Mazda cuts costs 50% and boosts performance 70% with Oracle Cloud
The global automaker migrated an on-premises inventory management system to Oracle Cloud Infrastructure, cutting five-year total cost of ownership in half.
“This project was a true partnership between Mazda and our counterparts at Oracle.”
Business challenges
Mazda, a multinational automaker based in Hiroshima, Japan, supplies 1.5 million automobiles annually in 130 countries. On January 30, 2020, Mazda celebrated its 100th anniversary. While the company has strong traditions, its operations teams are also looking to technology for a new edge.
Long after a sale, Mazda must guarantee customers have repair parts and accessories available for their vehicle. Mazda needs to manage approximately 240,000 items, which may include parts for vehicle models built more than 25 years ago. So the company must house a massive inventory of service parts.
Mazda’s global Inventory management (G-IM) system for repair parts and accessories involves a large and complex store of data. It relies on demand forecasting based on thousands of order records that are processed monthly. Mazda needed to shorten this processing cycle to improve the accuracy of demand forecasting.
These transactions were previously processed using Mazda's on-premises server and storage infrastructure, which also hosted other business functions. Inventory management needed to be moved to a cloud-based platform so the demand forecasting workload would not interfere with the performance of other critical systems.
We migrated a global inventory management system that tracks thousands of automotive repair parts and accessories from an on-premises system to Oracle Cloud Infrastructure. We've already achieved a 70% increase in performance and cut our 5-year total cost of ownership in half.
Why Mazda Chose Oracle
Mazda chose Oracle Cloud Infrastructure because it delivered significant performance improvement and reduction in the five-year total cost of ownership. The inventory management system that Mazda uses is part of Oracle E-Business Suite, running on Oracle Linux, so Oracle Cloud offered the best choice for a cloud migration.
In addition to cost savings and performance gains, Mazda could also scale transaction capacity up or down based on business demand, so it could run its inventory forecasts daily instead of monthly.
The initial idea was to bring in dedicated physical storage, but given the characteristics of the inventory management system, this would have required substantial capital investment to achieve high I/O transactions. So instead, Mazda opted for Oracle Cloud Infrastructure.
Results
Based on a three-month proof of concept, Mazda concluded that running applications on Oracle Cloud Infrastructure has a 50% lower total cost of ownership over five years compared with Mazda’s current on-premises data center environment. The OCI environment also provides up to a 70% performance improvement.
Another critical advantage: Mazda can make demand forecasting calculations any time they’re needed, without worrying as they had in the past about crimping other applications that share the on-premises computing resources. Now that the application runs on OCI, Mazda can run models daily, incorporating the latest order records and thus increasing the accuracy of demand forecasting and inventory management.
The carmaker is able to keep a hybrid computing model. It moved some of its E-Business Suite applications to Oracle Cloud Infrastructure, left some on-premises, and connected them using Oracle Golden Gate. It didn’t have to change the applications to run on OCI, which simplified the implementation and testing.
Mazda can now also bring more parameters into its service parts demand forecast, which contributes to accuracy—by country, region, and for Mazda globally.