Established in 1947, Taiwan-based China Surgical Dressings had been expanding rapidly for the past decade and adopting more digital processes, such as paperless signatures, with its in-house, on-premises enterprise resource planning (ERP) system. But the need for more widespread transformation came in early 2020, when the business faced a sudden surge in demand for its face masks.

China Surgical Dressings' rapid growth revealed complex reporting challenges in its legacy ERP system. Each time the company required a new report, they had to liaise with the ERP system designer to create a new template, which took 2–3 weeks. End-of-month closing could only be accomplished on the 25th day of the following month, which was far too long for management to make agile decisions based on closing data.

“Our on-premises ERP system was not flexible enough to accommodate our growing business,” explains Jonathan Chang, COO at China Surgical Dressings. Chang was keen to explore SAP and cloud solutions to address its ERP challenges but needed to convince his managers that the cloud was a secure means of storing sensitive production data. China Surgical Dressings is ISO 13485 certified for its medical devices and must ensure the quality of its products and processes, with data security a leading consideration.

China Surgical Dressings turned to Nextlink Technology, an Amazon Web Services (AWS) Partner, to accelerate its digital transformation efforts. Nextlink Technology suggested SAP S/4HANA on AWS, and the quick time-to-market possible on the AWS Cloud appealed to China Surgical Dressings’ leaders.

Chang adds, “Nextlink Technology proposed a flexible plan that suited our current and future business needs. Plus, they offered their expertise in other aspects of our digital transformation.” For example, China Surgical Dressings implemented Salesforce CRM software simultaneously with the SAP S/4HANA project and received integration support from Nextlink Technology on both fronts.

Nextlink Technology coordinated the greenfield implementation of SAP S/4HANA on AWS in about 6 months, while staying on budget. The company is using Amazon Elastic Compute Cloud (Amazon EC2) R5 Instances powered by Intel Xeon scalable processors for elastic, memory-optimized performance. It also uses Amazon S3 for secure storage of production data and Amazon CloudWatch to automate monitoring.

For Chang, the most significant advantage of implementing SAP S/4HANA on AWS is the availability of month-end data 10 days faster than with the previous on-premises ERP system. He elaborates, “The medical accessory industry is extremely volatile right now. With month-end data available sooner, I can better adjust stock levels to match predicted demand.” Raw materials for China Surgical Dressings’ products take up to 2 months to arrive in Taiwan, so improved forecasting helps mitigate supply-chain delays.

Previously, the business required 2–3 employees to input data that’s factored into costing. In addition, some data was missing because it wasn’t available soon enough. With SAP S/4HANA on AWS, data collection is automated and thorough, capturing all input sources for near–real time analysis. As a result, only one employee is required to input data and the business now enjoys 20–30 percent higher accuracy in post-production cost analysis.

Considering the human resources, electricity, floor space, and licensing costs required to maintain the legacy on-premises solution, AWS’ pay-per-use pricing model has led to a 20 percent reduction in operational cost. “Being on the AWS Cloud means I can always use and immediately procure the exact amount of compute I need. That makes more sense than overpaying for servers or waiting around for new servers to arrive when we run out of space,” Chang explains. Since switching to SAP S/4HANA on AWS, China Surgical Dressings is also spending 80 percent less time on server maintenance.  

With SAP S/4HANA on AWS, China Surgical Dressings can obtain more accurate data faster and expand the business seamlessly in Hong Kong with elastic, secure cloud resources. The transfer of information between offices is seamless and the business gains market information swiftly. Employees at all levels can access mission-critical production data from anywhere with improved connectivity, which has unlocked work-from-home possibilities.

In addition, workflows are more efficient and transparent with the SAP S/4HANA on AWS implementation. As the company grew, many tasks fell to the finance team that could be better allocated elsewhere; these workflows are now smoother, and workloads are more balanced among departments. Chang also notes that the transition to SAP S/4HANA provided him with new insights into his workforce. “Learning new technology-driven processes requires strong logical thinking,” he explains. “This project has helped me identify who we should consider training for managerial positions, based on how certain individuals display advanced logical reasoning.”

China Surgical Dressings is now exploring ways to implement Internet of Things (IoT) technology in its new plant, which is projected to be operational by end of 2023. Chang envisions a more automated production line and plans to work closely with Nextlink Technology and AWS to identify the best technology solutions for this use case. He concludes, “We have a stable, secure starting point with SAP S/4HANA on AWS, which lowers the risk for trialing new technologies like IoT.”