other AWS users. “AWS has made public a lot of information about security and has earned many third-party security certifications. It also offers features we never implemented ourselves for cost reasons, such as disk encryption. For that reason, it could be said that AWS is actually safer than our own data center,” says Mitsubori.
AGC began migrating SAP ERP to AWS in 2014. By 2017, migration was complete for five of seven areas, with the remaining two scheduled for completion in 2018. AGC used AWS Professional Services for support as it standardized its IT infrastructure and introduced a standard catalog service for AWS systems, called Alchemy. The company took this route because it anticipated a rapid expansion in requests to run other systems on AWS.
As expected, requests to use AWS flooded in as soon as the SAP ERP migration began. As of November 2018, a total of 142 systems were running on AWS. Unable to design individual architectures for all the systems migrated to AWS, AGC created several basic structural patterns in advance, from which decision makers could choose. This is what made it possible to migrate so many systems so quickly. With Alchemy, once the necessary security and governance features are secured, an optimal structure for the given requirements can be quickly provided.
AGC's standardized structures are based on Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3). The company uses Amazon Relational Database Service (Amazon RDS) as its database and Amazon Glacier for data archiving. As operating environments for these standardized structures, private network spaces are secured using AWS Direct Connect and Amazon Virtual Private Cloud (Amazon VPC). Traffic management using AWS Elastic Load Balancing and monitoring via Amazon CloudWatch are also included as basic services.
By limiting the AWS services used to only what is absolutely necessary for enterprise systems, and planning and designing strictly within those bounds, the AGC IT department quickly delivered foundational systems with the advanced security and governance features required for enterprise use.
The company has realized significant cost savings. “Adopting AWS has reduced costs by roughly 40 percent compared to our old onsite solution. For some systems, the cost savings were even greater,” says Hajime Itoh, global IT leader and information systems department manager. These savings were made possible not just by the AWS fee structure but also by ensuring that instances are run only when necessary. Eliminating the need to replace hardware every five years or so has also made major contributions to efficiency and reduction in total cost of ownership (TCO).
Because hardware replacement requires significant human resources, responses to requests from business departments tended to be slower during the replacement period, which was an issue for the company. “In the past, the lack of synchronization between the business change and hardware-replacement cycles caused problems for us. By eliminating those problems, AWS has leveled the workload for the IT department and given us more freedom to take on new challenges,” says Oki.
AGC is using AWS to create IT infrastructure for new systems as well. For example, when the company needs to create a new system infrastructure for an acquired company, a systems architecture request is made as soon as the acquisition is decided. With the company’s previous solution, procurement of servers could take more than two months from after a request was made. With AWS, however, a server environment can be prepared in just days.
The skills AGC requires of its internal technical staff are also changing. In the past, technical staff members were divided by field of specialization. Now that the company uses AWS, a single employee can prepare an entire infrastructure environment, creating a need for full-stack knowledge to master these possibilities. To ensure its employees are able to reap the speed and flexibility benefits offered by the cloud, AGC is also focusing on development for technical staff to help them master AWS services.
With so many systems running on AWS, vendor lock-in arises as a new concern. AGC, however, does not feel “locked in.” On the contrary: the company has “locked on” to AWS in order to make full use of the possibilities of the cloud. “We used to narrow down our choice of vendors for infrastructure based on goals like standardizing our hardware as much as possible. However, we ensured we could freely choose which applications we ran on that hardware. Adopting AWS hasn’t changed that,” says Kazuya Ohashi, electronics and infrastructure technology group leader, information systems department.
As the digitization of manufacturing continues, IT departments are taking the lead in promoting this change. AGC has a digitization strategy looking several years into the future while simultaneously adopting the latest technology at an early stage and repeating cycles of trial and error. For activities in the latter category, the company is considering the possibilities of introducing AWS services such as AWS Lambda, AWS IoT, and Amazon Machine Learning, as well as making use of data lakes and big data via AWS Glue.
AGC urges its employees to face new challenges without fear of failure. “AWS makes it possible for us to face new challenges right away. As a result, business departments have started coming to the IT department to discuss creating things based on higher-order concepts, and the IT department is moving from simply providing stable infrastructure to a position from which it can contribute to the business itself,” says Itoh.
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