SAP S/4 HANA Streamlines Global Manufacturing Operations Through Company-Wide ERP Standardization

Kobe Steel, a comprehensive Japanese manufacturer with operations spanning steel, aluminum, forging, welding, machinery, engineering, construction machinery, and electric power, faced critical obstacles to digital transformation. The company had built independently optimized systems across departments, resulting in fragmented processes and outdated infrastructure. The SAP ERP system in the accounting department alone had accumulated approximately 400 custom add-on developments, creating complexity that hindered version upgrades and maintainability. As SAP maintenance deadlines approached, the company's aging systems could no longer respond quickly to business changes or scale for future growth. Kobe Steel required a unified, modern ERP foundation that could standardize operations across all business divisions while enabling enterprise-wide digital transformation.

Kobe Steel partnered with IBM to build KOBELCO-SAP, the company's first enterprise-wide ERP platform using SAP S/4 HANA. IBM served as the cross-vendor program manager throughout conception, implementation, and adoption phases, promoting standardization using the Fit to Standard (F2S) principle. Rather than allowing individual departments to implement SAP separately, the company consolidated into a single-instance configuration where three business divisions—engineering, power, and headquarters—shared one unified SAP environment, significantly reducing implementation and maintenance costs. Infrastructure was built on AWS across two regions to ensure security and disaster recovery, with server management outsourced to AWS to reduce operational burden and IT expenses.

The implementation delivered measurable results that solved Kobe Steel's core structural business challenges. Standard function usage increased dramatically from 6% to 82% in the headquarters accounting area, while customizations were reduced from approximately 400 add-ons to 100, substantially lowering development and maintenance costs. The digitization of forms and online settlement processes eliminated the company's paper-based culture and enabled flexible work arrangements. Real-time data access across previously siloed headquarters systems reduced waiting times and eliminated unnecessary departmental confirmation tasks. The implementation also strengthened enterprise governance, business controls, and workflows across divisions, establishing a unified IT governance model that now supports next-generation initiatives including AI and advanced data analytics.