To celebrate its 30th Anniversary, SAP is presenting the Asian Leadership Series comprised of interviews with captains of industry speaking on key business issues for the 21st Century. Each interview highlights one of three themes -- vision, innovation or experience -- concepts that have driven SAP's success over the past three decades. Lee Kum Kee Hero Honda Tenaga Nasional Berhad Quanta Computer Singapore Airlines Legend Computer LG Chem

30 Years of SAP 1972 • SAP is founded as "Systems Analysis & Program Development" in Mannheim, Germany • Number of employees at year end: 9 • Total revenues: DM 620,000 • SAP R/1 solutions launched 1974 • Two local companies -- Rothhändle and Knoll -- select the newly developed SAP Financial Accounting (RF) System 1976 • SAP organizes as a limited liability corporation with the name of "Systems, Applications and Products in Data Processing" 1977 • SAP moves its headquarters from Mannheim to Walldorf 1979 • SAP R/2 solutions launched • Total revenues: DM 4 Million 1980 • 50 of the 100 largest industrial companies in Germany are SAP clients 1982 • SAP revenues increase to DM 24 million for the year and more than 250 companies in Germany, Austria and Switzerland are using SAP-developed programs 1985 • Headquarters in Walldorf expand by 10,000 square meters • Sales increased by another 45% • SAP system is used throughout Europe as well as South Africa, Kuwait, Trinidad, Canada and the United States • The first headquarters in the United States is established in Wayne, Pennsylvania 1988 • Subscribed capital stock increases from DM 5 Million to DM 60 Million, company goes public (Frankfurt and Stuttgart) • SAP gains its 1000th Customer, Dow Chemical 1989 • SAP stock is traded on the Zurich stock exchange • 1st SAPPHIRE Conference • 1st Stockholder Meeting • Established Asia Pacific presence with offices in Australia and Singapore. • Number of employees: Over 1000 • SAP enters Russian market and begins development of a Russian version of the R/2 system 1992 • SAP enters Hong Kong market • SAP R/3 solutions launched • Revenue increases to DM 831 million of which almost 50% derives from international operations 1993 • Customer base grows to 3,500 companies • SAP introduces an R/3 version for the Japanese market 1995 • Customer base grows to 6,000 • SAP share included in the German stock index (DAX) 1996 • SAP R/3 Release 3.1 is Internet-enabled 1997 • SAP begins developing industry-specific solutions 1998 • Company is listed on the New York Stock Exchange • Company launches new solutions for Business Information Warehouse, Business-to-Business Procurement and Supply Chain Management. 1999 • SAP delivers mySAP.com • SAP receives "Best Managed Companies" Award by Industry Week 2000 • Named "Most Successful Company Over the Long-term in the 90's" (Jury of 40 CEO's: Wiesbaden 3/10/2000) 2001 • SAP acquires Top Tier and forms SAP Portals • Revenues for SAP in 2001 top EUR 7.3 Billion 2002 • SAP acquires TopManage Software Solutions for its SMB offering • SAP customer base grows to 18,000 • SAP has over 27,800 employees • SAP celebrates its 30th Anniversary! Q1. What are some of the challenges you face in managing a global operation? A1. We see a lot of variation in tastes in the different regions we sell to. This is because the cultures are different, food regulations are different, and the competition is different. Eating habits also differ. We have to observe markets carefully and take note of the differences before choosing which products to market. In Japan, for instance, housewives prefer an oyster sauce with a low viscosity, compared to housewives in Hong Kong or Taiwan. Q2. Is there a secret to your long success? A2. No secret. You will find our product anywhere you find Chinese cooking. And I've never had anyone tell me they don't like Chinese food. People trust our brand name because it's built on 114 years of history. It's not like buying tissues, where you take less care which brand you buy each time. People buy our products because of the quality. Q3. Do you have an interesting anecdote to tell on how a particular product came to be? A3. Many. In the mid-'80s when I began doing much of the work my father used to do, he took to spending much of his leisure time playing mahjong. One day, when playing mahjong with friends on his yacht moored in a Hong Kong marina, he asked the captain to rustle up something to eat. In no time, the captain was serving a very tasty chicken dish in soy sauce, spiced with ginger and other condiments. My father was so impressed he got the recipe from the captain, and we ended up mass producing the chicken marinade sauce as a popular convenient condiment.

In this interview, Eddy Lee, chairman of Lee Kum Kee Co. Ltd, tells how this family-owned sauce and condiment business has spiced up more than a hundred years of experience with some fresh thinking to maintain its lead in the food industry.

Blending Innovation with Long Experience is Lee Kum Kee's Recipe for Success

The story of how oriental sauces and gourmet food manufacturer Lee Kum Kee came to be is one that company chairman, Eddy Wai Man Lee -- just Eddy to all who know him -- enjoys telling. His great grandfather owned a tiny eatery on the south coast of China in an area famous for oysters. One night in 1888, he went home, forgetting he'd left oysters and broth in a wok over a dying cooking fire. The next morning he was greeted by a delicious aroma and discovered he had accidentally created what has become the world's premium oyster sauce, as well as the company's flagship product.

"Until then, there was no such thing as oyster sauce," says Eddy, 45, married with four children. "There were no bottles available either. So my enterprising ancestor began selling the sauce in ceramic jars. That's how the business began -- by accident."

But there is little accidental in the way the business has grown since Eddy joined the Hong Kong-based company back in 1980. Fresh from the University of California, Davis in the U.S.A., waving a degree in food science and technology, Eddy, the eldest son in the family, went straight to work helping his father and 25 employees market oyster sauce and shrimp paste. "With only two products, we were still a small business, even though we sold those products around the world," recalls Eddy. "I had to do everything then. I learned a lot."

With his background in food science, Eddy has encouraged innovative thinking throughout the company, as well as the use of information technology to obtain more data on markets, in order to become a proactive company. Nevertheless, as the head of Lee Kum Kee and imbued with its history stretching back four generations, he respects the traditions of a company that emphasize stability, focus on quality and trust in the Lee Kum Kee label. "Our brand name has been created over 114 years," he stresses. "It's why people trust our products." The company logo also uses the likeness of a bridge in its design to symbolize Lee Kum Kee's goal of building a cultural bridge between East and West with its food products.

To take advantage of this name recognition, Eddy encourages Lee Kum Kee's development group to aggressively add new products to the company's inventory. He's also pointed out how regional differences create varied eating habits among customers -- which play a vital role in a particular product's success or failure. Meanwhile, the marketing team is now using the brand name to leverage new items into restaurants, supermarkets, retail stores and food service distribution channels around the world. As a result of this fresh approach, the firm has grown rapidly in the past two decades. With 2,000 employees today, Lee Kum Kee manufactures over 200 different sauces and food products, marketing them in more than 80 countries. It has also built factories in China, South East Asia, Europe and the U.S.A.

Instinct Plus Experience
So how does Lee Kum Kee come up with ideas for so many successful products? "Ideas can come from gut instinct, our long experience, close observation of the market, and from our customers," says Eddy. But turning products into success stories takes more than good ideas. It involves innovative product development, the right packaging, focused marketing and hitting the pricing sweet spot. "All this requires a team of bright, hardworking staff, as well as help from our business partners -- so teamwork is the key to our success," he emphasizes.

Teamwork and experience helped Lee Kum Kee take the lead in gourmet convenience foods. The marketing group was quick to spot the beginnings of a trend for easy-to-prepare quality foods, and it worked with product development to provide some samples. Convenience foods have now become a fast-growth segment for the company. "People have less time to cook today, and many lack the cooking skills of their mothers," says Eddy. "They find our one-step sauce and food products can be the solution, because we do the work for them."

With its large Chinese population, the U.S.A. is Lee Kum Kee's biggest market, while China is the fastest growing, already resulting in a top-four ranking for Lee Kum Kee among food condiment companies there.

Changing Times
Corporate growth has not come without its challenges. The Lee family combines internal and external expertise to manage its company. "We promote employees to management and recruit specialists from outside -- just like other companies," says Eddy.

Several years ago, Lee Kum Kee realized it needed more than experience, name recognition and innovation to compete globally with the multinationals busy carving up the food industry. One area it pushed ahead in was information technology. It brought in SAP to help optimize its business processes and use it as a strategic tool. Market information is now being accessed in real time, helping the company make more informed decisions, improve its product planning and better market its products.

"IT is helping us progress and expand," says Eddy. "It's helping us react faster to changes in the market. We can spot problems and opportunities arising earlier, so we're moving faster to deal with or exploit them."

This willingness to change and innovate, yet still maintain its traditional values, gives Lee Kum Kee advantages, vision and focus that stem from its long experience.

While Eddy has helped introduce new ideas into the company, he says he has also learned many valuable lessons from working with his grandfather and father over the years. "The most important thing they taught me is that you have to have passion for this business in order to be successful," says Eddy. "And I love this work."

Melding Business Vision with IT Strategy
How is a family business founded in the 19th Century still able to grow and compete successfully in 21st Century markets dominated by global enterprises? The answer is its ability to blend innovation with its traditions and experience. Having more than a century of experience, Lee Kum Kee understands the importance of fresh thinking and making use of leading technologies.

Yet as Eddy Lee, the fourth-generation head of Lee Kum Kee, points out, the company's task is not to focus on technology, but rather to tempt every household to use its products. Instead of spending time worrying about the latest computer hardware and software, Lee Kum Kee has selected to partner with SAP to take care of its IT needs.

"To be able to grow our business around the world, we had to automate our management of business information and make it adaptable to changing markets and new challenges," says Lee. "So we chose to work with SAP." He says the partnership is already paying dividends. "Since implementation last year, we're now getting information faster and our business work flow is improving. This is already helping us make better business decisions and to manage the company more effectively."

Because information is being delivered in real time, managers are able to analyze markets and forecast demand for different products. "IT has become a strategic tool, though one that we're still mastering," says Eddy.

In upcoming issues of the SAP 30th Anniversary Leadership Interview series, we learn how experience, innovation and vision are driving other major Asian corporations to be leaders in their fields.



Print Design by Step Design Consultants Ltd.
FAX: +852 2543 4269
www.step.com.hk