Management Summary
With the establishment of the joint venture ZF Foxconn Chassis Modules (ZFFCN), ZF Friedrichshafen AG’s global axle assembly business was separated from the existing SAP landscape without interrupting the just-in-sequence production. To create a future-proof digital core, this step was combined with the migration from SAP ECC to SAP S/4HANA RISE. With cbs as a partner and the Selective Data Transition approach, the team completed the ambitious transformation within 20 months. The global big-bang go-live, with a downtime of just one hour, resulted in near-perfect business continuity.
About ZF Foxconn Chassis Modules
As a Tier 0.5 automotive supplier, ZF Foxconn Chassis Modules GmbH supplies global premium and volume manufacturers and operates at 27 locations worldwide. The joint venture between ZF Friedrichshafen AG and Foxconn (Hon Hai Technology Group) employs approximately 4,000 people. Revenue in 2023 totaled approximately 4.3 billion euros.
The automotive supplier ZF Foxconn has implemented a complex SAP transformation within a just-in-sequence/just-in-time production environment that leaves no room for error.
ZF Friedrichshafen AG, one of the world’s largest automotive suppliers, and Foxconn, the world’s largest electronics manufacturer, have entered into a strategic partnership in the form of a joint venture. For the newly created company, ZF Foxconn Chassis Modules, the axle business had to be separated from ZF Friedrichshafen AG’s existing SAP ECC system and transferred to its own environment. In addition to the actual carve-out, the company decided to migrate to SAP S/4HANA and switch to SAP RISE in the cloud.
A small internal IT organization, evolving governance structures within the new joint venture, and a parallel business transformation while operations continued posed additional challenges.
Preparing the SAP Carve-Out: Structures, Processes, and Data in Focus
ZF selected cbs Corporate Business Solutions as its partner: “This transformation required the highest level of experience and implementation expertise. Our successful joint projects with cbs at ZF Friedrichshafen gave us the confidence to embark on this journey together,” emphasizes Thomas Spalthoff.
The first step was the targeted preparation of the existing ECC landscape for the upcoming transformation. Together with cbs, the structures to be migrated from the ZF system landscape were analyzed, and preparations were made for the organizational separation of company codes, plants, and business processes. The goal was to establish ZF Foxconn’s operational independence without disrupting ongoing business operations.
Preliminary Study Provides Transparency for the S/4HANA Target Architecture
Subsequently, a preliminary study conducted jointly with cbs provided the necessary transparency regarding the project. This study examined the future SAP S/4HANA target architecture, key transformation requirements, and the need for adjustments to in-house developments and interfaces. The results were evaluated together with senior management, IT leadership, and the business units. The preliminary study confirmed that the risk was well manageable.
SAP Transformation with a Global Dimension
In total, the transformation project encompassed 23 production sites on various continents as well as 26 of ZF Friedrichshafen’s 120 company codes. Within 20 months, the goal was to separate the relevant subsidiaries along with their logistics, production, and business processes from ZF Friedrichshafen’s complex structure, migrate historical data and in-house developments, and simultaneously carry out a transformation to SAP S/4HANA.
The volume of data posed a particular challenge: more than 16.5 billion data records had to be analyzed, validated, and migrated. The data history spanned a period of six years.
Selective Data Transition: Targeted Data Migration Instead of Full Data Transfer
ZF Foxconn, in collaboration with cbs, adopted an innovative Selective Data Transition approach in which relevant data and structures were selectively migrated to the new system landscape.
Due to global just-in-sequence production and delivery processes, business operations could be interrupted for no more than six hours during the cutover at the start of the project, while production at a single plant had to continue even during the go-live.
Near-Zero Downtime Through Uptime Migration and Big-Bang Go-Live
Early and thorough preparation in SAP ECC as part of the preliminary project reduced the transformation risk. In addition, a portion of the data was transferred to the new environment via Uptime Migration even before the actual go-live.
On the day of the go-live, which took place on a weekend, the remaining data was migrated simultaneously across all global locations in a “big bang” approach. The result: business downtime of just one hour.
cbs ET Enterprise Transformer as a Key to Successful Data Migration
The cbs ET Enterprise Transformer played a key role in the successful migration. The software made it possible to carry out the complex transformation and migration steps in an automated, traceable, and repeatable manner.
Key Success Factors: Teamwork, Governance, and Business Continuity
Other key factors contributing to the project’s success included strong project management, effective collaboration between IT and business all the way down to the shop floor, the trust of stakeholders, and, last but not least, a special team spirit.
SAP S/4HANA RISE as a Foundation for the Future
ZF Foxconn implemented an ambitious transformation project in just 20 months. As a result, the company now has an independent, future-proof system landscape that goes beyond simply being an offshoot from the former corporate environment.
“The new digital platform forms the basis for continuously developing processes, increasing the level of digitalization within the company, and making targeted use of new SAP functionalities,” confirms Thomas Spalthoff.
SAP S/4HANA RISE unlocks additional potential for AI, automation, and optimization along the entire value chain. For ZF Foxconn, the successful carve-out to SAP S/4HANA was therefore not the end of the transformation, but rather a milestone in a long-term strategic development.
